Shoe Station Group Inc. (NASDAQ:SHOE) shares fell 13.07% in pre-market trading on Thursday after the footwear retailer issued fiscal 2026 guidance below analyst estimates and reported a second-quarter revenue decline.
Adjusted earnings per share were $0.45, above the analyst consensus of $0.34. Revenue fell 7.2% year on year to $284.3 million from $306.4 million, below the $297.63 million consensus estimate. Comparable store sales declined 7.1%.
Gross profit margin decreased to 31.9% from 38.8% a year earlier, a decline of 690 basis points. The company attributed the change to increased promotional activity, inventory liquidation and the absence of prior-year pricing benefits ahead of tariff-related cost increases.
“Our second quarter results reflect a footwear marketplace that became increasingly promotional as the quarter progressed. We priced competitively to protect our market position and accelerated the liquidation of aged and excess inventory, both of which pressured our gross profit margin,” said Cliff Sifford, Interim President and Chief Executive Officer.
Shoe Station Forecasts FY26 EPS of $0.75 to $0.90
For fiscal 2026, Shoe Station expects adjusted EPS of $0.75 to $0.90, compared with an analyst consensus of $1.48.
Revenue is forecast at between $1.1 billion and $1.111 billion, compared with the $1.13 billion consensus estimate. The company expects a full-year gross profit margin of approximately 32.5% to 32.7%, representing a year-on-year decline of 390 to 410 basis points.
Shoe Station said comparable store sales improved in August but remained down by a low-single-digit percentage, supported by changes to product assortments.
The company ended the quarter with no debt and $131.6 million in cash, cash equivalents and marketable securities.