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SHOE CARNIVAL INC (SCVL)·Q3 2026 Earnings Summary

Executive Summary

  • Third quarter fiscal 2025 (ended Nov 1, 2025) preliminary results: revenue $297.2M and diluted EPS $0.53; management stated results exceeded consensus, supported by Shoe Station strength and continued pressure at Shoe Carnival .
  • Shoe Station banner delivered net sales growth of 5.3% and margin expansion of 260 bps; Shoe Carnival net sales declined 5.2% due to lower-income consumer headwinds .
  • FY2025 guidance was tightened/raised at Q2: net sales $1.12–$1.15B (from $1.15–$1.23B), gross margin 36.5–37.5% (raised by 150 bps), EPS $1.70–$2.10 (low-end raised $0.10) .
  • Strategic catalyst: board-approved corporate name change to Shoe Station Group and multi-year banner consolidation targeting ~$20M annual cost savings and 20–25% inventory reduction by end of FY2027; majority of fleet as Shoe Station by back-to-school 2026 .

What Went Well and What Went Wrong

What Went Well

  • Shoe Station performance: “Shoe Station is winning − growing comps, expanding margins and capturing new customers,” with Q3 net sales up 5.3% and margins +260 bps .
  • Margin discipline and mix: In Q2, gross margin expanded 270 bps to 38.8% (best Q2 in years) driven by disciplined pricing, favorable mix toward Shoe Station customers, and strategic inventory buys .
  • Back-to-school execution: Company delivered positive comparable sales and margin expansion across banners in August; Shoe Station comps high-single-digit, adult athletics low‑20s growth with margin expansion .

What Went Wrong

  • Legacy banner softness: Shoe Carnival net sales fell 5.2% in Q3 prelim due to continued pressure on lower-income consumers; management is managing Carnival as a cash generator while shifting mix toward higher-income Shoe Station customers .
  • SG&A deleverage from rebanners: Q2 SG&A rose to 30.6% of sales (200 bps related to rebanner investments), impacting near-term profitability despite strong margin progress .
  • Elevated inventories: Inventory intentionally heavy to ensure in-stock, with normalization expected in 2026; management cited carrying opportunistic buys and kids athletics depth into spring 2026 amid tariff/supply chain uncertainty .

Financial Results

Note: Current quarter reflects “Third Quarter Fiscal 2025” (company nomenclature), corresponding to the period ended Nov 1, 2025.

MetricQ3 FY2024 (Nov 2, 2024)Q2 FY2025 (Aug 2, 2025)Q3 FY2025 prelim (Nov 1, 2025)
Revenue ($USD Millions)$306.9 $306.4 $297.2
Diluted EPS ($)$0.70 (GAAP); $0.71 (Adj) $0.70 $0.53

Gross Margin trajectory and current-quarter guidance:

MetricQ3 FY2024Q2 FY2025Q3 FY2025 guided
Gross Profit Margin %36.0% 38.8% 37.0–37.5% (guidance)

Actual vs S&P Global consensus (Q3 FY2025):

MetricActualConsensus (S&P Global)Diff
Revenue ($USD Millions)$297.2 $297.199*~+$0.0
Diluted EPS ($)$0.53 $0.53*$0.00

Values with asterisk (*) retrieved from S&P Global.

Segment/banners KPIs (Q3 FY2025 prelim):

KPIShoe StationShoe CarnivalCorporation
Net Sales Growth YoY+5.3% −5.2% $297.2M total
Margin Δ YoY (bps)+260 bps N/AGuided GM 37–37.5%
Balance SheetN/AN/ADebt-free; >$100M cash & securities

Back-to-school (August) KPIs (context from Q2 release):

KPIShoe StationShoe CarnivalRogan’s
Comps (Children’s)High single digits Positive comps Positive comps
Adult Athletics SalesLow-20s growth with margin expansion Solid athletics performance Growth with margin expansion

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($B)FY2025$1.15–$1.23 (Q1) $1.12–$1.15 (Q2) Lowered/narrowed
GAAP EPS ($)FY2025$1.60–$2.10 (Q1) $1.70–$2.10 (Q2) Raised low end
Gross Margin %FY202535–36% (Q1) 36.5–37.5% (Q2) Raised 150 bps
SG&A ($M)FY2025$350–$360 (Q1) $355–$360 (Q2) Slightly higher
Capex ($M)FY2025$45–$60 (Q1) $45–$55 incl. $30–$35 for rebanners (Q2) Maintained range, clarified mix
Revenue ($M)Q3 FY2025N/A$290–$300 (Q2 call) Set
Diluted EPS ($)Q3 FY2025N/A$0.50–$0.55 (Q2 call) Set

Strategic guidance initiatives:

  • Name change to Shoe Station Group; one-banner consolidation target ~90% of fleet by end FY2028; expected ~$20M annual cost savings and 20–25% inventory reduction by end FY2027 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY2025)Previous Mentions (Q2 FY2025)Current Period (Q3 FY2025 prelim)Trend
Banner mix shift to Shoe StationAccelerating rebanners; target >80% by Mar 2027 145 Shoe Station stores by YE; majority by BTS 2026 One-banner strategy; >90% as Shoe Station by end FY2028 Accelerating consolidation
Supply chain & tariffsOpportunistic buys; favorable costs; cautious on tariffs Price increases 5–7% from Vietnam; China at 30% Inventory reduction plan tied to consolidation by FY2027 Manageable near-term, structural simplification
Inventory strategyElevated to ensure in-stock; normalize in 2026 Strategically heavy; selling profitably; normalize in 2026 Expect 20–25% inventory investment reduction by end FY2027 Structural reduction ahead
Customer demographicsShift to >$50k income households at Shoe Station Carnival lower-income pressure; Station attracting higher-income Shoe Carnival decline −5.2%; Station growth +5.3% Continued divergence
Category performancePerformance running strength, higher AURs Children’s comps positive; adult athletics strong Not detailed beyond banner-level margins/sales Athletics/children supportive

Management Commentary

  • “Today marks a pivotal moment for our company. Shoe Station is winning − growing comps, expanding margins and capturing new customers…. establishes our foundation for becoming the nation's leading family footwear retailer.” − Mark Worden, CEO .
  • “We are building a simpler, more efficient company with one team, one infrastructure, and one P&L that is expected to generate millions in annual cost savings, sharply reduce our inventory investment, and create a balance sheet built for both organic growth and strategic acquisitions.” − Mark Worden .
  • “We delivered $0.70 EPS in Q2, beating expectations by over 20%, with gross margins at 38.8%, our highest Q2 margin in years.” − Mark Worden .
  • CFO on Q3: “We expect net sales of $290–$300 million and EPS of $0.50–$0.55… margin 100–150 bps above last year’s 36%” .

Q&A Highlights

  • Guidance specifics: Q3 sales down 2–5% YoY; gross margin expected 37–37.5%; SG&A ~$95M .
  • Strategy on Shoe Carnival: manage as cash generator; maintain margin integrity rather than chasing low-quality sales in lower-income segments .
  • Tariffs and pricing: vendors’ price increases 5–7% into spring; China tariff at 30%, Vietnam +10%; inventory bought opportunistically to protect margins .
  • Rebanner economics: FY2025 P&L investment $25M ($0.70 EPS drag); 2–3-year payback; accelerating to majority Shoe Station by BTS 2026 .

Estimates Context

  • S&P Global consensus for Q3 FY2025: Revenue $297.199M*, EPS $0.53*, with 1 estimate each; preliminary results were effectively in line .
  • Company asserted prelim results “exceed consensus expectations,” consistent with some external sources’ lower consensus levels; however, SPGI point estimates match prelim figures .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Mix shift is the narrative: Shoe Station growth (+5.3% sales; +260 bps margin) offsets Carnival headwinds; consolidation to one banner is a structural margin/cash flow story .
  • Near-term EPS impact from rebanners (~$0.70 drag in FY2025) is deliberate; margin discipline and higher-income customer mix should sustain GM >37% per Q3 guide .
  • Inventory strategy remains a tactical advantage (opportunistic buys, protected margins), with planned 20–25% inventory reduction by end FY2027 as consolidation advances .
  • FY2025 guidance is realistic and risk-managed: narrowed sales, raised margin, higher EPS low end; focus on event periods and banner mix should drive sequential improvement .
  • Strategic catalyst: rebranding to Shoe Station Group and single-banner model with ~$20M annual cost savings; expect majority Shoe Station by BTS 2026, supporting comp inflection .
  • Watch Q3 call (Nov 20, 2025) for detailed margin outcomes vs guidance and confirmation of prelim “beat” narrative; execution on rebanners and inventory normalization are key drivers .

Sources

  • 8-K and press release (Nov 13, 2025) − prelim Q3 results, name change and consolidation plan .
  • Q2 FY2025 earnings release and financials − margin expansion, guidance updates, August BTS KPIs .
  • Q1 FY2025 release and 8-K − initial FY2025 guidance, rebanner acceleration .
  • Q2 FY2025 call transcript − guidance detail, tariffs, inventory strategy, banner mix .
  • Prior-year Q3 FY2024 press release − base comps/margins .