After a sluggish first half of the year, the low-priced American shoe retailer saw revenues for its third fiscal quarter increase by 2.0 percent from the year-ago quarter to $274.6 million. Comparable store sales jumped by 3.5 percent in the important back-to-school season.
The company saw broad-based strength across all product categories, geographies and sales channels, along with record earnings. The gross margin advanced by 0.7 percentage points to 30.9 percent, while net income jumped by 13.9 percent to $13.7 million.
The management believes that it benefited from the planned shutdown of 1,700 Payless ShoeSource stores in markets where Shoe Carnival has a presence. It said that its robust assortment of family footwear for back-to-school has been resonating well with new and existing customers.
The good results led the company to raise its full-year outlook for sales and profits. Sales should be in the range of $1.033 billion to $1.036 billion for the year, up from a range of $1,028 to $1,033 million. Comparable store sales are still expected to increase by a low single-digit rate.
The trend toward athleisure and away from performance styles continued. Women's non-athletic shoes were up by mid-single digits, boosted by a high-single-digit increase for sport casuals. Men's non-athletic footwear was also up by a mid-single digit. In children's, comparable sales progressed by a mid-single digit, thanks to an improvement for boys' and girls' athletic and non-athletic styles.
Shoe Carnival says it has now fully implemented its new Customer Relationship Management (CRM) system, which offers an unparalleled view into its shoppers' data, allowing it to communicate more effectively with customers on a one-to-one basis. The aim is to gain insights into the customers' overall shopping journeys, determining where, when and how they shop in stores either online or at brick-and-mortar locations.
The company said that the marketing, merchandising and real estate teams are getting much better customer data to analyze. The Shoe Perks loyalty program is up by 11 percent this year, with Gold members up by over 50 percent.
E-commerce represented about 7 percent of sales in the quarter. At the end of the period, the company had 393 stores in operation in 35 U.S. states and Puerto Rico, with one store closed and one opened.
The management said that once the weather became more seasonal in the autumn, it saw an acceleration in its seasonal boot categories across all departments and sales channels. Seasonal boots tend to account for around 25 percent of total footwear sales in the fourth quarter, and Shoe Carnival expects the positive trends witnessed since the arrival of cooler weather to continue through the rest of the financial year.