Company Reports Comparable Store Sales
Increase for Eighth Consecutive Quarter
Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of
moderately priced footwear and accessories, today reported results
for the second quarter ended July 30, 2016.
Second Quarter Highlights
- Net sales increased $4.1 million to
$231.9 million compared to $227.8 million in the second quarter of
fiscal 2015
- Comparable store sales increased 0.5
percent in the second quarter of 2016
- Per-store inventories were down 2.5
percent at the end of the quarter compared to the second quarter of
fiscal 2015
- Repurchased 966,828 shares of common
stock at a total cost of $23.6 million under share repurchase
program
“Our non-athletic footwear categories, particularly sandals,
performed well in the second quarter. Shoe Perks, our loyalty
program, continued to be a valuable tool for us as we increased
shopping frequency and average order value across our most loyal
customers to report an eighth consecutive quarterly increase in
comparable store sales,” stated Cliff Sifford, Shoe Carnival’s
President and CEO. “We remain focused on the execution of our
multi-channel strategic initiatives to fuel future growth in sales
and profitability. Going forward, we have confidence in our
opportunities and our ability to capitalize on them while
maintaining the financial flexibility to continue our commitment of
returning value to our shareholders through share repurchases and
consistent dividend payments.”
Second Quarter Financial Results
The Company reported net sales of $231.9 million for the second
quarter of fiscal 2016, a 1.8 percent increase compared to net
sales of $227.8 million for the second quarter of fiscal 2015.
Comparable store sales increased 0.5 percent in the second quarter
of fiscal 2016.
The gross profit margin for the second quarter of fiscal 2016
decreased to 29.0 percent compared to 29.1 percent in the second
quarter of fiscal 2015. The merchandise margin decreased 0.4
percent. Buying, distribution and occupancy expenses decreased 0.3
percent as a percentage of sales.
Selling, general and administrative expenses for the second
quarter of fiscal 2016 increased $2.2 million to $60.6 million. As
a percentage of sales, these expenses increased to 26.1 percent
compared to 25.6 percent in the second quarter of fiscal 2015.
The Company opened nine new stores in the second quarter of
fiscal 2016 compared to five new stores in the second quarter of
fiscal 2015.
Net earnings for the second quarter of fiscal 2016 were $4.1
million, or $0.22 per diluted share. For the second quarter of
fiscal 2015, the Company reported net earnings of $4.8 million, or
$0.24 per diluted share.
Six Month Financial Results
Net sales during the first six months of fiscal 2016 increased
$11.8 million to $492.4 million compared to the same period last
year. Comparable store sales for the twenty-six week period ended
July 30, 2016, increased 1.6 percent. Net earnings for the first
six months of fiscal 2016 were $14.8 million, or $0.78 per diluted
share, compared to net earnings of $15.2 million, or $0.76 per
diluted share, in the first six months of fiscal 2015. The gross
profit margin for the first six months of fiscal 2016 was 29.0
percent compared to 29.3 percent in the same period last year.
Selling, general and administrative expenses remained flat as a
percentage of sales. The Company opened 12 stores and closed four
stores during the first six months of fiscal 2016 compared to 12
store openings and 12 store closings in the first six months of
fiscal 2015.
Fiscal 2016 Earnings Outlook
The Company is updating its annual fiscal 2016 sales outlook and
is maintaining its diluted earnings per share outlook due to the
positive benefit from the shares repurchased during the first half
of the year. Fiscal 2016 net sales are now expected to be in the
range of $1.012 billion to $1.016 billion, with a comparable store
sales increase in the range of 1.5 percent to 2.0 percent. Earnings
per diluted share for the fiscal year are expected to be in the
range of $1.58 to $1.65. This represents an increase of 9 percent
to 14 percent over fiscal 2015 earnings per diluted share of
$1.45.
Store Growth
The Company expects to open approximately 20 stores, including
seven small-market stores, and close approximately ten stores in
fiscal 2016. Store openings and closings by quarter for the fiscal
year are as follows:
New Stores Store Closings 1st quarter
2016 3 4 2nd quarter 2016 9 0
3rd quarter 2016
2 1 4th quarter 2016 6 5 Fiscal year 2016 20 10
The nine new stores opened during the second quarter include
locations in:
City Market Total Stores in the Market
Deptford, NJ Philadelphia 9 Dover, DE Philadelphia 9 Grandview, MO
Kansas City 5 Lebanon, IN Indianapolis 13 Mesquite, TX Dallas 11
Omaha, NE Omaha 3 Paris, TN Nashville 7 Richardson, TX Dallas 11
Vestal, NY Binghamton 1
Conference Call
Today, at 4:30 p.m. Eastern Time, the Company will host a
conference call to discuss the second 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
August 31, 2016, the Company operates 412 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; 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 or impairment charges
associated with the closing of underperforming stores; our ability
to successfully grow our e-commerce sales; 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; 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)
(Unaudited)
Thirteen Thirteen Twenty-six
Twenty-six Weeks Ended Weeks Ended Weeks Ended Weeks Ended July 30,
2016 August 1, 2015 July 30, 2016 August 1, 2015 Net
sales $ 231,907 $ 227,822 $ 492,377 $ 480,589
Cost of sales (including buying,
distribution and occupancy costs)
164,677 161,548 349,591 339,626 Gross profit 67,230 66,274
142,786 140,963
Selling, general and administrative
expenses
60,570 58,397 118,841 116,056 Operating income 6,660 7,877
23,945 24,907 Interest income (2 ) (31 ) (5 )
(34
) Interest expense 41 42 84 84
Income before income taxes 6,621 7,866 23,866 24,857 Income
tax expense 2,517 3,049 9,101 9,644
Net income $ 4,104 $ 4,817 $ 14,765 $ 15,213
Net income per share: Basic $ 0.22 $ 0.24 $ 0.78 $ 0.76
Diluted $ 0.22 $ 0.24 $ 0.78 $ 0.76 Weighted
average shares: Basic 18,277 19,593 18,526
19,590 Diluted 18,282 19,606
18,531 19,604 Cash dividends declared per
share $ 0.070 $ 0.065 $ 0.135 $ 0.125
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)
July 30, 2016
January 30, 2016
August 1, 2015
ASSETS Current Assets: Cash and cash equivalents $
41,549 $ 68,814 $ 39,503 Accounts receivable 3,185 2,131 2,449
Merchandise inventories 351,220 292,878 349,037 Deferred income
taxes 2,680 1,061 1,154 Other 7,991 5,193
9,093 Total Current Assets 406,625 370,077 401,236 Property and
equipment - net 103,363 103,386 105,817 Deferred income taxes 7,045
7,158 7,003 Other noncurrent assets 1,053 472
381 Total Assets $ 518,086 $ 481,093 $ 514,437
LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities:
Accounts payable $ 116,989 $ 72,086 $ 95,934 Accrued and other
liabilities 19,759 15,848 20,740 Total Current
Liabilities 136,748 87,934 116,674 Deferred lease incentives 30,634
31,971 30,411 Accrued rent 11,407 11,224 11,137 Deferred
compensation 10,022 9,612 10,313 Other 811 550
370 Total Liabilities 189,622 141,291 168,905 Total Shareholders'
Equity 328,464 339,802 345,532 Total
Liabilities and Shareholders' Equity $ 518,086 $ 481,093 $ 514,437
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twenty-six Weeks Ended July 30, 2016 Twenty-six Weeks
Ended August 1, 2015 Cash Flows From Operating Activities
Net income $ 14,765 $ 15,213
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 11,773 11,378 Stock-based
compensation 2,123 1,752 Loss on retirement and impairment of
assets 59 422 Deferred income taxes (1,506 ) (2,973 ) Lease
incentives 898 2,628 Other (1,973 ) (1,804 ) Changes in operating
assets and liabilities: Accounts receivable (1,054 ) 230
Merchandise inventories (58,341 ) (61,160 ) Accounts payable and
accrued liabilities 49,229 34,369 Other (3,381 )
(3,116 ) Net cash provided by (used in) operating activities
12,592 (3,061 ) Cash Flows From Investing
Activities Purchases of property and equipment (11,910 ) (16,679 )
Proceeds from notes receivable 0 250
Net cash used in investing activities (11,910 )
(16,429 ) Cash Flows From Financing Activities Proceeds from
issuance of stock 133 128 Dividends paid (2,533 ) (2,497 ) Excess
tax benefits from stock-based compensation 2 32 Purchase of common
stock for treasury (25,238 ) 0 Shares surrendered by employees to
pay taxes on restricted stock (311 ) (46 ) Net cash
used in financing activities (27,947 ) (2,383 ) Net
decrease in cash and cash equivalents (27,265 ) (21,873 ) Cash and
cash equivalents at beginning of period 68,814
61,376 Cash and Cash Equivalents at End of Period $ 41,549
$ 39,503
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version on businesswire.com: http://www.businesswire.com/news/home/20160831006305/en/
Shoe CarnivalCliff SiffordPresident and Chief Executive
Officeror W. Kerry JacksonSenior Executive Vice President,Chief
Operating and Financial Officer and
Treasurer812-867-6471www.shoecarnival.com
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