Shoe Carnival Continues to Pay Workers as Top Execs Take Salary Cuts
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As its stores remain closed to help stem the spread of the novel coronavirus, Shoe Carnival will continue to pay its associates while top executives take salary cuts to preserve the business’ liquidity.
The Evansville, Ind.-based retailer said today its workers will receive pay as scheduled. However, its senior leaders and board will “substantially reduce” their respective base salaries and cash retainer fees. The cutbacks, said the company, would be effective until at least half of its stores have reopened.
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“The economic uncertainty that comes with government-mandated shelter-in-place orders has made many of our team members face financial hardships, and our continued support during this period is critical,” CEO Cliff Sifford said in a statement. “At the same time, we are taking decisive actions to manage costs across the company, which includes salary and discretionary expense reductions. While these are tough decisions, we believe they are necessary for the long-term success of Shoe Carnival.”
What’s more, Shoe Carnival is working with its supply chain partners to scale down inventories and extend credit terms, as well as deferring nonessential projects and marketing activities for its brick-and-mortar fleet.
The company’s e-commerce business, on the other hand, has recorded a boost: Last week, it noted that digital sales have “grown significantly,” with a “steep acceleration” of online customer engagement driving triple-digit order increases on its site since the store closures.
During the fourth quarter ended Feb. 1, Shoe Carnival logged earnings per diluted share of 24 cents, versus analysts’ bets of 21 cents, on profits of $3.5 million. Revenues improved 2.2% to $239.9 million, compared to forecasts of $238 million, and same-store sales advanced 3.2% from the prior year.
The company added that it would evaluate the length of its store closures in line with federal, state and local governments’ guidance. At the end of February, it had $57 million in cash and a $50 million credit facility.
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