US-based footwear retailer Shoe Carnival has reported that its net sales dropped by 5.7% to $294.6m in the second quarter (Q2) of fiscal year (FY) 2023, compared to $312.26m in Q2 FY22.

During the quarter ended 29 July 2023, the retailer’s comparable store sales decreased by 6.5%, but its e-commerce sales grew by 5.4%.

The retailer’s selling, general and administrative expenses (SG&A) were $80.8m in Q2 FY23, representing 27.4% of net sales.

Gross profit margin of Shoe Carnival was down by 40 basis points (bps) to 35.8%, driven by a decline of merchandise margin by 20bps.

Its net income for Q2 FY23 was $19.4m, down from $28.9m a year ago while earnings per diluted share were $0.71 against $1.04 in Q2 FY22.

The retailer opened its 400th store this month, taking its total store count to 373 Shoe Carnival stores and 27 Shoe Station stores.

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By GlobalData

It aims to cross 500 stores by 2028.

Shoe Carnival president and chief executive officer Mark Worden said: “Our second quarter results demonstrated the momentum of our strategy within the context of a challenging economic backdrop.

“We delivered improvement on net sales, earnings per share and market share growth versus first quarter 2023, while also increasing investment in our branding, advertising and in-store experience.”

For the full year of 2023, the retailer expects net sales in the range of $1.19bn to $1.21bn and net income to be between $85m and $89m.

Shoe Carnival also expects diluted EPS of $3.10 to $3.25 in FY23.

Worden added: “We saw improving conditions related to the impact of inflation in the second quarter, but some of our urban customers remain challenged in the current economic environment. As such, we are taking a measured approach to the balance of the year. Given the strength of our balance sheet and our strategy, we are in a strong position to grow as the economy improves and continue to actively evaluate both organic and acquisition-related opportunities.”