Shoe Carnival lowers FY outlook as Q2 sales, profits fall

US footwear retailer Shoe Carnival has lowered its full-year guidance after reporting falling sales and profitability in the second quarter of the year.

The Evansville, Indiana-based company generated revenue of 294.6 million dollars in the three months ended July 29, a drop of 5.7 percent from the prior-year period. Comparable store sales were down 6.5 percent.

The company said that while overall conditions improved from earlier in the year, “soft traffic results continued within lower income households and urban markets”.

The drop in overall sales was partially offset by growth from new Shoe Station stores and a 5.4 percent increase in e-commerce sales.

The retailer’s net profit in the quarter narrowed to 19.4 million dollars, or 0.71 dollars per diluted share (EPS), compared to 28.9 million dollars, or EPS of 1.04 dollars, the prior year.

Shoe Carnival noted that its EPS improved by 18.3 percent quarter-to-quarter, and was nearly 80 percent higher than any other Q2 in the company’s history prior to 2021.

‘Challenging economic backdrop’

“Our second quarter results demonstrated the momentum of our strategy within the context of a challenging economic backdrop,” said CEO Mark Worden in a statement.

He continued: “We saw improving conditions related to the impact of inflation in the second quarter, but some of our urban customers remain challenged in the current economic environment.”

Accordingly, the company has lowered its full-year outlook. It now expects net sales of between 1.19 billion dollars and 1.21 billion dollars, compared to previous guidance of between 1.23 billion dollars and 1.25 billion dollars.

It expects EPS of between 3.10 dollars and 3.25 dollars, compared to previous guidance of between 3.60 dollars and 3.85 dollars.