Shares of Shoe Carnival jumped nearly 20% at the opening bell Thursday after the shoe retailer topped Wall Street earnings estimates and reported strong back-to-school sales versus 2019. At press time, the stock was still up 11%.
In an interview with FN, CEO Mark Worden noted that today’s market gains were driven by the company reporting the highest three-day sales period in company history during back-to-school this month.
In its earnings release, the company said year-to-date August merchandise sales are up in the mid-teens compared to 2019 and down a mid-point compared to 2021. The August back-to-school shopping period is over half of The company’s third quarter profitability, the company added.
Additionally, Worden told FN that the company hit nearly 30 million loyal customers this quarter, which is only 30% more than 2019. “Plus, first-half earnings per share of nearly $2 are higher than any complete. “Annual earnings in our 44-year history, excluding last year’s incentives boosted results,” added Worden.
“It goes back to the loyalty our customers have to Shoe Carnival, and our new Shoe Station brand is playing with the strongest leverage we’ve seen in a very, very long time,” the CEO said.
In the second quarter of 2022, the Evansville, Ind.-based retailer. reported net sales of $312 million, up 16.4% from 2019 but down 6% from 2021. Net income in the second quarter was $28.9 million, or $1.04 per share decrease . That’s down from $44.2 million in the same period last year.
Sales of athletic styles took an expected hit in the quarter, Worden noted, with the company attributing that to an inability to offer new styles in the category to meet demand due to supply chain challenges. Athletic inventories ended the quarter down in the low-teens versus 2019.
But Shoe Carnival Chief Merchandising Officer Carl Scibetta said on Thursday’s earnings call that the company believes athletic inventories will be replenished as it moves through the third quarter.
As far as non-athletic footwear goes, the company is exceeding expectations. Women’s non-athletic was up in the 20s vs. 2019. Sales were driven by apparel, up 50%, and sandals, in the mid-teens. Men’s non-athletic sales were up in the mid-20s vs. 2019. Men’s apparel and casual were both up over 20% with men’s boots up over 30%. And kids’ non-athletic sales soared into the high 50s. Growth in this segment was driven by pediatric cases, up to 90%, and infants, up to the 70s.
“As consumers return to a more normal life outside the home, we’re finding that these apparel options will continue to be strong through the rest of the year,” Worden told FN. “We are looking forward to an incredible non-athletic season as we will soon be in boots and then on holiday. Plus, there’s been so much athleisure shopping going on during the pandemic that we’re finding our customers have their closets full of a great variety. So we see that category retreating at this point in time and non-athletic growth.”
As for Shoe Station, which the company bought in December for $67 million, Worden told FN that the banner “continues to exceed expectations on all fronts.” Sales at Shoe Station were $54 million during the first half of 2022, and the company now expects sales to exceed its previously announced full-year guidance of $100 million by approximately 10%.
This growth only reinforces the company’s plans to expand Shoe Station’s store portfolio. At the time of the acquisition, there were 21 Shoe Station stores. By 2023, there will be 30 or more total stores in the flagship, Worden told FN, with the number surpassing 100 locations and beyond in the next five years.
“We have almost completed the integration less than a year since the acquisition,” said the CEO. “Shoe Station is proving to be a tremendous success and will continue to be a growth story for many years to come. The higher income consumer is enjoying our wide assortment from the best brands and it is far beyond expectations. So we’re going to grow as fast as real estate happens throughout the southern US.”
Looking ahead, the company expects net sales for the full fiscal year 2022 to be between $1.29 billion and $1.34 billion, up 24% to 29% compared to 2019.
