Shoe Carnival cut its full-year guidance on Thursday after reporting a hit to sales in Q3, driven by softness during the fall season that persisted into November.
The Evansville, Ind.-based footwear retailer reported that net sales in Q3 declined 6.4 percent year-over-year to $319.9 million, with comparable store sales down 7.4 percent. Third quarter net income was $21.9 million, or $0.80 per diluted share, compared to $32.7 million, or $1.18 per diluted share the year prior. These results fell short of expectations of analysts surveyed by Yahoo, who were looking for EPS of $0.97 and revenues of $321.35 million.
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Sales at the Shoe Station banner increased in the low double-digits in Q3, led by new stores and the Shoe Station e-commerce launch that occurred in early 2023.
Shoe Carnival said the sales slowness in Q3 began after Labor Day, thanks to unseasonably warm weather in September and October, which impacted sales of fall merchandise. Seasonal boot comparable sales declined in the low-twenties in Q3.
“After Labor Day, Shoe Carnival banner results softened and were below our expectations, as persistently hot and dry weather led to soft seasonal sales and a sluggish start to the boot season,” said Shoe Carnival president and CEO Mark Worden in a statement.
Despite the fall sales dip, which Shoe Carnival said has persisted into November, August net sales were particularly strong this year and marked the second highest children’s category sales for the company, driven by back-to-school.
Worden said the company will continue to pursue “additional growth initiatives and M&A opportunities in 2024,” despite the results in Q3.
Given the slow start to the fall season and “uncertainty regarding customer holiday shopping and broader macro-economic conditions,” Shoe Carnival downgraded its guidance for 2023 and now expects net sales for the full year between $1.16 billion and $1.18 billion, with earnings per share between $2.65 and $2.75. This is down from previous guidance, which indicated an expected net sales range of $1.19 billion to $1.21 billion and earnings per share between $3.10 to $3.25 for the year.
Shoe Carnival opened its 401st store in October and said it has completed 55 percent of its store modernizations. The company said it is on track to complete about two thirds of store renovations by the summer of 2024 and expects to be a multi-billion dollar retailer in 2028.
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