Shoe Carnival CEO Mark Worden is gearing up for another strong year in 2022 after the footwear retailer reported its best results ever in both the fourth quarter and fiscal 2021 on Wednesday.
In the fourth quarter of 2021, Shoe Carnival saw net sales grow 23.4% to $313.4 million, setting a new quarterly record. Net income in the quarter also reached a record high at $20.6 million compared to $7.4 million in the same period last year.
As for the full fiscal year of 2021, Shoe Carnival saw net sales grow 36.2% to $1.33 billion, the highest annual net sales in the company’s 43-year history, with full year net income coming in at a record $154.9 million, up from $16.0 million in fiscal 2020.
Much of the company’s success in the fourth quarter was due to a strong holiday season and the on-boarding of Shoe Station, which Shoe Carnival purchased in December for $67 million.
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Looking at Shoe Station, Worden said its integration into the business is ahead of schedule. “Our original plan was to complete the back-office integration by late 2022 and then begin rapid store growth in the 2023, 2024 horizon,” Worden told FN on a call on Wednesday. “I’m very pleased to share that the teams did an amazing job, and the back-office integration is complete 6 months ahead of our expectations.”
Now, the company is focused on shifting resources to store growth mode and building advanced CRM capabilities for the new banner. “We are seeing encouraging opportunities to grow our new banner with complementary consumer demographics and real estate locations to the Shoe Carnival banner,” Worden added. “The real estate and analyst teams are deep into our CRM data and finding many promising markets to expand into.”
With both banner stores productive and generating strong cash flow, Worden said the company is moving ahead on its opening plan. For 2022, Shoe Carnival aims to add over 10 stores to the fleet and then accelerate to 20 stores annually beginning in 2023, through a combination of organic growth and acquisitions.
According to Worden, much of the store growth will be focused on the Shoe Station banner across the regions it has strategic strongholds in like Alabama, Mississippi, Georgia, Florida, and Louisiana.
As for Shoe Carnival, the retailer is focusing on modernizing its existing fleet of stores by the end of fiscal 2024. As of the end of fiscal 2021, approximately 20% of the fleet remodels were complete, with over 100 more in process. The company expects approximately 50% of the fleet to be completed by the end of this year.
“Our athletic shop-in-shops with the top five brands our customers love is a compelling traffic driver and a competitive differentiator in this design,” said Worden. “With net sales and gross margins overperforming expectations, we are again accelerating capital investments for this program.”
Looking ahead, Worden is bullish on 2022. “As we come off the heels of our best year ever in 2021, we are poised to deliver another 4% to 7% growth this year,” Worden told FN. “And we expect to be able to have our earnings per share and our gross margins multiple times higher than they were pre-pandemic. For us, that positions us incredibly well to be going after that rapid growth accelerator we’re talking about. And do it in a way that’s profitable and enhancing value.”
