Shoe Carnival accelerates rebanner strategy

Shoe Station has been the industry’s fastest growing retailer over the last two years, according to industry data. Over this same period, the Company’s Shoe Carnival (SCVL) banner and the family footwear industry have experienced declines. Earlier this year, the Company announced plans to grow its Shoe Station banner from a market leader in the Southeast into a national footwear and accessories leader. As part of this plan, the Company rebannered 10 stores during a test phase in Fiscal 2024 and rebannered 24 stores in first quarter 2025. The company is accelerating its rebanner strategy and now expects that approximately 120 stores, or 28 percent of the store fleet, to operate as a Shoe Station store by the end of Fiscal 2025. An additional 51 stores are expected to rebanner in Fiscal 2025 (20 in second quarter 2025, 25 in third quarter 2025 and 6 in fourth quarter 2025), with stores expanding into new markets and in markets where the brand is already known. By March 2027, the company now expects over 80 percent of the current fleet to operate as a Shoe Station store. The company expects the following prospects and impacts from the rebanner strategy: Significant market share growth in regions where the company has underperformed with its Shoe Carnival concept or can perform even better under its Shoe Station concept. Significant financial leverage from a more productive store base. Fiscal 2025 rebanner investment impacting operating income in a range of $20 to $25 million, resulting in an approximate $0.65 decline in Fiscal 2025 EPS, of which the company estimates $0.15 was incurred in first quarter 2025. Recovery of this first-year investment over a two-to-three-year period following a store’s grand opening. As Shoe Station stores surpass over half of the store fleet by back-to-school shopping in Fiscal 2026, achievement of overall comparable stores net sales growth in third quarter 2026. As a future phase of the growth strategy, the Company continues to expect to enter new markets where it does not compete today.