Shoe Carnival's shares jumped by 10 percent after the U.S. shoe retailer reported earnings for its fiscal fourth quarter that exceeded analysts' expectations. The company's net income reached $1.4 million, compared with losses of $3.9 million for the year-ago period.
Revenues went down by 3.5 percent to $234.7 million for the quarter ended Feb. 2, 2019. However, the quarter ended Feb. 3, 2018, had an extra week which brought extra revenues of $15.2 million. Adjusted to exclude this extra week, comparable store sales rose by 4.7 percent.
The management said the comparable store sales increase was broad-based, driven by positive results for both athletic and non-athletic footwear.
The company began the process of implementing a Customer Relationship Management (CRM) initiative, which it says offered an unparalleled view into its shoppers' data, allowing it to more effectively communicate with customers on a one-to-one basis. The aim is to gain insights into the customer's overall shopping journeys of where, when and how they shop in stores either online or at brick-and-mortar locations.
The management also highlighted the re-launch of its new and improved loyalty program, Shoe Perks. It added a new gold level of rewards for its most active customers. On average, gold level shoppers shop more often and spend approximately 20 percent more than non-gold members each time they shop. This led to a comparable store sales increase of 4.6 percent for the second half of the year.
By categories, sales of women's non-athletic footwear increased by mid-single-digits on a comparable basis, driven by boots. The men's non-athletic department was up by mid-single-digits on a comparable basis, led by seasonal boots, which posted a low double-digit comparable store sales increase. Children's shoes advanced by mid-single-digits on a comparable basis.
On the athletic side of the business, children produced a mid-single-digit comparable gain, while adult styles improved by a low single-digit rate on a comparable basis. The management pointed out that, while the basketball category remained soft, the casual and running categories performed well.
Shoe Carnival closed five stores during the quarter, ending with a total of 397 stores. The gross margin declined by 0.5 percentage points to 28.4 percent for the quarter, as the gross margin in the fourth quarter of fiscal 2017 included a $3.3 million gain on insurance proceeds related to hurricane-affected stores. Excluding this item, the gross margin would have been 27.5 percent for the year-ago quarter.
For the full year, comparable store sales increased by 4.3 percent, while revenues reached a record $1,030 million, an increase of 1.1 percent compared with the previous year. The gross margin gained 0.9 percentage points to 30.0 percent, while net income soared by 101.4 percent to $38.1 million.
The company reiterated its fiscal 2019 outlook previously provided in January. It expects sales to be in the range of $1,035 million to $1,043 million, with a comparable store sales increase in the low single digits.