Shoe Carnival, Inc., parent company of the Shoe Carnival, Shoe Station and Rogan’s footwear retailers, saw SCVL shares move lower in pre-market trading on Thursday, March 20 after posting mixed fourth-quarter earnings results. Top-line sales of $262.94 million missed the analyst consensus estimate of $274.21 million, while Adjusted EPS of 54 cents beat the consensus estimate of 43 cents per share.

  • Achieved high end of annual EPS expectations with GAAP EPS of $2.68 and Adjusted EPS of $2.72.
  • Achieved annual sales growth of 2.3 percent, in line with expectations.
  • Achieved sales growth of 5.7 percent from Shoe Station.
  • Exceeded profit and synergy expectations from the Rogan’s Shoes acquisition.
  • Launched a long-term growth strategy to expand Shoe Station into a national footwear retailer.

“I would like to thank our team members and brand partners for their exceptional contributions to our growth during Fiscal 2024. We achieved the very top end of our annual profit guidance and drove solid sales growth despite a challenging economic landscape. Shoe Station expanded at a pace that made it the fastest-growing retailer in our industry once again. We rapidly captured full synergies from our Rogan’s acquisition and grew our sales during key event periods throughout the year,” said company President and CEO Mark Worden.

Fourth Quarter Summary
The fourth quarter of 2024 included 13 weeks compared to 14 weeks in the fourth quarter of Fiscal 2023, and Fiscal 2024 included 52 weeks compared to 53 weeks in Fiscal 2023.

Net sales in the fourth quarter of 2024 were $262.9 million, consistent with expectations, compared to $280.2 million in the fourth quarter of 2023. The extra week and the retail calendar shift benefited the fourth quarter of 2023 by approximately $20 million. Without this benefit, net sales would have increased by roughly $2 million, primarily driven by Shoe Station, Rogan’s acquisition and growth during the November and December holiday shopping periods. Comparable store sales declined 6.3 percent, primarily from continued Shoe Carnival declines during non-event periods.

Gross profit margin in the fourth quarter of 2024 was 34.9 percent, reflecting a 35-basis point increase in merchandise margin compared to the fourth quarter of 2023.

Selling, general and administrative expenses for the fourth quarter of 2024 decreased $2.1 million to $77.6 million. The decrease included lower selling costs at comparable stores, offsetting the incremental costs of Rogan’s. During the fourth quarter of 2024, the company captured full synergies within Rogan’s, resulting in approximately $2.5 million of profit synergies during Fiscal 2024 results.

Fourth quarter 2024 net income was $14.7 million, or 53 cents per diluted share (EPS), compared to the fourth quarter 2023 net income of $15.5 million, or 57 cents per diluted share. On an adjusted basis, excluding merger and integration expenses, the fourth quarter of 2024 Adjusted EPS was 54 cents compared to 59 cents in the fourth quarter of 2023. The company estimates that the retail calendar shift and extra week benefited the fourth quarter of 2023 by approximately 10 cents per share.

Fiscal Year 2024 Operating Results
Net sales were $1.203 billion, consistent with expectations, and increased $27.0 million, or 2.3 percent, compared to Fiscal 2023. This increase resulted from continued growth from Shoe Station’s 5.7 percent net sales growth and over $80 million in net sales from Rogan’s. The company grew net sales during peak shopping periods throughout the year. These areas of growth were partially offset by a 3.9 percent comparable store sales decline, driven by Shoe Carnival declines during non-event periods. The extra week in Fiscal 2023 benefited Fiscal 2023 by approximately $15 million. In Fiscal 2024, net sales increased roughly $42 million, or 3.7 percent.

Fiscal 2024 gross profit margin was 35.6 percent, resulting in the fourth consecutive year gross profit margin exceeding 35 percent.

Net income for Fiscal 2024 grew to $73.8 million, or $2.68 per diluted share, compared to net income of $73.3 million, or $2.68 per diluted share, in Fiscal 2023. Adjusted net income in Fiscal 2024 grew to $75.0 million, or $2.72 per diluted share compared to $74.0 million, or $2.70 per diluted share, in Fiscal 2023.

Acquired Stores Results
Since 2021, the company has completed acquisitions of Shoe Station in the Southeast (2021) and Rogan’s in the upper Midwest (2024). The successful acquisitions support the company’s commitment to M&A as a key component of its growth strategy to become the nation’s leading family footwear retailer.

In the initial year of acquisition, Rogan’s contributed over $80 million in net sales in Fiscal 2024, including $16.5 million in the fourth quarter of 2024, consistent with expectations, and contributed operating income that exceeded its initial $10 million target by more than 20 percent. This increased contribution to operating income and income before income taxes was driven primarily by accelerated integration and synergy capture, margin expansion and tax credits.

Store Count
As of March 20, 2025, the company operated 431 stores, with 346 Shoe Carnival stores, 57 Shoe Station stores and 28 Rogan’s stores.

Dividend and Share Repurchase Program
In March 2025, the company’s Board of Directors approved an 11.1 percent dividend increase to 15.0 cents per share. The quarterly cash dividend will be paid to shareholders of record on April 21, 2025, as of the close of business on April 7, 2025. This new annualized dividend rate is a 238 percent increase compared to the rate paid to shareholders five years ago, and this increase marks the 11th consecutive year the company has increased its dividend. The company has now paid a dividend for 52 consecutive quarters.

As of March 20, 2025, the company has $50 million available for future repurchases under its share repurchase program. During Fiscal 2024, the company did not repurchase any shares.

Capital Management and Cash Flow
The 2024 fiscal year-end marked the 20th consecutive year the company ended a year with no debt, fully funding its operations, acquisitions, and investments from operating cash flow. At the end of Fiscal 2024, the company had approximately $123.1 million of cash, cash equivalents and marketable securities, an increase of $11.9 million compared to the prior year. Operating cash flow for Fiscal 2024 totaled $102.6 million.

Merchandise inventories supporting Shoe Carnival and Shoe Station stores were slightly down on a unit basis at the end of Fiscal 2024 compared to the end of Fiscal 2023. Additional inventory purchases were made near Fiscal 2024 year-end to support the rebanner strategy and, to a lesser extent, as a hedge against potential supply chain disruption from tariffs and port worker strikes. The increase in inventory on a dollar basis during Fiscal 2024 primarily reflects inventory supporting Rogan’s.

Worden continued, “For the 20th consecutive year, we ended the year with no debt and cash flow generation that fully funded our growth initiatives, acquisitions, and operations. We completed a full year of in-market testing for our Shoe Station growth strategy, and the customer response drove results that exceeded my expectations. Today, we are announcing a new long-term strategy to expand Shoe Station from the regional market leader it is today into a national footwear and accessories leader. The first phase of this expansion plan is to rebanner 175 stores to Shoe Station, resulting in over half of our fleet being operated under the Shoe Station banner in the next 24 months. We are rapidly scaling up Shoe Station store counts and near-term investments to capture market share and significant profit expansion by early 2027.”

New Growth Strategy
The company has been evaluating customer analytics and market data and developing strategies to expand Shoe Station since acquiring the chain in December 2021. For the past two years, Shoe Station has been a market leader in the Southeast, and, according to industry data, Shoe Station has been the industry’s fastest-growing retailer, the company said. During the same period, the company’s Shoe Carnival banner and the family footwear industry experienced comparable sales declines.

The company said it believes that a national expansion opportunity exists in markets where the customer and/or market characteristics align with the Shoe Station concept. A ten-store in-market test was completed over the past year, where underperforming Shoe Carnival stores were closed and new Shoe Station stores were opened in those markets. The customer response and business results exceeded the company’s criteria on an aggregated basis with sales and profit contributions of over 10 percent higher at the new Shoe Station stores versus Shoe Carnival stores.

The company announced Thursday a new long-term strategy to rapidly scale Shoe Station into a national footwear and accessories retailer. The first investment phase is to re-banner 175 stores to the Shoe Station banner over the next 24 months. Once this phase is complete, the company expects to operate 218 Shoe Station stores, representing 51 percent of the company’s present store fleet.

The company expects the long-term prospects of this strategy to result in significant market share growth in areas where the company has underperformed with its Shoe Carnival concept. The company also expects to enter new markets where the company does not compete today as a future phase of the expansion plan. The Shoe Station re-banner strategy is expected to create significant financial leverage from a more productive store base.

During Fiscal 2025, the company expects to re-banner between 50 to 75 Shoe Carnival stores to Shoe Station stores. The first-year investment is forecasted to decrease Fiscal 2025 operating income by between $20 million to $25 million, inclusive of store closing costs, amortization of new store construction costs, a four-to-six-week store closure period through each store’s grand opening, and customer acquisition costs. The company expects this first-year investment will result in an approximate 65 cents decline in Fiscal 2025 EPS. The company expects this first-year investment will be recovered over a two-to-three-year period following a store’s grand opening. In Fiscal 2027, the company expects that net sales from these rebannered stores will be over 10 percent higher and profit contribution will increase over 20 percent compared to the stores before being re-bannered.

In Fiscal 2026 and early Fiscal 2027, the plan is to scale up further and complete 100 or more re-banners with a first-year investment forecast between $22 million to $27 million and a similar path to payback of the investment of approximately two-to-three years.

Fiscal 2025 Outlook
The company is initiating its financial outlook for Fiscal 2025. The wider range is reflective of anticipated volatility and uncertainty surrounding tariffs, inflation, and geopolitical topics, and the impacts these uncertainties might have on consumer confidence and spending for family footwear. The company’s guidance is also impacted by variability of when each of the anticipated 50 to 75 rebannered stores will grand open.

  • Net Sales: $1.15 billion to $1.23 billion, representing a range of down 4 percent to up 2 percent versus Fiscal 2024.
  • GAAP EPS: $1.60 to $2.10, inclusive of the rebanner strategy’s initial year costs.
  • Capital Expenditures: $45 to $60 million.

Image courtesy Shoe Carnival