EVANSVILLE —
In an effort to boost its women’s shoe sales, Shoe Carnival plans to adjust its product mix and test-market a handful of new brands at selected stores.
The retailer provided some details of its strategy Thursday afternoon during a second-quarter earnings conference call with analysts.
Shoe Carnival’s President and Chief Executive Officer, Cliff Sifford, said the chain will add “select better brands” of women’s nonathletic shoes at about 20 percent of its stores. Those four new brands, he said, are Anne Klein Sport, Calvin Klein Jeans, Steve Madden and Report Footwear.
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The test-marketing, Sifford said, is set to begin “in earnest” by mid-September.
Sifford said Shoe Carnival will also expand its selection of six brands that it already carries: Bare Traps, Clarks, Earth Origins, Roxy, Bandolino and Madden Girl. And as part of the same effort, Sifford said, the retailer has reduced its selection of “tertiary brands” that retail at lower price points — though he did not name those brands.
The overall strategy, Sifford said, is to grow women’s nonathletic shoe sales to 30 percent of total sales. At the end of last year, Sifford said, this category made up 26 percent of total sales.
Also during the call, Sifford talked briefly about Shoe Carnival’s expansion plans.
By the end of this year, the company expects to have 378 stores, which would represent a net gain of 27 stores over last year.
In 2014, Sifford said, “we’ll continue to aggressively grow our store base,” opening about 40 new stores.
Some of those new stores will be in brand-new markets, Sifford said, though citing competitive reasons he declined to provide details on where those markets might be.
The last time Shoe Carnival entered a major new market was in 2012, when it opened stores in both Dallas and Puerto Rico.
Looking at the company’s second-quarter performance:
Comparable store sales increased 2.6 percent. This metric, also called same-store sales, includes sales only from stores that have been open for at least 12 months.
The measurement is considered an important way to gauge a retailer’s core performance, because it takes out the sales boost that a company gets from opening new locations.
Net quarterly income was $5.8 million (29 cents per share), as compared to $2.9 million (14 cents per share) during the same period a year ago.
Net sales were $216.4 million, up 18.8 percent over the same period last year.
Nearly half of last quarter’s net sales increase was caused by a calendar quirk, the retailer said, and that same quirk will likely hurt third-quarter performance.
The company’s 2012 fiscal year contained 53 weeks, meaning that the first three quarters of this year are shifted a week later as compared to last year.
The shift means that one week of the important back-to-school sales season occurred in the second quarter of this year, as opposed to the third quarter of last year. This shift, the company said, helped boost second-quarter numbers this year and likewise is expected to reduce third-quarter sales and earnings.
The company said it expects its third-quarter net sales will be in the range of $236 to $240 million, with a comparable store sales increase in the range of 1 to 2.5 percent.
Earnings are expected in the range of 51 cents to 55 cents per share.
During the third quarter of 2012, Shoe Carnival had net sales of $244 million, with comparable store sales up 6.2 percent and earnings of 60 cents per diluted share.
Shares of Shoe Carnival closed at $25.32 Friday on the Nasdaq market, down 98 cents.
Shoe Carnival plans to add stores, diversify brands
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