American retailer Shoe Carnival's net sales at $319.9 mn in Q3 FY23

20 Nov '23

3 min read

Pic: JHVEPhoto - stock.adobe.com

Insights

Shoe Carnival reported a 6.4 per cent drop in Q3 FY23 sales to $319.9 million, with a 7.4 per cent fall in comparable store sales post-Labor Day.
August saw high children's sales, but overall decline continued.
Shoe Station's sales rose, driven by new stores and e-commerce.
The company's gross margin was 36.8 per cent, despite a slight drop.

Shoe Carnival, a leading retailer of footwear, has reported a decline in net sales in the third quarter of fiscal 2023 (Q3 FY23), with figures dropping by 6.4 percent to $319.9 million compared to the same period last year. This downturn is primarily attributed to a decrease in comparable store sales by 7.4 percent, largely due to a reduction in consumer spending following Labor Day.

Despite the overall decline, August recorded a notable success with the second highest children’s category sales in the company’s 45-year history, thanks to a thriving back-to-school season. However, the positive trend did not continue post-Labor Day, particularly in Shoe Carnival stores, the company said in a media release.

In contrast, the Shoe Station banner reported an increase in net sales by low double-digits in the quarter compared to the third quarter of FY22. This growth was driven by the opening of new stores and the successful launch of the Shoe Station e-commerce site in early 2023.

Shoe Carnival's total e-commerce sales saw a rise of nearly 10 percent in the third quarter of FY23 compared to the same period in FY22.

Gross profit margin for the third quarter of 2023 stood at 36.8 percent, marking the 11th consecutive quarter where the company’s gross profit margin exceeded 35 percent. The long-term increase in gross profit margin has been a significant contributor to the company's profit transformation. However, there was a 150-basis-point decline in the gross profit margin compared to the third quarter of FY22.

Selling, general, and administrative expenses were $89.8 million in the third quarter of 2023, accounting for 28.1 percent of net sales. This represents a $2.5 million increase over the previous year.

The effective tax rate in the third quarter of FY23 was 23.8 percent, lower than the previous year's rate of 25.6 percent. The expected effective tax rate for the full year is anticipated to be between 23 and 24 percent, a decrease from 25.2 percent in FY22.

Net income for the third quarter of FY23 was $21.9 million, or $0.80 per diluted share, a decline from the third quarter of FY22's net income of $32.7 million, or $1.18 per diluted share.

“Our team delivered a successful back-to-school season, with solid growth in the children’s business, double-digit Shoe Station banner growth and continued market share gains in the family footwear channel. After Labor Day, Shoe Carnival banner results softened and were below our expectations, as persistently hot and dry weather led to soft seasonal sales and a sluggish start to the boot season,” said Mark Worden, president and chief executive officer.

Fibre2Fashion News Desk (DP)

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