Core Insights - W. Kerry Jackson has returned to Shoe Carnival as executive vice president and chief financial officer, effective September 28, 2023, after previously serving in this role for 27 years before retiring in May 2023 [1][2][3] Leadership Changes - Patrick C. Edwards, who was the senior vice president and chief financial officer since 2023, will now take on the role of senior vice president and treasurer while remaining a key member of the finance leadership team [3] Business Development and Growth Plans - Shoe Carnival celebrated the grand opening of its 100th Shoe Station store, expanding from 21 locations with plans to exceed 215 stores by July 2026 [4] - Jackson's return to the CFO role aligns with the company's strategic plan execution, leveraging his extensive knowledge of the business [4] Financial Performance - For the second quarter of fiscal 2025, Shoe Carnival reported net sales of $306.4 million, a decrease of 7.9% from $332.7 million in the second quarter of 2024 [4] - The net income for Q2 was $19.2 million, or 70 cents per diluted share, compared to $22.6 million, or 82 cents per diluted share in the prior year [4] - The reported results exceeded analyst expectations, which forecasted net sales of $299.02 million and earnings per share of 50 cents [5]

Core Insights - Deckers Outdoor Corporation (DECK) reported strong first-quarter fiscal 2026 results, driven by flagship brands HOKA and UGG, with revenues of $964.5 million, a 17% year-over-year increase, and earnings per share rising 24% to 93 cents, indicating robust consumer demand [1][11] Group 1: Brand Performance - HOKA emerged as the primary growth driver, achieving record quarterly revenues of $653.1 million, a 19.8% increase from the prior year, supported by global wholesale expansion and strong international demand [2][11] - UGG experienced 18.9% growth, reaching $265.1 million, marking its largest June quarter in history, with success attributed to diversification into men's footwear and year-round styles [3][11] Group 2: Strategic Initiatives - The company’s 365 initiative has successfully broadened UGG's consumer base while maintaining its iconic appeal, aided by strong wholesale momentum and new product launches [3][11] - Deckers has implemented selective price increases and operational efficiencies to counteract rising tariffs and freight costs, although these measures may impact near-term profitability [4][5] Group 3: Future Outlook - For second-quarter fiscal 2026, net sales are projected between $1.38 billion and $1.42 billion, with HOKA expected to grow by 10% and UGG anticipated to see mid-single-digit growth [6] - Deckers is well-positioned for continued long-term growth, with HOKA leading performance in running and UGG evolving into a versatile lifestyle brand [5]

Core Points - Shoe Carnival, Inc. has declared a quarterly cash dividend of $0.15 per share, to be paid on October 20, 2025, to shareholders of record as of October 6, 2025 [1][2] - This dividend marks the 54th consecutive quarterly dividend and reflects the company's strong cash flow, with nearly $150 million in cash and securities available after the Back-to-School season [3] - The company operates with no debt on its balance sheet, positioning it well for future investments and enhancing shareholder returns [3] Company Overview - Shoe Carnival, Inc. is a leading retailer of family footwear, operating 428 stores across 35 states and Puerto Rico, and also offers online shopping [5] - The company emphasizes national name brands in its product offerings, which include dress, casual, and athletic footwear for men, women, and children [5] - Shoe Carnival trades on the Nasdaq Stock Market under the symbol SCVL [5]

Core Insights - Steven Madden, Ltd. (SHOO) reported second-quarter fiscal 2025 results, indicating ongoing tariff impacts on profitability despite solid consumer demand for the brand [1][10] - Order cancellations and shipment delays, particularly in mass and off-price channels, negatively affected performance, pushing deliveries into later periods and creating pressure on earnings [1][5] Financial Performance - Gross margin remained at 41.9%, an increase of 40 basis points year over year, but tariffs reduced profitability by approximately 230 basis points after supplier discounts [2][10] - Wholesale gross margin decreased to 31% from 33.1%, while direct-to-consumer margin fell to 61.3% from 64.3%, influenced by higher landed costs and the lower-margin Kurt Geiger concessions business [2][10] - Operating income dropped to 4% of revenues compared to over 10% a year ago, leading to adjusted quarterly earnings declining 64.9% from $0.57 to $0.20 per share [2][10] Supply Chain Management - To address supply-chain pressures, the company diversified production to countries like Vietnam and Cambodia while shifting some orders back to China to ensure timely delivery and maintain quality [3][10] - Global trade uncertainty continues to inflate inventory costs and lengthen transit times, making sourcing diversification an ongoing process [3] Pricing Strategy - The company implemented average price increases of about 10% to counter rising costs, with early consumer acceptance being encouraging in categories like boots and dress shoes [4] - Price-sensitive items, such as sandals and sneakers, remain under pressure, and the full impact of pricing strategies is expected to be clearer in the fall season [4] Future Outlook - Management anticipates margin pressure to persist through the fiscal third quarter, with potential easing later in the year if trade conditions stabilize [5] - Until the tariff environment becomes clearer, EBIT margins are unlikely to return to historical double-digit levels, but the company remains confident in brand strength and consumer demand for new assortments [5] Stock Performance and Valuation - Shares of the company have gained 13.6% in the past six months, outperforming the industry's 5.5% growth [8] - From a valuation perspective, Steven Madden is trading at a forward 12-month price-to-sales ratio of 0.87X, significantly lower than the industry average of 1.96X [9]

Group 1 - Designer Brands has improved its in-stock levels of regular-priced products to about 70%, indicating progress in inventory availability [3] - The company is strategically reducing its choice count for the latter half of 2025 by 25% while increasing the depth of its inventory by 15% to enhance inventory productivity [4] - Designer Brands ended the second quarter with total inventories down 5% year over year [4] Group 2 - Other companies, such as Target and Nordstrom Rack, are also reevaluating their in-store fulfillment strategies to optimize supply chain operations [5][6] - Target is scaling back on in-store fulfillment operations to enhance the customer retail experience, advising some stores to shut down e-commerce packing stations [5] - Nordstrom Rack has slowed in-store fulfillment to simplify operations and reduce order cancellations [6] Group 3 - Designer Brands is shifting U.S. inventory between digital fulfillment centers and store locations to optimize in-store product availability [7] - The company reported that over 80% of its digital demand was fulfilled through logistics centers in the second quarter, which is more operationally efficient than fulfilling from stores [7]

Group 1 - Shoe Carnival (NASDAQ: SCVL) reported a decline in sales for 2Q25, mirroring the performance seen in 1Q25 [1] - Gross margins showed significant improvement, but this was insufficient to offset the deleverage in selling, general and administrative expenses (SG&A) [1] - Profits were lower compared to the previous year, and this trend is expected to continue [1]

Company Performance - Shoe Carnival (NASDAQ: SCVL) reported a decline in sales for 2Q25, mirroring the performance seen in 1Q25 [1] - Despite a significant improvement in gross margins, the gains were insufficient to offset the deleverage in selling, general, and administrative (SG&A) expenses [1] - Profits for the company were lower compared to the previous year, with expectations of continued decline [1] Investment Perspective - The investment approach focuses on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The strategy emphasizes holding companies for the long term, with a preference for a small fraction of companies being classified as a buy at any given time [1]

Core Insights - Ulta Beauty, Inc. (ULTA) continues to lead in the beauty retail sector by integrating mass, prestige, and luxury products into a dynamic shopping experience, demonstrating strong traffic growth in both physical and digital channels [1] Expansion Strategy - Ulta Beauty has opened its first stores in Mexico, marking its international brick-and-mortar debut and a significant milestone in its growth strategy [2] - The company collaborates with Axo to provide an exclusive retail experience in Mexico, focusing on expanding its global presence [2][9] Product Offering - The new stores in Mexico feature a curated selection of 35 beauty brands, including exclusives like Isima by Shakira and local Mexican labels such as AHAL and AloeVida [5][9] - The stores will offer a variety of products across makeup, skincare, haircare, fragrance, and wellness, along with trend-driven displays and beauty services [3][5] Market Presence - The first store was inaugurated on August 21 at Antara Fashion Hall in Mexico City, followed by another opening on August 30 at Galerías Metepec, with more locations planned throughout the year [4] Growth Potential - Ulta Beauty's strategy focuses on five key areas: enhancing product assortment, increasing social relevance, improving digital experiences, leveraging its loyalty program, and evolving promotional strategies [7] - The company's efforts in influencer marketing and social media have significantly boosted brand awareness and customer engagement, contributing to a 45.7% increase in shares compared to the industry's 22.8% growth [7]

Group 1 - Shoe Carnival's shares increased by 20.3% on September 4th following the announcement of its second-quarter financial results [1] - The company is focused on generating cash flow, which is essential for value and growth prospects [1] Group 2 - Crude Value Insights provides an investing service centered on oil and natural gas, emphasizing cash flow analysis [2] - Subscribers have access to a stock model account and in-depth analyses of exploration and production firms [2]

Financial Data and Key Metrics Changes - The company reported Q2 net sales of $306.4 million, a decrease from $332.7 million in the prior year, reflecting a 7.9% change due to a strategic focus on higher margin business [26] - Gross profit margin reached 38.8%, representing a 270 basis point expansion compared to the previous year, driven by disciplined pricing and improved inventory availability [29][30] - Net income was $19.2 million, or $0.70 per diluted share, down from $22.6 million, or $0.82 per share in the prior year [31] Business Line Data and Key Metrics Changes - Shoe Station sales grew by 1.6%, with comparable store sales essentially flat, while Shoe Carnival sales declined by 10.1% due to pricing discipline amidst pressure on low-income consumers [27][28] - The children's category saw high single-digit growth in sales, while the adult athletics category grew in the low 20s, contributing to overall positive comparable sales growth [12][28] Market Data and Key Metrics Changes - The company is experiencing a shift in customer demographics, with a growing number of customers from households earning over $50,000, which is driving improved economics and reducing exposure to economic downturns [9][20] - The company reported that the sub-$30,000 income consumer is facing ongoing pressure, leading to a strategic shift away from this segment [19] Company Strategy and Development Direction - The company is focusing on a rebanner strategy, prioritizing margin dollars over lower quality sales, and investing in inventory depth to improve availability [7][10] - By the end of fiscal 2025, the company plans to operate 145 Shoe Station stores, which will represent approximately one-third of its entire fleet, indicating a significant shift in its business model [14][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position, highlighting a debt-free status and cash and securities exceeding $148 million, up over 10% year over year [20][31] - The company raised its annual EPS guidance range to reflect the Q2 profit beat and positive August comparable sales growth results [25][34] Other Important Information - The company is investing approximately $25 million in its rebanner strategy, expecting a two to three-year ROI payback [21] - Inventory levels were reported at $449 million, up 5% year over year, reflecting strategic investments to improve product availability [31][32] Q&A Session Summary Question: Sales performance in Q2 and unexpected changes - Management noted that opportunistic buys and additional inventory performed better than expected, contributing to higher margins [43] Question: Third quarter guidance on sales and margins - The company expects Q3 sales in the range of $290 million to $300 million, with gross margins targeted at 37% to 37.5% [46] Question: Managing Shoe Carnival as a cash generator - Management clarified that they are not chasing low-income customers with aggressive pricing, focusing instead on maintaining margin integrity [48][50] Question: Impact of rebannering on next year's earnings - Management indicated that reaching 51% of the fleet as Shoe Station will lead to sustained positive comparable sales growth [52] Question: Inventory levels and gross margin guidance - Management acknowledged having higher inventory levels but emphasized that it is strategically positioned for margin opportunities [60][64]