Shoe Carnival See Sales Dip in Q3, But Benefits of Shoe Station Conversion Come Into Focus

Core Insights - Shoe Carnival reported a net income of $14.6 million for Q3, down from $19.2 million in the previous year, reflecting a decrease in earnings per diluted share from 70 cents to 53 cents [1] - The company’s net sales decreased by 3.2% to $297.2 million compared to $306.9 million in Q3 2024, with Shoe Station showing a 5.3% increase in net sales while Shoe Carnival experienced a 5.2% decline [2] Rebranding Strategy - The board of directors approved a name change to Shoe Station Group, pending shareholder approval in June 2026 [3] - As of November 20, Shoe Station accounts for 34% of the company's 428-store fleet, a significant increase from 10% at the start of fiscal 2025 [4] - The company aims to operate 215 Shoe Station stores by back-to-school 2026, which would represent 51% of its fleet, with plans for over 90% of the fleet to transition to Shoe Station by the end of fiscal 2028 [5] Financial Implications - The transition to Shoe Station is expected to yield $20 million in annual cost savings and a $100 million reduction in inventory investment, which is projected to be 20-25% less per store [6] - To achieve the 51% threshold for Shoe Station by back-to-school 2026, the company plans to rebanner 70 stores, with capital expenditures estimated between $25 million to $35 million [7]