Reports Record Quarterly Diluted Earnings Per Share
Reports Comparable Store Sales Increase of 3.5 Percent
Raises Fiscal 2019 Net Sales and Earnings 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 2, 2019.
Third Quarter Highlights
- Net sales increased 2.0 percent to $274.6 million compared to
the third quarter last year
- Record earnings per diluted share of $0.94, a 23.7 percent
increase over prior year quarter, surpassing the previous record of
$0.91 achieved in the first quarter of this fiscal year
- Comparable store sales increased 3.5 percent
- Repurchased 521,800 shares of common stock at a total cost of
$16.9 million
- Cash and cash equivalents were $33.7 million with no
outstanding debt as of November 2, 2019
Cliff Sifford, Shoe Carnival’s Vice Chairman and Chief Executive
Officer, commented, “We are very pleased with our broad-based
strength across all product categories, geographies and sales
channels in the third quarter. Our record earnings were fueled by
solid comparable store sales growth throughout the quarter,
including our seventeenth consecutive positive comparable store
sales for the month of August. This demonstrates that Shoe Carnival
remains a destination for back-to-school family footwear. Our
customer-centric organization and fun, engaging shopping
environment continues to resonate with consumers and gives us
confidence in our raised outlook for fiscal 2019. Going forward, we
believe our strong foundation, combined with the recent addition of
new customer-data driven resources, positions us well for
sustainable, profitable growth for many years to come.”
Third Quarter Financial Results
The Company reported net sales of $274.6 million for the third
quarter of fiscal 2019, a 2.0 percent increase compared to net
sales of $269.2 million for the third quarter of fiscal 2018.
Comparable store sales increased 3.5 percent for the third quarter
of fiscal 2019.
Gross profit margin for the third quarter of fiscal 2019
increased 0.7 percent to 30.9 percent compared to 30.2 percent in
the third quarter of fiscal 2018. Merchandise margin increased 0.5
percent and buying, distribution and occupancy expenses decreased
0.2 percent as a percentage of net sales compared to the third
quarter of fiscal 2018.
Selling, general and administrative expenses for the third
quarter of fiscal 2019 increased $1.4 million to $66.6 million. As
a percentage of net sales, these expenses remained flat at 24.3
percent compared to the third quarter of fiscal 2018.
Net income for the third quarter of fiscal 2019 was $13.7
million, or $0.94 per diluted share. For the third quarter of
fiscal 2018, the Company reported net income of $12.0 million, or
$0.76 per diluted share.
Nine Month Financial Results
Net sales for the first nine months of fiscal 2019 increased
$1.7 million to $796.7 million compared to the first nine months of
fiscal 2018. Comparable store sales increased 1.6 percent for the
first nine months of fiscal 2019.
Net income for the first nine months of fiscal 2019 were $39.4
million, or $2.66 per diluted share, compared to net income of
$36.8 million, or $2.36 per diluted share, in the first nine months
of fiscal 2018. Included in the first nine months of fiscal 2019
was a tax benefit in connection with the vesting of equity-based
compensation of approximately $1.9 million, or $0.13 per diluted
share, that was recorded in the first quarter of this fiscal year.
The gross profit margin for the first nine months of fiscal 2019
was 30.4 percent compared to 30.5 percent in the same period last
year. Selling, general and administrative expenses for the first
nine months decreased $1.5 million to $192.5 million. As a
percentage of net sales, these expenses decreased to 24.2 percent
compared to 24.4 percent in the first nine months of fiscal
2018.
Store Openings and Closings
The Company opened its one new store for the fiscal year in the
third quarter of fiscal 2019 and closed one store for a total of
five store closures during the fiscal year compared to opening
three stores and closing 14 stores during fiscal 2018.
Expected store openings and closings by quarter for the fiscal
year are as follows:
New Stores
Store Closings
First quarter 2019
0
2
Second quarter 2019
0
2
Third quarter 2019
1
1
Fourth quarter 2019
0
0
Fiscal year 2019
1
5
The new store opened during the third quarter was located
in:
City
Market
Total Stores in
the Market
Jeffersonville, IN
Louisville, KY
8
Fiscal 2019 Outlook
The Company is raising its annual outlook based on its results
year-to-date and its outlook for the remainder of the fiscal year.
The Company now expects annual diluted earnings per share of $2.85
to $2.89 compared to its previous guidance of $2.77 to $2.83. This
compares to diluted earnings per share of $2.45 in the prior fiscal
year. Total net sales for the fiscal year 2019 are now expected to
be in the range of $1.033 billion to $1.036 billion and the Company
is reiterating its annual comparable store sales guidance of a low
single-digit increase.
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
investors and analysts. 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 name brands. As of November 21,
2019, the Company operates 393 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 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; 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 2, 2019
November 3, 2018
November 2, 2019
November 3, 2018
Net sales
$
274,645
$
269,181
$
796,676
$
794,992
Cost of sales (including buying,
distribution
and occupancy costs)
189,911
187,963
554,707
552,666
Gross profit
84,734
81,218
241,969
242,326
Selling, general and administrative
expenses
66,584
65,202
192,537
194,063
Operating income
18,150
16,016
49,432
48,263
Interest income
(163
)
(273
)
(580
)
(392
)
Interest expense
34
37
155
113
Income before income taxes
18,279
16,252
49,857
48,542
Income tax expense
4,553
4,206
10,426
11,766
Net income
$
13,726
$
12,046
$
39,431
$
36,776
Net income per share:
Basic
$
0.95
$
0.80
$
2.71
$
2.40
Diluted
$
0.94
$
0.76
$
2.66
$
2.36
Weighted average shares:
Basic
14,404
15,071
14,544
15,282
Diluted
14,556
15,812
14,826
15,544
Cash dividends declared per share
$
0.085
$
0.080
$
0.250
$
0.235
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
November 2,
February 2,
November 3,
2019
2019
2018
ASSETS
Current Assets:
Cash and cash equivalents
$
33,707
$
67,021
$
39,699
Accounts receivable
2,470
1,219
2,322
Merchandise inventories
298,002
257,539
300,510
Other
10,868
11,534
11,762
Total Current Assets
345,047
337,313
354,293
Property and equipment – net
69,147
70,605
74,471
Deferred income taxes
7,678
9,622
8,866
Other noncurrent assets
3,692
459
389
Operating lease right-of-use assets
222,148
0
0
Total Assets
$
647,712
$
417,999
$
438,019
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable
$
66,089
$
48,715
$
56,270
Accrued and other liabilities
22,052
22,069
28,094
Current portion of operating lease
liabilities
42,481
0
0
Total Current Liabilities
130,622
70,784
84,364
Long-term portion of operating lease
liabilities
202,138
0
0
Deferred lease incentives
0
22,171
23,478
Accrued rent
0
8,436
8,808
Deferred compensation
13,220
12,108
11,811
Other
984
67
806
Total Liabilities
346,964
113,566
129,267
Total Shareholders’ Equity
300,748
304,433
308,752
Total Liabilities and Shareholders’
Equity
$
647,712
$
417,999
$
438,019
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirty-nine
Thirty-nine
Weeks Ended
Weeks Ended
November 2, 2019
November 3, 2018
Cash Flows From Operating Activities
Net income
$
39,431
$
36,776
Adjustments to reconcile net income to
net
cash provided by operating activities:
Depreciation and amortization
12,652
16,551
Stock-based compensation
5,207
7,604
Loss/(gain) on retirement and impairment
of assets, net
767
(1,412
)
Deferred income taxes
1,944
(684
)
Non-cash operating lease expense
30,932
0
Lease incentives
0
298
Other
1,111
(6,882
)
Changes in operating assets and
liabilities:
Accounts receivable
(1,251
)
4,218
Merchandise inventories
(40,463
)
(40,010
)
Operating lease liabilities
(34,306
)
0
Accounts payable and accrued
liabilities
17,173
23,330
Other
(5,165
)
(2,009
)
Net cash provided by operating
activities
28,032
37,780
Cash Flows From Investing Activities
Purchases of property and equipment
(15,081
)
(5,021
)
Other
8
1,489
Net cash used in investing activities
(15,073
)
(3,532
)
Cash Flow From Financing Activities
Borrowings under line of credit
20,000
0
Payments on line of credit
(20,000
)
0
Proceeds from issuance of stock
148
148
Dividends paid
(4,466
)
(3,593
)
Purchase of common stock for treasury
(30,915
)
(39,046
)
Shares surrendered by employees to pay
taxes on
restricted stock
(11,040
)
(312
)
Net cash used in financing activities
(46,273
)
(42,803
)
Net decrease in cash and cash
equivalents
(33,314
)
(8,555
)
Cash and cash equivalents at beginning of
period
67,021
48,254
Cash and cash equivalents at end of
period
$
33,707
$
39,699
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191121005946/en/
Cliff Sifford Vice Chairman and Chief Executive Officer, or W.
Kerry Jackson Senior Executive Vice President, Chief Financial and
Administrative Officer and Treasurer
7500 East Columbia Street Evansville, IN 47715
www.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
