Shoe Carnival Inc. is zeroing in on the growing importance of omnichannel by embarking on ambitious plans to revamp its stores.
In its fourth-quarter conference call with analysts, the Evansville, Ind.-based company announced a strategy to “modernize our most profitable stores” across its 383-strong brick-and-mortar fleet. It shared a goal of overhauling approximately two-thirds of its locations in the next three to five years.
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“This will be achieved through a robust annual remodel plan; relocations where we have strong customer opportunities in the market but underperforming real estate; and reigniting new store growth,” said president and chief customer officer Mark Worden, who will step into the role of CEO this fall as part of a previously announced succession plan.
The exec shared that the retailer is finalizing beta testing and intends to “move ahead rapidly with rollouts” this year, assuming no further disruptions from the COVID-19 pandemic. He added that Shoe Carnival will not renew approximately 10 leases on stores “that do not drive long-term profit potential nor connect with our most valuable consumers … As highly profitable real estate opportunities open up in late 2022 and 2023, we plan to pursue store openings within existing operating states as a top strategic priority.”
The announcement came in tandem with the release of Shoe Carnival’s fourth-quarter financial results, which revealed earnings per share of 52 cents — more than double the prior year’s EPS of 24 cents — and revenues that increased 5.8% to $253.9 million. Comps also rose 6.4% — up from the 3.2% growth in the prior year period.
For the full year, e-commerce was the bright spot: Sales for the channel — representing roughly 19% of company revenues in 2020 versus 6% in 2019 — improved triple-digits in every quarter. It also advanced more than $110 million in the fiscal year.
What’s more, Shoe Carnival’s loyalty program, Shoe Perks, was responsible for about 67% of the company’s overall sales during the year. It reported adding more than two million new members, with its Gold members generating $15 more per order than non-members.
At the end of the quarter, the retailer had cash and equivalents of $106 million with no debt. It did not provide an outlook for the year, but it predicted “record” first-quarter sales and earnings of at least $273 million and $1.40, respectively.
“The strength of our balance sheet, coupled with our outstanding team and their dedication to executing our consumer-centric strategy, has allowed us to achieve our strongest Q4 operating results in what has been one of the most difficult periods for retail and modern history,” Worden said.
Beyond Worden’s appointment (and current CEO Cliff Sifford’s upcoming exit), Shoe Carnival announced the promotion of EVP and chief merchandising officer Carl Scibetta to the post of senior EVP and chief merchandising officer. It also named Marc Chilton as EVP and chief retail operations officer, succeeding 32-year veteran Tim Baker, and Patrick Edwards as chief accounting officer.