Shoe Carnival, Inc. (SCVL) reported Friday that its first-quarter profit, revenues as well as comparable stores net sales declined from the prior year. Further, the retailer of footwear and accessories confirmed its fiscal 2025 outlook.
The company also announced an expansion of its rebanner strategy, with Shoe Station now expected to represent over 80 percent of its store fleet by March 2027, up from previous target of 51 percent.
In the pre-market activity on the Nsadaq, Shoe Carnival shares were gaining around 11.4 percent to trade at $20.54.
Mark Worden, President and Chief Executive Officer, said, "Our first quarter results reflect the continued success of our strategic transformation, with profits outperforming expectations by approximately 10 percent despite the challenging macroeconomic and retail environment. 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."
Shoe Carnival now expects that approximately 120 stores, or 28 percent of the store fleet, would operate as a Shoe Station store by the end of Fiscal 2025. An additional 51 stores are expected to rebanner in Fiscal 2025, with stores expanding into new markets and in markets where the brand is already known.
By March 2027, the company now expects over 80 percent of the current fleet to operate as a Shoe Station store.
For fiscal 2025, the company continues to expect earnings of $1.60 to $2.10 per share, inclusive of the rebanner strategy's initial year costs of $0.65 per share.
The Wall Street analysts on average expected the company to report earnings of $1.88 per share. Analysts' estimates typically exclude special items.
Net sales are still expected to be in the range of $1.15 billion to $1.23 billion, representing a range of down 4 percent to up 2 percent from fiscal 2024.
In its first quarter, Shoe Carnival's net income was $9.34 million or $0.34 per share, compared to $17.29 million or $0.63 per share last year.
The latest results were negatively impacted by approximately $0.15 of rebanner strategy investment.
Analysts expected earnings of $0.30 per share for the quarter.
Total company net sales in first quarter declined 7.5 percent to $277.72 million from $300.37 million last year.
Comparable stores net sales declined 8.1 percent, of which around 1 percent was due to lost sales as impacted by the rebanner strategy.
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