SHOE CARNIVAL INC
For the period ended May 2, 2026. Filed Jun 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 2, 2026 · Filed Jun 5, 2026
SHOE$14.54-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-01; filed 2025-12-05.
0001193125-25-308714
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-02; filed 2026-06-05.
0001193125-26-258362
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 84 current paragraphs.
26 unchanged; 23 reworded; 35 added; 36 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Shoe Carnival
Current report
Our Shoe Carnival retail concept has developed over our 47-year history and is differentiated from our competitors by our distinctive, fun and promotional marketing efforts. Shoe Carnival stores combine competitive pricing with a high-energy in-store environment that encourages customer participation. Unique features of our Shoe Carnival store experience include upbeat music, opportunities for customers to spin our spin-n-win wheel and a mic-person who runs in-store specials. These specials include contests, games and hot deals of the moment to encourage customers to take immediate advantage of our special, in-store pricing. Our Shoe Carnival bannered stores serve families with children through moderate-income brands and a value-oriented selection, with entry-level price points.
Current report
Shoe Station
Current report
CEO Transition
Current report
Following the departure of Mark J. Worden from his position as our President and Chief Executive Officer and his resignation from our Board on February 24, 2026, our Board appointed Clifton E. Sifford to serve as our Interim President and Chief Executive Officer. Mr. Sifford continues to also serve as the Vice Chairman of our Board. Mr. Worden’s departure was not due to any disagreement with the Company on any matter relating to its operations, policies or practices.
Current report
Mr. Worden’s departure was treated as a termination without cause pursuant to his Amended and Restated Employment and Noncompetition Agreement, dated as of November 1, 2024. Payments to Mr. Worden included 168,184 shares of our common stock for the settlement of outstanding equity awards whose vesting accelerated upon his termination without cause and a cash payment of $4.8 million. Payments to Mr. Worden and other related costs incurred, net of accruals for incentive and stock-based compensation as of January 31, 2026, resulted in a charge of $5.3 million in first quarter 2026. The tax deductibility of the payments made to Mr. Worden was limited by the Internal Revenue Code and increased our income tax expense by approximately $1.6 million. The impact on our Diluted Net Loss per Share in first quarter 2026 was $0.20.
Current report
In first quarter 2026, we furthered our Fiscal 2026 goals by completing a review of our rebanner strategy and strategic direction, selling down inventory, and maintaining our capital discipline.
Current report
Our Strategic Direction
Current report
Following the CEO transition described above, we undertook a review of our previously announced rebanner program as well as our broader strategic direction. We completed our review during first quarter 2026 and determined that:
Current report
While our proposed corporate name change to Shoe Station Group, Inc. reflects the Board’s conviction that the Shoe Station concept is our primary long-term growth vehicle, we are no longer pursuing a single-banner Shoe Station strategy. The Shoe Carnival and Shoe Station banners will each serve distinct consumer segments, and we believe the Company is best positioned to operate both banners as permanent, independent components of our portfolio.
Current report
Only a limited number of additional Shoe Carnival locations meet the criteria for conversion to our Shoe Station banner. However, we continue to feel confident about growth opportunities for the Shoe Station banner through new store growth in markets that serve the target customer.
Current report
There are underperforming stores within our store fleet that we do not believe have a path to acceptable economics, with or without banner conversion. We expect to close 12 to 14 such stores during Fiscal 2026 and a further six to 10 stores during Fiscal 2027.
Current report
These decisions resulted in first quarter 2026 store level long-lived asset impairments, other Property and Equipment write-offs and other charges totaling approximately $8.3 million, or $0.23 per diluted share.
Current report
When combined with the CEO transition costs discussed above, these charges increased our Selling, General and Administrative Expenses (“SG&A”) in first quarter 2026 by $13.6 million and increased our Net Loss and Diluted Net Loss per Share by $11.9 million and $0.43, respectively.
Current report
Inventory Reductions
Current report
Our Merchandise Inventories at the end of first quarter 2026 were $417.2 million, down $11.2 million, or 2.6%, compared to the end of first quarter 2025. We anticipate aggregate declines in Merchandise Inventories in a range of $50 to $65 million by the end of Fiscal 2026 compared to the end of Fiscal 2025 as we expect to sell the remaining opportunistic pre-tariff and in-demand product purchased in Fiscal 2025 and increase promotional activity to work through excess inventory not part of our ongoing assortment, including legacy Shoe Carnival inventory, that will no longer be required as a result of rebannering. The promotional activity necessary to sell this inventory is expected to reduce gross profit margins in Fiscal 2026 compared to the 36.6% gross profit margin achieved in Fiscal 2025. Our first quarter 2026 gross profit margin declined 120 basis points compared to first quarter 2025.
Current report
Capital Discipline and Return of Capital to Shareholders
Current report
During first quarter 2026, we returned approximately $12.0 million to shareholders through dividends and share repurchases. The $5.0 million in dividend payments in first quarter 2026 were paid at an increased rate of $0.17 per share, up 13.3% compared to the first quarter 2025. This increase represented the 12th consecutive year we increased our quarterly dividend rate. The new Fiscal 2026 annualized rate represents a compounded annual growth rate of approximately 15.5% over the past 12 years. We have now paid a dividend for 56 consecutive quarters.
Current report
Approximately $7.0 million of shares were repurchased during first quarter 2026. As of May 2, 2026, $43 million remained available under our share repurchase authorization.
Current report
Operating Results
Current report
As impacted by the first quarter 2026 charges of $13.6 million ($11.9 million after tax or $0.43 per diluted share) discussed above involving CEO transition and related strategy review, our first quarter 2026 Net Loss was $(5.6) million, or $(0.21) per diluted share compared to Net Income of $9.3 million, or $0.34 per diluted share, reported in first quarter 2025. Our operating results in first quarter 2026 otherwise declined $0.11 compared to first quarter 2025 on lower Net Sales and lower gross profit margin.
Current report
Our Net Sales declined 2.5% in first quarter 2026 compared to first quarter 2025, primarily due to a 2.1% decline in comparable store Net Sales, driven by a decrease in units sold. For each respective banner:
Current report
Shoe Carnival Net Sales were $177.3 million, representing 65% of total Net Sales, and declined 2.2%, inclusive of a comparable store Net Sales decline of 1.7%. This was an improvement compared to mid-to-high single digit quarterly declines throughout Fiscal 2025.
Current report
Shoe Station Net Sales were $93.4 million, representing 35% of total Net Sales, and declined 3.1%, inclusive of a comparable store Net Sales decline of 2.9%. Improved trends in rebanner store net sales were more than offset by slower growth from the Shoe Station e-commerce sales channel.
Current report
Our Gross Profit margin of 33.3% in first quarter 2026 decreased 120 basis points from first quarter 2025. The decrease included a 140 basis point decrease in our merchandise margin, driven by the expected increase in promotional activity, higher merchandise cost, and higher e-commerce-related shipping costs. This more than offset 20 basis points gained from primarily lower buying, distribution and occupancy costs. As a result of our lower Net Sales and lower gross profit margin, our Gross Profit declined to $90.1 million in first quarter 2026 compared to $95.8 million in first quarter 2025.
Current report
Our SG&A increased in first quarter 2026 compared to first quarter 2025 by $12.3 million as a result of the $13.6 million charges related to CEO transition costs and review of our strategic direction, and otherwise decreased $1.3 million primarily from lower selling costs.
Current report
Gross Profit was $90.1 million during first quarter 2026, a decrease of $5.7 million compared to first quarter 2025. Gross profit margin in first quarter 2026 was 33.3%, a decrease of 120 basis points, compared to 34.5% in first quarter 2025. The decrease in gross profit margin resulted from a 140 basis point decrease in merchandise margin driven by increased promotional activity, higher merchandise cost, and higher e-commerce-related shipping costs. This decrease was partially offset by 20 basis points from primarily lower buying, distribution and occupancy costs.
Current report
SG&A increased $12.3 million in first quarter 2026 to $96.1 million compared to $83.8 million in first quarter 2025. The increase was due primarily to $13.6 million in charges recorded in first quarter 2026, offset by a decrease of $1.3 million primarily from lower selling costs. These charges included CEO transition costs totaling $5.3 million and the completion of a review of our strategic direction, which resulted in store level long-lived asset impairments, other Property and Equipment write-offs and other charges of approximately $8.3 million.
Current report
Income tax expense in the first quarter of 2026 was $0.6 million and was impacted by nondeductible CEO severance payments that increased income tax expense by approximately $1.6 million. Our effective tax rate in the first quarter of 2026 was (11.2)% compared to 28.1% in the first quarter of 2025. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events.
Current report
We had 426 stores at the end of first quarter 2026. The strategic review of our store portfolio performed in first quarter 2026 confirmed a permanent two-banner operating model. We rebannered one Shoe Carnival store into a Shoe Station store in the first quarter 2026 and will rebanner 20 additional Shoe Carnival stores into Shoe Station stores in second quarter 2026. CRM analysis and store-level trade area analysis identified only a limited number of other stores for future conversion to Shoe Station. No additional rebanners are planned for the third and fourth quarters of 2026. No stores were opened or permanently closed in first quarter 2026.
Current report
In addition to increasing our scale through acquisitions, we believe our current store footprint provides fill-in opportunities within existing markets as well as growth in new markets within the United States. New store growth is expected to commence in Fiscal 2027 with three to five store openings planned and another eight to 10 store openings planned for Fiscal 2028, primarily under the Shoe Station banner in suburban trade areas within our existing 35-state footprint.
Current report
We expect to close 12 to 14 underperforming stores during Fiscal 2026 and six to 10 stores during Fiscal 2027.
Current report
During first quarter 2026, we repurchased 390,492 shares of common stock at a total cost of $7.0 million under the 2026 Share Repurchase Program. As of May 2, 2026, we had $43.0 million available for future repurchases. No share repurchases were made during first quarter 2025.
Current report
Supreme Court Tariff Ruling
Current report
In February 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed by the United States executive branch under the International Emergency Economic Powers Act (“IEEPA”). The United States executive branch subsequently instituted additional tariffs under other laws. These actions have resulted in considerable uncertainty regarding the scope and duration of current and potential tariffs and the impact this uncertainty may have on us, including availability and timing of refunds of tariffs paid under IEEPA. We continue to monitor and evaluate tariff policy and assess the potential impact on our business, financial condition, and results of operations. At this time, we cannot reasonably estimate the total financial impact of these events; however, these actions, and any additional tariffs imposed, may materially affect our future results of operations and cash flows.
Removed paragraphs (36)
Previous report
Factors That May Affect Future Results
Previous report
This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. 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 achieve expected operating results from, and planned growth of, our Shoe Station banner, including our ability to increase our comparable stores Net Sales from rebannering Shoe Carnival locations into Shoe Station locations and our ability to achieve expected cost savings, synergies and inventory reductions from operating principally under one banner, within expected time frames, or at all; the impact of competition and pricing, including our ability to maintain current promotional intensity levels; changes in the political and economic environments in, the status of trade relations with, and the impact of changes in trade policies and tariffs impacting, China and other countries which are the major manufacturers of footwear; our ability to control costs and meet our labor needs in a rising wage, inflationary, and/or supply chain constrained environment; the effects and duration of economic downturns and unemployment rates; the potential impact of national and international security concerns, including those caused by war and terrorism, on the retail environment; general economic conditions in the areas of the continental United States and Puerto Rico where our stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; our ability to successfully utilize the e-commerce sales channel and its impact on traffic and transactions in our physical stores; the success of the open-air shopping centers where many of our stores are located and the impact on our ability to attract customers to our stores; our ability to attract customers to our e-commerce platform and to successfully grow our omnichannel sales; the effectiveness of our inventory management, including our ability to manage key merchandise vendor relationships and direct-to-consumer initiatives; changes in our relationships with other key suppliers; our ability to successfully manage and execute our marketing initiatives and maintain positive brand perception and recognition; our ability to successfully manage our current real estate portfolio and leasing obligations; changes in weather, including patterns impacted by climate change; changes in consumer buying trends and our ability to identify and respond to emerging fashion trends; the impact of disruptions in our distribution or information technology operations including at our distribution center located in Evansville, IN; the impact of natural disasters, public health and political c…
Excerpt shortened here; the source contains the full paragraph.
Previous report
Shoe Carnival, Inc. is one of the nation’s largest omnichannel sellers of footwear for the family. On December 3, 2021, we began operating under two banners: Shoe Carnival and Shoe Station. We furthered our acquisition strategy by acquiring all of the stock of Rogan Shoes, Incorporated (“Rogan’s”) in February 2024, which added 28 physical stores (25 in Wisconsin, 2 in Minnesota, and 1 in Illinois) to our portfolio, positioned us as the market leader in Wisconsin and established a store base in Minnesota, creating additional expansion opportunities. More information about the acquisition of Rogan’s can be found in Note 2— “Acquisition of Rogan Shoes” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Previous report
Our stores under the Shoe Carnival banner combine competitive pricing with a high-energy in-store environment that encourages customer participation. Footwear in our Shoe Carnival physical stores is organized by category and brand, creating strong brand statements within the aisles. These brand statements are underscored by branded signage on endcaps and in-line signage throughout the store. Our signage may highlight a vendor’s product offerings or sales promotions, or may highlight seasonal or lifestyle statements by grouping similar footwear from multiple vendors.
Previous report
We believe our distinctive shopping experiences give us various competitive advantages, including increased multiple unit sales; the building of a loyal, repeat customer base; the creation of word-of-mouth advertising; and enhanced sell-through of in-season goods.
Previous report
Our third quarter 2025 Net Income was $14.6 million, or $0.53 per diluted share, and was lower than the $19.2 million, or $0.70 per diluted share, reported in third quarter 2024. Our third quarter 2025 results included $0.22 per diluted share of rebanner strategy investments.
Previous report
Our Net Sales declined 3.2% in third quarter 2025 compared to third quarter 2024, primarily due to a 5.2% decline in Net Sales at our Shoe Carnival banner as we maintained pricing discipline despite pressure on lower-income consumers. In contrast, our Shoe Station banner achieved Net Sales growth of 5.3% in third quarter 2025 compared to third quarter 2024, driven by our rebanner strategy including omnichannel growth. Our Shoe Station banner’s Net Sales growth in third quarter 2025 compared to third quarter 2024 outperformed Shoe Carnival’s by 10.5 percentage points, highlighting the strength of the One Banner Strategy as more fully described below.
Previous report
Our comparable stores Net Sales declined 2.7% and included comparable stores Net Sales growth in Back-to-School August. Our Shoe Station banner grew comparable stores Net Sales mid-single digits in third quarter 2025, while comparable stores Net Sales at our Shoe Carnival banner declined mid-single digits and was the primary driver of our overall comparable stores Net Sales decline.
Previous report
We achieved a Gross Profit margin of 37.6%, up 160 basis points from third quarter 2024. The increase included a 190 basis point increase in our merchandise margin, driven by disciplined pricing across all banners, a favorable mix shift toward Shoe Station’s higher income customers and strategic inventory investments. This more than offset 30 basis points of deleverage in buying, distribution and occupancy costs. As a result, our Gross Profit increased to $111.8 million in third quarter 2025 compared to $110.4 million in third quarter 2024.
Previous report
Our Merchandise Inventories at the end of third quarter 2025 were $435.3 million, up approximately 7% compared to the end of third quarter 2024. We increased our inventory positions this year, taking advantage of opportunistic buys for seasonal and in-demand merchandise. This improved availability of key merchandise drove margin expansion in the second and third quarters of 2025 and positive comparable stores Net Sales during August 2025. We believe our inventory on hand positions us well to navigate any potential supply chain disruptions.
Previous report
One Banner Strategy
Previous report
Earlier this year, we announced our plan to grow our Shoe Station banner from a market leader in the Southeast into a national footwear and accessories leader. As part of this plan, we rebannered 10 Shoe Carnival stores to Shoe Station stores during a test phase in Fiscal 2024. As a result of divergent Net Sales trends between our Shoe Carnival and Shoe Station banners that we have experienced over time, including in third quarter 2025, we have rebannered 100 stores in year-to-date 2025, of which 56 were rebannered in third quarter 2025.
Previous report
We now have 144 Shoe Station stores, inclusive of an additional store that rebannered after third quarter 2025 ended, which represents approximately 34% of our current store fleet, up from 10% of stores at the beginning of Fiscal 2025. Stores rebannered during third quarter 2025 included Rogan’s store locations. Our Rogan's stores are now fully integrated into the Shoe Station banner while continuing to broadly utilize the Rogan’s trade name. Beginning in fourth quarter 2025, we will report Rogan's store results as part of the Shoe Station banner. No additional stores are expected to rebanner in Fiscal 2025.
Previous report
As a result of the rebannering completed in Fiscal 2025, we expect a reduction in our Fiscal 2025 Operating Income of approximately $25 million for store closing costs, amortization of new store construction costs, a four-to-six-week store closure period through each store's grand opening, customer acquisition costs and other costs. During third quarter 2025, we estimate these rebannering costs reduced our Operating Income by approximately $8.1 million, or $0.22 per diluted share, and in year-to-date 2025, we estimate rebannering costs reduced our Operating Income by approximately $21.1 million, or $0.58 per diluted share. Third quarter 2025 included an approximate 0.5% reduction in Net Sales due to lost sales and an approximate 2.5% increase in our Selling, General and Administrative Expenses (“SG&A”) as a percent of Net Sales. We continue to estimate the payback of this investment over a two-to-three year period after a store’s grand opening. Capital expenditures supporting the rebanner initiative totaled approximately $31 million in year-to-date 2025.
Previous report
We expect to have 215 Shoe Station stores by Back-to-School 2026, or approximately 51% of the current store base. We revised our rebanner timeline and now expect that well over 90% of our fleet will operate as Shoe Station before the end of Fiscal 2028, compared to the previous expectation that 80% of the fleet would be rebannered by March 2027. Remaining store locations will be evaluated for rebannering, outlet repositioning or closure. To achieve this 51% threshold by Back-to-School in Fiscal 2026, we expect capital expenditures in a range of $25 million to $35 million and rebannering costs decreasing our Operating Income in a range of $25 million to $30 million. Though impacting near-term profitability, we expect these investments will position us for more sustainable performance in the future.
Previous report
As we move toward well over 90% of the store fleet operating as a Shoe Station store, we expect to realize cost savings from reduced dual-brand complexity across merchandising, marketing, systems, supply chain and back office, as well as a reduction in our inventory investment, as Shoe Station’s merchandising model requires less inventory per store to deliver a superior customer experience. We expect full realization of these benefits by the end of Fiscal 2027, with some benefit expected in the second half of Fiscal 2026 after approximately 51% of our current fleet is expected to operate as a Shoe Station store.
Previous report
Gross Profit was $111.8 million during third quarter 2025, an increase of $1.5 million compared to third quarter 2024. Gross profit margin in third quarter 2025 was 37.6%, an increase of 160 basis points, compared to 36.0% in third quarter 2024. The increase in gross profit margin was driven by a 190 basis point increase in merchandise margin due to disciplined pricing, favorable mix shift toward higher income Shoe Station customers and strategic inventory investments. This increase was partially offset by the deleveraging effect of buying, distribution and occupancy costs due to lower Net Sales in third quarter 2025 compared to third quarter 2024.
Previous report
SG&A increased $7.4 million in third quarter 2025 to $93.2 million compared to $85.9 million in third quarter 2024. The increase was due primarily to expenses associated with our rebanner strategy. As a percent of Net Sales, SG&A were 31.3% in third quarter 2025 compared to 28.0% in third quarter 2024, with the increase being due primarily to the rebanner costs incurred in third quarter 2025 and lower Net Sales.
Previous report
The effective income tax rate for third quarter 2025 was 25.5% compared to 24.7% for third quarter 2024. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events. The higher effective tax rate in third quarter 2025 compared to third quarter 2024 was primarily due to impacts of the Rogan’s acquisition in Fiscal 2024. For the full 2025 fiscal year, we expect our tax rate to be approximately 26% compared to the 24.3% effective tax rate recognized during the full 2024 fiscal year.
Previous report
Results of Operations Year-to-Date Through November 1, 2025 Compared to Year-to-Date Through November 2, 2024
Previous report
Net Sales
Previous report
Net Sales were $881.3 million during year-to-date 2025, a decrease of $58.7 million, or 6.2%, compared to year-to-date 2024. The decrease was primarily due to an 8.5% Net Sales decline at our Shoe Carnival banner due to a decline in traffic and lost sales as impacted by our rebanner strategy. This decrease was partially offset by continued growth from our Shoe Station banner, which contributed a 3.8% increase in Net Sales compared to year-to-date 2024. Our 6.3% comparable stores Net Sales decline included an approximate 13% decrease in units sold, partially offset by pricing increases. Our Shoe Carnival banner comparable stores Net Sales declined high-single digits, and our Shoe Station banner comparable stores Net Sales increased low-single digits. E-commerce sales were approximately 9% of merchandise sales in year-to-date 2025, compared to 10% in year-to-date 2024.
Previous report
Gross Profit
Previous report
Gross Profit was $326.4 million during year-to-date 2025, a decrease of $10.7 million compared to year-to-date 2024. Gross profit margin in year-to-date 2025 was 37.0% compared to 35.9% in year-to-date 2024. The increase in gross profit margin was driven by a 220 basis point increase in merchandise margin due to disciplined pricing, favorable mix shift toward higher income Shoe Station customers and strategic inventory investments. This increase was partially offset by 110 basis points from buying, distribution and occupancy costs, primarily due to deleveraging on lower Net Sales in year-to-date 2025 compared to year-to-date 2024.
Previous report
Selling, General and Administrative Expenses
Previous report
SG&A increased $10.6 million in year-to-date 2025 to $270.6 million compared to $260.0 million in year-to-date 2024. The increase was due primarily to expenses associated with our rebanner strategy, partially offset by decreases in selling expenses impacting our other stores in year-to-date 2025 compared to year-to-date 2024. As a percent of Net Sales, SG&A were 30.7% in year-to-date 2025 compared to 27.7% in year-to-date 2024, with the increase being due primarily to the rebanner costs incurred in year-to-date 2025 and lower Net Sales.
Previous report
Interest Income and Interest Expense
Previous report
Changes in our interest income and expense increased our income before taxes by $542,000 in year-to-date 2025 compared to year-to-date 2024. This increase was primarily due to higher interest earned on invested cash balances.
Previous report
Income Taxes
Previous report
The effective income tax rate for year-to-date 2025 was 26.2% compared to 25.5% for year-to-date 2024. The higher effective tax rate in year-to-date 2025 compared to year-to-date 2024 was due to discrete adjustments recorded in both Fiscal 2025 and Fiscal 2024 related to share-settled equity awards.
Previous report
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the "OBBB"). The OBBB makes key elements of the Tax Cuts and Jobs Act permanent, including 100% bonus depreciation and domestic research cost expensing. We estimate that the OBBB will decrease our cash taxes to be paid for Fiscal 2025 by approximately 30%. We expect no material change in our effective income tax rate for Fiscal 2025 as a result of the OBBB.
Previous report
Our Rogan’s acquisition in first quarter 2024 resulted in the payment of initial cash consideration of $44.6 million, net of cash acquired. Additional information regarding the Rogan’s acquisition can be found in Note 2 — “Acquisition of Rogan Shoes” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Previous report
We currently have 428 stores and we believe our current store footprint provides for growth in new markets within the United States as well as fill-in opportunities within existing markets. In Fiscal 2025, we rebannered 24 Shoe Carnival stores in the first quarter and 20 Shoe Carnival stores in the second quarter. In third quarter 2025, we rebannered 28 Shoe Carnival stores and all 28 Rogan’s locations. One store was rebannered after the end of third quarter 2025, and we expect no additional rebanners in Fiscal 2025. We also opened new Shoe Station stores and closed Shoe Carnival stores in the thirty-nine weeks ended November 1, 2025 and November 2, 2024 as follows:
Previous report
We expect limited store openings and closures in the near term as we execute our One Banner Strategy and increase our scale through acquisitions.
Previous report
We expect to have 215 Shoe Station stores by Back-to-School 2026, or approximately 51% of our current store base. We have revised our rebanner timeline and now expect that well over 90% of our fleet will operate as Shoe Station before the end of Fiscal 2028, compared to our previous expectation that 80% of our fleet would be rebannered by March 2027. The remaining locations will be evaluated for rebannering, outlet repositioning or closure. To achieve this 51% threshold by Back-to-School 2026, we expect capital expenditures in Fiscal 2026 to be similar to Fiscal 2025 in a range of $25 to $35 million.
Previous report
No share repurchases have been made to date in Fiscal 2025 and no share repurchases were made during year-to-date 2024.
Reworded paragraphs (23)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our Condensed Consolidated Financial Statements and the notes thereto included in PART I, ITEM 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 as filed with the SEC. This section of this Quarterly Report on Form 10-Q generally discusses our results for third quarter 2025 and third quarter 2024 and year-over-year comparisons between third quarter 2025 and third quarter 2024, as well as year-to-date results for, and comparisons between, the two periods.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our Condensed Consolidated Financial Statements and the notes thereto included in PART I, ITEM 1 of this Quarterly Report, as well as our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 as filed with the SEC. This section of this Quarterly Report generally discusses our results for first quarter 2026 and first quarter 2025 and year-over-year comparisons between first quarter 2026 and first quarter 2025.
Previous wording
Referred to herein, third quarter 2025 is the thirteen weeks ended November 1, 2025 and third quarter 2024 is the thirteen weeks ended November 2, 2024. Also referred to herein, year-to-date 2025 is the thirty-nine weeks ended November 1, 2025 and year-to-date 2024 is the thirty-nine weeks ended November 2, 2024.
Current wording
Referred to herein, first quarter 2026 is the thirteen weeks ended May 2, 2026, first quarter 2025 is the thirteen weeks ended May 3, 2025 and Fiscal 2026 is the fiscal year ending January 30, 2027.
Previous wording
Our goal is to be the leading family footwear retailer in the United States. Our product assortment, whether shopping in a physical store or through our e-commerce sales channel, is primarily branded footwear and includes dress and casual shoes, sandals, boots and a wide assortment of athletic shoes. Our typical physical store carries shoes in two general categories – athletics and non-athletics with subcategories for men’s, women’s and children’s, as well as a broad range of accessories. In addition to our physical stores, through our e-commerce sales channel, customers can purchase the same assortment of merchandise in all categories of footwear with expanded options in certain instances.
Current wording
Shoe Carnival, Inc. is one of the nation’s largest omnichannel sellers of footwear for the family, and our goal is to be the leading family footwear retailer in the United States. Our product assortment, whether shopping in a physical store or through our e-commerce sales channel, is primarily branded footwear and includes dress and casual shoes, sandals, boots, work shoes, and a wide assortment of athletic shoes. We carry shoes in two general categories – athletics and non-athletics with subcategories for men’s, women’s and children’s and we also carry certain accessories. In addition to our physical stores, through our e-commerce sales channel, customers can purchase the same assortment of merchandise in all categories of footwear with expanded options in certain instances. We operate under two banners: Shoe Carnival and Shoe Station. As of May 2, 2026, we operated 426 stores across 35 states and Puerto Rico, consisting of 145 Shoe Station locations and 281 Shoe Carnival locations.
Previous wording
On November 13, 2025, we announced that our Board of Directors unanimously approved changing our corporate name to Shoe Station Group, Inc., subject to shareholder approval at our Annual Meeting of Shareholders in June 2026.
Current wording
On November 13, 2025, we announced that our Board unanimously approved changing our corporate name to Shoe Station Group, Inc., subject to shareholder approval at our Annual Meeting of Shareholders on June 10, 2026.
Previous wording
The Shoe Station banner and retail locations serve a broader base of footwear customers. The Shoe Station concept targets a more affluent footwear customer, and its product assortment includes higher end athletics and non-athletics shoes and more accessories. Shoe Station has a strong track record of capitalizing on emerging footwear fashion trends and introducing new brands.
Current wording
The Shoe Station banner and retail locations, which includes stores co-branded as “Shoe Station at Rogan’s” and business-to-business operations branded as “Rogan’s Work”, serve a broader base of footwear customers. Our Shoe Station concept targets a more affluent footwear customer than our Shoe Carnival banner and has a strong track record of capitalizing on emerging footwear fashion trends and introducing new brands that meet the needs of the target customer. Shoe Station serves this demographic through a differentiated assortment of premium brands and an enhanced in-store experience.
Previous wording
Comparable stores Net Sales is a key performance indicator for us. Comparable stores Net Sales include stores that have been open for 13 full months after such stores’ grand opening or acquisition prior to the beginning of the period, including those stores that have been relocated, remodeled or rebannered. Therefore, stores recently opened, acquired or permanently closed are not included in comparable stores Net Sales. We generally include e-commerce sales in our comparable stores Net Sales as a result of our omnichannel retailer strategy. Due to our omnichannel retailer strategy, we view e-commerce sales as an extension of our physical stores. Rogan’s comparable stores Net Sales are included in our comparable stores Net Sales quarterly calculations beginning in the thirteen weeks ended August 2, 2025. Rogan’s comparable stores Net Sales will begin to be included in our comparable stores Net Sales year-to-date and annual calculations beginning in Fiscal 2026.
Current wording
Comparable store Net Sales is a key performance indicator for us. We include in our comparable store Net Sales stores that have been open for 13 full months after such stores’ grand opening or acquisition prior to the beginning of the period. We do not remove stores from comparable store Net Sales when stores are relocated, remodeled or rebannered. Stores recently opened, acquired or permanently closed are not included in comparable store Net Sales. We generally include e-commerce sales in our comparable store Net Sales as a result of our omnichannel retailer strategy. Due to our omnichannel retailer strategy, we view e-commerce sales as an extension of our physical stores.
Previous wording
Executive Summary for Third Quarter Ended November 1, 2025
Current wording
Executive Summary for First Quarter Ended May 2, 2026
Previous wording
The Fiscal 2024 year-end marked the 20th consecutive year where we ended a fiscal year with no debt, fully funding our operations, acquisitions and investments from operating cash flow. Through third quarter 2025, we also funded our operations, including our rebanner investments and inventory positions, without incurring any debt and grew our Cash, Cash Equivalents and Marketable Securities by $16.6 million, or 18.2%, compared to the end of third quarter 2024. At the end of third quarter 2025, we had $107.7 million of Cash, Cash Equivalents and Marketable Securities and $99.0 million of available borrowings under our existing credit facility to fund our growth objectives.
Current wording
The Fiscal 2025 year-end marked the 21st consecutive year where we ended a fiscal year with no debt, fully funding our operations, acquisitions and investments from operating cash flow and cash reserves. Through first quarter 2026, we also funded our operations without incurring any debt and grew our Cash, Cash Equivalents and Marketable Securities by $36.4 million, or 39.2%, compared to the end of first quarter 2025. At the end of first quarter 2026, we had $129.3 million of Cash, Cash Equivalents and Marketable Securities and $99.0 million of available borrowings under our existing credit facility to fund our growth objectives, including new store openings expected in Fiscal 2027 and strategic acquisitions of other footwear retailers. Cash Flow from Operations increased $32.7 million compared to first quarter 2025 while Capital Expenditures declined $2.9 million.
Previous wording
Results of Operations for Third Quarter Ended November 1, 2025 Compared to Third Quarter Ended November 2, 2024
Current wording
Results of Operations for First Quarter Ended May 2, 2026 Compared to First Quarter Ended May 3, 2025
Previous wording
Net Sales were $297.2 million during third quarter 2025, a decrease of $9.7 million, or 3.2%, compared to third quarter 2024. The decrease was primarily due to a 5.2% Net Sales decline at our Shoe Carnival banner due to a decline in traffic, as we maintained pricing discipline despite pressure on lower-income consumers, and lost sales as impacted by our rebanner strategy. This decrease was partially offset by continued growth from our Shoe Station banner, which contributed a 5.3% increase in Net Sales compared to third quarter 2024. Our 2.7% comparable stores Net Sales decline included an approximate 11% decrease in units sold, partially offset by pricing increases. Our Shoe Carnival banner comparable stores Net Sales declined mid-single digits, and our Shoe Station banner comparable stores Net Sales increased mid-single digits. E-commerce sales were approximately 10% of merchandise sales in third quarter 2025, compared to 11% in third quarter 2024.
Current wording
Net Sales were $270.7 million during first quarter 2026, a decrease of $7.0 million, or 2.5%, compared to first quarter 2025. The decrease was primarily due to a 2.1% decline in our comparable store Net Sales, which included an approximate 6% decrease in units sold, partially offset by price increases. Our Shoe Carnival banner comparable store Net Sales declined 1.7%, and our Shoe Station banner comparable store Net Sales declined 2.9%. E-commerce sales were approximately 10% of merchandise sales in first quarter 2026, compared to 9% in first quarter 2025.
Previous wording
Our primary sources of liquidity are $107.7 million of Cash, Cash Equivalents and Marketable Securities on hand at the end of third quarter 2025, cash generated from operations and availability under our $100 million Credit Agreement. We believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are normally for working capital, which are principally inventory purchases, investments in our stores, such as rebanners and new stores, remodels and relocations, distribution center initiatives, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program and the financing of capital projects, including investments in new systems. As part of our growth strategy, we have also pursued strategic acquisitions of other footwear retailers.
Current wording
Our primary sources of liquidity are $129.3 million of Cash, Cash Equivalents and Marketable Securities on hand at the end of first quarter 2026, cash generated from operations and availability under our $100 million Credit Agreement. We believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are normally for our working capital needs, which are principally inventory purchases, investments in our stores and distribution center, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program and the financing of other capital projects, including investments in new systems and technology. As part of our growth strategy, we have also pursued, from time to time, strategic acquisitions of other footwear retailers.
Previous wording
Net cash generated from operating activities was $37.3 million in year-to-date 2025 compared to $58.1 million in year-to-date 2024. The decrease in operating cash flow was primarily driven by increased inventory purchases and reduction in Net Income to support our rebanner strategy.
Current wording
Net cash generated from operating activities was $23.1 million in first quarter 2026 compared to net cash used in operating activities of $9.6 million in first quarter 2025. The increase in operating cash flow was primarily driven by decreased inventory purchases, partially offset by lower earnings.
Previous wording
Working capital increased on a year-over-year basis and totaled $431.7 million at November 1, 2025 compared to $391.3 million at November 2, 2024. The increase was primarily attributable to higher Merchandise Inventories and a higher cash balance, partially offset by higher Accounts Payable. Our current ratio was 4.1 as of November 1, 2025 compared to 3.9 as of November 2, 2024.
Current wording
Working capital increased on a year-over-year basis and totaled $429.0 million at May 2, 2026 compared to $399.0 million at May 3, 2025. The increase was primarily attributable to a higher cash balance coupled with lower payables and accrued liabilities, partially offset by lower Merchandise Inventories. Our current ratio was 4.0 as of May 2, 2026 compared to 3.7 as of May 3, 2025.
Previous wording
Our cash outflows for investing activities are normally for capital expenditures. During year-to-date 2025 and 2024, we expended $38.3 million and $24.8 million, respectively, for the purchase of Property and Equipment, primarily related to store rebanners and remodels and opening new Shoe Station stores.
Current wording
Our cash outflows for investing activities are normally for capital expenditures. During first quarters 2026 and 2025, we expended $10.4 million and $13.3 million, respectively, for the purchase of Property and Equipment, primarily related to our stores.
Previous wording
We invest in publicly traded mutual funds designed to mitigate income statement volatility associated with our non-qualified deferred compensation plan. The balance of these Marketable Securities was $13.3 million at November 1, 2025, compared to $14.4 million at February 1, 2025 and $13.9 million at November 2, 2024. Additional information can be found in Note 5 — “Fair Value Measurements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Current wording
We invest in publicly traded mutual funds designed to mitigate income statement volatility associated with our non-qualified deferred compensation plan. The balance of these Marketable Securities was $13.2 million at May 2, 2026, compared to $13.6 million at January 31, 2026 and $14.5 million at May 3, 2025. Additional information can be found in Note 5 — “Fair Value Measurements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Previous wording
During year-to-date 2025, net cash used in financing activities was $14.7 million compared to $11.6 million during year-to-date 2024. The increase in net cash used in financing activities was primarily due to increased dividend payments and the increase in shares surrendered by employees to pay taxes on stock-based compensation awards.
Current wording
During first quarter 2026, net cash used in financing activities was $14.2 million compared to $6.5 million during first quarter 2025. The increase in net cash used in financing activities was primarily due to shares repurchased under our Board of Directors’ authorized share repurchase program, increased dividend payments, and an increase in shares surrendered by employees to pay taxes on stock-based compensation awards.
Previous wording
The Credit Agreement contains certain restrictions. However, as long as our consolidated EBITDA is positive and there are either no or low borrowings outstanding, we expect these restrictions would have no impact on our ability to pay cash dividends, execute share repurchases or facilitate acquisitions from cash on hand. The Credit Agreement stipulates that cash dividends and share repurchases of $15 million or less per fiscal year can be made without restriction as long as there is no default or event of default before and immediately after such distributions. We are also permitted to make acquisitions and pay cash dividends or repurchase shares in excess of $15 million in a fiscal year provided that (a) no default or event of default exists before and immediately after the transaction and (b) on a proforma basis, the ratio of (i) the sum of (A) our consolidated funded indebtedness plus (B) three times our consolidated rental expense to (ii)
Current wording
The Credit Agreement contains certain restrictions. However, as long as our consolidated EBITDA is positive and there are either no or low borrowings outstanding, we expect these restrictions would have no impact on our ability to pay cash dividends, execute share repurchases or facilitate acquisitions from cash on hand. The Credit Agreement stipulates that cash dividends and share repurchases of $15 million or less per fiscal year can be made without restriction as long as there is no default or event of default before and immediately after such distributions. We are also permitted to make acquisitions and pay cash dividends or repurchase shares in excess of $15 million in a fiscal year provided that (a) no default or event of default exists before and immediately after the transaction and (b) on a proforma basis, the ratio of (i) the sum of (A) our consolidated funded indebtedness plus (B) three times our consolidated rental expense to (ii) the sum of (A) our consolidated EBITDA plus (B) our consolidated rental expense is less than 3.5 to 1.0. Among other restrictions, the Credit Agreement also limits our ability to incur additional secured or unsecured debt to $20 million.
Previous wording
The Credit Agreement bears interest, at our option, at (1) the agent bank’s base rate plus 0.0% to 1.0% or (2) Adjusted Term SOFR plus 0.9% to 1.9%, depending on our achievement of certain performance criteria. A commitment fee is charged at 0.2% to 0.3% per annum, depending on our achievement of certain performance criteria, on the unused portion of the lenders’ commitment. During year-to-date 2025, we did not borrow or repay funds under the Credit Agreement. Letters of credit outstanding were $1.0 million at November 1, 2025 and our borrowing capacity was $99.0 million.
Current wording
The Credit Agreement bears interest, at our option, at (1) the agent bank’s base rate plus 0.0% to 1.0% or (2) Adjusted Term SOFR plus 0.9% to 1.9%, depending on our achievement of certain performance criteria. A commitment fee is charged at 0.2% to 0.3% per annum, depending on our achievement of certain performance criteria, on the unused portion of the lenders’ commitment. During first quarter 2026, we did not borrow or repay funds under the Credit Agreement. Letters of credit outstanding were $1.0 million at May 2, 2026 and our borrowing capacity was $99.0 million.
Previous wording
Capital expenditures for Fiscal 2025, inclusive of the approximate $31 million of rebanner capital expenditures in year-to-date 2025, are expected to be between $45 million and $55 million. The resources allocated to projects are subject to near-term changes depending on potential inflationary, supply chain and other macroeconomic impacts. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, rebannered, relocated and remodeled, and the amount of lease incentives, if any, received from landlords. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.
Current wording
Capital expenditures for Fiscal 2026 are expected to be between $15 million and $20 million, inclusive of $6 million to $8 million related to rebanner activity. The resources allocated to projects are subject to near-term changes depending on potential inflationary, supply chain and other macroeconomic impacts. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, rebannered, relocated and remodeled, and the amount of lease incentives, if any, received from landlords. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.
Previous wording
On September 23, 2025, the Board of Directors approved the payment of a third quarter cash dividend paid to our shareholders. The quarterly cash dividend of $0.15 per share was paid on October 20, 2025 to shareholders of record as of the close of business on October 6, 2025. In third quarter 2024, the dividend paid was $0.135 per share. During year-to-date 2025 and 2024, we returned $12.6 million and $11.0 million, respectively, to our shareholders through our quarterly cash dividends. The declaration and payment of any future dividends are at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.
Current wording
On March 3, 2026, the Board of Directors approved a 13.3% increase in our cash dividend paid to our shareholders in first quarter 2026. The quarterly cash dividend of $0.17 per share was paid on April 20, 2026 to shareholders of record as of the close of business on April 6, 2026. In first quarter 2025, the dividend paid was $0.15 per share. During first quarters 2026 and 2025, we returned $5.0 million and $4.4 million, respectively, to our shareholders through our quarterly cash dividends. The declaration and payment of any future dividends are at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.
Previous wording
On December 11, 2024, our Board of Directors authorized a share repurchase program for up to $50.0 million of our outstanding common stock, effective January 1, 2025 (the “2025 Share Repurchase Program”). The purchases may be made in the open market or through privately negotiated transactions from time-to-time through December 31, 2025 and in accordance with applicable laws, rules and regulations. The 2025 Share Repurchase Program may be amended, suspended, or discontinued at any time and does not commit us to repurchase shares of our common stock. We have funded, and intend to continue to fund, share repurchases from cash on hand, and any shares acquired will be available for stock-based compensation awards and other corporate purposes. The actual number and value of the shares to be purchased will depend on the performance of our stock price and other market and economic factors.
Current wording
On December 10, 2025, our Board of Directors authorized a share repurchase program for up to $50.0 million of our outstanding common stock, effective January 1, 2026 (the “2026 Share Repurchase Program”). The purchases may be made in the open market or through privately negotiated transactions from time to time through December 31, 2026 and in accordance with applicable laws, rules and regulations. The 2026 Share Repurchase Program may be amended, suspended, or discontinued at any time and does not commit us to repurchase shares of our common stock. Although we may use other sources of capital, we have funded, and intend to continue to fund, share repurchases from cash on hand, and any shares acquired will be available for stock-based compensation awards and other corporate purposes. The actual number and value of the shares to be purchased will depend on the performance of our stock price and other market and economic factors.
Previous wording
Our Credit Agreement permits the payment of dividends and repurchase of shares, subject to certain covenants and restrictions. See “Credit Agreement” above and Note 10 — “Debt” to our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 for a further discussion of the Credit Agreement, its covenants and restrictions regarding dividends and share repurchases and other matters. The Credit Agreement’s covenants and restrictions did not change during year-to-date 2025.
Current wording
Our Credit Agreement permits the payment of dividends and repurchase of shares, subject to certain covenants and restrictions. See “Credit Agreement” above and Note 10 - “Debt” to our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 for a further discussion of the Credit Agreement, its covenants and restrictions regarding dividends and share repurchases and other matters. The Credit Agreement’s covenants and restrictions did not change during first quarter 2026.
Previous wording
See Note 4 — “Recently Issued Accounting Pronouncements and Tax Legislation” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements that may have an impact on our condensed consolidated financial statements when adopted.
Current wording
See Note 4 - “Recently Issued Accounting Pronouncements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report for a description of recent accounting pronouncements that may have an impact on our condensed consolidated financial statements when adopted.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
the sum of (A) our consolidated EBITDA plus (B) our consolidated rental expense is less than 3.5 to 1.0. Among other restrictions, the Credit Agreement also limits our ability to incur additional secured or unsecured debt to $20 million.