EVANSVILLE, Ind.--(BUSINESS WIRE)--Aug. 30, 2017--
Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of moderately
priced footwear and accessories, today reported results for the second
quarter and six months ended July 29, 2017.
Second Quarter Highlights
-
Net sales increased 1.4 percent to $235.1 million
-
Comparable store sales increased 0.4 percent
-
Earnings per diluted share increased 9.1 percent to $0.24
-
Repurchased 469,000 shares of common stock at a total cost of $10.2
million under existing share repurchase program
Cliff Sifford, Shoe Carnival’s President and Chief Executive Officer
commented, “We are pleased with the quarterly improvement in our sales
trend, particularly given this year’s later back-to-school dates in
certain markets, which shifted sales from July into August. Our
quarterly earnings were driven by the increase in sales along with our
ability to efficiently manage our expenses. Looking ahead, we believe we
are well positioned for back-to-school with a trend-right assortment of
branded, family footwear, favorable inventory position, and our
multi-channel initiatives which have already generated an August
comparable store sales increase of 7.0 percent. Our team remains focused
on enhancing value for shareholders through our recently increased
quarterly cash dividend and existing share repurchase program, in
addition to improved execution in a challenging retail environment.”
Second Quarter Financial Results
The Company reported net sales of $235.1 million for the second quarter
of fiscal 2017, a 1.4 percent increase, compared to net sales of $231.9
million for the second quarter of fiscal 2016. Comparable store sales
increased 0.4 percent in the second quarter of fiscal 2017.
Gross profit margin for the second quarter of fiscal 2017 remained flat
at 29.0 percent compared to the second quarter of fiscal 2016.
Merchandise margin, along with buying, distribution and occupancy
expenses as a percentage of net sales, remained flat compared to the
second quarter of fiscal 2016.
Selling, general and administrative expenses (“SG&A”) for the second
quarter of fiscal 2017 increased $1.2 million to $61.8 million. As a
percentage of net sales, these expenses increased to 26.3 percent
compared to 26.1 percent in the second quarter of fiscal 2016.
Net income for the second quarter of fiscal 2017 was $3.9 million, or
$0.24 per diluted share. For the second quarter of fiscal 2016, the
Company reported net income of $4.1 million, or $0.22 per diluted share.
Six Month Financial Results
Net sales during the first six months of fiscal 2017 decreased $3.9
million to $488.5 million compared to the same period last year.
Comparable store sales for the twenty-six week period ended July 29,
2017, decreased 1.9 percent.
Net earnings for the first six months of fiscal 2017 were $12.1 million,
or $0.73 per diluted share, compared to net earnings of $14.8 million,
or $0.78 per diluted share, in the first six months of fiscal 2016. The
gross profit margin for the first six months of fiscal 2017 was 28.7
percent compared to 29.0 percent in the same period last year. SG&A for
the first six months increased $1.9 million to $120.7 million. As a
percentage of net sales, these expenses increased to 24.7 percent
compared to 24.1 percent in the first six months of fiscal 2016. The
Company opened 12 stores and closed nine stores during the first six
months of fiscal 2017 compared to 12 store openings and four store
closings in the first six months of fiscal 2016.
Store Openings and Closings
The Company expects to open approximately 19 stores and close
approximately 25 to 27 stores during fiscal 2017 compared to opening 19
stores and closing nine stores during fiscal 2016.
Expected store openings and closings by quarter for the fiscal year are
as follows:
|
|
New Stores
|
|
Store Closings
|
1st quarter 2017
|
|
7
|
|
5
|
2nd quarter 2017
|
|
5
|
|
4
|
3rd quarter 2017
|
|
7
|
|
1
|
4th quarter 2017
|
|
0
|
|
15 to 17
|
Fiscal year 2017
|
|
19
|
|
25 to 27
|
The five new stores opened during the second quarter include locations
in:
City
|
|
Market
|
|
Total Stores in the Market
|
Columbus, IN
|
|
Indianapolis
|
|
14
|
Gainesville, FL
|
|
Gainesville
|
|
1
|
Morristown, TN
|
|
Knoxville
|
|
5
|
Mt. Vernon, OH
|
|
Columbus
|
|
2
|
Quakertown, PA
|
|
Philadelphia
|
|
11
|
|
|
|
|
|
Fiscal 2017 Earnings Outlook
The Company expects fiscal 2017 net sales to be in the range of $1.006
billion to $1.019 billion, with comparable store sales flat to down low
single digits. Earnings per diluted share for the fiscal year are
expected to be in the range of $1.35 to $1.45. Fiscal 2016 earnings per
diluted share were $1.28 and adjusted earnings per diluted share were
$1.40.
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.
Non-GAAP Adjusted Results
The non-GAAP adjusted results for the full year of fiscal 2016 discussed
herein exclude the impact of non-cash asset impairment charges related
to long-lived assets associated with seven of the Company’s Puerto Rico
stores, which are recorded in SG&A. These adjusted results are provided
to enhance the user's overall understanding of the Company's historical
operations and financial performance. Specifically, the Company believes
the adjusted results provide investors with relevant period-to-period
comparisons of the Company’s core operations. The unaudited adjusted
results are provided in addition to, and not as alternatives for, the
Company’s reported results determined in accordance with generally
accepted accounting principles. A complete reconciliation of actual
results to the adjusted results appears below in the table entitled
“Reconciliation of Non-GAAP Financial Measures to GAAP.”
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 30, 2017, the Company
operates 419 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 on-line 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; 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; 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; the inability of manufacturers to deliver
products in a timely manner; changes in the political and economic
environments in, and continued favorable trade relations with, China and
other countries which are the major manufacturers of footwear; 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; 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
|
|
|
Twenty-six
|
|
|
Twenty-six
|
|
|
|
Weeks Ended
|
|
|
Weeks Ended
|
|
|
Weeks Ended
|
|
|
Weeks Ended
|
|
|
|
July 29, 2017
|
|
|
July 30, 2016
|
|
|
July 29, 2017
|
|
|
July 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
235,064
|
|
|
|
$
|
231,907
|
|
|
$
|
488,453
|
|
|
$
|
492,377
|
Cost of sales (including buying, distribution and occupancy costs)
|
|
|
|
166,837
|
|
|
|
|
164,677
|
|
|
|
348,070
|
|
|
|
349,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
68,227
|
|
|
|
|
67,230
|
|
|
|
140,383
|
|
|
|
142,786
|
Selling, general and administrative expenses
|
|
|
|
61,803
|
|
|
|
|
60,570
|
|
|
|
120,732
|
|
|
|
118,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
6,424
|
|
|
|
|
6,660
|
|
|
|
19,651
|
|
|
|
23,945
|
Interest income
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(5
|
)
|
Interest expense
|
|
|
|
149
|
|
|
|
|
41
|
|
|
|
191
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
6,276
|
|
|
|
|
6,621
|
|
|
|
19,462
|
|
|
|
23,866
|
Income tax expense
|
|
|
|
2,380
|
|
|
|
|
2,517
|
|
|
|
7,335
|
|
|
|
9,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
3,896
|
|
|
|
$
|
4,104
|
|
|
$
|
12,127
|
|
|
$
|
14,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.24
|
|
|
|
$
|
0.22
|
|
|
$
|
0.73
|
|
|
$
|
0.78
|
Diluted
|
|
|
$
|
0.24
|
|
|
|
$
|
0.22
|
|
|
$
|
0.73
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
16,091
|
|
|
|
|
18,277
|
|
|
|
16,453
|
|
|
|
18,526
|
Diluted
|
|
|
|
16,094
|
|
|
|
|
18,282
|
|
|
|
16,457
|
|
|
|
18,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
|
$
|
0.075
|
|
|
|
$
|
0.070
|
|
|
$
|
0.145
|
|
|
$
|
0.135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 29,
2017
|
|
January 28, 2017
|
|
July 30,
2016
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
18,531
|
|
$
|
62,944
|
|
$
|
41,549
|
Accounts receivable
|
|
|
2,798
|
|
|
4,424
|
|
|
3,185
|
Merchandise inventories
|
|
|
357,467
|
|
|
279,646
|
|
|
351,220
|
Deferred income taxes
|
|
|
0
|
|
|
0
|
|
|
2,680
|
Other
|
|
|
7,029
|
|
|
4,737
|
|
|
7,991
|
Total Current Assets
|
|
|
385,825
|
|
|
351,751
|
|
|
406,625
|
Property and equipment - net
|
|
|
96,046
|
|
|
96,216
|
|
|
103,363
|
Deferred income taxes
|
|
|
10,072
|
|
|
9,600
|
|
|
7,045
|
Other noncurrent assets
|
|
|
869
|
|
|
911
|
|
|
1,053
|
Total Assets
|
|
$
|
492,812
|
|
$
|
458,478
|
|
$
|
518,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
93,829
|
|
$
|
67,808
|
|
$
|
116,989
|
Accrued and other liabilities
|
|
|
20,367
|
|
|
18,488
|
|
|
19,759
|
Total Current Liabilities
|
|
|
114,196
|
|
|
86,296
|
|
|
136,748
|
Long-term debt
|
|
|
26,700
|
|
|
0
|
|
|
0
|
Deferred lease incentives
|
|
|
28,909
|
|
|
30,751
|
|
|
30,634
|
Accrued rent
|
|
|
10,977
|
|
|
11,255
|
|
|
11,407
|
Deferred compensation
|
|
|
11,141
|
|
|
10,465
|
|
|
10,022
|
Other
|
|
|
686
|
|
|
829
|
|
|
811
|
Total Liabilities
|
|
|
192,609
|
|
|
139,596
|
|
|
189,622
|
Total Shareholders' Equity
|
|
|
300,203
|
|
|
318,882
|
|
|
328,464
|
Total Liabilities and Shareholders' Equity
|
|
$
|
492,812
|
|
$
|
458,478
|
|
$
|
518,086
|
|
|
|
|
|
|
|
|
|
|
|
SHOE CARNIVAL, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Twenty-six Weeks Ended July 29, 2017
|
|
Twenty-six Weeks Ended July 30, 2016
|
|
|
|
|
|
Cash Flows From Operating Activities
|
|
|
|
|
Net income
|
|
$
|
12,127
|
|
|
$
|
14,765
|
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
11,961
|
|
|
|
11,773
|
|
Stock-based compensation
|
|
|
927
|
|
|
|
2,123
|
|
Loss on retirement and impairment of assets
|
|
|
1,705
|
|
|
|
59
|
|
Deferred income taxes
|
|
|
(472
|
)
|
|
|
(1,506
|
)
|
Lease incentives
|
|
|
1,560
|
|
|
|
898
|
|
Other
|
|
|
(3,140
|
)
|
|
|
(1,973
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
|
1,626
|
|
|
|
(1,054
|
)
|
Merchandise inventories
|
|
|
(77,821
|
)
|
|
|
(58,341
|
)
|
Accounts payable and accrued liabilities
|
|
|
27,356
|
|
|
|
49,229
|
|
Other
|
|
|
(2,329
|
)
|
|
|
(3,381
|
)
|
Net cash (used in) provided by operating activities
|
|
|
(26,500
|
)
|
|
|
12,592
|
|
|
|
|
|
|
Cash Flows From Investing Activities
|
|
|
|
|
Purchases of property and equipment
|
|
|
(12,737
|
)
|
|
|
(11,910
|
)
|
Proceeds from notes receivable
|
|
|
0
|
|
|
|
0
|
|
Net cash used in investing activities
|
|
|
(12,737
|
)
|
|
|
(11,910
|
)
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
Borrowings under line of credit
|
|
|
79,200
|
|
|
|
0
|
|
Payments on line of credit
|
|
|
(52,500
|
)
|
|
|
0
|
|
Proceeds from issuance of stock
|
|
|
142
|
|
|
|
133
|
|
Dividends paid
|
|
|
(2,389
|
)
|
|
|
(2,533
|
)
|
Excess tax benefits from stock-based compensation
|
|
|
0
|
|
|
|
2
|
|
Purchase of common stock for treasury
|
|
|
(29,343
|
)
|
|
|
(25,238
|
)
|
Shares surrendered by employees to pay taxes on restricted stock
|
|
|
(286
|
)
|
|
|
(311
|
)
|
Net cash used in financing activities
|
|
|
(5,176
|
)
|
|
|
(27,947
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(44,413
|
)
|
|
|
(27,265
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
62,944
|
|
|
|
68,814
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
18,531
|
|
|
$
|
41,549
|
|
|
|
|
|
|
|
|
|
|
SHOE CARNIVAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP
(In thousands, except per share data)
(Unaudited)
The following table provides reconciliations of GAAP to non-GAAP
financial measures, to reflect the exclusion of non-cash impairment
charges of long-lived assets for seven Puerto Rico stores. There were no
non-cash impairment charges of long-lived assets for our Puerto Rico
stores for the first six months of fiscal 2017.
|
|
|
|
|
Fifty-two
|
|
|
|
|
|
|
|
Weeks Ended
|
|
|
|
|
|
|
|
January 28, 2017
|
|
% of
Net Sales
|
|
|
|
|
|
|
|
|
|
|
Non-cash impairment charges
|
|
|
|
|
$
|
3,573
|
|
|
0.3
|
%
|
Tax effect
|
|
|
|
|
|
1,346
|
|
|
0.1
|
%
|
Non-cash impairment charges net of income taxes
|
|
|
|
|
$
|
2,227
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Reported selling, general and administrative expenses
|
|
|
|
|
$
|
251,323
|
|
|
25.1
|
%
|
Non-cash impairment charges
|
|
|
|
|
|
3,573
|
|
|
0.3
|
%
|
Adjusted selling, general and administrative expenses, pre-tax
|
|
|
|
|
$
|
247,750
|
|
|
24.8
|
%
|
|
|
|
|
|
|
|
|
|
|
Reported operating income
|
|
|
|
|
$
|
37,912
|
|
|
3.8
|
%
|
Non-cash impairment charges
|
|
|
|
|
|
3,573
|
|
|
0.3
|
%
|
Adjusted operating income, pre-tax
|
|
|
|
|
$
|
41,485
|
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Reported net income
|
|
|
|
|
$
|
23,517
|
|
|
2.4
|
%
|
Non-cash impairment charges net of income taxes
|
|
|
|
|
|
2,227
|
|
|
0.2
|
%
|
Adjusted net income
|
|
|
|
|
$
|
25,744
|
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
Reported net income per diluted share
|
|
|
|
|
$
|
1.28
|
|
|
|
Non-cash impairment charges net of income taxes
|
|
|
|
|
|
0.12
|
|
|
|
Adjusted diluted earnings per share
|
|
|
|
|
$
|
1.40
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170830006160/en/
Source: Shoe Carnival, Inc.
Shoe Carnival, Inc.
Cliff Sifford
President and Chief
Executive Officer
or
W. Kerry Jackson
Senior Executive
Vice President,
Chief Operating and Financial Officer and Treasurer
(812)
867-6471
www.shoecarnival.com