3 days ago
American footwear retailer Shoe Carnival's sales drop 7.5% in Q1 FY25
The net sales of Shoe Carnival, a leading US-based retailer of footwear, declined 7.5 per cent to $277.7 million in the first quarter (Q1) of fiscal 2025 (FY25) as compared to $300.4 million in first quarter of 2024. Comparable stores net sales declined 8.1 per cent, of which the company estimates approximately 1 per cent was due to lost sales as impacted by the rebanner strategy.
In the first quarter, the company's Shoe Station banner contributed a 4.9 per cent increase in net sales compared to the first quarter of 2024. These industry-leading results were primarily driven by double-digit comparable stores net sales growth from the company's rebanner strategy. The company's Shoe Carnival banner contributed a net sales decline of 10.0 per cent. First quarter 2025 net sales from Rogan's, which was acquired on February 13, 2024, were in-line with integration and synergy plans and exceeded $19 million in both first quarter of 2025 and first quarter of 2024, the company said in a press release.
Gross profit margin was 34.5 per cent compared to 35.6 per cent in the first quarter of 2024. Gross profit margin included a 50 basis point increase in merchandise margin while buying, distribution and occupancy costs decreased gross profit margin by 160 basis points primarily due to deleverage from lower net sales.
Selling, general, and administrative costs (SG&A) decreased $0.5 million in Q1. SG&A increases associated with the rebanner strategy were more than offset by the timing of selling expenses from other stores. As a per cent of net sales, SG&A were 30.2 per cent in first quarter 2025 compared to 28.1 per cent in first quarter 2024, with rebanner investment as the primary driver of this increase.
'Our first quarter results reflect the continued success of our strategic transformation, with profits outperforming expectations by approximately 10 per cent despite the challenging macroeconomic and retail environment,' said Mark Worden, president and chief executive officer . 'The Shoe Station growth strategy is working exceptionally well, delivering industry-leading sales growth and accretive margins across diverse market types. This consistent outperformance versus both Shoe Carnival and industry trends across all footwear categories has given us the confidence to accelerate our rebanner initiative.'
'Today, we're announcing an ambitious expansion of our rebanner strategy, with Shoe Station now expected to represent over 80 per cent of our store fleet by March 2027, up from our previous target of 51 per cent. We're making these investments from a position of financial strength, with growing cash reserves and no debt. This is a pivotal moment for our company as we transform from a traditional family footwear retailer to a premium brand-focused national leader in footwear,' Worden concluded.
Fibre2Fashion News Desk (RR)
