Shoe Carnival Reports $306.9M in Q3 Sales, Sees 4.1% Decline Due to Calendar Shift

Shoe Carnival, Inc. reported a net sales figure of $306.9 million for the third quarter of fiscal 2024, a decrease of $13 million or 4.1% compared to the same period in fiscal 2023. The decline was attributed primarily to a calendar shift that moved a significant week of back-to-school sales into the second quarter, resulting in an estimated $20 million reduction in sales for the quarter. However, excluding this impact, sales increased by $7 million, or 2.2%, driven by contributions from the recently acquired Rogan Shoes, which generated approximately $22.3 million in sales during the quarter.

The company's gross profit for the third quarter was $110.4 million, down from $117.7 million in the prior year, leading to a gross profit margin of 36.0%, a decrease of 80 basis points year-over-year. This decline was primarily due to increased buying, distribution, and occupancy costs associated with operating more stores, as well as the impact of lower sales volumes. Selling, general, and administrative expenses decreased by $3.9 million to $85.9 million, reflecting lower selling costs at Shoe Carnival and Shoe Station stores, which offset the costs associated with the Rogan's acquisition.

For the year-to-date period ending November 2, 2024, Shoe Carnival reported net sales of $939.9 million, an increase of 4.9% compared to the same period in the previous year. This growth was largely driven by the Rogan's acquisition, which contributed $63.9 million in sales since its integration. The company’s year-to-date gross profit was $337.1 million, consistent with the prior year, maintaining a gross profit margin of 35.9%. The effective tax rate for the year-to-date period was 25.5%, up from 23.0% in the previous year, primarily due to the absence of certain discrete tax benefits that were recognized in the prior year.

Shoe Carnival's acquisition of Rogan Shoes, completed on February 13, 2024, added 28 store locations and positioned the company as a market leader in Wisconsin while establishing a presence in Minnesota. The integration of Rogan's operations is expected to yield synergies exceeding $1 million in fiscal 2024. The company has also been actively rebannered stores, with plans to convert an additional 25 Shoe Carnival stores to the Shoe Station brand in the first half of fiscal 2025, reflecting its strategy to enhance market penetration and customer engagement.

Looking ahead, Shoe Carnival anticipates continued challenges due to market conditions, including rising costs and changing consumer behaviors. The company remains focused on optimizing its operations and leveraging its omnichannel strategy to drive sales growth. Management expects to navigate these challenges while maintaining a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $91.1 million at the end of the third quarter. The company plans to fund its operations and growth initiatives, including potential acquisitions, through cash generated from operations without incurring debt.