Shoe Carnival Inc. is focusing on the growing importance of omnichannel by embarking on ambitious plans to revamp its stores.
During its fourth quarter conference call with analysts, the Evansville, Indiana-based company announced a strategy to “modernize our most profitable stores” across its 383 physical store base. It shared the goal of renovating about two-thirds of its sites over the next three to five years.
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“This will be achieved through a solid annual renovation plan; relocations where we have strong customer opportunities in the market but underperforming real estate; and kick-start new store growth,” said President and Chief Customer Officer Mark Worden, who will assume the role of CEO this fall as part of a previously announced succession plan.
The executive shared that the retailer is finalizing beta testing and intends to “proceed quickly with rollouts” this year, assuming there are no further disruptions from the COVID-19 pandemic. He added that Shoe Carnival will not be renewing about 10 leases on stores “that don’t generate long-term profit potential or 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 in existing operating states as a top strategic priority.
The announcement came alongside the release of Shoe Carnival’s fourth quarter financial results, which showed earnings per share of 52 cents – more than double the previous year’s EPS of 24 cents – and revenue that rose 5.8% to $253.9 million. Compensation also increased by 6.4%, compared to growth of 3.2% in the prior year period.
For the full year, e-commerce was the bright spot: Channel sales — representing about 19% of company revenue in 2020 versus 6% in 2019 — grew by triple digits in every quarter. It also advanced more than $110 million during the fiscal year.
Additionally, Shoe Carnival’s loyalty program, Shoe Perks, accounted for approximately 67% of the company’s overall sales during the year. It reported adding more than two million new members, with its Gold members earning $15 more per order than non-members.
At the end of the quarter, the retailer had cash and cash equivalents of $106 million without any debt. He didn’t provide a full-year outlook, but he predicted “record” first-quarter sales and profits of at least $273 million and $1.40, respectively.
“The strength of our balance sheet, coupled with our exceptional team and their dedication to executing our consumer-centric strategy, enabled us to achieve our best operating results in the fourth quarter in what has been the one of the toughest times in retail and in modern history,” said Worden.
Beyond Worden’s appointment (and the upcoming exit of current CEO Cliff Sifford), Shoe Carnival announced the promotion of EVP and Chief Merchandising Officer Carl Scibetta to Executive Vice President and Chief Merchandising Officer. . He also named Marc Chilton as senior vice president and chief retail operations officer, succeeding 32-year veteran Tim Baker and Patrick Edwards as chief accounting officer.