SCVL - Earnings call 3 2024 | Shoe Carnival, Inc.

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Operator

Ladies and gentlemen, good morning, and welcome to Shoe Carnival's Third Quarter 2023 Earnings Conference Call. Today's conference call is being recorded and is also being broadcast via webcast. Any reproduction or rebroadcast of any portion of this call is expressly prohibited. I would now like to introduce Mr. Steve Alexander with Shoe Carnival Investor Relations. Mr. ahead. go please Alexander,

Steve Alexander

good we for release issued of third and Earlier for us this quarter morning, our XXXX. morning. you, joining Thanks today. the Thank earnings press

a Investors section. is need If release, of website the our it you in available copy on the

Shoe today's Patrick of of Edwards, may Officer. remarks statements. Carl me Chief Executive materially on President contain Chief Merchandising risk those factors company's These different the to today that factors. number are Financial risk call Joining Scibetta, involve forward-looking Worden, such Chief Mark in and cause Officer from Carnival; and a projected results statements Officer; Management's could actual be

Forward-looking not to statements, of which of call earnings any reliance any and date. statements Mark. or obligation conference And to with forward-looking today's to any conjunction included to today's on disclaims the be release. these update contained today's hand as revisions only SEC the The in reflect to factors Investors are in the filings company place risk press should undue I'll or cautioned call press the discussion in publicly today's of statements also on considered speak with developments. events factors to the over release announce forward-looking discussed future or that, risk company's

Mark Worden

Secretary. in of you has Treasurer XXXX financial sure to you since to get know new Edwards, going leadership Board Officer progressive Officer, Steve, the corporation and XX brings Financial with to of and September will I in our who Controller Chief over was as him Patrick he's as Previously, Patrick forward, Corporate Board I'm start to he XXXX. of all. our role an our Accounting promoted has introducing Chief working served you, know Thank the performance. Officer enjoy all joining and excited to experience by good his the morning, like instrumental financial been company Secretary. everyone. as since served years and today Executive to role Patrick I'd and

We a moderating QX in earlier We with moving to trends market successful year. and in growing compared saw quarter. campaign the Now the strong on to back-to-school started results. share momentum sales building key and out categories, very

However, sales once back-to-school shopping and softened concluded, the weekend, of seasonal heading September Labor saw Day and sales trend significantly disappointing October. the remainder into we for

achievement quarterly of team's had proud million sales I expectations, the never face For $XXX.X level at our million, a the sales commitment prior to in X.X% to focus XXXX. so year. of and to low our the that were down environment. achieving would which versus challenging yes, prior This the is in sales, $XXX result of end approximately the team's a come quarter like quarter, any customer commend of strong I'm company delivering results to close the in of was

was the Both fall quarter in by year-to-date. below the sluggish the impacted delivery EPS our expectations season. Our $X.XX were are and to very start and $X.XX

XX% than over results year-to-date more EPS prior XXXX. Looking full results the at to our longer-term horizon, EPS than higher these XXXX compare strategic is any how year

the that disappointed has QX our our just profit compared am fact, with I growth our advancing full strategies, shortfall a to In steadily to prior more transformative yet earlier. than company XXXX. $X.XX versus year EPS high, of results by long-term expectations any years set delivery EPS achieved performance few result too is we the

off experience fun best of brand's as family leader delivering the kids of for back-to-school with the the want Moving to year, categories the challenging breadth pride I show back footwear the Carnival this the has depth to over company's at the by for season. back on decades. Shoe single August, a year. shopping low is look our back-to-school recap growth We of been kids the sales most prior of kids and a August business during digits X head results they believe and I pleased XXXX. kids highest category the only XXXX history, month growing the with XX-year sales in The kids surpassed the is I'm season in When resulted second versus achieved school. to ourselves back-to-school

was into performance the sales geographies perspective, low the us earnings did we year. fall very sales of and October, not turned period. most increased seasonal After growth levels in declined likely sales as wrong our sales kids as moderating within advertising a this history. sales. compared trends we of sales to sales range of quickly quarter in and and high Total grew headed contributed over barely In dry multiple year typical in dry XXs hot summarize, among our year-to-date improving the persistently weather we have at top of by and were This appears court the and back-to-school soft moderate. to led the started in segments to last normal were softened for warm about driven weather. finish, September Our transaction share season boot growth total seasonal company that continue basketball to as certain weeks To and margins momentum category single-digit our This encouraging as call, XX% and conversion balance both the a balance were year and low supporting girls well where highest have as kick been fall the quarter, Similar sales declines of the seeing market and in. for in was trends back-to-school acceleration sales campaigns as line in aggressively to hindsight, all. to back-to-school business QX, value boys, for our confidence our early industry trends. XXXX. with we total double-digit of historical XX% during significant year-to-date of approximately XX% The gains family invested was XX% category to footwear backdrop full by and during boot our that marketing to and declined gave record-high athletic that From the

unexpected to top the EPS lowering on remarks, and part of we our our his I Patrick the broader highlight that QX sales the revised into comp quarters in sales declined volatile. latter guidance drivers reflects a our guidance is full the prior in are will on will Given shopping that customer outlook detail but than challenges holiday visibility guidance. year go steeper based into quarter, that XXXX and and line continue be macroeconomic limited

the customers including lower-income customers. softness our urban We in with under $XX,XXX, experience continue segment of to household our income

is seeing our mix above and customers $XX,XXX overall below affluent of mix perspective, to split more In about income that $XX,XXX. income, customer we're segment $XX,XXX. customers evenly income with household household household shift a above some our are of For the over

with In and segment XX% now year-to-date fact, Shoe on banner. basis the $XX,XXX above and transactions The is Station are by range. high segments e-commerce equal being $XX,XXX above about growth segments our a customer $XX,XXX driven our both in below the in

margins the Turning Shoe sales increasing the digits versus double accelerating Station, results with prior in excellent the produced versus low all growth QX. and year, sequentially expanding quarter, the sales net banner around

quarter, high that performance our CRM speed this year. results Station Shoe are softness, leading that driven in our be station synergies income growth achieving are commitment significantly customers. teens our grown to see customer investments which in regional membership M&A is versus largely company traffic of seeing generating additional rolled The our up Growth demonstrating continue we Total platform and have further company. category Shoe outpacing X is largely driving into in of strengthens our increased offset our marketing from engagement, acquisitions success overall within and urban helping acquisition partially strategy, station the growth We CRM prior capabilities can and awareness focused and footwear the CRM e-com digital sales on our to XX% the to making banner. the strategies approximately lower

part experience. our growth, customer-focused we end strategy October, sustainable As Shoe online at line Carnival to drive of our the continued website, to e-com improvements relaunched the bringing of long-term top

was before to profit higher the drive also and our profit about level excited XX.X%, customer. online our interaction, and emphasizing customers' site, create will leveraging quarter analytics to and in margin as of versus the to personalized experience of to QX experience more advanced above search our XXth transformation, the the XX%. AI XXX engaging are the very looking imagery. stores. ever get increase platform, representing purchase us we product more results of simply show than visiting Gross driver in a our As with view part the When CRM of XXXX. that over an leveraging we information this the while the improve and the one real-time closer completely We're or Combined believe evidenced most the of trending at this customer to user consecutive right XXX also improved for expansion key we a right a generated customer of site bring to analytics We're is of predictive searches, by across investments points to these basis right heavily QX quarter time. our customer the redesign, capabilities, power have the online engagement, XXXX display recent whether relevant and product relaunch reimplemented the margin longer-term taking is

discounting high of second of membership. back XXXX to during products margin season continued also XXXX, we long-term we shared in with running the gross CRM the this increased profit-losing growth to previously, back-to-school Shoe and margin our promotions. level investments, profit the as competitors, our discussed strategic our was advancing by driven strategies quarter, earlier, school.During prior plans, As business our continued while highest the growing and years kids basis our back-to-school buying modernization targeted gained I program. I season period smart our XXX many store deep to points, Perks expansion any promotional competitive Comparing back-to-school ago in X intensity the And

and discussed have approximately now in-store and X experience fleet fleet the the be summer complete into of investments be continue our Over we store of we drive to in program, to As productivity. of completed approaching years the remodel XX% all XX% to profitability XXXX. modernization past, continue stores have and

of have or bringing differentiated a experience athletic updated with shops, most store the multi-branded customers footprint. across shops now Nike XX% shopping athletic our to we Additionally, approximately of our fleet

improvement optimization inventory We our in also plan executing the continued quarter.

inventory our in ahead a in of in providing the cover levels customers. margins of but more a is freshest moments, of sustaining branded products our and coming and Carl gross strong out mix while few QX reducing position. are back-to-school schedule, good profit We will details for inventory

million end the of with at on sheet the strengthen year in balance hand cash to and approximately $XX progressed the as quarter. has Our has marketable securities continued

debt. the no opportunities we the Additionally, In position cash rate our carry continue debt strategic operating in and external strategically the in place business flow investments cash to us internal business. with X and generated fund efficiently our by puts a fund current from growth great interest to and both environment,

Given balance third XX% quarter by made per the during and strength XXXX of of we expectation and increase increase, provide to shareholder this our XXth dividend. level our a for of dividend lower quarterly With consecutive have dividend the near-term recent increased quarter. decision by growth, our XXX% we share the the the now sheet since

$XX.X our discretion Additionally, at available excess capital, and share share worth our program under the repurchased began approximately quarter of still with in of a making $X.X the management. shares of our portion repurchases. we repurchase million We million

advertising by briefly I'll growing saying market QX aggressively in profit growth turn once back-to-school I Carl, business marketing Before more digits and that to to summarize full And that pressured low while in and performance year single kids. we kids August alone prior invested profitability, our period, drive share. short-term to won growing again resulted than over We XXXX. any in our QX the generated it in behind it EPS

soft in a back-to-school quarter, in the the October never can of and fall top replicated kids' that drive business got were strong resulting and to The performance started, season success business place our quarter. September to part We seasons. line future challenging in date. results grows the playbook a but and really latter in the the seasonal other in visibility and start marketing certain guidance September have and be in seasonal the category balance poor our share were to a behind with limited gains, boots into categories. below We approach expectations. shopping to and and of October, poor We're invested driving year given holiday sales advertising market cautious customer the taking performance continued after

as During to the total accelerated we growth quarter, growth Shoe strong in continued drive e-com in sales. well Station our as

years pace on of a the X XXX points delivered plan in inventory assortment basis and part on we strategy, We're our profit gross are ahead As our profit levels position. schedule a for up margin deliver product approximately inventory from transformation margin optimization to of gross down healthy ago. profit year, and with approximately XX% good

are they value it And and the cash we over quarter QX shareholder business. trends XXXX declining the in to into category's become We and I'll flow. opportunities soft generated the debt, our fund and with available future disappointed beyond by solid positions hand and balance carrying no company cash our growth to as on to ending very provide further This color the with now is performance. Carl? sheet QX. Carl are and with Yes, increased strong generating

Carl Scibetta

Mark. you, Thank

and to consumer inflation We the and start it's highest inventory on interest their think into positioning the in be XX rates it backdrop impacted cautious I school results. consumer our set back level third helpful given family to with and the heading purchases footwear persistent knew the would years. with and how quarter a

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customers' this for August played more QX on in in during As consumer performance saw, we our our strong our assortment behavior delivered specifically our and back-to-school, results out needs.

reflecting the digits. this we athletic athletics, way, back their they single footwear deliver. to And we had essential essential school, headed category parents as on we central are who comes value business grew mid-singles, quarter, essential the an for only Children's it in for low them. well total another our that purchasing And performed most purchases. focus down footwear of one on wanted brands kids looking kids categories, to Our for the when Said

the very in grew during performance we our key August category was the discussed, back-to-school in singles season where low sales Mark As children's strong, particularly comp August.

children's decades. children's market in most Carnival the Shoe Station the We And leader our and the year, year. category have the share this Shoe and grew in again, season been footwear for we during across sales important of once

children's consumer the later, our make Our marketing demand but drove wanted background staffed out and for month performance right for merchandise assortment stores court I sales, market advertising the provide both sales what investments by to as more modernize digits platform purchases. and behind paid off aggressively strategies strong our boys our and was I to in fully athletic there e-commerce by August and performance the basketball. grow. the provided easy-to-shop quarter on first of category invested August. We to low our led will the girls details our during continued We highlight comp grew driven share single and

during we on the intensity it committed continue quarter, to can Our strategy delivered successfully and October. to margin quarter, CRM aggressive XX% XXth was fall profit the activity back-to-school Competitive growth the worked we in seasonal our through targeted high profit future. deliver during merchandise promotional and and consecutive way to transformation growth delivering we see again strong quarter, the deliver profit straight to continue be children's strategies In the to sales gross used and gross for margin. remain and all

basis increased as in in which XXX versus and boots, activity low hot points quarter that unseasonably softness the in weather in by Our margin September October. in resulted down the promotional merchandise decreased prior XXs, year were

points ability success long-term demonstrating to transformation significantly analytics. leverage and QX XXXX, our of strategy capabilities years X For and the compared the merchandise to advanced XXX a margin expanded by ago our our CRM basis our long-term quarter, profit in perspective, in

are quarter, down the X% prior XX% a optimize levels, unit at During on approximately year the the inventory end third prior schedule. further third versus of but to our continued we was inventory of lower total was basis than a dollar year. ahead Inventory and basis, on quarter

clean, Our content the flow offerings ensure inventory stores our to are that is with to want. continue our and manage inventory stocked customers we product

comp maintaining our for weekend. to that X.X%, will clear, balance freshest and to To as to more year-end the XXXX while headwinds the going optimize Labor customers ongoing increased into further which continue strategy fiscal our product than efficiency be Day quarter. the levels is August efficiencies XX% reflected to beyond at we the generate on sales of drive and execute down continue end will a basis dollar our for year, the QX assortment and of expect will Total moving more the out inventory of our be coming and XXXX. were XXXX.Now versus we inventory inventory continue additional down strategy We

were Our the top in comp while down sales, improved mid-singles, high improving in softened by single-digit back-to-school essentially fall sales assortment expectations down was Comp in category stabilize was QX quarter, perspective, seasonal sales. comparable sales sales adult athletic line sales in growth with particularly September comp and back-to-school athletic our trend and After finish, led low environment. flat men's digit. inventory boots for successful cost-conscious performance performance From sales even with business October. QX both a were were single our children children's by below both and nonathletic an for led versus and as and in was this in and basketball, athletics women's helped court growth and

XXs down fast athletic solid more that mid-teens. by running scale and the basketball optimize high down August in was this of to levels school, but offset than part inventory a performance XXs we quarter, year versus high as prior had As grew the growth

low down sport digit Casuals [Indiscernible] were in single quarter down the key mid-teens August, mid-teens. on boots was XXs growth sales double-digit in kids in tailored. growing season, the Casuals in led digit. non-athletic a high business down low down by mid-single were were were footwear and growth delivered low decline back-to-school XXs down mid-single digits digit. basketball in comp partially digit strong low quarter. XXs. down sales mid-XXs were double in high quarter, sales down performed digit, comp basis. single dress flats, the and summarize, double very offset by well down were our boots Men's low the during was in in Third women's Sandals down And adult with To non-athletic comp

softened weather as top that a with sales hot in urban challenged. performance and our most geographies in However, September, dry lower fall and income our October, seasonal business were persistently expectations line remains below customer

recent As past quarter, we is coming in including has the seasonal that footwear. our customer out of line limited. carried optimizing top have shopping other nonessential and visibility continued seen seasonal QX reducing inventory. into early QX periods trend is holiday In challenged into The purchases, softer we

We year-end track products for targeted and early a and transformation are schedule for basis We in to more over of are be lower with remain excited balance XX% to I'll and year and about at of our dollar of prior on on the into strategies profit fresh call financials. ahead XXXX. CRM the inventory review our to committed this Patrick are that remain coming than year XXXX. stores Patrick? turn of a that, And new our than

Patrick Edwards

excited for I and new growth to the and Carl, and to earlier of execution you, strategies. in of our thank supporting Carnival future Shoe am be success my role the Thanks, continue Mark, introduction.

ability share. working market am foundation, shareholder and you. look confident and in of growing continue I know I growing to each to have getting and forward to you value and strong with our a We driving

with financial line. Now to our results. moving Starting on top

basis. million. in store versus This and year QX prior Our down was on net $XXX.X were down the sales X.X% comparable a X.X%

including athletic and were As QX key in advertising August period QX, our Mark We gained and during results improving the to growth we children's sequentially marketing, share. category. in and market discussed, the invested compared back-to-school

Our strategy worked.

XX% October. continued line on partially by single-digit back-to-school October, the than seasonal for in moment Shoe Station net nearly Day, improved reflected sales September at impacted our in impacting of boots. stores Shoe total quarter September comparable a activity. new Going in total and success offset into into reduction The sales softened on to low high XXXX. prior XX% came an top trends Labor a and approximate traffic, a and in banner acquired strength And our That Carnival I September weather December increase QX October driven in at and year like the e-commerce. would both double-digit Shoe prior the year to comparative call single-digit sales decline, particularly versus merchandise, banner, came Station by the a Shoe banner increase for trend sales. including versus offsetting for by high was declines entire decline Carnival more of discuss take trend. third the warm banner X.X% e-commerce

stores, diluted we Shoe with and would time contributing gross and on EPS schedule, Our more. transaction expectations as several At ahead accretive delivered banners the both. we XX of efficiencies currently of sales. margin. XXXX, in operate incremental completed XX million have were that was started delivering the with clear continued on the immediately increase be approximately Integration Station to in synergies to expected, profit deal, the line of $XXX sight that,

profitable footwear success low for own we the in growth with discussed operations, this category. leads net summary, Station of today, are results the our are the e-commerce. Station' a commitment year-to-date. M&A driven the Within achieving Shoe outperforming is strategy. a and growing significantly double As the and at operating supports and shareholders on margin family our overall speed delivering acquisition attractive further and as in very of our digits Station margin and the acquisition Shoe sales the pace, a income investment integration synergies an In both to have completing return banner by storefront Station accelerated Shoe Shoe

back QX at results. strong margin Carnival Shoe XX.X%. gross total Now was profit moving to

QX reductions of lower that as XXXX distribution million, primarily result freight margin merchandise rent The by has share. XXXX continued $XX.X costs, as higher but margins. transformation. children's margins seasonal points, modernization a the the XXX decreasing been of Our increase down QX expense over increased to the basis in on QX third increased level that company's merchandise a or long promotions per of in drove XXX back profit driven representing pre-pandemic diluted quarter market half of more third QX $XX.X significantly deleveraged gains BDO of quarter $X.X driver and million Buying, expanded partially in over expense XXXX. income in by was profit XX of result share were was the for stores.SG&A primarily from costs increased gross was growth to back-to-school the mentioned, reflecting lower key increase higher XXXX profit occupancy advertising Net quarter margin an the offset with Carl profit investment and basis gross merchandise and the during associated increase quarter. operating throughout and in quarter. Compared distribution million gross points, the with, was sales. $X.XX with term store points investment margin the Compared sales basis of in declined XXXX,

quarter $X.XX given helped our quarter, more to to supporting X unseasonable is vendor support XX% And below As the weather and further us that have last shareholders our a post over we members to with to the a million. the term, we $X.XX growth XX% our that share growth also we you of The you To years. this worth totaling XXXX, In over full per Mark ago. were quarter our a mentioned, compared increase the these EPS in this our increased shares QX year thank transformation. results long price $X.X It shareholder profit prior XXX% value, expectations long-term a any represents period, delivered by weighted dividend Day. special is repurchased quarter, than achieve of a ending this XXXX. Over $XX.XX X-year partners also to XXX,XXX,XXX CAGR, the delivery thank share. have during X team kind reemphasizing at and for earned EPS increase years the Labor the average

repurchases. steady flow to growth history operating and and cash fund balance position dividend deliver generating are these Our sheet, drivers share liquidity key strong of and increases internally

funding through have of we As of at of the quarter. approximately debt cash with continued consecutive on $XX third the we had flow have $XX in total the and end and without million maintained XXXX and versus equivalents years, third basis, third end XXXX. we marketable cash of quarter, XX cash cash, the $XX debt for QX securities XXXX, operations over year-end no our million and XXXX from increased year-to-date equivalents operations debt a quarter versus Cash no almost increased million year-to-date outstanding. QX At

cash of planned in expect and year appropriate. fully provide remodels to activity fund the store to more performance than continue We new store if are capacity the balance opportunities flow and conditions M&A the for

hand. discussed, previously in the consummated As on cash Shoe XXXX closed that was Station transaction December with

no in we While desirable. issued was so incurred of doing future was acquisitions if debt or stock any in that deal, have the flexibility

in a provided fiscal earnings Now morning. detailed moving guidance. outlook XXXX earlier We our for this release updated to on

fiscal $X.XX part range comparable X.X% store of XX% sales full net year. XXXX. into billion expect to billion prior now Given QX, uncertainty $X.XX comparable the our to are quarter That the range updating billion the X.X% reflects in X% to to November store we for latter fourth billion. sales expectation and to holiday our be $X.XX with we to continuing down softness compared shopping, to XXXX the of of of We seen the trends in have $X.XX sale guidance of for decline a

of sales. and profit million or gross $XXX $XXX to XX% and net expect XX% approximately between million be margin be to SG&A approximately We

to we $XXX million. $XXX previous including year, million expectation $XXX extra are to week, diluted our the of from lowering the million EPS our For guidance million to $XXX

approximately lower $XX After October, and XXXX September continue Carnival promising and share growth, be fiscal end trends to children's inventory at with to improving our market Shoe last We in to than August, expect a or year. compared start growth, the continued at of banner the sales prior XX% slowed million year.

As balance to a taking are continuing measured regarding we with customer November Mark season the discussed, fall shopping, and softer-than-expected the year. of a holiday start approach into the uncertainty to

unchanged. remains growth drive to strategy Our

strong the review. opportunities, desirable our puts is for concludes steady. on in internal and would our call position to cash to up and We now great a growth, long-term most This sheet importantly, balance Operator? ability financial fund execute return. flow Our shareholder M&A This deliver is us questions. open the to like continued

Operator

Research take [Operator with Kummetz first Instructions] question And will Partners. from Seaport Mitch we our

Mitchel Kummetz

Patrick, Starting and those comp, I've the And sales gave give on guys a half hope questions, I Station the businesses on you congratulations like dozen Carnival okay. us but you you a that's XQ? didn't comp could quarter, promotion. for with X

Patrick Edwards

I'm meet to Patrick. banners at talk we think just you number the what X.X% I can't down. guidance wait is in do. fine to It's Mitch, individual you, person. out comp this time. We this going give We're to total not for glad just not is the to

Mitchel Kummetz

say I Can the Okay. double that from comp you growth digits, know with patient but stores. I that's the was lot imagine quarter? in positive a a of

Mark Worden

Mark. Mitch, it's

Let me on it comps don't again. We it. build between delineate

A Here's quarter. Stations performed what you now. I'll [Indiscernible] few tell in the

QX, you in double grew declined digit. If in single continuing acceleration We're go digit the trend. grew great it QX, in single and digit, back it quarters, X over last QX, seeing Station

the just banners. where going. So comps don't it's we're very We delineate pleased between with the

Mitchel Kummetz

XQ? the was boots Got the in non-boot the us And us then can tell either was boot -- boots what for what XXs. you consolidated Can it. mentioned Or comp like was give you compound penetration your down that low quarter? you

Carl Scibetta

certainly and It quarter in the non-athletic by the approximately What digits entire shopping. runs Good a for penetration high quarter. is September say total. Mitch, to for I would not category just Carl. this the starting affected boot that consumer really lack of under falls which the is is was into fall double the

And about we were adult were the directionally gave area the So [Indiscernible] finish. non-athletic in same. the athletic you affected prepared all remarks kids on and they

Mitchel Kummetz

boots, and Carl, November to you I by weather maybe it seen then boots. also performance speak there I'm the Can your colder there on in variation any the softness? that November, sort in because any uptick performance? if was first of on And some particularly And curious was was subcategory, broad-based know way. boot Have you of any week

Carl Scibetta

Sure. Sure, Sure. Mitch.

we see And boots right. signs, the in shaped that for fall stronger category, For quarter And did booties. in I'm we out quarter, big positive signs for -- sorry, not the some a sales though -- a in we get me than third category, category. let the fall saw [Indiscernible]

are in a a November first that earlier little more weather weather and slow. bit a piece big, cooled. that boot as did improve up quite week quite cooled. started very booties our big traditional The of did pop more of we So [Indiscernible] category a the that's off have, when business category traditional, that booty bit

happened in third -- revert weather quarter. again, got However, we to of saw a once the the week the what November warm -- back second

Mitchel Kummetz

XQ, boot then And of down on particular? portend How XX% inventory for does feeling about you Okay. mentioned year-over-year. in the are does what look? kind margin particularly that you your inventories that And How side?

Carl Scibetta

purchasing liquidating boots. not I'm planning boot team the our lot any pleased react did, needed. boots see But flexibility that at frankly, They as margin and job year. to very I hit with and if the erosion target themselves, the a our result, end and way the planned the to of inventory we'll the styles they do category, the a purchased and with of left flexibility

Mitchel Kummetz

last and maybe Okay. get I'll one, my back queue. And then in

guidance? that? I comp weeks terms the guys but XX%, September to guidance, up year? XQ X the that And for with come over basically and fourth actually, of extrapolating did first you the can as with of you comp us you In up of give the come how you did balance quarter, maybe October comp down think the your how Are X%

Patrick Edwards

comp The continued single-digit similar in of seeing first brackets and the we're XX% part is in the and Patrick right into September, very also that November, of now XX.X%. saw we and high that X% comp Mitch, decline have results we're that that. to QX seeing in of this saw again. October around sort encompasses in The decline what to we decline QX XXXX comp was

going lot too, within it's one that low-income season that. to Also range. just visibility There's So all and the customer go, is consumer how point, limited given uncertain our on over. season. We're sentiment other this a on of holiday holiday

days don't come how reaction Thanksgiving. sell, on we the So around is which indicate know going day that would I just targeted that we after to

Operator

question with will Trading. we Williams take Sam next our from Poser And

Samuel Poser

your you're to of about the what you I with back it to was get second. where way to had forward congratulations a -- for down business if back want as your you far talk weeks -- of Carl you've optimum them, the And smaller. still if when go back to leaves inventories even than getting a greater supply want just to to And or go you want turn tell planning inventory anybody, would well. you us, could Patrick, inventory Because be?

trying So that annual where would and the be turn -- I'm inventories what wondering turn to get you're too? optimum

Carl Scibetta

to we're should tell think optimizing going through have we'll in we is feel XXXX. rightsizing continues where have. we in out turn where and we improvements or the out what in not inventory as we to targets mind, What inventory be, certainly were in the I'll XXXX, the past, our Sam, internal give the you 'XX

reducing surgically into and before, still the the ensure customers we're that deliver I said inventory to As the damaging want working. back not products we're fill what's we're business carefully to our and able and shoes

So it and want as possibly a and where the the ongoing have business as strategy is get a to be. it is an stated I talked we more in past, strategy XX-day healthy we've it go to like could keep like process long-term than

Samuel Poser

you Shoe Can assume -- us can secondly, the And between store your I you then as that's rate talk you And and of -- within Station about about please? that sales about what XX%. us conversion traffic Shoe variance traffic, about you talked the Can the you -- give and you well, Carnival? can had down about e-commerce can you talk tell talk sales. talked traffic the you, one, also e-commerce

Patrick Edwards

from rate remains respect was basis question. it's to between X the from split but remains Hi overall, XXXX. been. in growth some Sam, variation back within to ever And it it about points conversion it quarter-to-quarter where that With highest higher it's period. XXX has It the respect e-commerce about with Thanks growth, banners, Patrick. this evenly it's the the for conversion, our

Samuel Poser

XX% say e-commerce both at When you was up evenly in split, -- both? so it was

Patrick Edwards

evenly is Well, of in out Shoe last overall the growth split the at with XXX%. balance, year, exist on was growth its Station e-commerce banners. didn't both business But so just e-commerce our website growth

Samuel Poser

well were at against up as shoecarnival.com nothing? as you up So

Patrick Edwards

Yes.

Samuel Poser

I I to I you're want Shoe how -- to how -- good Okay. the about mean, good felt giving same quite want mean Station. and overall you the you it's I question. good same comps. It talked ask about ask sounds like

may important. time mean, I can firm thing I business for to in exception but -- normally sort just of an understand I both to banners the -- people you the away it's here, hear it. comp know for anybody what's from Son be And on. do, understand think disclosure perspective, to I your to for a understand I it's a to going people it's provide it don't think so tell giving think that. not people want providing

Patrick Edwards

I the Sam. in we're under today. and that. I prepared and future advisement, just input, will We'll we to consider it not appreciate that enjoy calls, but that take do

Operator

next we And Monness, Hardt. Jim with will take question Chartier our Crespi, from

James Chartier

kind last been what's year quarters? do just Let my for opening up, Shoe Station the add store And has you me of what congratulations, in following the you about over then driving Can Station? Shoe acceleration plan with the X well. think next talk sales as Patrick the

Mark Worden

joining Three Mark. Station. Shoe well it's things today. are for morning. Jim, for Thanks Good working very

large XX,XXX. that And up I urban the speech. than higher-income we're of seeing share in it's the lion's as consumer. The is over the consumer about that's health of over First, consumer XX,XXX a better my talked consumer, significantly segments XX,XXX in and health

CRM number we've other of business. and Shoe base Number shoestation.com the compared Station a business. fully consumer launched platform, Perks Shoe the onto one, parts integrated our two, So to we healthy fully our

shoe over Station, we're of We [purse] building to purchase Perks and them growth building gained memberships those get start actively occasions. to talking now Shoe Shoe loyalty, So talking double-digit acquisition and rapidly program. we're customer through able them to new through that our

we're pleased So with very that.

Third, our growth is store new successful.

stores term I'd and have we industry-leading QX the performance of very have moving results was to to range share and comp is comps, the stores would good to XX I with a the improve to new quarter. in growth we're it seeing line and XX it, mentioned, the overall it's Patrick pleased we growth, well improve station from double-digit As stores, and as don't it the of XX-plus grown while analyst but our community near each you into as of the stores with results the XX the we as continues overall We're just over store we as Patrick the the to the to continued from sight the QX. share industry-leading with and delineate have of don't software you in said, QX dot-com. QX, I And stores said, health original the for contributing new share first banner was But for can that share share number XX asked those very that's company. ahead.

So I've kind of track-backed it, working. it's all

James Chartier

then third come back would you you don't have did guidance, And quarterly quarter in Great. expect in but EPS August? where give EPS

Patrick Edwards

than saw comp narrowing Patrick. what And appreciably QX and comp in the that missed they We at per August further. We and that initial We through to is see top better was narrowing on we share. trends revenues had XX this declines. with our even in was declines October We continuing QX, come Jim, our time, into came expected And line in it saw October. our would then reactions line sales. $X.XX that trend September continue plan to top by about at.

Operator

Mitch take will Partners. Research we questions Kummetz And follow-up Seaport from with

Mitchel Kummetz

to another All that XQ? right. getting is back I've got penetration what typically handful. the in Carl, --

Carl Scibetta

about It's XX%.

Mitchel Kummetz

it in be with that XQ you Okay. Are boots following of is performance? -- XQ -- And the how worse or expecting comp XQ you the kind sorry, to be of kind guide XX%. line are do so to the expecting X% I'm or on you down

Mark Worden

way I would the answer that, Here's Mitch.

manage you Our to the sales to drive going more into that But based is, we that consumer initial have weather and ability for season right to transfer athletic turns the into mentioned. be positioned shoes whether the or if at number on are to stays the plan was we boots weather the flexibility product the way have forward. going cold or we that able boots out of it

us flexible we fourth move the keeping great job as balance a So quarter. has can the through of done the team

Mitchel Kummetz

-- Okay. particularly thoughts I'm versus -- a to in that say assume comp And gross us fourth down XQ, sales you've interested little down -- the bit in much? about it you and then, I margin, around sales curious the quarter. earnings. you Patrick, margin your Can SG&A? guide on more expect be for given margin earnings, March and how

Patrick Edwards

the Mitch, year the the in on entire margin and -- high I at Overall, our sitting like sitting -- is projection XXs, thanks question. for think we're for at XX.X% we're year-to-date, XX%. overall approximately

So planning can for that margin in XX% expect QX or we just is we're about for. range what upper it's XX%,

margin down but we will prior not the anything appreciable. the be be it's going to versus year, side, March On

Mitchel Kummetz

for Okay. you, Mark. my And maybe last then question,

guys X margin the done SG&A You ago. kind have a up it out XXXX, versus to was great for look gross XX.X%. year, particular, this be years in with of pencils substantially maybe margin on job When I at being Back XX.X%, in XX.X%. March it

levers is here like given there are pulling there any? if business some that you term? challenges in worth and SG&A terms longer But different rate of about sales And the are there around the on is are recognize the Now think I mix do deleverage also how there. any

Mark Worden

'XX that the the say get functions. dollar available. where as range now we fuel right get to M&A accelerated it's back-office the get organization that to to beyond more roughly team in organization when And it's now economic ready leverage the think differently. growth to an we We've be size, in organization all I'd we back is into is on growth our to merchandising an or built marketing Yes, take and landscape that other built in team, built start

try committed that's advertising turning taken absolutely margin. offset in out a there the capture in those that for right but the customer cycle we're start sales to demand lower that now to be aggressively overinvesting to We things demand on to we trying down are gain and operating us longer leverage investing are portion double-digit a see marketing. has as And we of delivery at recognize that we make the with next consumer deleveraged, right the to able cycle we around, We're as revenues now industry, capturing we're for base our right remain term, that now. as in and and soft we'll down in we soon So Mitch, acquisitions.

So downturn, we we leverage is double-digit margins go. the operating through out committed come back built driver for next to to get as to as this M&A getting it's reiterate, come better top organization to to as of what we're going the and from is line it ready

Carl Scibetta

XX% of The make Mitch, boot side the want to want of the throwing total misquoted. to quarter here. athletic you're I business. business the to boot clear something may nonathletic I just is the the businesses don't in our business have of the total in mislead you. when I mid-XXs

Mitchel Kummetz

sense. more makes Carl. That right. All Thanks

Operator

And we will questions take all the Sam Williams Trading. from Poser with

Samuel Poser

a shopping. I sort more. about of is you event-driven of finding part this heard have what Carl, are X year the One, questions -- -- I we've X mean lot

So good a you it back-to-school, had post back-to-school. then softened

to I more back-to-school? consumer, you that that, may been shops it sub she is feeling be more who expecting arguably have are he holiday during especially maybe or think So, it $XX,XXX at Carnival $XX,XXX now mean, sub- driven event or feeling and do you than Shoe

Carl Scibetta

event it's believe driven. I Sam, Yes,

is for saw challenged essential in we it We spring, your the back-to-school, saw up time on I that event, there customer kind between. and dead frame. that's that consumer the and wait I it in think an then -- think softness during will of necessity comes pop shop which and

same think around as we'll the holiday I see well. thing

but come think will between it think in the I softness. where is I we late anticipate

Samuel Poser

what lot the and for kids did you then, with mean, a business talked marketing well really the I And back-to-school. about you

look we business, times? than that my year you to to the with say, weather happened next lessen macro-issues from learning So what and you what or the could those what warmer it your post done expected now question you or impact back-to-school into during, let's I is, softer and everything when have that of guess at to better are applying else, hurt

Mark Worden

hindsight, marketing we getting need during It's during is trip the invested shopping a invest occasion customer to in And more said a this Shoe I the have to question. thing cycle. that great differently, do limited dollars in would Carnival And continue share. continue gained down that. to probably to in share even footwear. gain We're few is a said hindsight, material working. faster coming to family I we're with taking down market we times, quarter it organically. try queue traffic And in not It's pleased a to a that market in choose

it have into improvement that next we to in there's year they in a to to those So to And be believe more we take economic us. certainly any and whoever will next We're continue QX expensive signs be into it's situation. to going as as improved conditions, that the period see get rapid choose, going I've year, customers QX. don't a time choose in going economic early to perspective said, of be not early and

more the perspective key sales but profitability learning marketing that's to activity, with engaging too customers in going is working. take we the with done So and We on driving have CRM maybe little a and the with branding we're short-term and it, hindsight. high profitability the balanced should the probably

Samuel Poser

a you've picked you times quantify You've you given up? can mentioned seen share quantify gain there are is? share you -- And share was gain. that what about you've you talked number of that the Can what gain, the

Mark Worden

Sure.

to in is And industry that numbers. Day in continue to we good to worked. an learnings than now. we're down footwear we less what to but you Sam, the the we are below really the sales, that. said, industry, I going even share, right period back-to-school, position dollar a as don't translate with do like that better. some what drive If at it's family down Labor the post approximately family look good and down footwear year-to-date, XX% could We're in through significantly what good We're have We significantly learnings exact of

Samuel Poser

Happy that. holidays. for Thanks

Mark Worden

Thank you, you. Sam. to And

Operator

and for all to closing for call is over gentlemen, the hand time management questions that will the And remarks. we have ladies today. back I

Steve Alexander

next with might discussing joining again. call early We thanks all for questions you today. I'm for around any the follow-up year. results Thanks And so QX look This reach or Steve. have. joining to forward please is day, out

Operator

and your for you participation. thank call, today's concludes this gentlemen, and Ladies we

You disconnect. may now

Shoe Carnival (SCVL) 16 Nov 232024 Q3 Earnings call transcript