Company Exceeds Quarterly Net Sales,
Comparable Store Sales and Earnings per Share Guidance
Company Declares Quarterly Cash
Dividend
Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of
moderately priced footwear and accessories, today reported results
for the fourth quarter and fiscal year ended January 31, 2015.
Fourth Quarter Highlights
- Net sales increased $27.3 million to
$227.6 million, compared to the fourth quarter of fiscal 2013
- Comparable store sales increased 9.5
percent in the fourth quarter of fiscal 2014, exceeded the
Company’s guidance for the quarter
- Earnings per diluted share were $0.15,
exceeded the Company’s guidance for the quarter
- Per-store inventories were down 5.0
percent at the end of the quarter, compared to the fourth quarter
of fiscal 2013
“We were pleased with our strong comparable store sales
performance in the fourth quarter driven by broad based gains
across all of our footwear categories. Although favorable weather
played an important role in our strong performance, we believe our
key initiatives of national advertising, better brands in our
women’s department and aggressive multi-channel initiatives
continued to bring new customers to our stores, e-commerce site,
and mobile touchpoints,” commented Cliff Sifford, President and
CEO.
Fourth Quarter Financial Results
The Company reported net sales increased 13.6 percent to $227.6
million for the fourth quarter of fiscal 2014, compared to net
sales of $200.3 million for the fourth quarter of fiscal 2013.
Comparable store sales increased 9.5 percent in the fourth quarter
of fiscal 2014.
The gross profit margin for the fourth quarter of fiscal 2014
increased to 28.6 percent compared to 28.5 percent for the fourth
quarter of fiscal 2013. The merchandise margin decreased 0.4
percent while buying, distribution and occupancy expenses decreased
0.5 percent, as a percentage of sales.
Selling, general and administrative expenses for the fourth
quarter increased $4.4 million to $60.5 million. As a percentage of
sales, these expenses decreased to 26.6 percent compared to 28.0
percent in the fourth quarter of fiscal 2013.
The Company opened one new store during the fourth quarter of
fiscal 2014 compared to three stores in the fourth quarter of
fiscal 2013.
Net earnings for the fourth quarter of fiscal 2014 were $3.0
million, or $0.15 per diluted share. For the fourth quarter of
fiscal 2013, the Company reported net earnings of $0.6 million, or
$0.03 per diluted share. Fourth quarter earnings for fiscal 2014
includes approximately $.03 of additional expense within cost of
sales attributable to the west coast port congestion.
Fiscal Year 2014 Financial Results
Net sales increased 6.3 percent to $940.2 million for fiscal
2014, as compared to net sales of $884.8 million for fiscal 2013.
Comparable store sales for the 52-week period ended January 31,
2015 increased 1.8 percent. Net earnings for fiscal 2014 were $25.5
million, or $1.27 per diluted share, compared to net earnings of
$26.9 million, or $1.32 per diluted share, in the last fiscal
year.
Gross profit increased to $273.7 million in fiscal 2014. The
gross profit margin in fiscal 2014 decreased to 29.1 percent from
29.3 percent in the prior fiscal year. Merchandise margin remained
flat between years while buying, distribution and occupancy costs,
as a percentage of sales, increased 0.2 percent.
Selling, general and administrative expenses, as a percentage of
sales, were 24.6 percent for fiscal 2014 compared to 24.4 percent
last year. The Company opened 31 stores during fiscal 2014 as
compared to 32 stores in the prior year.
Speaking on the results, Cliff Sifford, President and CEO, said,
“I am proud of our entire Shoe Carnival team who worked hard to
deliver great product and excellent customer service helping us to
exceed our fourth quarter guidance and achieve record annual sales.
I am also excited with our customers’ willingness to increasingly
embrace our multi-channel shopping experience with increased
traffic on-line and in our stores.”
Store Growth
During fiscal 2014, the Company opened 31 new stores and closed
seven to end the year at 400 stores. One store was opened and five
were closed in the fourth quarter of fiscal 2014. Total retail
selling space increased to 4.4 million square feet at the end of
fiscal 2014 from 4.1 million square feet at the end of fiscal
2013.
Store openings and closings by quarter for the fiscal year were
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 new store opened during the fourth quarter is located
in:
City Market
Total Stores inthe Market
Philadelphia, PA Philadelphia 2
In fiscal 2015, the Company expects to open 18 to 22 new stores,
relocate two stores and close 11 stores. During the first quarter
of fiscal 2015, the Company expects to open seven stores, relocate
one store and close six stores. In the first quarter of fiscal
2014, the Company opened seven stores, relocated two stores and one
store was closed.
Share Repurchase Program
For the fiscal year ended January 31, 2015, approximately
405,000 shares were repurchased at an aggregate cost of $7.5
million under the Company’s share repurchase program. On December
11, 2014, the Company’s Board of Directors authorized a new share
repurchase program for up to $25 million of its outstanding common
stock, effective January 1, 2015. The new share repurchase program
replaced the existing $25 million share repurchase program that was
authorized in August 2010, which expired in accordance with its
terms on December 31, 2014.
Fiscal 2015 Earnings Outlook
The Company expects fiscal 2015 net sales to be in the range of
$977 million to $991 million, with a comparable store sales
increase in the range of 1.5 to 3.0 percent. Earnings per diluted
share for the fiscal year are expected to be in the range of $1.40
to $1.48. This represents an increase of 10 to 17 percent over
fiscal 2014 earnings per diluted share of $1.27.
Conference Call
Today, at 4:30 p.m. Eastern Time, the Company will host a
conference call to discuss the fourth quarter and fiscal 2014
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.
First Quarter Fiscal 2015 Cash Dividend
The Company announced today that its Board of Directors has
approved the payment of a quarterly cash dividend. The quarterly
cash dividend of $0.06 per share will be paid on April 20, 2015, to
shareholders of record as of the close of business on April 6,
2015.
Future declarations of dividends are subject to approval of the
Board of Directors and will depend on the Company's results of
operations, financial condition, business conditions and other
factors deemed relevant by the Board of Directors.
Record Date and Date of Annual Shareholder Meeting
The Company also announced that April 10, 2015 has been set as
the shareholder of record date and the Annual Meeting of
Shareholders will be held on June 11, 2015.
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
March 17, 2015, 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.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share)
Thirteen Thirteen Fifty-two
Fifty-two Weeks Ended Weeks Ended Weeks Ended Weeks Ended
January 31,2015
February 1,2014
January 31,2015
February 1,2014
Net sales $ 227,632 $ 200,311 $ 940,162 $ 884,785 Cost of
sales (including buying, distribution and occupancy costs)
162,519 143,129 666,483 625,468
Gross profit 65,113 57,182 273,679 259,317 Selling, general and
administrative expenses 60,525 56,134 231,826
215,650 Operating income 4,588 1,048 41,853
43,667 Interest income (3 ) (4 ) (14 )
(12
)
Interest expense 41 41 165 173
Income before income taxes 4,550 1,011 41,702 43,506 Income
tax expense 1,575 413 16,175 16,635
Net income $ 2,975 $ 598 $ 25,527 $ 26,871
Net income per share: Basic $ 0.15 $ 0.03 $ 1.27 $ 1.33
Diluted $ 0.15 $ 0.03 $ 1.27 $ 1.32 Weighted
average shares: Basic 19,576 19,949 19,777
19,926 Diluted 19,590 19,949
19,791 19,947 Cash dividends declared per
share $ 0.06 $ 0.06 $ 0.24 $ 0.24
Financial Note:
Per share amounts for net income purposes 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)
January 31,
2015
February 1,2014
ASSETS Current Assets: Cash and cash equivalents $
61,376 $ 48,253 Accounts receivable 2,928 4,337 Merchandise
inventories 287,877 284,801 Deferred income taxes 957 1,208 Other
5,991 3,916 Total Current Assets 359,129 342,515
Property and equipment - net 101,294 90,193 Deferred income taxes
4,227 3,426 Other noncurrent assets 366 717 Total
Assets $ 465,016 $ 436,851
LIABILITIES AND
SHAREHOLDERS’ EQUITY Current Liabilities: Accounts payable $
67,999 $ 62,671 Accrued and other liabilities 15,123
14,988 Total Current Liabilities 83,122 77,659 Deferred lease
incentives 29,908 24,430 Accrued rent 10,505 9,224 Deferred
compensation 9,901 8,232 Other 382 434 Total
Liabilities 133,818 119,979 Total Shareholders' Equity
331,198 316,872 Total Liabilities and Shareholders' Equity $
465,016 $ 436,851
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Fifty-twoWeeks EndedJanuary 31,2015
Fifty-twoWeeks EndedFebruary 1,2014
Cash Flows From Operating Activities Net income $ 25,527 $
26,871 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 20,063 17,428
Stock-based compensation 1,064 3,295 Loss on retirement and
impairment of assets 1,104 1,180 Deferred income taxes (550 ) (721
) Lease incentives 8,307 8,112 Other (1,070 ) 405 Changes in
operating assets and liabilities: Accounts receivable 1,409 (2,135
) Merchandise inventories (3,076 ) (12,519 ) Accounts payable and
accrued liabilities 6,838 (4,158 ) Other (1,962 ) 862
Net cash provided by operating activities 57,654
38,620 Cash Flows From Investing
Activities Purchases of property and equipment (33,543 ) (30,966 )
Proceeds from sale of property and equipment 836 0 Proceeds from
notes receivable 250 200 Net cash used
in investing activities (32,457 ) (30,766 )
Cash Flows From Financing Activities Proceeds from issuance of
stock 287 278 Dividends paid (4,828 ) (4,867 ) Excess tax benefits
from stock-based compensation 55 185 Purchase of common stock for
treasury (7,533 ) 0 Shares surrendered by employees to pay taxes on
restricted stock (55 ) (953 ) Net cash used in
financing activities (12,074 ) (5,357 ) Net increase
in cash and cash equivalents 13,123 2,497 Cash and cash equivalents
at beginning of period 48,253 45,756
Cash and Cash Equivalents at End of Period $ 61,376 $ 48,253
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
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