Shoe Carnival’s acquisition of Rogan’s Shoes is expected to generate approximately $84m in sales and $10m in operating income for the group.
Rogan’s, with 28 stores spread across Wisconsin, Minnesota and Illinois, advances Shoe Carnival’s strategy to be the “nation’s leading family footwear retailer”. Following the integration of Rogan’s into the company’s Shoe Station growth banner, the combined group sales are expected to surpass $200m by fiscal 2025.
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The acquisition brings the Shoe Carnival’s total number of stores to 429, bringing it closer to its goal of expanding to more than 500 stores by 2028.
Mark Worden, president & CEO of Shoe Carnival, emphasised the importance of the acquisition in expanding the company’s geographic reach and customer base. “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,” Worden said.
With this acquisition, Shoe Carnival gains immediate market dominance in Wisconsin and establishes a foothold in Minnesota, paving the way for further expansion opportunities.
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Pat Rogan, CEO of Rogan’s, added: “We share a strong focus on customers and employees, and this transaction provides the additional scale and expertise to drive future growth create efficiencies and expand profitability with that shared focus as the foundation.”
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By GlobalDataShoe Carnival’s vision for the future includes leveraging synergies between the two entities to enhance operational efficiency and maximise profitability. With an 18-month integration plan in place, Shoe Carnival anticipates capturing $1.5m in synergies and profit gains by fiscal 2025 and the full amount by fiscal 2026.
Shoe Carnival achieves FY sales and earnings forecasts
For the full year ended 3 February 2024, the company recorded net sales of $1.176bn, driven by strong sales growth during the December holiday period.
Shoe Carnival shared that its diluted earnings per share fall within the anticipated range of $2.65 to $2.75, with preliminary results landing in the mid-range. This figure excludes any transaction costs associated with the acquisition of Rogan’s.
Shoe Carnival ended fiscal 2023 with more than $110m in cash, cash equivalents and marketable securities, an increase of more than $45m compared to the previous year.
The fiscal year of 2024 is said to mark the 19th consecutive year that Shoe Carnival has ended the year without debt, fully funding its operations and new store growth.
On a preliminary base, the company anticipates modest growth in total net sales for fiscal year 2024, falling in the low to mid-single-digit range. This growth has been attributed to several factors including the addition of Rogan’s business, expansion within the Shoe Station banner, increased e-commerce activity and ongoing Customer Relationship Management (CRM) expansion efforts.
In August, Q2 profits at Shoe Carnival sank on lower sales but Worden remained upbeat about progress following investments in its CRM platform.
