Shoe Carnival 2026 Q1 Earnings Misses Targets as Net Income Drops 46%

Shoe Carnival (SCVL) reported its fiscal 2026 Q1 earnings on Jun 06th, 2025. Shoe Carnival faced a challenging first quarter in fiscal 2026, with results missing expectations. The company reported a 46% decline in net income compared to the previous year. Despite this, Shoe Carnival reaffirmed its fiscal 2025 guidance, maintaining projected net sales between $1.15 billion and $1.23 billion, with a GAAP EPS of $1.60 to $2.10. The company plans to continue its strategic transformation with accelerated store conversions to the Shoe Station format, aiming to represent over 80% of its fleet by March 2027.

Revenue

The total revenue of Shoe Carnival fell by 7.5% to $277.71 million in the first quarter of fiscal 2026, compared to $300.37 million in the same period of 2025. The Non-Athletics segment reported $135.38 million, while Women's footwear accounted for $67.14 million. Men's footwear contributed $49.12 million, and Children's footwear generated $19.12 million. The Athletics segment achieved $127.73 million in revenue, with Women's Athletics at $47.70 million, Men's Athletics at $50.10 million, and Children's Athletics at $29.93 million. Accessories and Other segments totaled $14.61 million, broken down into Accessories at $13.36 million and Other at $1.25 million.

Earnings/Net Income

Shoe Carnival's earnings per share (EPS) dropped significantly, declining 46.9% to $0.34 in Q1 2026 from $0.64 in Q1 2025. The company's net income mirrored this decline, falling 46% to $9.34 million compared to $17.29 million in the previous year's first quarter. The decline in EPS and net income reflects challenging market conditions for the retailer.

Price Action

The stock price of Shoe Carnival edged down 0.86% during the latest trading day, increased 1.93% over the most recent full trading week, and rose 13.83% month-to-date.

Post Earnings Price Action Review

The strategy of buying SCVL after a revenue miss and holding for 30 days resulted in a 13.47% return, significantly underperforming the benchmark return of 85.73%. This strategy exhibited a low Sharpe ratio of 0.05, indicating poor risk-adjusted returns, and faced a maximum drawdown of -64.79%, underscoring its high-risk nature. With a compound annual growth rate (CAGR) of 2.57% and volatility of 49.64%, the strategy experienced considerable instability and modest growth, making it less appealing compared to the benchmark. These metrics highlight the challenges and risks associated with this particular investment approach, suggesting that alternative strategies may be more beneficial for investors seeking better risk-adjusted returns.

CEO Commentary

“Our first quarter results reflect the continued success of our strategic transformation, with profits outperforming expectations by approximately 10 percent despite the challenging macroeconomic and retail environment,” said Mark Worden, President and Chief Executive Officer. “The Shoe Station growth strategy is working exceptionally well, delivering industry-leading sales growth and accretive margins across diverse market types. This consistent outperformance has given us the confidence to accelerate our rebanner initiative, now expected to represent over 80 percent of our fleet by March 2027, from a position of financial strength, with growing cash reserves and no debt.”

Guidance

Shoe Carnival continues to expect net sales for Fiscal 2025 to be between $1.15 billion and $1.23 billion, reflecting a decline of 4% to a potential increase of 2% compared to Fiscal 2024. GAAP EPS is projected to range from $1.60 to $2.10, inclusive of initial costs associated with the rebanner strategy. The company anticipates capital expenditures of $45 million to $60 million.

Additional News

Shoe Carnival is navigating a transformative period with strategic moves beyond earnings results. Recently, the company has accelerated its rebanner initiative, converting more stores to the Shoe Station format by March 2027, aiming for over 80% of its fleet. Financial strength supports this expansion, with no debt and growing cash reserves. Additionally, Shoe Carnival announced a $0.15 per share quarterly cash dividend paid on April 21, 2025. This marks the 11th consecutive year of increased dividends, showcasing consistent shareholder returns. Furthermore, Shoe Carnival maintains a robust share repurchase program, with $50 million available for future buybacks, reinforcing its capital management strategy.