Reports Record Quarterly Net Sales, Net Income, Diluted Net
Income Per Share Reports Quarterly Comparable Store Sales Increase
of 6.4 Percent Guides to Record Fiscal First Quarter 2021 Sales and
Earnings
Shoe Carnival, Inc. (Nasdaq: SCVL) (the “Company”), a leading
retailer of moderately priced footwear and accessories, today
reported results for the fourth quarter and fiscal year ended
January 30, 2021.
Fourth Quarter 2020 Highlights
- Record fourth quarter net sales of $253.9 million
- Fourth quarter net income increased 114 percent
year-over-year
- Record fourth quarter diluted net income per share of
$0.52
- Cash and cash equivalents were $106.5 million with no
outstanding debt as of January 30, 2021
- Comparable store sales increased 6.4 percent for the quarter,
on top of a 3.2 percent comparable store sales increase in the
fourth quarter of fiscal 2019
- Fourth consecutive quarter of triple digit increases in
e-commerce sales
- Shoe Perks customer loyalty program membership approached 10
percent growth compared to the prior year bringing total membership
in the program to over 26 million
“Our exceptional results for fiscal year 2020 were achieved
thanks to the resiliency and dedication of the Shoe Carnival team,
the unwavering support of our loyal customers, and our ongoing
partnership with vendors. Further, our unique concept, operational
excellence initiatives, and strategic investments in our CRM and
e-commerce capabilities were critical through this period of great
uncertainty. I want to offer heartfelt gratitude to our team
members and vendors for their tremendous efforts, and to our
customers for their loyalty and dedication to Shoe Carnival,”
commented Cliff Sifford, Shoe Carnival’s Vice Chairman and Chief
Executive Officer. “With consumer shopping habits upended by the
pandemic, our team quickly shifted to meet customer needs by
exponentially growing our e-commerce business and re-opening our
stores safely by early June. Our multi-year investment in a
world-class CRM platform played a significant role in our success
during the year, driving increased sales and margins through
segmented, personalized marketing.”
Mr. Sifford continued, “As we enter 2021, we remain financially
strong and will leverage the invaluable knowledge we have gained to
navigate through a changing dynamic. To date, our fiscal first
quarter 2021 results are shaping up to show continued momentum and
are on track for record first quarter sales and earnings. We remain
focused on maintaining our financial flexibility and expanding
market share, while placing an added emphasis on our merchandising
strategy and in-store experience. In addition, we will continue to
enhance our e-commerce capabilities, delivering growth well ahead
of our previous expectations. With so much great work being done, I
am looking forward to another strong year for the Shoe Carnival
team.”
Fourth Quarter Financial Results
The Company reported net sales of $253.9 million for the fourth
quarter of fiscal 2020, a 5.8 percent increase compared to net
sales of $239.9 million for the fourth quarter of fiscal 2019.
Comparable store sales increased 6.4 percent for the fourth quarter
of fiscal 2020. The timing of the sales increase during the fourth
quarter correlated with issuance of government stimulus toward the
end of calendar year 2020.
Net income for the fourth quarter of fiscal 2020 was $7.4
million, or $0.52 per diluted share. For the fourth quarter of
fiscal 2019, the Company reported net income of $3.5 million, or
$0.24 per diluted share.
Gross profit margin for the fourth quarter of fiscal 2020
increased to 30.8 percent compared to 29.1 percent in the fourth
quarter of fiscal 2019. Merchandise margin increased 1.6 percent
and buying, distribution and occupancy expenses decreased 0.1
percent as a percentage of net sales compared to the fourth quarter
of fiscal 2019. The increase in merchandise margin was primarily
due to lower promotional activity during the quarter but was
partially offset by higher shipping costs associated with the
increase in e-commerce sales.
Selling, general and administrative expenses for the fourth
quarter increased $2.5 million to $67.6 million compared to the
fourth quarter of fiscal 2019. The increase was primarily
attributable to costs supporting increased e-commerce sales. As a
percentage of net sales, these expenses were leveraged to 26.6
percent compared to 27.1 percent in the fourth quarter of fiscal
2019.
Fiscal Year 2020 Financial Results
Net sales during fiscal 2020 decreased $59.8 million to $976.8
million. This included a $106.3 million year-over-year decrease in
first quarter net sales resulting from the temporary closure of the
Company’s physical stores due to the global pandemic, followed by a
cumulative increase in sales over the remainder of the fiscal year.
E-commerce sales increased 175 percent compared to fiscal 2019 and
represented approximately 19 percent of net sales in fiscal 2020.
Overall, comparable store sales declined 5.3 percent in fiscal
2020, comprised of a 42.3 percent decline in the first quarter,
followed by a 6.9 percent cumulative increase over the remainder of
the fiscal year.
Net income for fiscal 2020 was $16.0 million, or $1.12 per
diluted share, compared to net income of $42.9 million, or $2.92
per diluted share, in fiscal 2019. Included in fiscal 2019 earnings
was a tax benefit in connection with the vesting of equity-based
compensation of approximately $1.9 million, or $0.13 per diluted
share.
Gross profit margin for fiscal 2020 was 28.7 percent compared to
30.1 percent in fiscal 2019. Merchandise margin decreased 0.6
percent and buying, distribution and occupancy expenses increased
0.8 percent as a percentage of net sales compared to fiscal 2019.
The decrease in merchandise margin was primarily due to increased
shipping costs associated with the higher level of e-commerce
sales. The decrease was partially offset by being less promotional
throughout fiscal 2020. The increase in buying, distribution and
occupancy costs as a percentage of sales was primarily due to
increased distribution costs resulting from recent investments at
the Company’s distribution center, and the deleveraging effect of
lower sales.
Selling, general and administrative expenses for fiscal 2020
increased $0.5 million to $258.1 million. As a percentage of net
sales, these expenses deleveraged to 26.5 percent compared to 24.9
percent in fiscal 2019.
Store Openings and Closings
The Company opened four stores and closed 13 stores during
fiscal 2020 compared to one store opening and six store closings in
fiscal 2019.
Store openings and closings by quarter for the fiscal year were
as follows:
New Stores
Store Closings
First quarter 2020
0
2
Second quarter 2020
2
10
Third quarter 2020
1
0
Fourth quarter 2020
1
1
Fiscal year 2020
4
13
Share Repurchase Program
Due to the volatility this year, no shares were repurchased in
fiscal 2020. As of January 30, 2021, $50.0 million was available
for future repurchases under the new share repurchase program. The
Company plans to resume the repurchase of shares under the
repurchase program in fiscal 2021 under the assumption that general
economic conditions will stabilize and the pandemic will have
significantly less impact on the Company’s performance and
operations.
Fiscal 2021 Earnings Outlook
Given the continued uncertainty surrounding COVID-19 and its
impact on consumer spending behaviors and recent supply chain
disruptions, the Company will not be introducing annual guidance at
this time. Instead, the Company is offering an initial view of its
first quarter of fiscal 2021.
Based on fiscal 2021 first quarter-to-date results, the Company
currently anticipates record first quarter sales and earnings, with
sales anticipated to be at least $273 million and diluted net
income per share of at least $1.40.
Conference Call
Today, at 4:30 p.m. Eastern Time, the Company will host a
conference call to discuss the fourth quarter and fiscal 2020
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.
Record Date and Date of Annual Shareholder Meeting
The Company also announced that April 9, 2021, has been set as
the shareholder of record date and the Annual Meeting of
Shareholders will be held on June 10, 2021.
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 March 24,
2021, the Company operates 383 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: the duration and spread of the COVID-19 outbreak,
mitigating efforts deployed by government agencies and the public
at large, and the overall impact from such outbreak on the
operations of our stores, economic conditions, financial market
volatility, consumer spending and our supply chain and distribution
processes; general economic conditions in the areas of the
continental United States in which our stores are located and the
impact of the ongoing economic uncertainty 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; the
success of the open-air shopping centers where our stores are
located and its impact on our ability to attract customers to our
stores; our ability to attract customers to our e-commerce platform
and to successfully grow our multi-channel sales; the potential
impact of national and international security concerns on the
retail environment; changes in our relationships with key
suppliers; our ability to control costs and meet our labor needs in
a rising wage environment; 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; our ability to successfully manage our
current real estate portfolio and leasing obligations; changes in
weather, including patterns impacted by climate change; changes in
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, other public health crises, political crises, civil
unrest, and other catastrophic events on our stores and our
suppliers, 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 cybersecurity 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; an increase in the cost, or a
disruption in the flow, of imported goods; the impact of regulatory
changes in the United States, including minimum wage laws and
regulations, and the countries where our manufacturers are located;
the resolution of litigation or regulatory proceedings in which we
are or may become involved; continued volatility and disruption in
the capital and credit markets; 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 and Quarterly Reports
on Form 10-Q.
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
data)
(Unaudited)
Thirteen
Thirteen
Fifty-Two
Fifty-Two
Weeks Ended
Weeks Ended
Weeks Ended
Weeks Ended
January 30,
2021
February 1,
2020
January 30,
2021
February 1,
2020
Net sales
$
253,897
$
239,875
$
976,765
$
1,036,551
Cost of sales (including buying,
distribution and occupancy costs)
175,745
169,975
696,783
724,682
Gross profit
78,152
69,900
279,982
311,869
Selling, general and administrative
expenses
67,587
65,123
258,117
257,660
Operating income
10,565
4,777
21,865
54,209
Interest income
(2
)
(150
)
(97
)
(730
)
Interest expense
119
36
412
191
Income before income taxes
10,448
4,891
21,550
54,748
Income tax expense
3,005
1,408
5,559
11,834
Net income
$
7,443
$
3,483
$
15,991
$
42,914
Net income per share:
Basic
$
0.53
$
0.25
$
1.14
$
2.97
Diluted
$
0.52
$
0.24
$
1.12
$
2.92
Weighted average shares:
Basic
14,096
14,076
14,066
14,427
Diluted
14,303
14,311
14,248
14,686
Cash dividends declared per share
$
0.090
$
0.085
$
0.355
$
0.335
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
January 30,
2021
February 1,
2020
ASSETS
Current Assets:
Cash and cash equivalents
$
106,532
$
61,899
Accounts receivable
7,096
2,724
Merchandise inventories
233,266
259,495
Other
8,411
5,529
Total Current Assets
355,305
329,647
Property and equipment – net
62,325
67,781
Deferred income taxes
5,635
7,833
Other noncurrent assets
13,843
8,106
Operating lease right-of-use assets
205,639
215,007
Total Assets
$
642,747
$
628,374
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable
$
57,717
$
60,665
Accrued and other liabilities
24,390
18,695
Current portion of operating lease
liabilities
48,794
43,146
Total Current Liabilities
130,901
122,506
Long-term portion of operating lease
liabilities
182,622
194,108
Deferred compensation
16,008
13,345
Other
3,040
1,052
Total Liabilities
332,571
331,011
Total Shareholders’ Equity
310,176
297,363
Total Liabilities and Shareholders’
Equity
$
642,747
$
628,374
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Fifty-Two
Fifty-Two
Weeks Ended
Weeks Ended
January 30,
2021
February 1,
2020
Cash Flows From Operating Activities
Net income
$
15,991
$
42,914
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
16,114
16,950
Stock-based compensation
3,883
6,486
Loss on retirement and impairment of
assets, net
2,807
1,503
Deferred income taxes
2,198
2,619
Non-cash operating lease expense
42,008
42,322
Other
2,035
1,236
Changes in operating assets and
liabilities:
Accounts receivable
(4,372
)
(1,505
)
Merchandise inventories
26,229
(1,956
)
Operating lease liabilities
(38,477
)
(45,933
)
Accounts payable and accrued
liabilities
2,510
9,468
Other
(7,531
)
(7,158
)
Net cash provided by operating
activities
63,395
66,946
Cash Flows From Investing Activities
Purchases of property and equipment
(12,396
)
(18,501
)
Other proceeds
303
750
Net cash used in investing activities
(12,093
)
(17,751
)
Cash Flows From Financing Activities
Borrowings under line of credit
24,903
20,000
Payments on line of credit
(24,903
)
(20,000
)
Proceeds from issuance of stock
195
182
Dividends paid
(5,128
)
(5,671
)
Purchase of common stock for treasury
0
(37,768
)
Shares surrendered by employees to pay
taxes on restricted stock
(1,736
)
(11,060
)
Net cash used in financing activities
(6,669
)
(54,317
)
Net increase (decrease) in cash and cash
equivalents
44,633
(5,122
)
Cash and cash equivalents at beginning of
year
61,899
67,021
Cash and cash equivalents at end of
year
$
106,532
$
61,899
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210324005859/en/
Cliff Sifford Vice Chairman and Chief Executive Officer, or W.
Kerry Jackson Senior Executive Vice President, Chief Financial and
Administrative Officer and Treasurer www.shoecarnival.com (812)
867-4034
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