การแถลงผลประกอบการไตรมาส 2 ปีงบประมาณ 2026 ของ Shoe Station Group (SHOE): ปรับลดประมาณการผลดำเนินงานหลังอัตรากำไรหดตัว

ประเด็นสำคัญ

• ยอดขายสุทธิในไตรมาส 2 ของปีงบการเงิน 2026 ลดลง 7.2% เมื่อเทียบรายปี สู่ระดับ 284.3 ล้านดอลลาร์ ขณะที่ยอดขายจากสาขาเดิมลดลง 7.1%
• อัตรากำไรขั้นต้นหดตัวลง 690 basis points สู่ระดับ 31.9% โดยฝ่ายบริหารระบุว่าสาเหตุของการลดลงมาจากผลประโยชน์ชั่วคราวจากการปรับราคาที่เกี่ยวเนื่องกับภาษีนำเข้าในปีก่อนหมดไป การส่งเสริมการขายที่ขยายวงกว้างขึ้น และการเร่งระบายสินค้าคงคลัง
• กำไรสุทธิลดลงสู่ระดับ 6.3 ล้านดอลลาร์ หรือ 0.23 ดอลลาร์ต่อหุ้นปรับลด จาก 19.2 ล้านดอลลาร์ หรือ 0.70 ดอลลาร์ต่อหุ้นปรับลด ในปีก่อนหน้า
• ยอดขายอีคอมเมิร์ซจากช่องทางเดิมเติบโต 18.8% แต่ยอดขายจากสาขาเดิมลดลง 9.5% โดยฝ่ายบริหารชี้ว่าจำนวนผู้เข้าใช้บริการในสาขาที่ลดลง คือความท้าทายหลักต่อยอดขาย ไม่ใช่อัตราการซื้อหรือการตั้งราคา
• ยอดขายจากสาขาเดิมในเดือนสิงหาคมของปีงบการเงินลดลง 2.7% ซึ่งปรับตัวดีขึ้นจากไตรมาส 2 เนื่องจากสินค้ากลุ่มสปอร์ตที่ปรับให้เหมาะกับท้องถิ่นและการเพิ่มการโฆษณาช่วยสนับสนุนผลงานในช่วงต้อนรับเปิดเทอม
• ชู สเตชัน กรุ๊ป ได้ปรับลดคาดการณ์ปีงบการเงิน 2026 ลง โดยคาดยอดขายสุทธิอยู่ที่ 1.1 พันล้านดอลลาร์ ถึง 1.111 พันล้านดอลลาร์ และกำไรต่อหุ้นปรับปรุงแล้วอยู่ที่ 0.75 ถึง 0.90 ดอลลาร์ ทั้งนี้ คาดการณ์ดังกล่าวอยู่บนสมมติฐานว่าแรงกดดันจากการส่งเสริมการขายและอัตรากำไรจะยังคงดำเนินต่อไป

ข้อมูลทางการเงินที่สำคัญ

สำหรับช่วงหกเดือนแรก ยอดขายสุทธิลดลง 5.0% สู่ระดับ 555.0 ล้านดอลลาร์ และยอดขายจากสาขาเดิมลดลง 4.7% โดยมีกำไรสุทธิตามมาตรฐาน GAAP อยู่ที่ 631,000 ดอลลาร์ หรือ 0.02 ดอลลาร์ต่อหุ้นปรับลด ซึ่งรวมค่าใช้จ่ายในไตรมาสแรกจำนวน 13.6 ล้านดอลลาร์ที่เกี่ยวกับการเปลี่ยนผ่านตำแหน่ง CEO และการทบทวนเชิงยุทธศาสตร์ ทั้งนี้ หากไม่รวมค่าใช้จ่ายดังกล่าว กำไรสุทธิปรับปรุงแล้วจะอยู่ที่ 12.5 ล้านดอลลาร์ หรือ 0.45 ดอลลาร์ต่อหุ้นปรับลด

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

บริษัทระบุว่าความอ่อนแอในไตรมาส 2 เกิดจากปัจจัยที่เกี่ยวเนื่องกันสามประการ ได้แก่ การจัดหมวดหมู่สินค้าและขนาดสินค้าในสาขาที่ยังไม่สอดคล้องกับท้องถิ่นอย่างเพียงพอ การตั้งใจเร่งระบายสินค้าคงคลังที่เก่าและเกินความต้องการ และตลาดรองเท้าที่มีการแข่งขันด้านการส่งเสริมการขายสูงขึ้นเรื่อย ๆ

รองเท้ากีฬาผู้ใหญ่ ซึ่งคิดเป็นประมาณ 37% ของยอดขาย ลดลงในอัตราหลักเดียวระดับปานกลาง โดยรองเท้ากีฬาผู้ชายลดลงประมาณ 1% ขณะที่รองเท้าวิ่งมียอดขายจากสาขาเดิมเป็นบวกทั้งประเภทผู้ชายและผู้หญิง ส่วนรองเท้าแฟชั่นสปอร์ต ซึ่งรวมถึงรองเท้าบาสเกตบอล มีผลงานต่ำกว่าเป้าหมาย

รองเท้ากีฬาผู้หญิง ซึ่งคิดเป็นประมาณ 23% ของยอดขาย ลดลงในอัตราหลักเดียวระดับสูง โดยรองเท้าแตะและรองเท้าสปอร์ตลำลองผู้หญิงต่างลดลงเป็นตัวเลขสองหลัก รองเท้าเด็กก็ลดลงในอัตราหลักเดียวระดับสูงเช่นกัน ขณะที่สินค้าประเภทรองเท้าทำงานและรองเท้าลำลองผู้ชายที่ไม่ใช่รองเท้ากีฬา ก็ปรับตัวลดลงในระดับใกล้เคียงกัน ส่วนรองเท้าบูททำงานผู้ชายเพิ่มขึ้นประมาณ 2% โดยได้รับปัจจัยหนุนจากรูปแบบธุรกิจที่ขับเคลื่อนด้วยการเติมสต็อกสินค้าอย่างต่อเนื่อง

ฝ่ายบริหารกล่าวว่า หมวดหมู่สินค้าที่มีการเติมสต็อกได้อย่างสม่ำเสมอทำผลงานได้ดีกว่าหมวดหมู่ที่ต้องอาศัยการจัดสินค้าและสัดส่วนขนาดให้เหมาะกับท้องถิ่น บริษัทกำลังฟื้นฟูระบบการเติมสินค้าอัตโนมัติในหมวดหมู่สินค้าผู้ชายบางประเภท โดยเฉพาะรองเท้าสำหรับทำงาน

การจัดหมวดหมู่สินค้ากลุ่มสปอร์ตให้สอดคล้องกับท้องถิ่นมีส่วนช่วยให้แนวโน้มในเดือนสิงหาคมดีขึ้น โดยรองเท้ากีฬาผู้ใหญ่เปลี่ยนจากการลดลงในอัตราหลักเดียวระดับต่ำในไตรมาส 2 มาเป็นการเติบโตในอัตราหลักเดียวระดับต่ำในเดือนสิงหาคม ส่วนสินค้าที่ไม่ใช่รองเท้ากีฬาปรับตัวดีขึ้นจากการลดลงในอัตราหลักเดียวระดับสูงในไตรมาส 2 มาเป็นการลดลงในอัตราหลักเดียวระดับปานกลางในเดือนสิงหาคม ฝ่ายบริหารมองเห็นโอกาสในการขยายหมวดหมู่สินค้าที่ใหญ่ขึ้นในกลุ่มรองเท้าที่ไม่ใช่รองเท้ากีฬาสำหรับผู้ชาย ผู้หญิง และเด็ก

บริษัทได้ดำเนินการเปลี่ยนแบรนด์สาขาเสร็จสิ้นจำนวน 20 แห่งในระหว่างไตรมาส 2 ส่งผลให้ยอดรวมในปีงบการเงินนี้อยู่ที่ 21 แห่ง และไม่มีแผนที่จะเปลี่ยนแบรนด์สาขาเพิ่มเติมในช่วงที่เหลือของปีงบการเงิน 2026 เพื่อมุ่งเน้นการจัดวางสินค้า การนำเสนอ และการสร้างการรับรู้ของลูกค้า ณ สาขาที่ได้รับการแปลงสภาพแล้วให้มากยิ่งขึ้น

สินค้าคงคลังลดลง 5.0% เมื่อเทียบรายปี และฝ่ายบริหารยังคงมุ่งเน้นที่จะลดสินค้าคงคลังลงประมาณ 50 ล้านดอลลาร์เมื่อสิ้นสุดปีงบการเงิน นอกจากนี้ ชู สเตชัน กรุ๊ป คาดว่าคำขอคืนเงินภาษีนำเข้าจะมีมูลค่ารวมประมาณ 1.2 ล้านดอลลาร์ โดยจะบันทึกเงินคืนเมื่อได้รับชำระแล้ว

แนวทางคาดการณ์จากฝ่ายบริหาร

มุมมองคาดการณ์ดังกล่าวรวมค่าใช้จ่ายในไตรมาสแรกจำนวน 13.6 ล้านดอลลาร์ หรือ 0.43 ดอลลาร์ต่อหุ้นปรับลดแล้ว โดยฝ่ายบริหารไม่ได้ตั้งสมมติฐานว่าสภาวะการส่งเสริมการขายจะปรับตัวดีขึ้น หรืออัตรากำไรจะฟื้นตัวในครึ่งปีหลัง

บริษัทคาดว่าสินค้าฤดูใบไม้ร่วงที่ปรับให้เข้ากับท้องถิ่น ผลิตภัณฑ์รองเท้าบูทที่แข็งแกร่งขึ้น การเพิ่มโฆษณา และฐานเปรียบเทียบที่ต่ำลง จะช่วยสนับสนุนให้ยอดขายปรับตัวดีขึ้นอย่างต่อเนื่อง ในช่วงการถาม-ตอบ (Q&A) ฝ่ายบริหารระบุว่าคาดการณ์ยอดขายจากสาขาเดิมในไตรมาส 3 จะค่อนข้างทรงตัว ขึ้นอยู่กับสภาพอากาศ และคาดว่าอุปสงค์รองเท้าบูทจะแข็งแกร่งขึ้นเมื่ออุณหภูมิเปลี่ยนเข้าสู่ฤดูกาลตามปกติ

ความเสี่ยงและประเด็นที่ต้องจับตา

• ตลาดรองเท้ายังคงมีการแข่งขันด้านโปรโมชันอย่างรุนแรงจนถึงเดือนสิงหาคม และฝ่ายบริหารคาดว่าแรงกดดันนี้จะดำเนินต่อไปตลอดช่วงที่เหลือของปีงบการเงิน 2026
• จำนวนผู้เข้าใช้บริการในสาขาลดลงแม้ว่าอัตราการซื้อจะปรับตัวดีขึ้น ซึ่งชี้ให้เห็นว่าการสร้างการรับรู้ของลูกค้าและการสื่อสารยังคงเป็นความท้าทายหลักในการดำเนินงาน
• อุปสงค์ของรองเท้าฤดูใบไม้ร่วงและรองเท้าบูทขึ้นอยู่กับสภาพอากาศที่เย็นลงเป็นส่วนหนึ่ง ซึ่งสร้างความไม่แน่นอนเกี่ยวกับช่วงเวลาที่ยอดขายจากสาขาเดิมจะปรับตัวดีขึ้น
• ความไม่สอดคล้องของการจัดหมวดหมู่สินค้าและขนาดสินค้ายังคงเป็นความเสี่ยง โดยเฉพาะในกลุ่มสินค้าที่เน้นแฟชั่นและสาขาของ ชู สเตชัน ที่ได้รับการเปลี่ยนแบรนด์ใหม่
• การเร่งระบายสินค้าคงคลังช่วยปรับปรุงคุณภาพของสินค้าคงคลังและการสร้างกระแสเงินสดให้ดีขึ้น แต่ยังคงส่งผลให้อัตรากำไรของสินค้าลดลงอย่างต่อเนื่อง
• การฟื้นตัวของอัตรากำไรขึ้นอยู่กับการควบคุมสินค้าคงคลัง การเติบโตของยอดขายจากสาขาเดิม และการเพิ่มประสิทธิภาพของต้นทุนคงที่

ประเด็นสำคัญจากการถาม-ตอบกับนักวิเคราะห์

ฝ่ายบริหารกล่าวว่าการเลื่อนปฏิทินวันแรงงาน (Labor Day) ทำให้ยอดขายบางส่วนย้ายจากสัปดาห์แรกของเดือนกันยายนไปอยู่ในสัปดาห์ที่สอง ทั้งนี้ ยอดขายยังคงติดลบเล็กน้อย ณ ช่วงเวลาที่มีการแถลง แต่วันในสัปดาห์ปัจจุบันทำผลงานได้ดีกว่าสัปดาห์ก่อนหน้า

ผู้บริหารแสดงความมั่นใจในหมวดหมู่สินค้ารองเท้าบูทฤดูใบไม้ร่วง โดยอ้างถึงสมดุลที่ดีขึ้นระหว่างรองเท้าบูททรงสูง รองเท้าบูทสั้น สินค้าแฟชั่น และสินค้าพื้นฐาน ตลอดจนการแบ่งระดับสินค้าแบบดี-ดีมาก-ดีที่สุด ที่เหมาะกับท้องถิ่น โดยฝ่ายบริหารคาดว่าราคารองเท้าบูทเฉลี่ยจะเพิ่มขึ้นอย่างมีนัยสำคัญเนื่องจากการผสมผสานผลิตภัณฑ์ที่สดใหม่อยู่เสมอ มากกว่าการทำโปรโมชันลดราคาที่แรงขึ้น

บริษัทวางแผนที่จะให้ค่าใช้จ่ายในการโฆษณาในครึ่งปีหลังทรงตัวค่อนข้างมากเมื่อเทียบรายปี โดยเงินออมที่เดิมคาดว่าจะได้จากการลดโฆษณาการเปลี่ยนแบรนด์สาขา จะถูกนำกลับไปลงทุนใหม่เพื่อสนับสนุนจำนวนผู้ใช้บริการและอธิบายข้อเสนอคุณค่าของ ชู สเตชัน ณ สาขาที่ได้รับการแปลงสภาพแล้ว

เกี่ยวกับอัตรากำไรในระยะยาว ฝ่ายบริหารกล่าวว่าปีงบการเงิน 2026 จะมุ่งเน้นไปที่การลดสินค้าคงคลังและการปรับกลุ่มเป้าหมายลูกค้าใหม่ โดยเชื่อว่าอัตรากำไรสามารถขยับเข้าใกล้ระดับในอดีตเมื่อไม่นานมานี้ ซึ่งรวมถึงช่วงประมาณ 35% ที่ได้หารือกันในการแถลง หากการควบคุมสินค้าคงคลัง การเติบโตของยอดขาย และการบริหารต้นทุนคงที่ปรับตัวดีขึ้น

เกี่ยวกับการจัดสรรเงินทุน บริษัทได้ระบุว่าเงินปันผล การซื้อหุ้นคืน และการควบรวมและซื้อกิจการ เป็นสามแนวทางที่เป็นไปได้ในการส่งคืนคุณค่าให้แก่ผู้ถือหุ้น แต่ยังไม่ได้ให้แผนการที่เฉพาะเจาะจง

บันทึกการแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Thank you. Good morning and welcome to Shoe Station Group's second quarter fiscal 2026 earnings conference call. This conference call is being recorded and is also being broadcast via webcast. Any reproduction or rebroadcast of any portion of this call is expressly prohibited. Management's remarks today contain forward-looking statements that involve a number of risks and uncertainties that could cause the company's actual results to be materially different projected in such statements. Forward-looking statements should also be considered in conjunction with the discussion of risk factors included in the company's SEC filings and today's earnings press release. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date. The company disclaims any obligation to update any of the risk factors or to publicly announce any revisions to the forward-looking statements discussed on today's conference call or contained in today's press release to reflect future events or developments.

Management's remarks today will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in today's earnings press release. I will now turn the conference over to Clifton Sifford, Interim President and Chief Executive Officer of Shoe Station Group, for opening remarks. Mr. Sifford, you may begin.

Clifton Sifford

Good morning, everyone, and thank you for joining us today. With me on the call are W. Kerry Jackson, our Chief Financial Officer, Tanya E. Gordon, our Chief Merchandising Officer, and Marc A. Chilton, our Chief Operating Officer. Tanya and Marc are both available to take your questions during the Q&A portion of the call. This is our first earnings call as Shoe Station Group, which became official in June. The new name reflects our strategic vision. Shoe Station as our primary vehicle for long-term growth, operating alongside Shoe Carnival in an ongoing two-banner model, with each banner serving its localized customer base with the right assortment at the right price. Our second quarter results fell short of our expectations.

This morning I'll cover what drove the quarter, what our product and customer data tell us, and the actions underway for the fall season, several of which are already showing up in our Q3 results. Kerry will then take you through the financials and our updated outlook. Three factors drove the quarter and they interacted with one another. First, and this is the issue we identified and discussed with you on our first quarter call. The assortments in our Shoe Carnival and rebannered Shoe Station stores were not fully aligned with the customers actually shopping those stores. This alignment by location includes brand, assortment, and sizing, all of which were not up to the standards we have set for our stores. When the assortment and sizing based on the customer that shops the store is wrong, promotion cannot fix it.

Both of these opportunities showed in our quarter 2 results. Second, we accelerated the liquidation of our aged and excess inventory. This was also deliberate. It pressured merchandise margin in the quarter, but it converted slow-moving inventory into cash and open receipt dollars for our fall assortments that I will describe in a moment. Our inventory ended the quarter down 5% from last year, and we remain on plan to reduce inventory approximately $50 million by year end. Third, the footwear marketplace became increasingly promotional as the quarter progressed. Faced with that environment, we made a deliberate choice. We priced in-season product competitively to protect our market position rather than defend margin rate and lose the customer.

That said, we were pleased with our customer conversion rate. When customers came in our stores during the quarter, they bought. Store conversion improved in both banners, rising to levels we have not experienced in years. What declined was traffic. Lower prices alone did not bring customers through the door. Our challenge is clearly traffic and consumer awareness, not price, and that shapes where we need to invest. We will be communicating our value proposition and our assortment to both the legacy Shoe Carnival customer and the Shoe Station customer.

The message will be different, but it will communicate our improved assortment and value proposition. We need to rebuild trust with our customers that our stores offer the best selection of shoes and accessories at a great value for the entire family. And that takes effective and targeted communication, not deeper discounting. Let me spend a moment on the product because the category detail tells you exactly where the assortment work matters and where we believe it is already paying off. Adult Athletic, our largest business at roughly 37% of sales, declined mid-single digits. The category underneath is mixed. Men's athletic was down only about 1% with the running category comping positive in both men's and women's. Where we underperformed was fashion athletic, including the basketball category.

Running shoes are a staple for our customers. They trust us to have the best brands and a broad assortment. And when we have the right brands and the right doors, we win. That is a localization thesis in 1 category. Women athletic roughly 23% of sales declined high single digits with both sandals and women's sport casuals down double digits. Children's shoes declined high single digits. This is a business that we should own in the Shoe Carnival stores.

Our family proposition in these stores start with the children's business. Our children's shoe buyers are as good as it gets in the industry and they are rebuilding this business back to the levels we have traditionally experienced. This is a huge opportunity for us and we believe we will once again be the destination shop for kids' shoes. Men's non-athletic declined high single digits in dress and casual, while men's work boots, a replenishment business with a loyal customer, comped up about 2%. The pattern across all categories is consistent. Replenishment categories perform better. The categories that depend most on having the right localized assortment and sizing structures underperformed. We believe this is fixable, and we are very focused on making that happen.

Back to school is the first evidence that our localized assortment focus is working. Ahead of the season, we were able to change many distributions to a more localized athletic assortment. The category that drives back to school and in August 2026, the beginning of our third quarter, comparable store sales declined 2.7%, a substantial improvement from the second quarter's 7.1% decline, with improvement in both banners and continued double-digit e-commerce growth. As we move forward, our merchandise will reflect not only the right product based on the customer shopping in each store, but also the size profiles that best serve that customer. We believe the bigger opportunity is still ahead of us. The majority of our fall receipts, localized across categories, not just athletic, arrive after back to school. And I will say this plainly, I believe our boot assortment is outstanding.

The strongest we have offered in several years. And boots are the most important fall category in family footwear. The brands, the styles, and the depth are targeted to each store's customer in a way they have not been before. We are supporting the season with intensified advertising and incremental investment directed at building customer traffic and communicating our assortment and value to both customer groups described. The second quarter demonstrated that price alone will not deliver traffic. We believe communication is the missing element. During the quarter, we completed the rebannering of 20 stores, bringing the year to 21, and we do not expect to rebanner additional stores for the remainder of fiscal 2026.

This pause allows us to concentrate on retail fundamentals, assortment, presentation, and the customer relationship, particularly at our converted stores where that relationship is still being established. We expect the promotional environment to persist through the balance of the year, and our updated guidance reflects that reality. We are not assuming the environment improves. What we are assuming is that the actions I have described, localized assortments, arriving for fall, a food offering we believe to be a good offer, and a good offer to the community and intensified advertising continue to close the sales gap the way back to school has begun to. We enter the second half debt free with strong cash position and inventory positioned for the season. With that, I'll turn the call over to Kerry to review the financials and our updated outlook in detail. Kerry?

Unknown Speaker

Thank you, Cliff, and good morning, everyone. Our second quarter results came in below the expectations underlying our first quarter guidance, driven principally by lower sales and gross profit margin in an increasingly promotional footwear marketplace. This morning, our review of the quarter, our year-to-date results, fiscal August, and our updated fiscal 2026 guidance, which we have lowered. I will start with the balance sheet because it is the foundation from which we are managing through this period. We ended the quarter with $131.6 million in cash, cash equivalents, and marketable securities, an increase of $39.7 million compared to the end of the second quarter of last year. We have no debt outstanding with $99 million currently available under our $100 million credit facility, which we expect to renew or replace in the second half of fiscal 2026. During the quarter, we paid the 57th consecutive quarterly dividend.

Inventory ended the quarter at $426.6 million, down $22.4 million, or 5.0% from last year, with inventory per store down 3.6%. This reduction was achieved deliberately through the accelerated liquidation of aged and excess inventory Cliff described, and we remain on plan for an approximately $50 million reduction in inventory by fiscal year end. are converting slower moving inventory into cash while funding open to buy for localized fall assortments. Due to the lower than originally expected sales performance for the year, we are targeting the year end inventory reduction at the low end of the range we gave in Q1 2026. One additional item. Following the Supreme Court's February rule striking down certain tariffs imposed under IEPA, we submitted initial tariff refund claims in July and expect to file additional claims in the second half of fiscal 2026. We expect these claims to total approximately $1.2 million, and we will record refunds when collected. Net sales in the second quarter were $284.3 million, compared to $306.4 million last year, a decline of 7.2%. Comparable store sales declined 7.1% compared to a 7.5% decline in the second quarter of last year.

By banner, Shoe Carnival net sales were $178.5 million, representing 63% of total net sales and declined 6.5%, with comparable store sales down 6.3%. Shoe Station net sales were $105.7 million, or 37% of the total, and declined 8.4% with comparable store sales down 8.5%. E-commerce was a bright spot. Comparable e-commerce sales grew 18.8% with growth in both banners, while store comparable sales declined 9.5%. We believe the sales shortfall in the quarter was concentrated in store traffic, not in demand for our banners. Gross profit margin in the second quarter was 31.9%, a decrease of 690 basis points from last year. Merchandise margins decreased 630 basis points, while buying distribution occupancy costs deleveraged 60 basis points on the lower sales base, even though those costs declined in dollars. The merchandise margin decline reflects three drivers.

First, the second quarter of last year included a temporary benefit from rising retail prices ahead of tariff-driven cost increases, while selling through inventory purchased at pre-tariff costs, a benefit that did not repeat. Second, we price competitively in an increasingly promotional marketplace which lowered average transaction size. And third, we accelerate the liquidation of aged excess inventory, accepting margin dilution in exchange for inventory quality. A simpler way to size these pieces who look back 2 years to the second quarter of fiscal 2024 before last year's tariff related pricing benefit. In that comparison, gross profit margin declined approximately 420 basis points and the merchandise margin declined approximately 240 basis points. Put plainly, of this year's 630 basis point merchandise margin decline, roughly 390 basis points came from lapping last year's temporary pricing benefit, and roughly 240 basis points reflect today's promotional environment and our inventory liquidation. SG&A in the second quarter was $83.0 million, a decrease of $10.6 million from last year, driven by lower selling costs, primarily advertising and other rebanner-related expenses, and lower incentive and equity compensation.

As a percentage of net sales, SG&A was 29.2% compared to 30.6% last year. In the normal course of business, we recorded $396,000 of store impairment charges on 4 stores during the quarter, bringing year-to-date impairment charges at $6.7 million on 11 stores, including the impairments recognized in the first quarter as part of our previously discussed strategic review. Income tax expense was $2.3 million and the effective tax rate was 26.7% compared to 25.9% in the prior year quarter. Net income for the quarter was $6.3 million, or $0.23 per diluted share, compared to $19.2 million, or $0.70 per diluted share last year. There were no non-GAAP financial measures adjustments in the second quarter. Through the first 6 months, net sales were $555.0 million, down 5.0%, with comparable store sales down 4.7%. GAAP net income year-to-date was $631,000, or $0.02 per diluted share, inclusive of the $13.6 million of non-recurring charges recorded in the first quarter related to the CEO transition and our strategic review.

Excluding those non-recurring charges, non-GAAP adjusted net income was $12.5 million, or $0.45 per diluted share, and non-GAAP adjusted SG&A declined $11.9 million year-to-date. Turning to the third quarter to date, comparable store sales for fiscal August, which ended on August 29, declined 2.7% and net sales declined 3.3%. This was a substantial improvement in both banners from the rate of decline in Q2 2020 and e-commerce continued double-digit growth. As Cliff described, we localized our athletic assortments ahead of back to school, and we attribute the improvement to that work along with competitive prices and intensified advertising. The majority of our fall receipts, localized across categories, arrived in the stores after back to school. I would note the promotional environment has not abated. Our margins in August continued to run below last year's at a rate comparable to the second quarter.

And our updated guidance contemplates that continuing. We are lowering our fiscal 2026 guidance to reflect second quarter results and current family footwear trends. For the second half of fiscal 2026, we expect comparable store sales in the range of down 1% to up 1%, inclusive of fiscal August. For the full year, we now expect net sales of $1.1 billion to $1.111 billion, representing a decline of approximately 2% to 3% versus fiscal 2025. GAAP EPS of $0.32 to $0.47, and adjusted EPS of $0.75 to $0.90. Gross profit margin of approximately 32.5% to 32.7%, representing approximately 390 to 410 basis points of compression versus fiscal 2025. GAAP SG&A approximately flat versus fiscal 2025, and a reduction in adjusted SG&A of approximately $14 million, inclusive of the intensified advertising investment. a GAAP tax rate of approximately 37% and an adjusted tax rate of approximately 27%.

The GAAP guidance reflects the $13.6 million of first quarter charges, or $0.43 per diluted share. The elevated GAAP tax rate reflects the non-deductible portion of the CEO severance against a lower pre-tax income base. Let me be clear about the philosophy behind the guidance. We are not assuming the promotional environment improves in the second half, and we are not assuming margin recovery. Our gross margin outlook contemplates continued pressure at rates similar to what we experienced in the second quarter and August. we are assuming is continued improvement in comparable sales consistent with the trend change we saw in August, supported by localized fall assortments, our boot offering, intensified advertising, and progressively easier prior year comparisons.

Clifton Sifford

With that, I will turn the call back to Cliff. Cliff Johnson, Thank you, Kerry. Before we open the line for questions, I want to thank our teams across both banners and our distribution and support centers. The second quarter did not meet our standards, but the response of this organization in resetting assortments, managing inventory with discipline, and delivering an improved back to school reflects the operating culture we are building. Our focus for the balance of the year is execution. The right product and the right store communicated to the right customer. Operator, we are ready for questions.

Operator

We will now begin the question and answer session. [Operator Instructions] Your first question comes from the line of Samuel Poser with Williams Trading. Your line is open. Please go ahead.

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Samuel Poser

Good morning, everybody. Cliff, can you talk about your quarter to date? same store sales and how much you think the shift of the later Labor Day impacted both late July back to school and quarter to date. I'm talking through Labor Day. sales, um uh can you just give us some color in your mind there and where you are quarter to date?

Clifton Sifford

Yes, no problem, Sam. I hope you're doing well. You're correct that the shift in Labor Day does have an effect, and our quarter 3 sales as we move sales out of the first week of September and then to the second week of September, which is where we are. So we have experienced a, I a pretty good beginning of this week. However, you gave back sales in the first week. So as of right now, ourselves are trending slightly negative, but with this week much better than last week.

Samuel Poser

So, I mean, so you're, so it was down, you were comping down 2.7% through July to through August 29. So as of today that has. improved a bit since then? No, I was.

Clifton Sifford

say as of the way we trended in August. But again, Labor Day shifted into this week, and this week is trending much better than last week. I think that we haven't experienced the full Labor Day shift.

Samuel Poser

Okay, thank you. And then when you think about the combination of your traffic was down, your conversions were up. your product mix is improving, we're going into a period of time in between back to school and holiday where we sort of get into the doldrums. How do you weight the macro, the promotional environment your need to improve, let people know you're around again with the right stuff, versus where you are in getting your merchandise assortments where they need to be and where, when do you think your merchandise assortments and the messaging will be optimized. I mean, I know it always can get better, but like optimized relative to where you think you where you need to be right now.

Clifton Sifford

Yes, I understand the question very well, Lee, because it's important. As we walk out of back to school and into September, you said it. you enter into a doldrums time period of September where you're waiting for all the new product catch on with the customer and the athletic business kind of slows down a little bit and the non-athletic business picks up. What you really look forward to is October when hopefully the weather turns cooler and then you can see the real results of the new fall product. getting the new fall product in every day. I mean, it's coming in rapidly, and we're really excited about it. And I've seen a few things start to pick up. I don't expect to see a true turnaround to the to better comps until we see a weather break. And that normally happens in October.

That doesn't happen in October, then it always happens by November. So we have to be very careful expect that at that point we'll see sales of fall product and our boot assortment kick in.

Samuel Poser

All right, I'll jump back on. Thank you very much. Thank you, sir.

Operator

Your next question comes from the line of Mitchel Kummetz with Seaport Research. Your line is open. Please go ahead.

Mitchel Kummetz

Yes, thanks for taking my questions. Let me just kind of follow up on 1 of Sam's questions. So you guys were minus 2.7% comp in August. That's kind of where you are quarter to date. this week should maybe be a little bit better. How are you thinking about the remainder of the quarter as we kind of go through this period of doldrums where the consumer kind of goes away for a bit until they come back for, you know, holiday or when the weather turns? And what and what does that mean in terms of kind of your comp expectation for the quarter? I know for the back half you're seeing down 1% to up 1%. But are you kind of anticipating sort of like a down 3% in the third quarter? And then I've got follow-ups.

Clifton Sifford

I tell you, we think quarter 3 is probably going to be flattish. It really depends again on to October the weather cooperates in October Then we could we could produce a small increase, but we can't count on that because October changes every year. You know, some years it's warm and others not. We that so we're assuming flattish for the third quarter and then the increase coming in the fourth quarter is boots. and the weather turns more seasonal, we think we're ready. We're we're armed and ready for that quarter, and that's when we believe that increases will start.

Mitchel Kummetz

And Cliff, it sounds like you're pretty bulled up on the boot assortment. Can you just elaborate on that? What is it about boots? this year that is so encouraging to you? You mean, did you kind of walk through some of the detail there?

Clifton Sifford

Yes, you know, I'm going to congratulate the boot buyers once again. When they took me through the boot assortment, it's well balanced. It's balanced between uh low boots and high boots and it has. a mix of fashion and basics. In fact, I personally believe that the fashion boots that they showed us are so much better than the years before. You know, we've gotten stale, and the whole shoe business has gotten stale in boots ever since the whole fur, or faux fur in our case, took hold and everything began to look the same year after year after year. And what our buyers decided to do this year, and which I think is absolutely right, is just just forget about the past and then build a new assortment that attracts uh across the board, all consumers, young uh and old. And I'm just really excited about it from a pricing standpoint.

Not all promotional the way it has been in the past, but We expected our blue average prices will be up, in my opinion, significantly, and that's good because it just tells us that we have new, fresh product. Don, you want to add anything to that? Sure.

Unknown Speaker

and something we were able to catch, hi Mitch, something we were able to catch just based on Clip's return, was really to go back on the full assortments. We had placed the goods, but we went back and based on localized assortment, made sure we were balanced both in the Shoe Carnival stores as well as the Shoe Station stores. We've got a really good balance of good, better, best. based on the trends, whenever you get to a better balance of tall shafts versus booties and fur, it bodes well for a good boot season. So we're much more balanced in terms of high boots versus low boots. So that tells me we're going to have a much better season. And I think our value proposition is much better this year versus last year. And you can see it. So the materials are better, the looks are better, the balance of fashion and the fashion pyramid is better.

So excited. about excited about what that looks like for the season. And again, it's really just getting it localized, localized back to the way we used to do things. And we got away from the true cookie cutter assortment that we've experienced the first half of the year.

Clifton Sifford

IT'S VERY HELPFUL. AND THAT LAST QUESTION SHE JUST MADE, MITCH, IS REALLY IMPORTANT. WE HAD GOTTEN OURSELVES INTO A COOKIE-CUTTER, ALL STORES NEED TO LOOK THE SAME. AND AS YOU KNOW, THAT DOESN'T WORK FOR OUR STORES BECAUSE WE SERVICE OUR STORES distinct, different customers based on the regions that we're in. And it's important that we merchandise those stores. I've mentioned that several times in my prepared remarks. It's critically important that we merchandise the stores based on the customers that are walking in, and that, I think Tanya and her team have done an outstanding job. job of that for the boots. Sorry, I interrupted you. Please ask your next question.

No, no, that's quite right. That was I appreciate that extra color.

Mitchel Kummetz

One last one for me. If you could just elaborate on the promotional environment. I mean, is it mostly concentrated in fashion athletic? Is it more broad based than that? And I know that the guide contemplates the continuation of a promotional environment for the balance of the year, but given your crystal ball, Cliff, I mean, when do you anticipate things getting better? Do you think we could be in better shape marketplace in better shape come, you know, spring '27.

Clifton Sifford

That is where we're focused, Mitch. We think that especially in the athletic business that things could stay challenging, you know, when our – 1 of the larger uh vendors we deal with, uh pretty much did away with MAP pricing for the time period of back to school. Uh there was a race, in my opinion, a race to the bottom, and um uh we didn't want to participate in that race. And hopefully as product is cleared and those stores that decided to race toward the bottom, things will recover. But the good news is, and you've heard me say this before, I really believe fashion cycles run in 3-year cycles. And I believe we're entering into a cycle of non-athletic being more important to our as we go into the fourth quarter and into the first quarter of next year. So that race to the bottom that did hurt our margins in the August time period in the second quarter won't be as pronounced because it'll be a fashion business.

Unknown Speaker

Great, thank you.

Operator

Your next question comes from the line of James Chartier with Maness Crespi Heart & Company. Your line is open. Please go ahead.

James Chartier

Good morning, thanks for taking my questions. I was wondering if you could talk about the difference in performance between athletic and non-athletic in August. and try and help us understand how impactful the changes to assortment and localization were, you know, more on the business so far in the third quarter today. You want to take that? Sure.

Unknown Speaker

Hi, Jim. So the difference between athletic and non-athletic in the August timeframe, we saw really great improvement in athletics specifically and the month of August with back to school is still really dominated by the athletic category. And adult athletics just from Q2. down low singles to August up low singles. So saw a significant shift there and that inventory, as Cliff had spoke to, came in localized. So that was bought, we were able to get those localized assortments in place, which is why I think we're seeing better performance overall in athletics. And then the non-athletic piece of it, we were down high singles for Q2, and we brought those to mid-down mid-singles for the month of August. So we're definitely seeing as we get more product in the right stores at the right prices on the non-athletic side, we're seeing some success. But based on my point earlier, we bought all of the first half of the year cookie cutter, and we also bought the non-athletic areas down to last year pretty significantly.

So, we didn't have the inventory to do the sales. So a lot of things that we've gotten in casuals, for instance, in women's, the flat category, the clog category, we're seeing really high sell-throughs. So we're getting new products in those categories every day. So I think we'll see a difference as we continue to move through the second half of the year. non-athletic piece of the business because we will have the localized assortments, we will have a better balance in our inventory, and we will continue to work through the age through the end of the year.

James Chartier

Okay. And then in terms of the opportunity from an assortment perspective for athletic versus non-athletic, is there more opportunity in 1 versus the other?

Unknown Speaker

There's more opportunity in the non-athletic business. Definitely. in both men's and women's, and actually in kids non-athletic as well. And we already started to see a shift in the month of August in the kids athletic versus non-athletic. the athletic kids business was actually down mid-singles in August, and the kids non-athletic business was up mid-singles. So we're already starting to see a shift there. And as we get, again, the stores more localized, we get to our customer in these re-bannered stores, I think. we've got a lot of opportunity on the non-athletic side, which is timed very well with Cliff's point of just the cycle and coming back into a non-athletic cycle.

James Chartier

Okay, and the last question, how did kind of your advertising investment for back to school in terms of in terms of the amount of incremental advertising, the type compared to what you're planning for holiday.

Clifton Sifford

Let me make sure I understood the question you're asking, how we thought the advertising for back to school performed. as compared to what we're going to do going forward.

James Chartier

How much more did you invest in advertising? Like how much was the growth in advertising spend for back to school year over year? how does that growth rate compare to what you're planning for holiday? And then in terms of the opportunities to shift the mix of that advertising around, how does that opportunity for holiday compare to what you were able to do for back to school?

Unknown Speaker

Jim, on the advertising, I'll generally talk about the second half. So we're going to be relatively flat on total advertising on the second half compared to last year. Now, if you remember last year, we were over investing in advertising for the rebanner stores. And at the beginning of the year, we intended to uh right-size that. Since we weren't re-bannering stores, we were going to have savings against in the SG&A by reducing the advertising by not having to re-advertise the rebanners. We're going to we're going to we've adjust the course on that and we're going to reinvest those dollars into advertising so they're going to be but they're going to be distributed slightly different I think to answer your question a little bit, it might give you a little context on the advertising about how I did it back to school, we were pleased in that that we were advertising to that Shoe Carnival customer again, and for, uh, while we were down 2.7% comp in the August timeframe, Shoe Carnival was down less than 1%. So we saw significant trajectory change in that banner.

What we saw though is Shoe Station did not respond as quickly, they were down mid-April. high single digits. It's better than what they had performed in Q2, but it just goes to show that our efforts are introducing uh that those re-banner stores that used to be Shoe Carnival, uh helping people understand what is that new re-bannered Shoe Station store look like, what does it have, what is its promotions. And that's what that additional advertising is going to be partly directed at is helping those rebanner stores to improve the shoe station performance in the second half. All right, that's helpful. Thank you.

Operator

Your next question comes from the line of Samuel Poser with Williams Trading. Your line is open. Please go ahead.

Samuel Poser

Thank you again. To follow up, 1, what percent of your sales right now are driven by the replenishable goods that you said had been outperforming?

Clifton Sifford

It's a small percent, Sam, at this point, mainly in men's. which was roughly about 18% of our total sales between 16% and 18% of our total sales and uh, That's where most of the replenishment comes from. Very little replenishment in the athletic business and in the uh women's business, uh, from a weekly replenishment. Now, we buy a lot of product off the floor. So if we see a brand that's or style that's selling through at a higher rate than we anticipated, that vendor immediately buying more of that product. We've always been aggressive in that regard. When I talk about replenishment, I'm talking about automated fill-ins. You sell an 8, you get an 8 back.

And that is something that we... We had not done very well in the previous year. It's something that 1 of the very first things that I course corrected on when I got here is that there are just certain categories of product, especially in men's, especially in work, where you cannot afford to be out of size. And it's actually, you know, utilizing the vendor inventory, so I don't know why in the world we wouldn't be filling in, but the The fact is that I think that we downplayed that fill-in business over the past year or 2.

Samuel Poser

Thank you. And then secondly, um given that a lot of the, you had that big chunk of gross margin in the quarter that was due to the price increases from last year pre-pandemic, uh tariff stuff and this other part of your business is you know, the gross margin is being driven down by promotions. When we look into '27, should we anticipate, like, I mean, is a 35% gross margin, you know, getting things sort of back to normal? you know, sort of close to '24, is that a reasonable assumption or is it just going to take longer to build back?

Clifton Sifford

No, I tell you, Sam, the concentration, and I mentioned this on the very first call after I came back, this is a year we're getting our inventories back in line. We mentioned to you that inventories would be down as much as $50 million by the end of the year. And this is the year we get the inventories back in line and the year that we retarget the customer that are shopping our stores. And if we do that job correctly, And I have all faith that we will do that. And we get the inventories back in line and the, and understand who the customer is at shopping each of our stores and get the product right as we go into spring, I believe that margins recover. We recover not to past expectations of 2004 and before, but closer to what we've been running over the past couple of years. years. But it's all about and you, Sam, you're on this all the time.

It's all about inventory control. We cannot continue to run the kind of inventories in our stores that we have. run over the past year or so, and we gotta get that back in line. And we announced that on my very first call. We're working hard to get it there as part of the margin uh, that we had in the second quarter. That's part of the guidance that we gave you for the remainder of the year, and I think that next year you'll see the margins recover to where they were over the past couple of years. But again, it's about inventory control. You've got to keep the inventories controlled in our stores. Gary, you want to add?

Unknown Speaker

add anything to that? No, I I I think you said it well. You know we said in last quarter's call that we thought we'd get back into the historical margins that were closer to the '24 and the 35% range. You know it depends on the sales growth, the comp increases and leveraging some of the fixed costs. That's as part of what we have to do that growth because we are being penalized on that side of it. So those 2 in combination will help us get back to those historical margins.

Samuel Poser

Okay. And then and then lastly, um uh you have, you know, you have a lot of cash on the balance sheet. Are you considering, I mean, given when stock is this morning and everything, is do you Can you give us some of your thoughts on how you're going to utilize that cash, maybe through buybacks or something else?

Unknown Speaker

Well, we have that always as an opportunity. We don't telegraph what we're going to do in the marketplace ahead of time. But, you know, we have the standard three-pronged that the dividends buybacks and acquisitions are how we expect to return value to shareholders. Um, All right. Thank you very much. We can't comment on that today.

Operator

There are no further questions this time. I will now turn the call back to Clifton Sifford for closing remarks.

Clifton Sifford

I want to thank you all for joining us on the call today. We look forward to speaking to you again in November.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.

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