Shoe Carnival Inc. posted a huge quarterly profit and sales beat as its loyalty program and in-store business made solid gains.
For the three months ended May 1, the retailer logged an income of $43.2 million, or earnings of $3.02 per share, compared with the prior year’s loss of $16.2 million, or loss of $1.16 per share. Market watchers had predicted earnings of 94 cents per share. Revenues advanced 122.7% to $328.46 million, versus analysts’ projections of $281.92 million.
In a statement, vice chairman and CEO Cliff Sifford attributed positive traffic trends to tax refunds, stimulus payments and the rollout of COVID-19 vaccines. First-quarter comps improved 125.8%, with the Evansville, Ind.-based company recording “all-time-high conversion rates.”
“The team delivered a record-breaking quarter with the highest quarterly sales, margin and EPS in the company’s history,” Sifford added in the Q1 2021 conference call. “Our solid balance sheet, combined with our strategic investments and exceptional execution, has allowed us to make incredible progress on our long-term goals despite these ever-changing market conditions.”
During the quarter, e-commerce as well as the chain’s Shoe Perks membership also saw notable growth: The loyalty program improved 10% from the prior year and now exceeds 27 million members. In addition, digital sales rose 11.8% compared with 2020, as the pandemic directed many shoppers away from stores and toward online channels, and 191.3% versus 2019.
What’s more, Shoe Carnival noted that it eliminated low-margin promotions like “buy one, get one half off” — a decision, it said, led to “record” product margins, which were up 910 basis points from the previous year.
Based on second-quarter results to date, the retailer expects earnings per share in the range of $1.00 to $1.20 and revenues between $268 million and $278 million for the Q2 2021 period. It did not provide guidance for the second half of the fiscal year.
Shoe Carnival is also currently in the process of revamping its brick-and-mortar fleet, with plans to “modernize” roughly 100 outposts by May 2022 and the goal of overhauling two-thirds of its store portfolio in the next three to five years.
“So far in 2021, Shoe Carnival consumers are resoundingly reengaging with live shopping experiences as COVID-19 restrictions continue to ease,” president and chief customer officer Mark Worden added in the call. “We anticipate this trend will continue, and our brick-and-mortar store sales growth will outpace e-commerce growth for 2021 as consumers continue to seek in-person experiences and family activities outside the home.”