Despite triple-digit gains in its e-commerce business, Shoe Carnival Inc.’s losses mounted over the past three months as the coronavirus pandemic kept its stores closed.
In its first-quarter earnings report, the Evansville, Ind.-based company logged a net loss of $16.2 million, or a loss of $1.16 per diluted share, compared with last year’s income of $13.9 million, or $0.91 per diluted share. Wall Street had anticipated a loss of 47 cents for the period ended May 2.
Revenues also declined nearly 42% to $147.5 million, falling short of analysts’ expectations of $164.6 million. All of Shoe Carnival’s stores were shuttered for roughly 50% of the quarter; during that closure period, e-commerce sales increased more than 350%. (Overall, digital revenues shot up more than 160%.)
“While many unknowns remain, we are taking the necessary steps to ensure we are well-positioned to address our customers’ summer footwear needs,” said vice chairman and CEO Cliff Sifford. “These are unprecedented times, but Shoe Carnival’s customer-centric culture, dedicated workforce, brand strength and business model resilience will enable us to emerge stronger as a leader in the family-footwear segment.”
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More than half of the retailer’s brick-and-mortar fleet — all of which shuttered in mid-March as a result of the health crisis — have reopened in states that have either relaxed or lifted their stay-at-home orders. Shoe Carnival added that none of its employees had been furloughed during the quarter.
In early May, the company reported that its initial store openings had gone “smoothly,” while foot traffic appeared to be “brisk” in most outposts. To help ensure the safety of its workers as well as customers, it said it has employed several protective measures, including supplying personal protective equipment, improving cleaning and sanitation procedures and displaying signage to reinforce federal social distancing guidelines.
Shoe Carnival previously revealed that it has exercised the accordion feature of its credit agreement to improve financial flexibility. As such, the retailer’s line of credit has been bumped by $50 million to $100 million. As of May 2, its cash and equivalents were $13.1 million, and it had no cash borrowings. It has also deferred nonessential projects and advertising activities and is working with its supply chain partners to scale down inventories.