On November 21, 2024, Shoe Carnival Inc (SCVL, Financial) released its 8-K filing detailing the financial results for the third quarter of fiscal 2024, ending November 2, 2024. The company, a prominent family footwear retailer, reported a GAAP EPS of $0.70, aligning with analyst expectations, and an adjusted EPS of $0.71. Despite facing challenges such as hurricanes and unseasonably warm weather, Shoe Carnival Inc achieved a year-to-date net sales growth of 4.9% compared to the previous year.
Company Background
Shoe Carnival Inc is a leading retailer offering a wide range of dress, casual, and athletic footwear for men, women, and children, emphasizing national brands like Nike, Skechers, and Adidas. The company operates as a single reportable segment, leveraging a bricks-first, omnichannel approach to provide customers with easy access to its products through various delivery channels.
Financial Performance and Challenges
In the third quarter of 2024, Shoe Carnival Inc reported net sales of $306.9 million, a decrease from $319.9 million in the same period of 2023. This decline was primarily due to a retail calendar shift, which moved approximately $20 million in net sales out of the third quarter. Excluding this shift, net sales increased by 2.2% compared to the previous year. The company's performance was bolstered by a strong Back-to-School season and the acquisition of Rogan Shoes, Incorporated, which contributed to sales growth.
“Our Back-to-School results were strong, with comparable store sales growth across our banners and robust margins,” said Mark Worden, President and CEO.
Key Financial Metrics
The gross profit margin for the third quarter was 36.0%, slightly lower than the previous year's 36.8%, due to increased costs from operating more stores and the impact of the retail calendar shift. Operating income for the quarter was $24.5 million, down from $27.9 million in the prior year, reflecting the lower net sales. However, the company managed to leverage SG&A expenses, which were 28.0% of net sales, down from 28.1% in the previous year.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $306.9 million | $319.9 million |
| Gross Profit Margin | 36.0% | 36.8% |
| Operating Income | $24.5 million | $27.9 million |
| Net Income | $19.2 million | $21.9 million |
| GAAP EPS | $0.70 | $0.80 |
Strategic Initiatives and Outlook
Shoe Carnival Inc continues to focus on strategic growth initiatives, including the expansion of its store rebannering strategy. The company plans to rebanner 25 additional stores in the first half of fiscal 2025, following successful early results. Additionally, the integration of Rogan Shoes is ahead of schedule, with expected synergies contributing positively to the company's financial performance.
Looking ahead, Shoe Carnival Inc has updated its fiscal 2024 net sales guidance to a range of $1.20 billion to $1.23 billion, reflecting growth of 2% to 4.5% compared to fiscal 2023. The company maintains its EPS guidance, expecting GAAP EPS to range from $2.55 to $2.70.
“Early results exceeded our sales and profit success criteria, encouraging the team to expand the rebanner test to an additional 25 stores during the first half of 2025,” concluded Mr. Worden.
Overall, Shoe Carnival Inc's third-quarter results highlight the company's resilience in navigating external challenges while executing strategic initiatives to drive future growth. The company's focus on expanding its store footprint and integrating acquisitions positions it well for continued success in the competitive retail footwear market.
Explore the complete 8-K earnings release (here) from Shoe Carnival Inc for further details.
