As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the footwear retailer industry, including Shoe Carnival (NASDAQ: SCVL) and its peers.
Footwear sales–like their apparel counterparts–are driven by seasons, trends, and innovation more so than absolute need and similarly face the bigger-picture secular trend of e-commerce penetration. Footwear plays a part in societal belonging, personal expression, and occasion, and retailers selling shoes recognize this. Therefore, they aim to balance selection, competitive prices, and the latest trends to attract consumers. Unlike their apparel counterparts, footwear retailers most sell popular third-party brands (as opposed to their own exclusive brands), which could mean less exclusivity of product but more nimbleness to pivot to what’s hot.
The 4 footwear retailer stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.6% below.
While some footwear retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.3% since the latest earnings results.
Best Q2: Shoe Carnival (NASDAQ: SCVL)
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ: SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Shoe Carnival reported revenues of $306.4 million, down 7.9% year on year. This print fell short of analysts’ expectations by 2.5%, but it was still a strong quarter for the company with an impressive beat of analysts’ gross margin and EBITDA estimates.
“Our second quarter results demonstrate meaningful progress, with profits beating consensus by double digits and gross margins reaching 38.8 percent - our strongest Q2 margin performance in years,” said Mark Worden, President and Chief Executive Officer.
Shoe Carnival delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. Interestingly, the stock is up 3.4% since reporting and currently trades at $22.24.
Is now the time to buy Shoe Carnival? Access our full analysis of the earnings results here, it’s free.
Boot Barn (NYSE: BOOT)
With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE: BOOT) is a western-inspired apparel and footwear retailer.
Boot Barn reported revenues of $504.1 million, up 19.1% year on year, outperforming analysts’ expectations by 1.5%. The business had a strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.
Boot Barn scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $171.65.
Is now the time to buy Boot Barn? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Foot Locker (NYSE: FL)
Known for store associates whose uniforms resemble those of referees, Foot Locker (NYSE: FL) is a specialty retailer that sells athletic footwear, clothing, and accessories.
Foot Locker reported revenues of $1.86 billion, down 2.3% year on year, falling short of analysts’ expectations by 0.6%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and gross margin estimates.
As expected, the stock is down 9.3% since the results and currently trades at $24.02.
Read our full analysis of Foot Locker’s results here.
Designer Brands (NYSE: DBI)
Founded in 1969 as a shoe importer and distributor, Designer Brands (NYSE: DBI) is an American discount retailer focused on footwear and accessories.
Designer Brands reported revenues of $739.8 million, down 4.2% year on year. This number was in line with analysts’ expectations. Overall, it was a strong quarter as it also recorded a beat of analysts’ EPS estimates and gross margin in line with analysts’ estimates.
The stock is down 7.2% since reporting and currently trades at $3.87.
Read our full, actionable report on Designer Brands here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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