Shoe Carnival is expanding its retail network with the $45 million acquisition of Rogan’s Shoes, a 53-year-old work and family footwear company with 28 locations across Wisconsin, Minnesota, and Illinois.
According to Shoe Carnival, the acquisition was funded with cash flow generated in fiscal 2023 and is expected to be immediately accretive to the company’s fiscal 2024 earnings. The company also expects to generate approximately $84 million in sales and approximately $10 million in operating income, excluding transaction and integration costs next year.
The company added that it has an 18-month integration plan in place and expects to capture an additional $1.5 million in synergies annually. It will realize half of the profit synergies by fiscal 2025 and the full amount by fiscal 2026, the company said.
In a press release about the acquisition, Shoe Carnival added that the buy advances its strategy to be the nation’s leading family footwear retailer. This includes immediately positioning the company as the market leader in Wisconsin, and it establishes a store base in Minnesota, creating additional expansion opportunities.
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Following the integration of the acquisition into the company’s Shoe Station growth banner, which it acquired in 2021 for $67 million, the combined banner sales are expected to surpass $200 million by fiscal 2025.
The acquisition also increases the company’s store count to an all-time high of 429, keeping the company on track to achieve its target to operate over 500 stores in 2028.
Mark Worden, president and chief executive officer of Shoe Carnival, praised the business that Rogan’s Shoes has built. “Over the past five decades the Rogan family has built a brand that is well known and trusted throughout the state of Wisconsin,” Worden said. “As such, they have established a clear market leadership position in Wisconsin for work and family footwear, with a compelling assortment, great customer service, and a highly committed team of employees.”
“I am excited about the new opportunities for Rogan’s as it becomes part of the Shoe Carnival family,” Pat Rogan, chief executive officer of Rogan’s, added. “We share a strong focus on customers and employees and this transaction provides the additional scale and expertise to drive future growth, create efficiencies and expand profitability with that shared focus as the foundation.”
Along with Tuesday’s acquisition, Shoe Carnival has released its preliminary results for fiscal 2023. The company said it has achieved the high end of its sales expectations with net sales of $1.176 billion, driven by strong sales growth during the December holiday period.
Diluted earnings per share are also in line with expectations to be between $2.65 – $2.75, with preliminary results in the mid-range, excluding any transaction costs related to the Rogan’s acquisition.
The company will provide its guidance for fiscal 2024 in March when it reports final audited financial results for fiscal 2023.
On a preliminary basis, the company said it currently expects to grow fiscal 2024 total net sales in the low mid-single digit range, driven by the newly acquired Rogan’s business, Shoe Station banner growth, e-commerce growth and continued CRM expansion.
