US' Shoe Carnival forecasts cautious FY25 amid rebannering drive

Capital expenditures (capex) are projected between $45 million and $60 million. The outlook considers anticipated volatility due to tariffs, inflation, geopolitical uncertainties, and their impact on consumer confidence and spending in the family footwear sector. Additionally, variability in the grand openings of 50 to 75 rebannered stores influences its guidance.

The company has also announced a new long-term strategy to rapidly scale up Shoe Station into a national footwear and accessories leader. The first investment phase is to rebanner 175 stores to the Shoe Station banner over the next 24 months. Once this phase is complete, it expects to operate 218 Shoe Station stores, representing 51 per cent of present store fleet.

The long-term prospects of this strategy are expected to drive substantial market share growth in underperforming areas for the Shoe Carnival concept, while also paving the way for entry into new markets not currently served. Additionally, the Shoe Station rebanner strategy is anticipated to generate strong financial leverage through a more productive store base.

The first-year investment is forecast to decrease FY25 operating income by between $20 to $25 million, inclusive of store closing costs, amortisation of new store construction costs, a four-to-six-week store closure period through each store’s grand opening, and customer acquisition costs.

Shoe Carnival expects this first-year investment will result in an approximate $0.65 decline in FY25 EPS. In FY27, it expects that net sales from these rebannered stores will be over 10 per cent higher and profit contribution will increase over 20 per cent compared to the stores before being rebannered.

In FY26 and early FY27, the plan is to scale up further and complete 100 or more rebanners with a first-year investment forecast between $22 to $27 million and a similar path to payback of the investment of approximately two-to-three years, Shoe Carnival said in a press release.

Fiscal 2024 (FY24) financial performance

Shoe Carnival has reported net sales of $1.203 billion in full fiscal 2024 (FY24) ended February 3,
2024, marking a 2.3 per cent YoY increase. Growth was driven by a 5.7 per cent rise in Shoe Station’s sales and over $80 million in contributions from Rogan’s, offset by a 3.9 per cent decline in comparable store sales.

Excluding the extra week in fiscal 2023, net sales increased by approximately 3.7 per cent. The company maintained a strong gross profit margin of 35.6 per cent for the fourth consecutive year. The net income rose to $73.8 million, or $2.68 per diluted share, from $73.3 million in fiscal 2023, while adjusted net income reached $75.0 million, or $2.72 per diluted share.

As of March 20, 2025, the company operated 431 stores, with 346 Shoe Carnival stores, 57 Shoe Station stores and 28 Rogan’s stores.

Fourth quarter (Q4) financial overview

Net sales in Q4 FY24 were $262.9 million and gross profit margin was 34.9 per cent and reflected a 35-basis point increase in merchandise margin compared to last fiscal. Selling, general and administrative (SG&A) expenses for decreased $2.1 million to $77.6 million. The decrease included lower selling costs at comparable stores, which more than offset the incremental costs associated with Rogan’s. The company captured full synergies within Rogan’s, resulting in approximately $2.5 million of profit synergies captured during FY24 results.

The net income was $14.7 million, or $0.53 per diluted share in this quarter. On an adjusted basis, excluding merger and integration expenses, adjusted EPS was $0.54.

ALCHEMPro News Desk (SG)