Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Shoe Carnival CEO: ‘Explosive E-Commerce Growth’ Caps Off Holiday Rebound

Shoe Carnival has to be coming out of the 2020 holiday season feeling good about its 2021 prospects if is preliminary earnings results are any indication.

For the fourth quarter, the footwear retailer anticipates that net sales will increase 5.8 percent to approximately $253.9 million, compared to $239.9 million in the year-ago period. Comparable store sales in the period, which include Shoe Carnival’s e-commerce sales, increased approximately 6.4 percent, the preliminary report said.

Net income per diluted share is expected to be in the range of 50 cents and 52 cents, more than doubling the 24-cent net income generated in the company’s fiscal 2019 fourth quarter.

Cliff Sifford, Shoe Carnival’s vice chairman and CEO, hinted at “incredible margin growth” and continued “explosive e-commerce growth” as the drivers for the fourth quarter’s anticipated bottom line. The retailer did not break out e-commerce sales numbers or gross margin percentages in the preliminary report.

“We take great pride in the strong foundation of trust we have built with our loyal customers who continue to rely on us for the latest trends from the best brands both online and in-store,” Sifford said. “However, this would not be possible without our committed Shoe Carnival employees and incredible vendor partnerships. We are looking forward to further success as we move into fiscal year 2021.”

Sequentially, the anticipated bottom line would be half of the $1.03 per diluted share earned in the third quarter, which amounted to a record $14 million in net income. But if top line growth holds, it would be a significant jump from quarter to quarter, as the third period’s net sales were flat. Shoe Carnival’s third quarter was marred by shifts in back-to-school shopping as many schools hadn’t returned to in-person learning until later in the period.

Despite the early results preview, the expected outcomes remain subject to the completion of normal quarter-end and year-end accounting procedures and closing adjustments. Shoe Carnival intends to release its fourth-quarter and full-year fiscal 2020 earnings results on March 24.

Cash and cash equivalents on hand at the end of the quarter were $106 million with no borrowings under the company’s credit facility.

The company is not only bouncing back nicely from the snags brought by the Covid-19 pandemic, it is actually outperforming pre-pandemic sales growth.

In last year’s fourth quarter earnings report, which released in the early days of the pandemic, Shoe Carnival saw net sales increase 2.2 percent to $239.9 million for the fourth quarter of fiscal 2019, a 2.2 percent increase on top of comparable store sales growth of 3.2 percent. The retailer also reported net income of $3.5 million, amounting to 24 cents earned per diluted share.

And in a time when many companies are being forced to rethink their real estate portfolio, as footwear retailers like DSW and Caleres are shuttering a combined 211 stores, Shoe Carnival closed only nine net stores since the start of the pandemic. Shoe Carnival now operates 383 locations in the U.S. and Puerto Rico.

The Shoe Carnival board of directors is confident in the future direction of the business given its decision to replace the share buyback program that expired on Dec. 31, and institute a quarterly dividend for shareholders. As of Jan. 25, shareholders would receive dividends of 9 cents per share every quarter.

With the share repurchase program, Shoe Carnival could buy back as much as $50 million of its outstanding common stock through Dec. 31, 2021. The company will continue to monitor the impact of the pandemic on its operations and be cautious with share repurchases under the newly authorized program as additional information regarding the effectiveness of measures to control the spread of Covid-19 becomes available and is evaluated.

More from our brands