Shoe Carnival cut its full-year guidance on Wednesday after reporting lower-than-expected earnings in the first quarter of 2023.

The Evansville, Ind.-based footwear retailer reported net sales in Q1 declined 11.4 percent to $281.2 million, compared to $317.5 million the same time last year. First quarter net income was $16.5 million, or $0.60 per diluted share, compared to $26.9 million, or $0.95 per diluted share the year prior.

According to Shoe Carnival, the declines were mainly due to reduced traffic, which was primarily driven by persistent inflation and a nearly 9 percent reduction in federal tax refunds compared to first quarter 2022. Unfavorable weather also impacted net sales, with spring seasonal product, most notably sandals, down approximately 23 percent compared to first quarter 2022, Shoe Carnival noted.

With these declines and market trends in mind, the company lowered its guidance for the full year. Shoe Carnival now expects net sales for the full year between $1.23 billion to $1.25 billion, with earnings per share between $3.60 to $3.85. This is down from previous guidance, which indicated an expected net sales range of $1.26 billion to $1.32 billion and earnings per share between $3.96 to $4.20 for the year.

Mark Worden, president and CEO of Shoe Carnival, said in a statement that despite the slower than expected start to 2023, the company’s customer base grew at the fastest pace of the last three years, climbing to a record high of 32.7 million members at quarter end. “I am most pleased our instore shopping experience is continuing to drive high conversion, and we once again captured market share growth within this challenging economic backdrop,” Worden said.

Despite a challenging first quarter, Worden is optimistic for the year ahead as he looks towards summer and the important back-to-school season. Worden noted on the call that the back-to-school selling season and a healthier athletic footwear inventory level positions the business in a good place in the second half of the year.

“We believe our third quarter position is ready to go for back-to-school and then we’ll moderate as the year continues on and as inflation continues to get more and more in control,” Worden said. “This year, we have the athletic brand assortment, depth and freshness in hand that we did not have last year. While I’m not saying the customer economic issues driving soft traffic will be soft in Q2, I do think we are in a position to continue to grab athletic market share this year, convert at very high levels, and maintain our healthy gross profits in this declining market environment we face.”