Shoe Carnival Completes Acquisition of Rogan’s Shoes and Unveils Preliminary Financial Results for Full Year Fiscal 2023

Shoe Carnival, Inc. (Nasdaq: SCVL) announced its successful acquisition of Rogan Shoes, Incorporated, a well-established work and family footwear company with 28 store locations across Wisconsin, Minnesota, and Illinois. The purchase, valued at $45 million and funded entirely through available cash, is expected to immediately enhance the Company’s fiscal 2024 earnings. Anticipated benefits include approximately $84 million in sales and around $10 million in operating income, excluding transaction and integration costs.

The integration plan spans 18 months, with projected annual synergies of $1.5 million. Half of the anticipated profit synergies are expected to be realized by fiscal 2025, with the full amount achieved by fiscal 2026. By integrating Rogan’s into the Shoe Station growth banner and leveraging existing systems, the Company aims to achieve strategic and cost synergies.

This strategic acquisition aligns with Shoe Carnival’s goal of becoming the nation’s leading family footwear retailer. The move positions the Company as the market leader in Wisconsin and establishes a base in Minnesota, opening doors for further expansion opportunities. The combined banner sales, post-integration, are forecasted to exceed $200 million by fiscal 2025, with the Company’s store count reaching an all-time high of 429.

Mark Worden, President & Chief Executive Officer of Shoe Carnival, expressed enthusiasm for the acquisition, stating, “Our growth strategy is focused on becoming the nation’s leading family footwear retailer through a combination of organic growth initiatives and M&A activity.” He acknowledged Rogan’s brand strength and market leadership in Wisconsin.

Pat Rogan, Chief Executive Officer of Rogan’s, shared his excitement, highlighting the shared focus on customers and employees. He sees the acquisition as an opportunity to drive future growth, create efficiencies, and expand profitability.

In terms of fiscal 2023 preliminary results, the Company achieved net sales of $1.176 billion, meeting the high end of management’s expectations. Diluted earnings per share are expected to range between $2.65 – $2.75. The inventory optimization plan exceeded annual expectations, reducing inventory levels by over $40 million compared to the previous year.

Ending fiscal 2023 with over $110 million in cash, cash equivalents, and marketable securities, the Company saw an increase of over $45 million from the prior year. This marks the 19th consecutive year without debt, with operations, new store growth, and remodels fully funded by cash on hand.

The Company plans to release its fiscal 2024 guidance in March, with expectations of low mid-single digit range growth in total net sales. Factors contributing to this growth include the newly acquired Rogan’s business, Shoe Station banner growth, e-commerce expansion, and CRM growth. The projections also account for challenges, including the absence of the 53rd week in fiscal 2024 and expectations of a challenging economic backdrop in early 2024. The presented results are preliminary and subject to standard accounting procedures and closing adjustments.

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