Overheard on Wall Street: Shoe Carnival, Sequential & VF Corp.

What’s been top of mind for the footwear industry’s market watchers this week?

In addition to keeping a finger on the pulse of earnings, insiders are always watching the market for emerging trends and key executive strategies. This week, Citi held its 2015 Global Consumer Conference, and executives from some of the industry’s leading footwear companies were in attendance.

Read on for key takeaways from the conference.

Shoe Carnival Inc.
The Evansville, Ind.-based family footwear retailer’s CEO, Cliff Sifford, and its COO/CFO, Kerry Jackson, shared insight on the company’s plans for new-store openings, an updated national marketing strategy and a stronger branded women’s fashion offering.

In addition to a focus on omnichannel and inventory management — the firm has been engaging in opportunistic buying from the port delays, though to a lesser extent than DSW Inc. — Shoe Carnival wants to eventually expand into all 50 states. To aid that growth, the firm is using new IT “to identify prime locations for new doors, opportunities to relocate/close underperforming doors and increase profitability in existing doors,” according to Citi’s conference wrap-up.

Regarding women’s fashion offerings, management said its strategy for merchandising better women’s brands has helped its dress-shoe category, with styles by Jessica Simpson and Steve Madden driving sales.

Sequential Brands Group
The brand-management firm that made headlines in April by snapping up a majority stake in the Jessica Simpson brand also made an appearance at Citi’s conference to shed light on its M&A strategy.

The company said it is currently evaluating options across its three categories — lifestyle, active and fashion. Its strategy of financing deals with both debt and equity — allowing prior brand owners to maintain a stake — represents a key advantage in its M&A efforts.

For the Jessica Simpson deal, management said it views the expansion of the brand into the activewear segment as a significant opportunity.

VF Corp.
Speaking of M&A, master acquirer VF Corp. said it is willing to make a purchase larger than the $2 billion it spent to buy the Timberland brand in 2011. However, the firm plans to remain patient and “disciplined” in its search for the right match. VF said it’s looking at outdoor and action sports as well as other categories to complement its existing portfolio.

Among the company’s executives making the rounds at Citi’s conference were CFO Scott Roe and VP of Investor Relations Lance Allega.

Regarding profits, the firm will use merchandising and increases in average selling price to achieve its margin goals in the face of unfavorable market pressures such as foreign exchange shifts.

On trade, according to Citi, the firm “remains cautious about the potential impact” of the Trans-Pacific Partnership (TPP) and “expects the situation to be clearer in 18-24 months.”

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