Shoe Carnival Inc (NASDAQ:SCVL) shares are trading lower in premarket on Thursday after the fourth-quarter earnings result.

The company reported a fourth-quarter sales decline of 6.2% year-on-year to $262.94 million, missing the analyst consensus estimate of $274.21 million.

Comparable store sales declined 6.3% in the quarter, primarily from continued Shoe Carnival declines during nonevent periods.

Gross profit fell 8% to $91.67 million, with the margin contracting 70 basis points to 34.9%. Adjusted EPS of 54 cents beat the consensus estimate of 43 cents.

Selling, general and administrative expenses fell 2.6% Y/Y to $77.6 million. The operating margin compressed from 7.1% to 5.3%, and operating income for the quarter declined 29% to $14 million.

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At the end of fiscal 2024, the company had approximately $123.1 million of cash, cash equivalents and marketable securities, an increase of $11.9 million compared to prior year. Operating cash flow for twelve months totaled $102.6 million.

As of March 20, 2025, the company operated 431 stores, with 346 Shoe Carnival stores, 57 Shoe Station stores and 28 Rogan’s stores.

In March 2025, the company’s Board of Directors approved an 11.1% dividend increase to 15.0 cents per share, payable on April 21, to shareholders of record as of the close of business on April 7. 

As of March 20, 2025, the company has $50 million available for future repurchases under its share repurchase program. During fiscal 2024, the company did not repurchase any shares.

Growth Strategy: Shoe Carnival said it has been evaluating customer analytics and market data and developing strategies to expand Shoe Station since acquiring the chain in December 2021.

Today, the company announced a new long-term strategy to scale up Shoe Station rapidly. The first investment phase is to rebanner 175 stores to the Shoe Station banner over the next 24 months.

During fiscal 2025, the Company expects to rebanner between 50 to 75 Shoe Carnival stores to Shoe Station stores. The company expects the first-year investment to result in an approximate $0.65 decline in fiscal 2025 EPS. 

In fiscal 2027, the company expects that net sales from these rebannered stores to be over 10% higher and profit contribution to increase over 20% compared to the stores before being rebannered.

Outlook: Shoe Carnival sees FY25 EPS of $1.60 – $2.10, including the rebanner strategy’s initial year costs, versus the consensus of $3.32.

Shoe Carnival sees FY25 net sales of $1.15 billion – $1.23 billion versus an estimate of $1.24 billion. This represents a range of down 4% to up 2% versus fiscal 2024.

The company expects FY25 capital expenditure of $45 million – $50 million.

Price Action: SCVL shares traded lower by 1.28% at $22.36 in premarket at last check Thursday.

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