Shoe Carnival Inc. said delays in the mailing out of tax refund checks was largely responsible for a 3.9 percent drop in same-store sales in its first quarter. Consequently, the shoe chain reduced its full-year guidance for sales and earnings.
“Our sales results improved as we progressed through the first quarter, but it was not enough to offset the soft start we experienced at the beginning of the year with comparable store sales down mid-teens in February,” said Cliff Sifford, Shoe Carnival’s president and CEO. “We primarily attribute the decline in our February sales to the delay in tax refund checks. Most recently, we have generated improved sales and we are optimistic that our financial performance will improve as we progress through fiscal 2017. We continue to believe the strength of our balance sheet and cash flow will enable us to enhance value for shareholders through our existing dividend and share repurchase programs.”
The company now expects fiscal year 2017 net sales to be in the range of $1.002 billion to $1.018 billion, with comparable store sales flat to down low single digits, and earnings per diluted share in the range of $1.30 to $1.45. This compares to the company’s prior outlook for net sales of $1.028 billion to $1.040 billion, with comparable store sales flat to up low single digits and earnings per diluted share of $1.45 to $1.54.
Fiscal 2016 earnings per diluted share were $1.28 and adjusted earnings per diluted share were $1.40.
On March 23 in reporting fourth-quarter results, Shoe Carnival said it couldn’t provide an update on its first-quarter performance due to tax refund delays and Easter arriving three weeks later versus the prior year. CEO Cliff Sifford described tax refunds as “almost like a second back to school” for Shoe Carnival. The of-price shoe chain will report full results on May 25.
Shoe Carnival’s closed competitors had likewise indicated that the refund delays were having an impact on top-line growth.
When it reported fourth-quarter results on March 13, DSW indicated that the impact of delayed tax refunds and the timing of several initiatives such as its website redesign and Ebuys acquisition would create headwinds weighing on earnings during the first half of the year.
When it reported fourth-quarter results on March 16, Caleres indicated that although it expects its Famous Footwear chain to show a mid-single-digit comp gain in the first quarter, the tax and Easter shifts, as well as store closings in the Northeast due to storms, makes the estimate “a very big moving target.”
Foot Locker, Finish Line and Genesco have been among others indicating that the refund delays have been a drag on sales in the first quarter.
Photo courtesy Shoe Carnival
