Company Exceeds Quarterly Net Sales,
Comparable Store Sales and Earnings per Share Guidance
Shoe Carnival, Inc. (Nasdaq: SCVL), a leading retailer of
moderately priced footwear and accessories, today reported results
for the third quarter ended November 1, 2014.
Third Quarter Highlights
- Net sales increased $18.9 million to
$254.7 million, as compared to net sales reported for the third
quarter of fiscal 2013, exceeding the Company’s guidance
- Comparable store sales increased 2.3
percent in the third quarter of fiscal 2014, exceeding the
Company’s guidance
- Earnings per diluted share for the
third quarter were $0.54, exceeding the Company’s guidance
- Per-store inventories were down 0.6
percent at the end of the quarter, as compared to the third quarter
last year
- 244,000 shares of common stock were
repurchased during the quarter under the current share repurchase
program
“We are pleased to report results that exceeded our expectations
for net sales, comparable store sales and earnings per share for
the third quarter. These results reflect strong sales in our
fashion boot category and progress in key initiatives we announced
last year, mainly, national advertising, better brands in our
women’s department and a reinvigorated e-commerce presence. I am
proud of the entire Shoe Carnival family and believe our strategy
will continue to benefit long-term sales and earnings growth,”
commented Cliff Sifford, President and CEO.
Third Quarter Financial Results
The Company reported net sales of $254.7 million for the third
quarter of fiscal 2014, an 8.0 percent increase, as compared to net
sales of $235.8 million for the third quarter of fiscal 2013.
Comparable store sales increased 2.3 percent in the third quarter
of fiscal 2014.
The gross profit margin for the third quarter of fiscal 2014 was
30.1 percent which was unchanged compared to the third quarter of
fiscal 2013. The merchandise margin increased 0.2 percent. Buying,
distribution and occupancy expenses increased 0.2 percent as a
percentage of sales.
Selling, general and administrative expenses for the third
quarter of fiscal 2014 increased $5.8 million to $59.0 million. As
a percentage of sales, these expenses increased to 23.1 percent
compared to 22.5 percent in the third quarter of fiscal 2013.
Net earnings for the third quarter of fiscal 2014 were $10.8
million, or $0.54 per diluted share. For the third quarter of
fiscal 2013, the Company reported net earnings of $10.9 million, or
$0.54 per diluted share.
Nine Month Financial Results
Net sales during the first nine months of fiscal 2014 increased
$28.1 million to $712.5 million as compared to the same period last
year. Comparable store sales for the thirty-nine week period ended
November 1, 2014 decreased 0.4 percent. Net earnings for the first
nine months of fiscal 2014 were $22.6 million, or $1.12 per diluted
share, compared to net earnings of $26.3 million, or $1.29 per
diluted share, in the first nine months of last year. The gross
profit margin for the first nine months of fiscal 2014 was 29.3
percent compared to 29.5 percent last year. Selling, general and
administrative expenses, as a percentage of sales, were 24.1
percent for the first nine months of fiscal 2014 compared to 23.3
percent last year. The Company opened 30 stores during the first
nine months of fiscal 2014 as compared to opening 29 stores during
the first nine months of last year.
Share Repurchase Program
In the third quarter of fiscal 2014, the Company repurchased
approximately 244,000 shares of its common stock at a total cost of
$4.5 million. For the nine months ended November 1, 2014,
approximately 405,000 shares were repurchased at an aggregate cost
of $7.5 million. The amount that remained available under the share
repurchase authorization at November 1, 2014 was $12.8 million.
Fourth Quarter Fiscal 2014 Earnings Outlook
For the 13 weeks ending January 31, 2015, earnings per diluted
share are expected to be in the range of $0.06 to $0.10, compared
to $0.03 in last year’s fourth quarter. The Company’s guidance is
based on the expectation that fourth quarter net sales will be in
the range of $218 to $222 million. This expectation includes a
comparable store sales increase to be in the range of 3 to 5
percent.
Looking ahead, Mr. Sifford stated, “Our customers’ reception to
our trend right product assortment combined with a strong fourth
quarter marketing presence gives us confidence to expect continued
increases in comparable store sales and earnings for the fourth
quarter.”
The Company expects to open 31 new stores and close seven stores
in fiscal 2014. Store openings and closings by quarter for the
fiscal year are as follows:
New Stores Store Closings 1st quarter 2014 7 1 2nd
quarter 2014 16 0 3rd quarter 2014 7 1 4th quarter 2014 1 5 Fiscal
year 2014 31 7
The seven new stores opened during the third quarter include
locations in:
Total Stores in City Market the Market Aurora, CO
Denver 3 Cedar Rapids, IA Cedar Rapids 4 Lakeland, FL Tampa 6
Roseville, MI Detroit 6 Salina, KS Wichita 3 Wilkes Barre, PA
Wilkes Barre 2 Willow Grove, PA Philadelphia 1
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.
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 and regional name brands. As of
December 1, 2014, the Company operates 404 stores in 33 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 and Puerto Rico in which our stores are
located; 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; the potential
impact of national and international security concerns on the
retail environment; changes in our relationships with key
suppliers; 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 hurricanes or other 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; our ability
to manage our third-party vendor relationships; our ability to
successfully execute our growth 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 growth plans;
higher than anticipated costs associated with the closing of
underperforming stores; our ability to successfully grow our
e-commerce business; the inability of manufacturers to deliver
products in a timely manner; changes in the political and economic
environments in China, Brazil, Europe and East Asia, where the
primary manufacturers of footwear are located; the impact of
regulatory changes in the United States and the countries where our
manufacturers are located; the continued favorable trade relations
between the United States and China and the other countries which
are the major manufacturers of footwear; the resolution of
litigation or regulatory proceedings in which we are or may become
involved; and our ability to meet our labor needs while controlling
costs; 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.
Financial Tables Follow
SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share)
(Unaudited)
Thirteen Thirteen Thirty-nine
Thirty-nine Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 1, November 2, November 1, November 2, 2014
2013 2014 2013 Net
sales $ 254,687 $ 235,770 $ 712,530 $ 684,474
Cost of sales (including buying,
distribution and occupancy costs)
177,922 164,759 503,964
482,339 Gross profit 76,765 71,011 208,566
202,135
Selling, general and administrative
expenses
58,973 53,196 171,301
159,516 Operating income 17,792 17,815 37,265
42,619 Interest income (2 ) (3 ) (11 ) (8 ) Interest expense
41 41 124 132
Income before income taxes 17,753 17,777 37,152 42,495
Income tax expense 6,936 6,861
14,600 16,222 Net income $ 10,817
$ 10,916 $ 22,552 $ 26,273 Net
income per share: Basic $ 0.54 $ 0.54 $ 1.12 $
1.30 Diluted $ 0.54 $ 0.54 $ 1.12 $
1.29 Weighted average shares: Basic 19,716
19,942 19,844 19,918
Diluted 19,729 19,962
19,859 19,939 Cash dividends declared
per share $ 0.06 $ 0.06 $ 0.18 $ 0.18
Financial Note:
Per share amounts are computed
independently for each quarter of the fiscal year. The sum of the
quarters may not equal the total year due to the impact of changes
in weighted shares outstanding and differing applications of
earnings under the two-class method.
SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
November 1, February 1, November 2,
2014 2014 2013
ASSETS Current Assets: Cash and cash
equivalents $ 29,089 $ 48,253 $ 33,562 Accounts receivable 2,954
4,337 3,251 Merchandise inventories 317,865 284,801 299,122
Deferred income taxes 794 1,208 1,794 Other 4,742
3,916 4,855 Total Current Assets 355,444 342,515 342,584
Property and equipment - net 101,362 90,193 89,905 Deferred income
taxes 8,085 3,426 2,383 Other noncurrent assets 384
717 675 Total Assets $ 465,275 $ 436,851 $ 435,547
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
Liabilities: Accounts payable $ 70,831 $ 62,671 $ 60,526 Accrued
and other liabilities 17,165 14,988 19,232
Total Current Liabilities 87,996 77,659 79,758 Deferred lease
incentives 28,383 24,430 21,623 Accrued rent 10,318 9,224 8,935
Deferred compensation 9,616 8,232 7,959 Other 250 434
359 Total Liabilities 136,563 119,979 118,634 Total
Shareholders' Equity 328,712 316,872 316,913
Total Liabilities and Shareholders' Equity $ 465,275 $ 436,851 $
435,547
SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirty-nine Thirty-nine Weeks Ended Weeks
Ended November 1, November 2, 2014 2013
Cash Flows From Operating Activities Net income $ 22,552 $
26,273
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 14,713 12,848 Stock-based
compensation 292 2,662 Loss on retirement and impairment of assets
698 489 Deferred income taxes (4,245 ) (264 ) Lease incentives
5,810 4,751 Other (383 ) 668 Changes in operating assets and
liabilities: Accounts receivable 1,383 (1,050 ) Merchandise
inventories (33,064 ) (26,840 ) Accounts payable and accrued
liabilities 9,144 (5,002 ) Other 1,327 2,449
Net cash provided by operating activities 18,227
16,984 Cash Flows From Investing
Activities Purchases of property and equipment (27,533 ) (25,220 )
Proceeds from sale of property and equipment 836 0 Proceeds from
notes receivable 250 200 Net cash used
in investing activities (26,447 ) (25,020 )
Cash Flows From Financing Activities Proceeds from issuance of
stock 203 226 Dividends paid (3,631 ) (3,650 ) Excess tax benefits
from stock-based compensation 35 172 Purchase of common stock for
treasury (7,533 ) 0 Shares surrendered by employees to pay taxes on
restricted stock (18 ) (906 ) Net cash used in
financing activities (10,944 ) (4,158 ) Net decrease
in cash and cash equivalents (19,164 ) (12,194 ) Cash and cash
equivalents at beginning of period 48,253
45,756 Cash and Cash Equivalents at End of Period $ 29,089
$ 33,562
Shoe Carnival, Inc.Cliff SiffordPresident,
Chief Executive Officer and Chief Merchandising
OfficerorW. Kerry JacksonSenior Executive Vice
President, Chief Operating and Financial Officer and
Treasurer(812) 867-6471
Shoe Carnival (NASDAQ:SCVL)
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