Reports Comparable Store Sales Increase of 4.5 Percent
Raises Fiscal Year 2018 Net Sales and Earnings Per Diluted Share
Outlook
Shoe Carnival, Inc. (Nasdaq: SCVL) (“the Company”), a leading
retailer of moderately priced footwear and accessories, today
reported results for the third quarter and nine months ended
November 3, 2018.
Third Quarter Highlights
- Earnings per diluted share increased 15
percent to $0.76
- Comparable store sales increased 4.5
percent
- Due to fiscal 2017 being a 53-week
year, approximately $25.1 million of net sales reported in the
third quarter of 2017 shifted into the second quarter of fiscal
2018, resulting in a net sales decrease of $18.3 million in the
third quarter compared to the same period last year
- Repurchased 519,048 shares of common
stock at a total cost of $20.0 million under share repurchase
program
“We are pleased with our strong third quarter sales results,
which reflect growth in all geographic regions and virtually all of
our product categories,” commented Cliff Sifford, Shoe Carnival’s
President and Chief Executive Officer. “Our third quarter
comparable store sales growth of 4.5 percent was on top of a 4.4
percent increase for the same quarter last year. On a year-to-date
basis, our comparable store sales have increased 4.2 percent,
operating income increased 28.6 percent and earnings per diluted
share increased 71.0 percent. As a result of our year-to-date
performance and outlook for the remainder of fiscal 2018, we are
pleased to raise our annual net sales and earnings guidance.”
Third Quarter Financial Results
Comparable store sales for the thirteen-week period ended
November 3, 2018 increased 4.5 percent compared to the
thirteen-week period ended November 4, 2017. Primarily due to the
calendar shift, net sales in the third quarter ended November 3,
2018 decreased 6.4 percent to $269.2 million, compared to net sales
of $287.5 million for the third quarter ended October 28, 2017.
Gross profit margin for the third quarter of fiscal 2018
increased to 30.2 percent compared to 29.8 percent in the third
quarter of fiscal 2017. Merchandise margin increased 1.1 percent
and buying, distribution and occupancy expenses increased 0.7
percent as a percentage of net sales compared to the third quarter
of fiscal 2017.
Selling, general and administrative expenses (“SG&A”) for
the third quarter of fiscal 2018 decreased $2.6 million to $65.2
million. The decrease in expense was primarily due to lower
advertising expense, expense reductions from closed stores and a
gain on insurance proceeds related to stores affected by recent
hurricanes, partially offset by an increase in incentive and equity
compensation expense as a result of the improved financial
performance of the Company. As a percentage of net sales, these
expenses increased to 24.3 percent compared to 23.6 percent in the
third quarter of fiscal 2017.
Net income for the third quarter of fiscal 2018 increased 12.6
percent to $12.0 million, or $0.76 per diluted share. For the third
quarter of fiscal 2017, the Company reported net income of $10.7
million, or $0.66 per diluted share.
Nine Month Financial Results
Comparable store sales for the thirty-nine week period ended
November 3, 2018 increased 4.2 percent compared to the thirty-nine
week period ended November 4, 2017. Net sales during the nine
months ended November 3, 2018 increased $19.1 million to $795.0
million compared to the nine months ended October 28, 2017.
The gross profit margin for the first nine months of fiscal 2018
was 30.5 percent compared to 29.1 percent in the same period last
year. SG&A expenses for the first nine months increased $5.5
million to $194.1 million. As a percentage of net sales, these
expenses increased to 24.4 percent compared to 24.3 percent in the
first nine months of fiscal 2017.
Net earnings for the first nine months of fiscal 2018 increased
61.1 percent to $36.8 million, or $2.36 per diluted share, compared
to net earnings of $22.8 million, or $1.38 per diluted share, in
the first nine months of fiscal 2017.
Store Openings and Closings
The Company opened three stores and closed nine stores during
the first nine months of fiscal 2018 compared to 19 store openings
and ten store closings in the first nine months of fiscal 2017. For
the full fiscal year 2018, the Company expects to open three stores
and close 14 stores compared to opening 19 stores and closing 26
stores during fiscal 2017.
Expected store openings and closings by quarter for the fiscal
year are as follows:
New Stores Store Closings
1st quarter 2018 0 3 2nd quarter 2018 0 3 3rd quarter 2018 3 3 4th
quarter 2018 0 5 Fiscal year 2018 3 14
The three new stores opened during the third quarter include
locations in:
City Market Total Stores
in the Market Cookeville, TN Nashville, TN 8 Dania, FL Miami-Ft.
Lauderdale, FL 3 Miami Gardens, FL Miami-Ft. Lauderdale, FL 3
Fiscal 2018 Outlook
The Company is raising its fiscal 2018 outlook as follows:
- Net sales in the range of $1.020
billion to $1.022 billion, with comparable store sales up
approximately 3.5 percent;
- Earnings per diluted share in the range
of $2.36 to $2.38. Fiscal 2017 earnings per diluted share were
$1.15 and adjusted earnings per diluted share were $1.49.
Conference Call
Today, at 4:30 p.m. Eastern Time, the Company will host a
conference call to discuss the third quarter results. Participants
can listen to the live webcast of the call by visiting Shoe
Carnival's Investors webpage at www.shoecarnival.com. While the
question-and-answer session will be available to all listeners,
questions from the audience will be limited to institutional
analysts and investors. A replay of the webcast will be available
on the Company’s website beginning approximately two hours after
the conclusion of the conference call and will be archived for one
year.
Non-GAAP Adjusted Results
The non-GAAP adjusted results for the full year of fiscal 2017
discussed herein exclude the impact of a gain on insurance proceeds
recorded in cost of sales related to hurricane affected stores,
non-cash impairment charges for underperforming stores and
additional stock-based compensation expense recorded in selling,
general and administrative expenses and additional income tax
expense associated with the enactment of the U.S. Tax Cuts and Jobs
Act of 2017 (the “Tax Act”).
These adjusted results are provided to enhance the user's
overall understanding of the Company's historical operations and
financial performance. Specifically, the Company believes the
adjusted results provide investors with relevant period-to-period
comparisons of the Company’s core operations. The unaudited
adjusted results are provided in addition to, and not as
alternatives for, the Company’s reported results determined in
accordance with generally accepted accounting principles. A
complete reconciliation of actual results to the adjusted results
appears below in the table entitled “Reconciliation of GAAP to
Non-GAAP Financial Measures.”
About Shoe Carnival
Shoe Carnival, Inc. is one of the nation’s largest family
footwear retailers, offering a broad assortment of moderately
priced dress, casual and athletic footwear for men, women and
children with emphasis on national name brands. As of November 15,
2018, the Company operates 402 stores in 35 states and Puerto Rico,
and offers online shopping at www.shoecarnival.com. Headquartered
in Evansville, IN, Shoe Carnival trades on The NASDAQ Stock Market
LLC under the symbol SCVL. Shoe Carnival's press releases and
annual report are available on the Company's website at
www.shoecarnival.com.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of
1995, that involve a number of risks and uncertainties. A number of
factors could cause our actual results, performance, achievements
or industry results to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, but are not
limited to: general economic conditions in the areas of the
continental United States in which our stores are located and the
impact of the ongoing economic crisis and hurricane recovery in
Puerto Rico on sales at, and cash flows of, our stores located in
Puerto Rico; the effects and duration of economic downturns and
unemployment rates; changes in the overall retail environment and
more specifically in the apparel and footwear retail sectors; our
ability to generate increased sales at our stores; our ability to
successfully navigate the increasing use of online retailers for
fashion purchases and the impact on traffic and transactions in our
physical stores; our ability to attract customers to our e-commerce
website and to successfully grow our e-commerce sales; the
potential impact of national and international security concerns on
the retail environment; changes in our relationships with key
suppliers; changes in the political and economic environments in,
the status of trade relations with, and the impact of changes in
trade policies and tariffs impacting, China and other countries
which are the major manufacturers of footwear; the impact of
competition and pricing; our ability to successfully manage and
execute our marketing initiatives and maintain positive brand
perception and recognition; changes in weather patterns, consumer
buying trends and our ability to identify and respond to emerging
fashion trends; the impact of disruptions in our distribution or
information technology operations; the effectiveness of our
inventory management; the impact of natural disasters on our
stores, as well as on consumer confidence and purchasing in
general; risks associated with the seasonality of the retail
industry; the impact of unauthorized disclosure or misuse of
personal and confidential information about our customers, vendors
and employees, including as a result of a cyber-security breach;
our ability to manage our third-party vendor relationships; our
ability to successfully execute our business strategy, including
the availability of desirable store locations at acceptable lease
terms, our ability to open new stores in a timely and profitable
manner, including our entry into major new markets, and the
availability of sufficient funds to implement our business plans;
higher than anticipated costs associated with the closing of
underperforming stores; the inability of manufacturers to deliver
products in a timely manner; the impact of regulatory changes in
the United States and the countries where our manufacturers are
located; the resolution of litigation or regulatory proceedings in
which we are or may become involved; our ability to meet our labor
needs while controlling costs; the impact of the U.S. Tax Cuts and
Jobs Act of 2017; and future stock repurchases under our stock
repurchase program and future dividend payments; and other factors
described in the Company’s SEC filings, including the Company’s
latest Annual Report on Form 10-K.
In addition, these forward-looking statements necessarily depend
upon assumptions, estimates and dates that may be incorrect or
imprecise and involve known and unknown risks, uncertainties and
other factors. Accordingly, any forward-looking statements included
in this press release do not purport to be predictions of future
events or circumstances and may not be realized. Forward-looking
statements can be identified by, among other things, the use of
forward-looking terms such as “believes,” “expects,” “may,” “will,”
“should,” “seeks,” “pro forma,” “anticipates,” “intends” or the
negative of any of these terms, or comparable terminology, or by
discussions of strategy or intentions. Given these uncertainties,
we caution investors not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
We disclaim any obligation to update any of these factors or to
publicly announce any revisions to the forward-looking statements
contained in this press release to reflect future events or
developments.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share data)
(Unaudited)
Thirteen
Thirteen Thirty-nine Thirty-nine Weeks Ended Weeks Ended Weeks
Ended Weeks Ended November 3, 2018 October 28, 2017 November 3,
2018 October 28, 2017 Net sales $ 269,181 $ 287,469 $
794,992 $ 775,922 Cost of sales (including buying, distribution and
occupancy costs) 187,963 201,802
552,666 549,872 Gross profit 81,218
85,667 242,326 226,050 Selling, general and administrative
expenses 65,202 67,787 194,063
188,519 Operating income 16,016 17,880
48,263 37,531 Interest income (273 ) (1 ) (392 ) (3 ) Interest
expense 37 57 113
248 Income before income taxes 16,252 17,824 48,542
37,286 Income tax expense 4,206 7,127
11,766 14,462 Net income $
12,046 $ 10,697 $ 36,776 $ 22,824
Net income per share: Basic $ 0.80 $ 0.66 $
2.40 $ 1.38 Diluted $ 0.76 $ 0.66 $
2.36 $ 1.38 Weighted average shares: Basic
15,071 15,957 15,282
16,287 Diluted 15,812 15,966
15,544 16,293 Cash
dividends declared per share $ 0.080 $ 0.075 $ 0.235
$ 0.220
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
November 3,
2018
February 3,2018
October 28,
2017
ASSETS Current Assets: Cash and cash equivalents $
36,699 $ 48,254 $ 21,050 Accounts receivable 2,322 6,270 7,365
Merchandise inventories 300,510 260,500 302,935 Other 11,762
5,562 6,883 Total Current Assets 354,293 320,586
338,233 Property and equipment - net 74,471 86,276 93,041 Deferred
income taxes 8,866 8,182 10,769 Other noncurrent assets 389
536 663 Total Assets $ 438,019 $ 415,580 $ 442,706
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
Liabilities: Accounts payable $ 56,270 $ 41,739 $ 59,355 Accrued
and other liabilities 28,094 15,045 21,933
Total Current Liabilities 84,364 56,784 81,288 Deferred lease
incentives 23,478 29,024 29,297 Accrued rent 8,808 10,132 10,689
Deferred compensation 11,811 11,372 10,974 Other 806
966 884 Total Liabilities 129,267 108,278 133,132 Total
Shareholders' Equity 308,752 307,302 309,574
Total Liabilities and Shareholders' Equity $ 438,019 $ 415,580 $
442,706
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Thirty-nine Weeks EndedNovember 3,
2018
Thirty-nine Weeks EndedOctober 28,
2017
Cash Flows From Operating Activities Net income $ 36,776 $
22,824 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 16,551 17,944
Stock-based compensation 7,604 2,073 Loss on retirement and
impairment of assets (1,412 ) 1,831 Deferred income taxes (684 )
(1,169 ) Lease incentives 298 3,515 Other (6,882 ) (5,212 ) Changes
in operating assets and liabilities: Accounts receivable 4,218
(2,047 ) Merchandise inventories (40,010 ) (23,289 ) Accounts
payable and accrued liabilities 23,330 (8,446 ) Other (2,009
) 940 Net cash provided by operating activities
37,780 8,964 Cash Flows From
Investing Activities Purchases of property and equipment (5,021 )
(16,708 ) Other 1,489 0 Net cash used
in investing activities (3,532 ) (16,708 )
Cash Flows From Financing Activities Borrowings under line of
credit 0 88,600 Payments on line of credit 0 (88,600 ) Proceeds
from issuance of stock 148 196 Dividends paid (3,593 ) (3,603 )
Purchase of common stock for treasury (39,046 ) (29,798 ) Shares
surrendered by employees to pay taxes on restricted stock
(312
)
(945
)
Net cash used in financing activities (42,803 )
(34,150 ) Net decrease in cash and cash equivalents (8,555 )
(41,894 ) Cash and cash equivalents at beginning of period
48,254 62,944 Cash and Cash Equivalents at End
of Period $ 39,699 $ 21,050
SHOE CARNIVAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Fifty-three Weeks EndedFebruary 3,
2018
Reported net income per diluted share $ 1.15 Gain on
insurance proceeds (0.21) Non-cash impairment charges 0.21
Additional stock-based compensation expense associated with the Tax
Act 0.12 Tax effect of gain on insurance proceeds, non-cash
impairment charges and stock-based compensation expense (0.05)
Additional income tax expense on re-measurement of deferred tax
assets and liabilities 0.27 Adjusted diluted earnings per share $
1.49
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181115005999/en/
Cliff SiffordPresident and Chief Executive Officer, orW. Kerry
JacksonSenior Executive Vice President, Chief Operating and
Financial Officer and Treasurerwww.shoecarnival.com(812)
867-6471
Shoe Carnival (NASDAQ:SCVL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Shoe Carnival (NASDAQ:SCVL)
Historical Stock Chart
From Apr 2023 to Apr 2024