Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the rebannering strategy, specifically regarding the 50 to 75 stores planned for 2025? Are these stores all in existing markets, or will some be in new markets? A: Mark Worden, President and CEO, explained that the initial 10-store test was conducted in existing markets and performed well, with sales growing over 10% compared to Shoe Carnival. The first tranche of the 50 to 75 stores will focus on existing markets, with some expansion into new markets within states where Shoe Station is already known. The strategy will gradually expand into new states, with more significant expansion planned for 2026.
Q: What impact do you expect tariffs to have on pricing, and how are vendors responding? A: Carl Scibetta, Chief Merchandising Officer, noted that the situation is currently unsettled, with vendors negotiating with factories. While some price increases are expected, particularly on new items, they are not across the board. The company anticipates mid-single-digit price increases at most, which they believe can be passed on to consumers. Mark Worden added that the guidance assumes current conditions continue, without significant changes from Vietnam or China.
Q: Can you provide more details on the financial guidance for 2025, including comp outlook and margin expectations? A: Patrick Edwards, CFO, stated that the guidance for net sales is between $1.15 billion to $1.23 billion, with a GAAP EPS range of $1.60 to $2.10. The company expects gross profit margins to remain above 35%, despite some deleverage due to expected sales declines. The rebannering strategy is expected to impact EPS by $0.65 for the year, with a $0.15 to $0.20 impact in Q1.
Q: How will the timing of the rebannering affect sales and comps during key periods like back-to-school and holidays? A: Mark Worden explained that the rebannering will be timed to avoid key shopping periods, with about half of the stores completed before back-to-school and the remainder after. This strategy aims to minimize disruption during peak periods, with the expectation that back-to-school and holiday periods will see the strongest comp performance due to the rebannered stores being operational.
Q: How do you view the transition in the Chief Merchandising Officer role, and what are your expectations for the incoming CMO? A: Carl Scibetta expressed confidence in Tanya Gordon, the incoming CMO, highlighting her extensive experience and strong vendor relationships. Mark Worden echoed this sentiment, emphasizing Tanya's role in driving growth and engaging higher-income customers as the company expands the Shoe Station banner.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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