First quarter net sales and net income were down at Shoe Carnival Inc., but its stock rose in pre-market trading after the company reaffirmed its full-year guidance and said it will move faster on plans to rebanner its stores to its stronger Shoe Station retail concept.

“Our first quarter results reflect the continued success of our strategic transformation, with profits outperforming expectations by approximately 10 percent despite the challenging macroeconomic and retail environment,” Mark Worden, the shoe retailer’s president and CEO said.

For the three months ended May 3, net income fell nearly 46 percent to $9.3 million, or 34 cents a diluted share, from net income of $17.3 million, or 63 cents, a year ago. Net sales fell 7.5 percent to $277.7 million from $300.4 million, while comparable store net sales were down 8.1 percent. The company bested Wall Street’s expectations on diluted earnings per share of 30 cents by 10 percent, but missed on revenue expectations of $280.7 million.

The company said net sales at its Shoe Station banner grew 4.9 percent, while the “family footwear industry declined.” Net sales at Shoe Carnival fell by 10 percent in the quarter. Its Rogan’s business, acquired in February 2024, saw net sales in-line with integration plans and exceeded $19 million in the quarter.

“The Shoe Station growth strategy is working exceptionally well, delivering industry-leading sales growth and accretive margins across diverse market types. This consistent outperformance versus both Shoe Carnival and industry trends across all footwear categories has given us the confidence to accelerate our rebanner initiative,” the CEO said.

He said the prior target for the rebanner was 51 percent of the store fleet, and now the new goal for Shoe Station is to have it represent over 80 percent of the store fleet by March 2027.

The company said that its Shoe Station banner has been the industry’s fastest growing retailer over the last two years, citing to industry data. Over the same period, the Shoe Carnival nameplate and the family footwear industry have experienced declines. That contributed to the decision to have Shoe Station, a market leader in the Southeast, become a national footwear and accessories banner.

Shoe Carnival tested the rebanner of 10 stores in Fiscal 2024 and 24 doors in the first quarter of 2025. It now plans to have 120 locations, or 28 percent of the store fleet to operate at a Shoe Station store by the end of Fiscal 2025. Twenty are targeted for the rebanner in the second quarter, 25 in the third quarter and six in the fourth quarter. Those stores also will be expanding into new markets, as well as in markets where the brand is already known.

“We’re making these investments from a position of financial strength, with growing cash reserves and no debt. This is a pivotal moment for our company as we transform from a traditional family footwear retailer to a premium brand-focused national leader in footwear,” Worden said.

The company said it expects “significant market share growth” in regions where it has either underperformed with its Shoe Carnival concept or where it can perform even better under its Shoe Station concept.

While investing in the rebanner is expected to impact operating income in the range of $20 million to $25 million, or a 65-cent decline in Fiscal 2025 earnings per share, the company said it expects to recover the first-year investment over a two-to-three period following a store’s grand opening.

Moreover, it expects to see “significant financial leverage” from a more productive store base and achieve overall comparable store sales growth in the third quarter of Fiscal 2026, when Shoe Station stores surpass over half of the store fleet by the back-to-school shopping season. Future growth is expected as the company enters new markets where it is not present in today, it said.

The company also reaffirmed its Fiscal 2025 outlook, which expects earnings per share at between $1.60 to $2.10 on net sales of $1.15 billion to $1.23 billion.

Shares of Shoe Carnival rose to as high as $20.54, or an 11.4 percent gain on Thursday’s close of $18.44, in pre-market trading.

Shoe Carnival at the end of the quarter operated 429 locations, with 334 Shoe Carnival doors, 67 Shoe Station stores and 28 Rogan’s sites.