Shoe Carnival Misses Q2 After Slow Summer Start

Shoe Carnival
A Shoe Carnival store.
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Family footwear retailer Shoe Carnival Inc. missed Wall Street expectations during the second quarter.

Net income for the quarter was $4.1 million, or 22 cents diluted earnings per share, missing analyst expectations of 27 cents per share. Profits were down about 15 percent compared to the same quarter last year, when Shoe Carnival’s profits were $4.8 million, or 24 cents a share.

Net sales topped $231.9 million in the second quarter, an increase of 1.7 percent from the year-ago period of $227.8 million. Analyst predicted sales of $237.2 million. Comparative store sales increased half a percent.

“We remain focused on the execution of our multichannel strategic initiatives to fuel future growth in sales and profitability,”  said Cliff Sifford, Shoe Carnival’s president and CEO. “Going forward, we have confidence in our opportunities and our ability to capitalize on them while maintaining the financial flexibility to continue our commitment of returning value to our shareholders through share repurchases and consistent dividend payments.”

Executives said in a call Wednesday with investors that women’s sandals, junior’s dress shoes, men’s casual and nonathletic styles were a particularly good performer during the second quarter. Sandals were up in June, July and August after a slow start to the season after a mild, wet May. The company did highlight that athletic styles trended down in July and areas of men’s casual, especially boat shoes, weren’t as strong.

Like other family footwear retailers, Shoe Carnival said the all-important back-to-school season was off to a good start, but more this year than in years past, shoppers were heading to the store later than usual. The company said that canvas shoe sales were affected by the change and slowed and that comparative store sales started to pick up in August.

“[Our customer] shops closer to the start of school and well after school [has started],” said Sifford. He added it was “more pronounced” that shoppers were doing back-to-school shopping either after or a day or two before school kicked off.

Shoe Carnival said that like many other stores, it was trying to adjust product to better fit when customers were shopping for need and seasonality.

The Evansville, Ind.-based company adjusted its annual sales expectations. Net sales in fiscal 2016 are expected to range $1.012 billion to $1.016 billion. The company previously guided sales of $1.007 billion to $1.027 billion. Comparable store sales are expected to increase in the range of 1.5 percent to 2 percent, adjusted from a 1-3 percent range. Shoe Carnival maintained that diluted earnings per share outlook to range of $1.58 to $1.65.