Dive Brief:
- Shoe Carnival on Monday announced that Erik Gast, who had served as CFO since April, has left the company effective immediately. Gast replaced former CFO W. Kerry Jackson, who retired this spring after 35 years with the retailer.
- In Gast’s place, the company on Monday named Patrick Edwards the new chief financial officer. He will also serve as a senior vice president and the company’s secretary and treasurer. Edwards joined Shoe Carnival in 2019, serving first as vice president and controller, and then as chief accounting officer and secretary.
- Edwards will be the third person to serve as CFO this year at the retailer.
Dive Insight:
According to a Monday filing with the U.S. Securities and Exchange Commission, Shoe Carnival wanted Gast, in his capacity as CFO, to “spend substantially more time working from the company’s Evansville, Indiana headquarters, and Mr. Gast was not supportive of this change.” Gast had been working primarily at a Shoe Carnival office in Fort Mill, South Carolina.
New CFO Edwards “has been a significant contributor to our success since joining Shoe Carnival in 2019,” CEO Mark Worden said in an announcement. “I am very pleased that he has agreed to expand his role and I am confident that he will continue to add incredible value as we move forward in executing our strategy to grow the business and drive shareholder value.”
Before joining Shoe Carnival, Edwards worked in finance and accounting for nearly 20 years in the public utility sector. He also worked in public accounting for PricewaterhouseCoopers.
According to the securities filing, Edwards’ base salary increased to $366,000, while Gast will receive a one-time lump sum severance payment of $566,000. Shoe Carnival also stated in the securities filing that Gast’s departure was not related to any disagreement relating to the company’s financial reporting or condition, operations, policies or practices.
For the three months ending July 29, Shoe Carnival reported net sales fell 5.7% to $294.6 million from a year ago, while comparable sales were down 6.5%. The company cited soft traffic within lower-income households and urban markets.
However, those declines were partially offset by 5.4% net sales growth in e-commerce and growth from new Shoe Station stores. The company in August opened its 400th location and said it has updated half of its stores.
Back-to-school season also delivered a boost to the company’s bottom line with August sales and profits among the highest of any month in the Indiana-based company’s 45-year history. Shoe Carnival said the back-to-school shopping period accounts for half of the company’s Q3 gross profit.
Based on its results so far, Shoe Carnival said it’s on track to deliver its full-year gross profit margin guidance of 36% to 37%. Its full-year outlook also anticipates $1.19 billion to $1.21 billion in net sales, $85 million to $89 million in net income and the opening of six to 10 new stores.
Shoe Carnival has 400 physical stores in 35 states and Puerto Rico, along with an e-commerce store. The company also operates stores under the Shoe Station brand, which it acquired in 2021 for $67 million.
