Shoe Carnival, a prominent US footwear retailer, reported a 7.5 per cent drop in net sales, reaching $277.7 million in the first quarter (Q1) of fiscal 2025 (FY25), compared to $300.4 million in Q1 of 2024. Comparable store net sales saw an 8.1 per cent decline, with the company attributing roughly 1 per cent of the decline to lost sales caused by the rebanner strategy.
During Q1 FY25, the Shoe Station banner achieved a 4.9 per cent increase in net sales compared to the same period in 2024. This strong performance, largely driven by double-digit comparable store net sales growth from the rebanner strategy, stood out as an industry leader. However, the Shoe Carnival banner reported a 10.0 per cent decline in net sales. Meanwhile, net sales from Rogan’s Shoes, acquired on February 13, 2024, aligned with integration and synergy goals, surpassing $19 million in both Q1 FY25 and Q1 FY24, the company stated in a press release.
The gross profit margin stood at 34.5 per cent in Q1 FY25, a decrease from 35.6 per cent in Q1 FY24. The gross profit margin included a 50 basis point improvement in merchandise margin, though buying, distribution, and occupancy costs reduced the gross profit margin by 160 basis points, mainly due to lower net sales.
Selling, general, and administrative (SG&A) expenses fell by $0.5 million in Q1. SG&A increases tied to the rebanner strategy were offset by changes in the timing of selling expenses from other stores. As a percentage of net sales, SG&A was 30.2 per cent in Q1 FY25 compared to 28.1 per cent in Q1 FY24, with the rebanner investment being the main factor for the rise.
“Our first quarter results reflect the continued success of our strategic transformation, with profits outperforming expectations by approximately 10 per cent despite the challenging macroeconomic and retail environment,” stated Mark Worden, president and CEO. “The Shoe Station growth strategy is working exceptionally well, delivering industry-leading sales growth and accretive margins across diverse market types. This consistent outperformance versus both Shoe Carnival and industry trends across all footwear categories has given us the confidence to accelerate our rebanner initiative.”
Worden also announced, “Today, we’re announcing an ambitious expansion of our rebanner strategy, with Shoe Station now expected to represent over 80 per cent of our store fleet by March 2027, up from our previous target of 51 per cent. We’re making these investments from a position of financial strength, with growing cash reserves and no debt. This is a pivotal moment for our company as we transform from a traditional family footwear retailer to a premium brand-focused national leader in footwear.”
