Shares of Shoe Station Group fell over 5 percent Thursday morning after the company missed quarterly expectations.
In its first earnings report since it officially changed its name from Shoe Carnival, the Fort Mills, S.C.-based company saw income in the second quarter of fiscal 2026 of $6.3 million, or 23 cents per diluted share, compared to net income of $19.2 million, or 70 cents per diluted share, in the same time last year.
Net sales were $284.3 million compared to $306.4 million in the same time last year. Comparable store sales declined 7.1 percent.
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These results were below analysts’ expectations, which called for net sales in the quarter between $300 million and $301.33 million, and earnings per share between 48 cents and 51 cents per share.
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.
Cliff Sifford, interim president and chief executive officer of Shoe Station Group, said in a statement that the company’s 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,” Sifford noted. “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.”
Through the four weeks ended Aug. 29, net sales declined 3.3 percent, and comparable store sales declined 2.7 percent compared to the same period in 2025. Shoe Station noted that this performance is a “significant improvement” compared to the comparable store sales decline of 7.1 percent in the second quarter of 2026.
The interim CEO added that the majority of the company’s fall merchandise has been allocated with localized assortments, which is expected to further benefit sales performance.
“We are supporting the fall season with incremental investment in advertising to drive customer traffic and to communicate our value proposition and product offering,” Sifford said. “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.”
Looking ahead, the company is adjusting its previously communicated fiscal 2026 guidance, which now calls for net sales between $1.10 billion to $1.11 billion, representing a decline of approximately 2 to 3 percent versus fiscal 2025.
This is down from the previous yearly guidance issued at the end of the first quarter which called for net sales between $1.13 billion to $1.15 billion, representing a range of down 1 percent to up 1 percent versus fiscal 2025.