Shares of Shoe Carnival fell nearly 17% on Wednesday after the Evansville, Ind.-based company. shoe retailer announced its results for the first quarter of 2022, impacted by rising transport and fuel costs.
During the company’s quarterly earnings call on Wednesday, the CEO of Shoe Carnival Marc Worden compared the first quarter of 2022 to the same quarter in 2019, as “footwear category trends and customer behavior closely resembled the first quarter of 2019 before the pandemic began,” he said. “Especially in this quarter, we have gained valuable insight into how our customers would buy shoes without the massive government stimulus handouts in 2021 and the pandemic-driven retail store closures in 2020. . »
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Net sales in the first quarter of 2022 increased 25.1% to $317.5 million from the pre-pandemic first quarter of 2019, which Worden said was driven by new customer acquisition from more down 25% from the first quarter of 2019. However, if you compare the quarter to the same period in 2021, net sales were down 3.3% from $328.5 million the year before, and comparable store sales decreased 10.6%. These results contrasted with a net sales increase of 122.7% and a comparable store sales increase of 125.8% in the first quarter of last year.
Net income for the first quarter of 2022 was $26.9 million, or $0.95 per diluted share, down from $43.2 million in 2021, but up from 13, $9 million in 2019.
Chief Financial Officer W. Kerry Jackson said on Tuesday’s call that these results were “due to the current global supply chain issues and transient inflation” that the company experienced in the first quarter of this year, resulting in “significantly higher transportation and fuel costs.” These costs reduced its merchandise margin by 150 basis points. basis and increased its distribution costs by 190 basis points.
“While we expect higher transportation and fuel costs for the remainder of the year, we believe the year-over-year increase will moderate in the second quarter and beyond, in part due to the mitigation measures we have put in place,” Jackson added.
Regarding category performance, Worden mentioned on the call that customers are “very engaged” with the wearable, casual and sandals product categories, showing a strong return to lifestyles and trends pre -pandemics. Specifically, women’s non-athletic footwear grew by mid-digits, while men’s non-athletic styles grew by low-single digits in the first quarter of 2022 compared to the same period last year. . Children’s shoes were down in teens, while adult athletic styles were down 20% from the first quarter of 2021. Those numbers, according to Worden, bring the retailer’s category mix “back to our normal distribution of ‘about 50-50 athletes and non-athletes. .”
And on inventory levels, Worden added that despite global supply chain challenges and goods being safeguarded at ports, Shoe Carnival’s inventory per door is up around 20% over last year and over 2019 and is “positioned to win” the back-to-school season with these inventory levels.
Looking ahead, Shoe Carnival expects net sales to grow 4% to 7% in fiscal 2022 from the prior year.