The following is a summary of the Shoe Carnival, Inc. (SCVL) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Shoe Carnival reported Q2 net sales of $332.7 million, reflecting a 12.9% growth.

• Gross profit margin attained was 36.1%, marking the 14th consecutive quarter above 35%.

• The quarter saw a 22% increase in operating income to $30.1 million, with an EPS of $0.83 adjusted, marking a 17% increase from the previous Q2.

Business Progress:

• Celebrated new sales records, particularly during the back-to-school season, attributed to a digital-first marketing approach and successful brand-focused product assortments.

• The acquisition of Rogan's Shoes is integrating smoothly, contributing fiscal expectations and synergies projected for 2025.

• Initiated a test market for the 'banner switch strategy' converting select Shoe Carnival locations to Shoe Station, generating significant growth in those test markets.

Opportunities:

• New digital first marketing approach that enhances customer engagement and spending efficiency.

• Expanding the test of the 'banner switch strategy' to additional locations following encouraging profits and customer reception from initial tests.

Risks:

• Dip in sales and customer activity anticipated during non-event periods, likely influenced by consumer caution amidst the election cycle and off-peak shopping seasons.

• Possible deleverage in SG&A as a percentage of sales is expected before synergies from Rogan's acquisition are realized in fiscal 2025.

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