FORT MILL, S.C.--(BUSINESS WIRE)--September 10, 2026--
Shoe Station Group, Inc. (Nasdaq: SHOE) (the "Company"), a leading omnichannel retailer of footwear and accessories for the family, today reported results for the second quarter ended August 1, 2026 and updated its Fiscal 2026 guidance.
On June 12, 2026, following overwhelming shareholder approval, the Company changed its name to Shoe Station Group, Inc. In connection with the name change, the Company's common stock began trading on The Nasdaq Stock Market LLC under the symbol SHOE.
Second Quarter 2026 and Back-to-School Highlights
-- Net sales of $284.3 million compared to $306.4 million in the second
quarter 2025.
-- Shoe Carnival banner net sales declined 6.5 percent; Shoe Station
banner net sales declined 8.4 percent. Sales in both banners were
impacted by an increasingly promotional footwear marketplace and by
assortments not fully aligned with the customers shopping the stores.
-- Gross profit margin of 31.9 percent, compared to 38.8 percent in the
second quarter of 2025, reflecting increased promotional activity,
liquidation of aged and excess inventory, and the prior-year benefit from
raising prices in advance of tariff-related cost increases.
-- Cash, cash equivalents, and marketable securities of $131.6 million at
quarter-end, an increase of $39.7 million compared to the second quarter
of 2025; the Company ended the second quarter of 2026 debt-free.
-- Back-to-school comparable store sales improved significantly from
second quarter trends, with August comparable store sales down low single
digits, supported by improved and more localized assortments.
-- Full year 2026 net sales guidance and non-GAAP adjusted diluted
earnings per share ("Adjusted EPS") guidance lowered to reflect Q2
results and current family footwear industry trends.
"Our second quarter results reflect a footwear marketplace that became increasingly promotional as the quarter progressed. We priced competitively to protect our market position and accelerated the liquidation of aged and excess inventory, both of which pressured our gross profit margin. Sales were further impacted by merchandise assortments that were not fully aligned with the customers shopping our stores. The significant improvement in our fiscal August back-to-school results reflects the better and more localized assortments in athletic footwear," said Cliff Sifford, Interim President and Chief Executive Officer.
"The majority of our fall merchandise has been allocated with localized assortments, which we expect to further benefit sales performance, and we believe our boot assortment is outstanding. We are supporting the fall season with incremental investment in advertising to drive customer traffic and to communicate our value proposition and product offering. These actions do not change our expectation that the promotional environment will persist through the balance of the year, and our updated guidance reflects that environment. We enter the second half with no debt, $131.6 million of cash and marketable securities, and inventory positioned to serve our customers," concluded Mr. Sifford.
Second Quarter 2026 Operating Results
Net sales in the second quarter of 2026 were $284.3 million compared to $306.4 million in the second quarter of 2025. Comparable store sales declined 7.1 percent.
By banner:
-- Shoe Carnival net sales were $178.5 million, representing 63 percent of
total net sales, and declined 6.5 percent, inclusive of a comparable
store net sales decline of 6.3 percent.
-- Shoe Station net sales were $105.7 million, representing 37 percent of
total net sales, and declined 8.4 percent, inclusive of a comparable
store net sales decline of 8.5 percent.
During the second quarter of 2026, the Company rebannered 20 Shoe Carnival stores into Shoe Station stores, marking 21 total rebanners year-to-date in Fiscal 2026. The Company does not expect to rebanner any additional stores for the remainder of Fiscal 2026.
Gross profit margin in the second quarter of 2026 was 31.9 percent, a decrease of 690 basis points compared to the second quarter of 2025. Merchandise margin decreased 630 basis points compared to the second quarter of 2025. Merchandise margin in the second quarter of 2025 included a temporary benefit from raising prices in advance of increasing tariff-related costs. In the second quarter of 2026, merchandise margins were also impacted by increased promotional activity and product liquidation. Although buying, distribution and occupancy costs decreased compared to the second quarter of 2025, due to lower net sales, these costs reduced gross profit margin by 60 basis points.
Selling, general and administrative expenses ("SG&A") decreased $10.6 million compared to the second quarter of 2025. As a percent of net sales, SG&A for the second quarter of 2026 was 29.2 percent as compared to 30.6 percent in the second quarter of 2025. The lower SG&A was driven by lower selling costs, primarily advertising and other rebanner-related expenses, and lower performance-based compensation.
Income tax expense in the second quarter of 2026 was $2.3 million and the effective tax rate in the second quarter of 2026 was 26.7% compared to 25.9% in the second quarter of 2025.
Net income for the second quarter of 2026 was $6.3 million, or $0.23 per diluted share, compared to net income of $19.2 million, or $0.70 per diluted share, in the second quarter of 2025.
Year-to-Date 2026 Operating Results
Net sales during the first six months of 2026 (year-to-date 2026) were $555.0 million, a decrease of 5.0 percent compared to the first six months of 2025 (year-to-date 2025). Comparable store sales declined 4.7 percent. By banner, Shoe Carnival comparable store sales declined 4.0 percent and Shoe Station comparable store sales declined 5.8 percent.
Gross profit was $180.7 million in year-to-date 2026, a decrease of $33.9 million compared to year-to-date 2025. Gross profit margin was 32.6 percent in year-to-date 2026 compared to 36.7 percent in year-to-date 2025.
SG&A increased $1.7 million in year-to-date 2026 compared to year-to-date 2025. As a percent of net sales, SG&A for year-to-date 2026 was 32.3 percent compared to 30.3 percent in year-to-date 2025. Year-to-date 2026 non-GAAP adjusted SG&A ("Adjusted SG&A") decreased $11.9 million on lower advertising and other rebanner-related costs and lower performance-based compensation. Adjusted SG&A excludes non-recurring charges of $13.6 million incurred in the first quarter of 2026 related to the previously disclosed Chief Executive Officer transition (the "CEO Transition") and the Company's strategic review of its rebanner strategy and other operations (the "Strategic Review").
The Company's effective tax rate in year-to-date 2026 was 81.8 percent compared to 26.6 percent in year-to-date 2025. The increase was primarily due to the non-deductibility of a portion of the severance paid as part of the CEO Transition. The Company's non-GAAP adjusted effective tax rate ("Adjusted Tax Rate") for year-to-date 2026, which excludes the impacts related to the CEO Transition, was 26.8 percent.
Year-to-date 2026 net income was $0.6 million, or $0.02 per diluted share. Year-to-date non-GAAP adjusted net income ("Adjusted Net Income") and Adjusted EPS, which each exclude the impacts from the non-recurring charges recorded in the first quarter of 2026 discussed above, were $12.5 million and $0.45 per diluted share, respectively, compared to net income of $28.6 million and EPS of $1.04 in the first six months of 2025.
Back-to-School Performance Update
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 compared to the same period in 2025. This is a significant improvement compared to the comparable store sales decline of 7.1 percent in the second quarter of 2026.
Fiscal 2026 Guidance
The Company is adjusting its previously communicated Fiscal 2026 guidance, which now contemplates:
-- Net sales of $1.100 billion to $1.111 billion, representing a decline
of approximately 2 to 3 percent versus Fiscal 2025, inclusive of
comparable store sales for the second half of Fiscal 2026 in a range of
down 1 percent to up 1 percent;
-- GAAP EPS of $0.32 to $0.47 and Adjusted EPS of $0.75 to $0.90;
-- Gross profit margin of approximately 32.5 to 32.7 percent, representing
approximately 390 to 410 basis points of compression versus Fiscal 2025;
-- GAAP SG&A approximately flat versus Fiscal 2025 and a reduction in
Adjusted SG&A of approximately $14 million versus Fiscal 2025, inclusive
of incremental advertising investment supporting the fall and holiday
seasons; and
-- A GAAP tax rate of approximately 37 percent and an Adjusted Tax Rate of
approximately 27 percent.
The Company's Adjusted EPS, reduction in Adjusted SG&A and Adjusted Tax Rate guidance excludes the $13.6 million of non-recurring pre-tax charges related to its CEO Transition and the Strategic Review recorded during the first quarter of 2026. A reconciliation of the adjusted guidance measures to the corresponding GAAP guidance measures is provided in a table at the end of this press release.
Conference Call
Today, at 9:00 a.m. Eastern Time, the Company will host a conference call to discuss its second quarter results. Participants can listen to the live webcast of the call by visiting Shoe Station Group's Investors webpage at investors.shoestationgroupinc.com. While the question-and-answer session will be available to all listeners, questions from the audience will be limited to institutional analysts and investors. A replay of the webcast will be available on the Company's website shortly after the conclusion of the conference call and will be archived for one year.
About Shoe Station Group
Shoe Station Group, Inc. is one of the nation's largest omnichannel family footwear retailers, offering a broad assortment of dress, casual and athletic footwear for men, women and children with emphasis on national name brands. As of September 10, 2026, the Company operated 421 stores in 35 states and Puerto Rico under its Shoe Carnival and Shoe Station banners and offers shopping at shoecarnival.com and shoestation.com. Headquartered in Fort Mill, SC, and with distribution and support operations located in Evansville, IN, Shoe Station Group, Inc. trades on The Nasdaq Stock Market LLC under the symbol SHOE.
Press releases and annual reports are available on the Company's website at investors.shoestationgroupinc.com.
Cautionary Statement Regarding Forward-Looking Information
As used herein, "we," "our" and "us" refer to Shoe Station Group, Inc. This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties, such as statements about our future growth, execution of our current multi-banner strategy, sales expectations, corporate and store level inventory management, the financial impact of a continuing promotional footwear industry, the success of our advertising investment to drive customer traffic through the fall and holiday seasons, store growth, cost savings, operations and results, cash flows, and shareholder returns. These forward-looking statements necessarily depend upon assumptions, estimates, data and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties, and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. Forward-looking statements can be identified by, among other things, the use of forward-looking terms such as "believes," "expects," "aims," "on track," "may," "will," "should," "seeks," "pro forma," "anticipates," "intends" or the negative of any of these terms, or comparable terminology, or by discussions of strategy or intentions. Given these uncertainties, we caution investors not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We disclaim any obligation to update any of these factors or to publicly announce any revisions to the forward-looking statements contained in this press release to reflect future events or developments. A number of factors could cause our actual results, performance, achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to:
-- our ability to increase sales at our existing stores;
-- the impact of intense competition and our ability to effectively
compete;
-- the impact of changes in consumer spending on our business and the
impact of our promotional strategies and intensity;
-- our ability to successfully manage and execute our marketing and
pricing strategies;
-- the impact of higher gasoline and energy prices on discretionary
spending and our cost of operations;
-- our dependence on key suppliers for merchandise and advertising support,
and the impact of any loss of any key suppliers;
-- the impact of changes in the cost, or a disruption in the flow, of
imported goods as a result of trade policy and/or tariffs;
-- our ability to manage other risks related to our reliance on imported
goods;
-- our ability to anticipate, identify and respond to emerging fashion
trends;
-- our ability to effectively manage our real estate portfolio;
-- our ability to manage the risks associated with our e-commerce platform
and its impact on traffic and transactions in our physical stores;
-- our ability to maintain positive brand perception and recognition;
-- our ability to maintain, grow and generate sales from members of our
Shoe Perks loyalty program;
-- our ability to successfully execute our strategies to grow our
business;
-- our ability to identify or consummate future acquisitions or achieve
expected benefits from and effectively integrate future acquisitions;
-- the internal and external impact of a failure of our information
technology systems to operate effectively, or in the event such systems
are disrupted or compromised;
-- our ability to manage the risks associated with our outsourced business
processes and other third-party business relationships, including
disruptions to our business and increased costs;
-- our ability to adapt to emerging technologies that may create
disruption to our operations and the retail industry;
-- our ability to manage, and the impact of, fluctuating quarterly
operating results due to seasonality, weather conditions and other
factors;
-- the impact of any physical and financial risk related to the
uncertainty of climate change;
-- the impact of natural disasters, public health crises, political crises,
civil unrest, wars, and other catastrophic events or other events outside
of our control on our facilities or the facilities of third parties on
which we depend, as well as on our supply chain and access to customers;
-- the impact of litigation and reputational risk resulting from a failure
to protect the integrity and security of individually identifiable data
of our customers and employees, including as a result of a cybersecurity
breach;
-- the impact of losses or liabilities in excess of our insurance
coverage;
-- the impact of periodic litigation and other regulatory proceedings,
which could result in the unexpected expenditure of time and resources;
-- our ability to manage key executive succession and retention, and
attract and retain qualified personnel and control labor costs;
-- our ability to generate and maintain cash flow and capital necessary to
implement our business strategy and meet our other liquidity needs;
-- the impact of financial market volatility on the sources and costs of
financing available to us;
-- the impact of significant non-cash impairment charges in the event our
long-lived assets become impaired;
-- the impact of the loss of investor confidence in our financial reports
and adverse effect on our stock price if we fail to maintain effective
internal control over financial reporting;
-- the impact of perceptions of the overall retail industry and other
macroeconomic conditions on our business and stock;
-- the impact and risk of volatility in the stock market and our stock;
-- the impact of any changes to our dividend policy or stock repurchase
program;
-- the impact of any influence over our management and operations exerted
by our principal shareholders;
-- the impact of our organizational documents and Indiana law on potential
acquisition bids for us; and
-- other factors described in our SEC filings, including our latest Annual
Report on Form 10-K and our subsequent SEC filings.
Financial Tables Follow
SHOE STATION GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Thirteen Thirteen Twenty-six Twenty-six
Weeks Weeks
Ended Ended Weeks Ended Weeks Ended
August 1, August 2, August 1, August 2,
2026 2025 2026 2025
--------- --------- ----------- -----------
Net sales $ 284,309 $ 306,388 $ 555,039 $ 584,103
Cost of sales
(including buying,
distribution and
occupancy costs) 193,698 187,580 374,327 369,518
-------- -------- ---------- ----------
Gross profit 90,611 118,808 180,712 214,585
Selling, general and
administrative
expenses 82,996 93,580 179,134 177,392
-------- -------- ---------- ----------
Operating income 7,615 25,228 1,578 37,193
Interest income (1,011) (782) (2,073) (1,885)
Interest expense 90 77 175 155
-------- -------- ---------- ----------
Income before income
taxes 8,536 25,933 3,476 38,923
Income tax expense 2,277 6,708 2,845 10,355
-------- -------- ---------- ----------
Net income $ 6,259 $ 19,225 $ 631 $ 28,568
======== ======== ========== ==========
Net income per
share:
Basic $ 0.23 $ 0.70 $ 0.02 $ 1.05
Diluted $ 0.23 $ 0.70 $ 0.02 $ 1.04