Shoe Station Group Inc.

Shoe Carnival reported sharply weaker second-quarter results and lowered its fiscal 2026 outlook, with net sales falling 7.2% to $284.3 million and comparable-store sales declining 7.1%. Diluted earnings per share dropped to $0.23 from $0.70 a year earlier, while gross margin contracted 690 basis points to 31.9% as the company discounted merchandise and cleared aged inventory, which fell 5% year over year to $426.6 million. Within the two-banner group, Shoe Carnival sales declined 6.5% to $178.5 million and Shoe Station sales declined 8.4% to $105.7 million, though comparable e-commerce sales rose 18.8%. Interim President and Chief Executive Officer Cliff Sifford said assortments at Shoe Carnival and re-bannered Shoe Station locations had not been sufficiently aligned with the customers shopping those stores, and management is relying on localized assortments, increased advertising and fall boot sales, with August comparable-store sales improving to a 2.7% decline. The company now projects fiscal 2026 net sales of $1.1 billion to $1.111 billion and adjusted earnings per share of $0.75 to $0.90, and it ended the quarter with $131.6 million in cash equivalents and marketable securities and no debt outstanding.

Shoe Station Group reported quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.32 per share and down from $0.7 per share a year ago. The result marked an earnings surprise of -28.13%, and the footwear retailer has surpassed consensus EPS estimates just once over the last four quarters. Revenue for the quarter ended July 2026 came in at $284.31 million, missing the Zacks Consensus Estimate by 4.97% and below year-ago revenues of $306.39 million, though the company has topped consensus revenue estimates two times over the last four quarters. Ahead of the release, the estimate revisions trend was mixed, translating into a Zacks Rank #3 (Hold), and the current consensus stands at $0.51 per share on $301.33 million in revenues for the coming quarter and $1.50 per share on $1.13 billion in revenues for the current fiscal year. Shoe Station Group shares have lost about 23.4% since the beginning of the year versus the S&P 500's gain of 11.6%.

Shoe Carnival is scheduled to announce its second-quarter fiscal 2027 earnings on Thursday, September 10th, before market open. The consensus EPS estimate is $0.34, down 51.4% year-over-year, while revenue is expected at $297.79 million, a 2.8% decline. Over the past two years, the company has beaten EPS estimates 75% of the time and revenue estimates 38% of the time. In the last three months, EPS estimates have seen no upward revisions and one downward, with revenue estimates also seeing no upward and one downward revision.

Shoe Carnival announced plans to permanently close roughly 24 underperforming stores over the next two fiscal years after admitting its shift toward higher-priced merchandise alienated value-focused customers. Interim President and CEO Clifton E. Sifford said the company expects to close 12 to 14 stores during fiscal 2026 and a further 6 to 10 stores during fiscal 2027, while also planning to open 3 to 5 new stores in fiscal 2027 and 8 to 10 in fiscal 2028. The retailer reported net income of $52.3 million for fiscal 2025, down from $73.8 million in fiscal 2024, and net sales declined 5.6% year over year. Sifford acknowledged that reengaging value-focused families and fast-fashion-forward customers will take longer than a single quarter, and the company has abandoned its earlier plan to rebanner all legacy stores to Shoe Station, instead operating both banners as permanent independent components of its portfolio.