American affordable footwear retailer Shoe Carnival said it has now reopened over 80 percent of its stores, which are generally delivering better-than-expected results following the easing or cancellation of Covid-19 lockdown measures in several U.S. states.
Shoe Carnival closed all stores on March 19 due to the pandemic before re-opening the first ones, representing over 50 percent of its total, from late April to May 5. As of May 20, 82 percent of the retailer’s stores were open and the company said it is on track to increase the rate to 95 percent by the second week of June, barring changes in government regulations tied to the health situation. No employees were furloughed during store closures, a factor that has facilitated re-openings.
Over the first quarter, which ended May 2, substantially all stores were closed for about half of the time. In the quarter, the company swung to a net loss of $16.2 million from a profit of $13.9 million the year earlier, as the gross profit margin decreased to 21.3 percent from 29.6 percent,
First-quarter sales declined by 41.9 percent from the year earlier to $147.5 million, after an encouraging start to the reporting period, with comparable sales increasing by 3.9 percent through March 12. Comparable sales for the quarter were down by 42.3 percent.
The decline in sales came despite a boom in online transactions. In the six weeks all its brick-and-mortar stores were closed, e-commerce sales increased by over 350 percent, bringing growth for the quarter to 150 percent. Growth came from both new customers and Shoe Carnival’s traditional loyalty program customers and was marked by a strong performance of athletic footwear.
In the four weeks ending on May 16, Shoe Carnival’s e-commerce sales rose by 500 percent and company president and chief customer officer Mark Worden said he expects the expansion of the company’s e-commerce base “will lead to a new normalized growth rate considerably higher than it was pre-Covid-19.” Early signs from recently re-opened stores are also “very encouraging,” Worden added. He noted that last week comparable store sales rose by a high single-digit.
Despite encouraging signs, Shoe Carnival is not providing full-year guidance due to uncertainty about the impact of Covid-19 on sales and operations.
No new stores were opened in the first quarter, while two stores closed. The company expects to open four stores and close seven to 10 during the full fiscal year compared to one store opening and six closing the previous year. As of May 20, Shoe Carnival operated 390 stores in 35 U.S. states and Puerto Rico