Shoe Carnival's Q3 2024 Results: Navigating Retail Calendar Shifts and Strategic Growth
Thursday, Nov 21, 2024 6:20 am ET
4min read Shoe Carnival, Inc. (Nasdaq: SCVL), a leading retailer of footwear and accessories for the family, reported its third quarter fiscal 2024 results on November 21, 2024. The company achieved earnings per share (EPS) expectations with GAAP EPS of $0.70 and adjusted EPS of $0.71. Year-to-date net sales growth was 4.9 percent versus the prior year. Shoe Carnival reiterated its EPS guidance for the full year of Fiscal 2024 and expanded its store rebannering test to 25 additional stores in the first half of Fiscal 2025.
The company's net sales in the third quarter were $306.9 million, compared to $319.9 million in the third quarter of 2023. This decrease was primarily due to a retail calendar shift that resulted in approximately $20 million of net sales moving out of the third quarter of 2024 compared to the prior year. Without the impact of the retail calendar shift, net sales would have increased by 2.2 percent versus the prior year. On a year-to-date basis, net sales totaled $939.9 million, increasing 4.9 percent versus the prior year.
Shoe Carnival's strong Back-to-School performance, comparable store net sales growth in August, and net sales from the February 2024 acquisition of Rogan Shoes, Incorporated ("Rogan's") contributed to the quarter's results. However, comparable store net sales in September and October were significantly impacted by two hurricanes that disrupted many of the company's store operations and customer shopping trends, along with persistently warm weather that delayed the winter boot shopping season. Comparable store net sales for the thirteen-week period ended November 2, 2024, declined 4.1 percent compared to the thirteen-week period ended November 4, 2023.
The company's gross profit margin in the third quarter was 36.0 percent, marking the 15th consecutive quarter that Shoe Carnival's gross profit margin exceeded 35 percent. Gross profit margin was lower in the quarter by 80 basis points compared to the prior year primarily due to buying, distribution, and occupancy costs ("BD&O") from operating more stores and the deleveraging effect of lower net sales in the quarter, as impacted by the retail calendar shift. Year-to-date 2024 gross profit margin was flat versus the prior year.
Shoe Carnival's store rebannering strategy, shifting 10 stores from Shoe Carnival to Shoe Station this year, with plans to add 25 more in the first half of 2025, could significantly impact long-term sales and profitability. Early results from the rebannered stores exceeded sales and profit expectations, suggesting potential for increased market share and improved margins. By expanding the Shoe Station banner, the company may tap into new customer segments, boost brand awareness, and drive sales growth. Additionally, the strategy could enhance operational efficiency by leveraging synergies between the two banners, potentially leading to improved profitability.
The integration of Rogan's acquisition contributed $22.3 million in sales during the third quarter, demonstrating its immediate impact on the company's top line. Additionally, Shoe Carnival has captured synergies within Rogan's and is ahead of schedule in integrating the acquired operations. As the integration continues, Shoe Carnival anticipates further growth and profitability from Rogan's, which will likely drive the company's overall financial performance in the coming quarters.
In conclusion, Shoe Carnival's third quarter fiscal 2024 results highlight the company's ability to navigate retail calendar shifts and execute strategic growth initiatives. Despite the impact of hurricanes and warm weather on sales, the company's strong Back-to-School performance and the successful integration of the Rogan's acquisition contributed to a solid quarter. With a focus on store rebannering and continued integration of Rogan's, Shoe Carnival is well-positioned to maintain its position as a leading family footwear retailer in the long term.
The company's net sales in the third quarter were $306.9 million, compared to $319.9 million in the third quarter of 2023. This decrease was primarily due to a retail calendar shift that resulted in approximately $20 million of net sales moving out of the third quarter of 2024 compared to the prior year. Without the impact of the retail calendar shift, net sales would have increased by 2.2 percent versus the prior year. On a year-to-date basis, net sales totaled $939.9 million, increasing 4.9 percent versus the prior year.
Shoe Carnival's strong Back-to-School performance, comparable store net sales growth in August, and net sales from the February 2024 acquisition of Rogan Shoes, Incorporated ("Rogan's") contributed to the quarter's results. However, comparable store net sales in September and October were significantly impacted by two hurricanes that disrupted many of the company's store operations and customer shopping trends, along with persistently warm weather that delayed the winter boot shopping season. Comparable store net sales for the thirteen-week period ended November 2, 2024, declined 4.1 percent compared to the thirteen-week period ended November 4, 2023.
The company's gross profit margin in the third quarter was 36.0 percent, marking the 15th consecutive quarter that Shoe Carnival's gross profit margin exceeded 35 percent. Gross profit margin was lower in the quarter by 80 basis points compared to the prior year primarily due to buying, distribution, and occupancy costs ("BD&O") from operating more stores and the deleveraging effect of lower net sales in the quarter, as impacted by the retail calendar shift. Year-to-date 2024 gross profit margin was flat versus the prior year.
Shoe Carnival's store rebannering strategy, shifting 10 stores from Shoe Carnival to Shoe Station this year, with plans to add 25 more in the first half of 2025, could significantly impact long-term sales and profitability. Early results from the rebannered stores exceeded sales and profit expectations, suggesting potential for increased market share and improved margins. By expanding the Shoe Station banner, the company may tap into new customer segments, boost brand awareness, and drive sales growth. Additionally, the strategy could enhance operational efficiency by leveraging synergies between the two banners, potentially leading to improved profitability.
The integration of Rogan's acquisition contributed $22.3 million in sales during the third quarter, demonstrating its immediate impact on the company's top line. Additionally, Shoe Carnival has captured synergies within Rogan's and is ahead of schedule in integrating the acquired operations. As the integration continues, Shoe Carnival anticipates further growth and profitability from Rogan's, which will likely drive the company's overall financial performance in the coming quarters.
In conclusion, Shoe Carnival's third quarter fiscal 2024 results highlight the company's ability to navigate retail calendar shifts and execute strategic growth initiatives. Despite the impact of hurricanes and warm weather on sales, the company's strong Back-to-School performance and the successful integration of the Rogan's acquisition contributed to a solid quarter. With a focus on store rebannering and continued integration of Rogan's, Shoe Carnival is well-positioned to maintain its position as a leading family footwear retailer in the long term.
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