Shoe Carnival announced the launch of an updated loyalty program, Shoe Perks Gold, that will focus on incentivizing its best customers to shop more frequently. In addition, a vendor-drop ship program is being launched during the current quarter to enable shoppers to gain access to a broader range of styles online, while allowing Shoe Carnival's merchant team to test styles, brands and expand sizes without the risk of inventory ownership.
The share price of Shoe Carnival gained 3 percent after the American shoe retail chain posted profits for the first quarter of its fiscal year that exceeded Wall Street expectations and raised its outlook for the full year. The management attributed these results to continued strength in athletic and athleisure styles. The retailer's net income for the 13 weeks ended May 5 soared by 58.5 percent to $13 million.
Sales inched up by 1.6 percent from the year-ago quarter to $257.4 million, and comparable store sales advanced by 1.3 percent, thanks to a cold and wet start to the quarter, which affected sales through the Easter selling season. In addition, sales of spring product categories accelerated toward the end of the quarter. In March and April, sales of athletic shoes in total were up by a mid-single-digit rate, while non-athletic styles were up by a low single-digit rate.
During the first quarter, women's non-athletic sales were down by a low-single digit on a comparable basis, while women's boots were up in the teens. A low-single digit increase in comparable sales was recorded in sandals with the weather warming up at the end of the period. Men's non-athletic and children's shoes were both up by a low single-digit rate.
The company did not open any stores and closed three of them, finishing the quarter with 405 locations. The plans for the current year call for six new openings and 20 to 25 stores shutdowns. The management said this program of store closures will reduce its overall sales volume in the near-term, but in the long term, it should help the company to realize increased operating profits and earnings per share (EPS).
Overall, the gross margin increased by 1.5 percentage points to 30.0 percent in the latest quarter.
For the full year, Shoe Carnival is predicting better profitability on sales ranging between $1,013 million to $1,020 million, with comparable store sales up by a low single digit.