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Yahoo
30-05-2025
- Business
- Yahoo
Shoe Carnival CEO Is Upbeat About Shoe Station: Here's Why
Shoe Carnival CEO Mark Worden has reasons to be upbeat about the future, which contributed to the retailer's reaffirmation of Fiscal Year 2025 guidance after posting first quarter earnings results on Friday. He sees the current environment, although volatile, as an 'opportunistic one' for the footwear retailer. With a debt free balance sheet and no manufacturing or wholesale operations, the company can more easily pivot as required by the changing retail landscape. That's where the rebanner of existing Shoe Carnival stores to the Shoe Station brand comes into play. More from WWD Name Game: Shoe Carnival Is Converting More Stores to Shoe Station Banner The Maesa Magic: Building the Next Generation of Beauty Brands Allbirds, Which Produces Most of Its Shoes in Vietnam, Is Tightening Inventory and Adjusting Prices Amid Trump's Tariff Trade War 'I may be a contrarian on this next statement, but I'm starting to feel cautiously optimistic about back-to-school as we have a compelling assortment in hand and our product costs have not skyrocketed,' Worden told analysts during a company conference call on Friday. And added benefit has been the close collaboration with vendor partners. 'We have not yet experienced, nor do we have visibility to any massive product cost or price increases outside of ranges considered in our guidance,' he said, adding that the situation could evolve and that the singular corporate purpose is to be the leading footwear retailer for families. He also cited another benefit: 'We operate no wholesale businesses, and this has us in a comparatively solid and flexible stance to shift our buying decisions as costs evolve. This does not mean we're immune to vendor price volatility.' Since it is not a wholesaler, it also doesn't have any direct manufacturing exposure, the CEO highlighted, noting that the absence also means it is not locked into any production commitments that could 'force uncompetitive decisions.' Moreover, the company's debt free balance sheet and expanded cash reserves 'has us poised to make opportunistic buys in this volatile time and capture margin growth prospects ahead,' Worden said. 'Given all these variables, the executive team does not view it appropriate to withdraw 2025 guidance and today are reaffirming our annual profit guidance as the most likely outcome. For the first quarter ended May 3, net income was $9.3 million, or 34 cents a diluted share, on net sales that fell 7.5 percent to $277.7 million. For Fiscal Year 2025, the company expects earnings per share at between $1.60 to $2.10 on net sales of $1.15 billion to $1.23 billion. The CEO said that the customer was becoming more cautious during the quarter, particularly at Shoe Carnival, which targets a lower-income household, while tax refund season saw 'muted results' that indicated consumer concerns about prices and the speculation of higher prices to come. 'As previously shared, I do not anticipate a Shoe Carnival nor the family footwear industry return to profitable sales growth in the near term based on the current external conditions and soft consumer confidence we are seeing,' he said. Shoe Carnival sales were down 10 percent in the quarter, while those at Shoe Station rose 4.9 percent. The company sees the opportunity to move Shoe Station from a regional chain to a national footwear chain. 'Shoe Station is our premium retail banner attracting higher income households, providing customers the top brands [and] assortments for both non-athletic and athletic branded footwear,' Worden said, adding that the concept offers high levels of service and a contemporary shopping environment. A total of 75 Shoe Carnival stores will be rebranded to the Shoe Station banner this year, ending 2025 with 120 locations. More rebranding will continue in 2026 and by March 2027, over 80 percent of the store fleet will operate under the Shoe Station banner. Worden said Shoe Station has been outpacing the industry and the Shoe Carnival banner quarter-after-quarter for over two years, including producing increased AURs (average unit retail) and accretive product margins 'in markets we expected to win in more affluent, suburban, mature customers.' The CEO said the company is expanding significantly into new markets in Alabama, Mississippi, Georgia, Louisiana, South Carolina, Tennessee and Florida. All are locations where data indicates that metrics for the Shoe Station banner will surpass those for Shoe Carnival. According to Worden, it is 'crystal clear that Shoe Station is the future of our organic growth and future of our store base.' He also noted that vendors and key stakeholders support the rebanner initiative. 'Will Shoe Station represent 100 percent of the current store fleet in the future? I can share the organization is deeply evaluating that,' Worden said. He explained that the company will test the urban market to see if the 'Station banner can better meet all of our store needs,' noting that the company first has to find out how it can satisfy the needs of the 'low household income, highly diverse customer base' in cities such as Chicago and Houston. Looking ahead to the fall, back-to-school and holiday, the CEO said the company made a 'deliberate decision' to maintain elevated inventory levels to better navigate what he described as marketplace uncertainties. 'With our cash rich position we determined the best approach to serve customers during back-to-school and holiday seasons was to invest early in key products, maximize our in-stock position and ensure our stores are fully prepared,' Worden said. 'I want to assure you our customers will find their favorite brands fully stocked across Shoe Station, Shoe Carnival and Rogan's locations throughout 2025.' He added that men's and women's performance running brands continue to deliver 'exceptional results' and were particularly strong with double-digit growth at Shoe Station, where styles for back-to-school have 'robust' AURs over $130 on average. And separately, the CEO said the company remains committed to pursuing M&A—when the right opportunity at a fair valuation becomes avaialble—to achieve its long-term vision to be the nation's leading footwear retailer for families. 'Our M&A targeting focus is on market leading footwear retailers with scale, providing geographic expansion and/or diversifying to a higher income customer base. The leadership team will pursue scale changing M&A,' he told analysts on the call. Best of WWD All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos]
Yahoo
22-05-2025
- Business
- Yahoo
Inside Allbirds' Refreshed Store Concept Designed to Make It ‘Easier to Shop'
Allbirds is rethinking its in-store experience. On the footwear company's first quarter earnings call, Allbirds chief executive officer Joe Vernachio told analysts about a new refreshed store concept it was piloting at its Hayes Valley location in San Francisco, Calif. More from WWD Lingerie Label Ysé Opens First London Store on King's Road EXCLUSIVE: Alohas Opens First U.S. Store in NYC as It Continues Retail Expansion Allbirds, Which Produces Most of Its Shoes in Vietnam, Is Tightening Inventory and Adjusting Prices Amid Trump's Tariff Trade War Now, FN is getting a clearer picture of what this new concept looks like in-person. 'Our objective was to create an environment that feels personal, inviting, and one that amplifies our authenticity–in essence, the 'home' of Allbirds,' a company spokesperson told FN in a statement. 'We believed the space could better reflect who we are and what we stand for: intentional design, incredible comfort and high quality.' According to the company the updates included changes to layout, fixtures, navigation, and visual merchandising, all resulting in a space that's 'warmer, more welcoming, and much easier to shop.' One of the main points of difference in the store design is how the brand's shoes are displayed. 'In our current store format, we have a single footwear wall, where many of the shoes cannot [be taken] off the wall,' the CEO explained on the company's earnings call earlier this month. 'They are on lasts and fixed to the wall. It's very difficult to shop a shoe that you can't pick up and look at the stance of the shoe in different orientations.' Now, products are positioned on pegs, rather than adhered to lasts, which means customers can pick up, touch, feel and properly experience the product. Allbirds has also made changes to its merchandising and imagery throughout the stores in order to tell more 'in-depth' stories. 'Our newly installed fixture package allows us to market more 'stories' at the same time–whether that's product marketing or brand initiatives,' the spokesperson further explained. 'These updates increased branded images throughout the store by three-times, offering more storytelling space and increasing opportunities to immerse and educate our customers.' And to achieve a more elevated look, the company added more modern tables styled with curated props, books and greenery. Newly installed light dimmers; plush seating in the form of modern sofas, ottomans and chairs; and colorful rugs lend a warmer, more inviting feel to the in-store environment, Vernachio noted. 'These improvements require minimal investment but deliver outsized impact,' the CEO added on the call. 'These improvements are already delivering measurable impact, driving increased engagement and higher daily sales.' Following its initial test in San Francisco, the company is set to roll out this new format to two additional locations – its SoHo store in New York City and the Stanford Shopping Center store in Palo Alto, Calif. 'We plan to build on our key learnings and expand the concept around more stores in the coming quarters,' Vernachio said. This comes as the San Francisco-based company reported earlier this month that its net revenue in the first quarter of fiscal 2025 decreased 18.3 percent to $32.1 million, compared to $39.3 million in the same time last year. There was also a net loss in Q1 of $21.9 million, compared to $27.3 million in the first quarter of 2024. Earnings for Q1 were in line with Allbirds' expectations, however. For the first quarter, the company was expecting net revenues between $28 million to $33 million. During Q1, Allbirds said it closed five retail stores and had one additional closure after the quarter ended. That brings the company to a current U.S. store count of 24. Looking ahead, Allbirds expects net revenue for fiscal 2025 to be between $175 million to $195 million. In the second quarter of 2025, the company expects net revenue between $36 million to $41 million. Best of WWD Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Julia Fox's Sleekest and Boldest Shoe Looks Over the Years [Photos] Crocs Collaborations From Celebrities & Big Brands You Should Know Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
