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Shoe Carnival Notched Record Sales Before Virus Struck

Shoe Carnival reported record sales for fiscal 2019 on Wednesday, but the coronavirus pandemic is forcing the retailer to bank on e-commerce for any near-term sales.

In a Nutshell: Though stores remained closed amid the U.S. outbreak, CEO Cliff Sifford said Shoe Carnival continues to provide e-commerce fulfillment and is well positioned to survive any sourcing struggles related to the upheaval.

“Shoe Carnival has one of the most distinct brands in this space with a well-tenured buying organization that has a proven ability to see trends well ahead of others in this space,” Sifford said in the company’s quarterly conference call. “In addition, our unique selling concept has distinct brand advantages and our assets resonate with our consumer, setting us apart from our competitors.”

The retailer continues to focus on leveraging its newly updated CRM system and reported its loyalty program grew by double digits in 2019, now encompassing 23 million members and accounting for $35 million in sales growth over the prior year.

Since closing stores last week, the company said it has seen a triple-digit increase in e-commerce sales. Before the virus, Sifford said Shoe Carnival was pulling in comparable same-store sales growth of 4.5 percent, above company expectations.

Sales: Net sales reached $239.9 million in the fourth quarter on top of comparable store sales growth of 3.2 percent, slightly above the $238 million average Wall Street estimate.

Sifford said women’s nonathletic footwear was up by mid-single digits in the quarter, driven by a demand for dress shoes and limited by declines in boots due to a mild winter. Without boots, women’s nonathletic footwear was up double digits. Men’s nonathletic footwear followed suit with a mid-single-digit increase in the casual shoe and seasonal boot sales.

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Overall, adult athletic footwear declined “modestly” in the low-single digits during Q4, according to Sifford.

Full-year revenue totaled $1.037 billion, a 1.9 percent increase in comparable sales and above the $997.97 million Wall Street was expecting.

Shoe Carnival joined its retail peers in declining to provide guidance for the upcoming year, citing uncertainty stemming from the pandemic.

Earnings: Fourth-quarter net income totaled $3.5 million for earnings per diluted share of 24 cents, above the 21-cent Wall Street consensus. For the full year, net income reached $42.9 million and a record diluted earnings per share of $2.92.

CEOs Take: “2019 was another record year for Shoe Carnival, as we exceeded our sales and earnings expectations while extending our leadership position in the family footwear segment,” Sifford said. “In addition, we delivered the eleventh consecutive year of comparable same-store sales growth, driven in large part by strong performance in non-athletic footwear and accessories.”