Shoe Carnival posts positive Q3 amidst major rebranding efforts

Shoe Carnival, Inc. reported third-quarter results that surpassed expectations, underscoring the early success of its One Banner Strategy as the company accelerates its transition to the Shoe Station brand.

Net sales for the quarter were 297.2 million dollars, ahead of consensus estimates, while earnings per diluted share were 53 cents. Comparable store sales declined 2.7 percent, but Shoe Station continued to outperform, delivering sales growth of 5.3 percent and a 206-basis-point expansion in product margins.

“Third quarter results exceeded expectations. Shoe Station is winning,” said president and chief executive officer Mark Worden, noting that consolidation into a single banner is expected to unlock 20 million dollars in annual savings and free up one 100 million dollars in working capital to fund growth from the company’s debt-free balance sheet.

Shoe Station powers Q3 results

By banner, Shoe Carnival sales fell 5.2 percent as lower-income consumers remained pressured, while Rogan’s contributed more than 21 million dollars in line with integration plans. Gross profit margin expanded 106 basis points year-on-year to 37.6 percent, driven by disciplined pricing, a shift toward higher-income Shoe Station customers and improved inventory management; these gains more than offset approximately 30 basis points of deleverage in buying, distribution and occupancy costs.

Net income was 14.6 million dollars, compared with 19.2 million dollars the prior year, with rebanner-related investments weighing on earnings by an estimated 22 cents per share in the quarter.

Shoe Carnival reaffirms full year outlook

The company reaffirmed its full-year net sales outlook and raised the lower end of its earnings guidance, now expecting fiscal 2025 EPS between 1.80 dollars and 2.10 dollars. Shoe Carnival also announced plans to change its corporate name to Shoe Station Group, Inc., pending shareholder approval in June 2026. While the company expects fiscal 2026 sales to decline in the first half and earnings to be lower year-on-year due to rebannering, management anticipates a return to growth in the back half of the year and accelerating performance into fiscal 2028 as the transformation nears completion.

As of November twenty, Shoe Station accounts for 144 stores, or 34 percent of the company’s 428 store fleet, up sharply from 10 percent at the start of the fiscal year. The fleet is expected to reach 215 Shoe Station stores by Back-to-School 2026 and more than 90 percent by the end of fiscal 2028.

Under its One Banner Strategy, the company expects to deliver 20 million dollars in annual cost savings and reduce inventory by 100 million dollars, or roughly 20 to 25 percent, by the end of fiscal 2027. To reach the milestone of having Shoe Station represent at least 51 percent of the fleet by Back-to-School 2026, the company plans to re-banner 70 stores.