Shoe Carnival, the American chain of 313 stores, had an 8 percent increase in sales to $165.4 million for the second quarter ended July 31, with a 1.5 percentage point increase in the gross profit margin to 28.3 percent. Comparable store sales grew by 8.3 percent, and the operating margin rose by 2.4 percentage points. Net income leapt by 319 percent to $4.1 million.
Traffic was up by 4.7 at the entire chain, and every category had an increase in the number of units sold. Men's non-athletic footwear was up by double digits on a comparable basis driven by sandals, hiking, work shoes and vulcanized; women's non-athletic grew by high single digits on a comparable store basis with particular strength in summer sandals and high-double-digit growth in boots. Adult athletic footwear rose by the mid-single digits on a comparable store basis; women's rose by high single digits and men's by low single digits.
Shoe Carnival said the toning segment will continue to have a positive impact on comparable store sales for the rest of this fiscal year, as consumers approve of new silhouettes and technologies. The company thinks the Free technology by Nike, which it will introduced in the fourth quarter, will spur the category, which it has renamed ?active.? However, even without the boost from toning, comparable store sales would still have risen by low single digits in the second quarter.
Shoe Carnival said results in the 60 percent of its markets that returned to school in August were positive, with comparable store sales rising by 6 percent through Aug. 25. Comparable store sales in every footwear category have been up, led by a double-digit increase in non-athletic shoes and a mid-single-digit gain in athletic. The top categories have been men's and women's boots, boat shoes, children's running, and performance running for men and women. Boots are expected to be a top fashion trend for men, women and children for autumn.
For all of 2010, Shoe Carnival plans to open 10 stores while closing seven. However, the plan for 2011 is to open 20 new doors and close six, and door growth should be higher in 20122.
Looking ahead, Shoe Carnival expects comparable store sales to rise by 3 to 6 percent in the third quarter, with sales hitting $196-202 million and earnings reaching $8.3-8.7 million. For the full year, comparable store sales should rise by 6.5 percent to 8 percent, with sales totaling $728-737 million. Earnings for 2010 should hit about $25.3 million.