Shoe Station Cuts Full-Year Sales Outlook After 7.1% Comp Drop
The family footwear retailer guided fiscal 2026 net sales to $1.100 billion to $1.111 billion after second-quarter comparable store sales fell 7.1 percent.
Shoe Station Group, Inc. (SHOE), an omnichannel retailer of family footwear, lowered its fiscal 2026 sales and earnings outlook after comparable store sales declined 7.1 percent in the thirteen weeks ended August 1, 2026, a sharp worsening from the 2.1 percent comparable decline in the first quarter.
Net sales were $284.3 million, compared with $306.4 million a year earlier. The company said sales in both banners were hit by an increasingly promotional footwear marketplace and assortments that were not fully aligned with the customers shopping in the stores.
The Shoe Carnival banner, which accounted for 63 percent of net sales, posted $178.5 million, down 6.5 percent, including a 6.3 percent comparable store sales decline. That followed a 2.2 percent banner sales decline and a 1.7 percent comparable decline in the first quarter. Shoe Station net sales were $105.7 million, down 8.4 percent, including an 8.5 percent comparable store sales decline, after a 3.1 percent banner sales decline and a 2.9 percent comparable decline in the prior quarter.
Gross profit margin compressed to 31.9 percent from 38.8 percent a year earlier, a 690-basis-point drop, after 33.3 percent in the first quarter versus 34.5 percent a year earlier. Merchandise margin decreased 630 basis points versus the year-ago quarter. The company said merchandise margins were also impacted by increased promotional activity and product liquidation, and that the year-ago quarter had included a temporary benefit from raising prices in advance of tariff-related cost increases.
Selling, general and administrative expenses decreased $10.6 million versus the year-ago quarter and were 29.2 percent of net sales, compared with 30.6 percent a year earlier. The company said the lower SG&A was driven by lower selling costs, primarily advertising and other rebanner-related expenses, and lower performance-based compensation. Net income was $6.3 million, or $0.23 a share, compared with $19.2 million, or $0.70 a share, a year earlier.
Cash, cash equivalents, and marketable securities were $131.6 million at quarter-end, an increase of $39.7 million compared with the second quarter of 2025. The company ended the quarter debt-free.
During the quarter, the company rebannered 20 Shoe Carnival stores into Shoe Station, marking 21 total rebanners year-to-date in fiscal 2026. It said it does not expect to rebanner any additional stores for the remainder of the fiscal year.
Through the four weeks of fiscal August ended August 29, 2026, net sales declined 3.3 percent and comparable store sales declined 2.7 percent, which the company described as a significant improvement from the 7.1 percent comparable store sales decline in the second quarter. Interim President and Chief Executive Officer Cliff Sifford said the improvement reflected better and more localized assortments in athletic footwear.
The company is adjusting previously communicated fiscal 2026 guidance to net sales of $1.100 billion to $1.111 billion, a decline of about 2 to 3 percent versus fiscal 2025, with second-half comparable store sales in a range of down 1 percent to up 1 percent. GAAP EPS guidance is $0.32 to $0.47, and Adjusted EPS guidance is $0.75 to $0.90. Gross profit margin is guided at approximately 32.5 to 32.7 percent, about 390 to 410 basis points of compression versus fiscal 2025. GAAP SG&A is expected to be approximately flat versus fiscal 2025, with a reduction in Adjusted SG&A of about $14 million, inclusive of incremental advertising investment supporting the fall and holiday seasons.
Sifford said the majority of fall merchandise has been allocated with localized assortments, which the company expects to further benefit sales performance, and that it is supporting the fall season with incremental advertising investment. He said these actions do not change the expectation that the promotional environment will persist through the balance of the year, and that the updated guidance reflects that environment.