Shoe Carnival Reports Second Quarter Fiscal 2015 Financial Results
Second Quarter Fiscal 2015 Diluted Earnings Per Share Increase
84.6 Percent to $0.24
EVANSVILLE, Ind.–(BUSINESS WIRE)–Shoe Carnival, Inc. (Nasdaq: SCVL), a leading retailer of moderately
priced footwear and accessories, today reported results for the second
quarter ended August 1, 2015.
Second Quarter Fiscal 2015 Highlights
-
Net sales increased $5.7 million to $227.8 million, compared to $222.1
million in the second quarter of fiscal 2014 -
Comparable store sales increased 0.5 percent, in-line with the
Company’s guidance -
Merchandise margin increased 1.1 percent, compared to the second
quarter of fiscal 2014 -
Earnings per diluted share increased 84.6 percent to $0.24, compared
to $0.13 in the second quarter of fiscal 2014
Cliff Sifford, President and CEO, stated, “We are pleased with our
second quarter financial performance. Our strong quarterly earnings were
driven by a combination of higher merchandise margins and lower
advertising expenses. Comparable store sales were in-line with our
expectations as the solid start to the quarter was muted by an
anticipated shift in tax-free holidays to the third quarter of this year
from the second quarter of fiscal 2014. We believe our assortment of
branded, family footwear, favorable inventory position, and our
multi-channel initiatives positioned us well to capture the robust
back-to-school sales with our August comparable store sales up high
single digits.”
Mr. Sifford concluded, “We recently hosted a major grand opening event
in Philadelphia, Pennsylvania, our latest large market. Also, we look
forward to opening two complementary small market stores in the Midwest
in the second half of fiscal 2015.”
Second Quarter Financial Results
The Company reported net sales of $227.8 million for the second quarter
of fiscal 2015, a 2.6 percent increase, as compared to net sales of
$222.1 million for the second quarter of fiscal 2014. Comparable store
sales increased 0.5 percent in the second quarter of fiscal 2015.
The gross profit margin for the second quarter of fiscal 2015 increased
to 29.1 percent compared to 28.0 percent in the second quarter of fiscal
2014. The merchandise margin increased 1.1 percent while buying,
distribution and occupancy expenses remained flat as a percentage of
sales.
Selling, general and administrative expenses for the second quarter of
fiscal 2015 increased $0.4 million to $58.4 million. As a percentage of
net sales, these expenses decreased to 25.6 percent compared to 26.1
percent in the second quarter of fiscal 2014.
Net earnings for the second quarter of fiscal 2015 were $4.8 million, or
$0.24 per diluted share. For the second quarter of fiscal 2014, the
Company reported net earnings of $2.6 million, or $0.13 per diluted
share.
Six Month Financial Results
Net sales during the first six months of fiscal 2015 increased $22.8
million to $480.6 million as compared to the same period last year.
Comparable store sales for the twenty-six week period ended August 1,
2015, increased 1.8 percent. Net earnings for the first six months of
fiscal 2015 were $15.2 million, or $0.76 per diluted share, compared to
net earnings of $11.7 million, or $0.58 per diluted share, in the first
six months of fiscal 2014. The gross profit margin for the first six
months of fiscal 2015 was 29.3 percent compared to 28.8 percent in the
same period last year. Selling, general and administrative expenses, as
a percentage of net sales, were 24.1 percent for the first six months of
fiscal 2015 compared to 24.5 percent during the same period in fiscal
2014. The Company opened 12 stores and closed 12 stores during the first
six months of fiscal 2015 as compared to opening 23 stores and closing 1
store in the first six months of fiscal 2014.
Fiscal 2015 Earnings Outlook
The Company continues to expect 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 percent to 3.0 percent. Earnings per diluted share
for the fiscal year are expected to be in the range of $1.42 to $1.48.
This represents an increase of 12 percent to 17 percent over fiscal 2014
earnings per diluted share of $1.27.
Store Growth
The Company expects to open 21 new stores and close 15 stores in fiscal
2015. Store openings and closings by quarter for the fiscal year are as
follows:
New Stores | Store Closings | ||||||
1st quarter 2015 | 7 | 6 | |||||
2nd quarter 2015 | 5 | 6 | |||||
3rd quarter 2015 | 6 | 2 | |||||
4th quarter 2015 | 3 | 1 | |||||
Fiscal year 2015 | 21 | 15 | |||||
The five new stores opened during the second quarter include locations
in:
City | Market | Total Stores in the Market | |||||
Adrian, MI | Toledo | 4 | |||||
Bensalem, PA | Philadelphia | 7 | |||||
Philadelphia, PA | Philadelphia | 7 | |||||
Mays Landing, NJ | Philadelphia | 7 | |||||
Moorestown, NJ | Philadelphia | 7 | |||||
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 September 1, 2015, the
Company operates 400 stores in 34 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) (Unaudited) |
|||||||||||||||||
Thirteen | Thirteen | Twenty-six | Twenty-six | ||||||||||||||
Weeks Ended | Weeks Ended | Weeks Ended | Weeks Ended | ||||||||||||||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | ||||||||||||||
Net sales | $ | 227,822 | $ | 222,073 | $ | 480,589 | $ | 457,843 | |||||||||
Cost of sales (including buying, | |||||||||||||||||
distribution and occupancy costs) | 161,548 | 159,854 | 339,626 | 326,042 | |||||||||||||
Gross profit | 66,274 | 62,219 | 140,963 | 131,801 | |||||||||||||
Selling, general and administrative | |||||||||||||||||
expenses | 58,397 | 57,955 | 116,056 | 112,328 | |||||||||||||
Operating income | 7,877 | 4,264 | 24,907 | 19,473 | |||||||||||||
Interest income | (31 | ) | (3 | ) | (34 | ) |
(9 |
) |
|||||||||
Interest expense | 42 | 41 | 84 | 83 | |||||||||||||
Income before income taxes | 7,866 | 4,226 | 24,857 | 19,399 | |||||||||||||
Income tax expense | 3,049 | 1,642 | 9,644 | 7,664 | |||||||||||||
Net income | $ | 4,817 | $ | 2,584 | $ | 15,213 | $ | 11,735 | |||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.24 | $ | 0.13 | $ | 0.76 | $ | 0.58 | |||||||||
Diluted | $ | 0.24 | $ | 0.13 | $ | 0.76 | $ | 0.58 | |||||||||
Weighted average shares: | |||||||||||||||||
Basic | 19,593 | 19,856 | 19,590 | 19,908 | |||||||||||||
Diluted | 19,606 | 19,869 | 19,604 | 19,923 | |||||||||||||
Cash dividends declared per share | $ | 0.065 | $ | 0.06 | $ | 0.125 | $ | 0.12 |
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) |
||||||||
August 1,
2015 |
January 31, |
August 2,
2014 |
||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 39,503 | $ | 61,376 | $ | 32,686 | ||
Accounts receivable | 2,449 | 2,928 | 3,808 | |||||
Merchandise inventories | 349,037 | 287,877 | 337,648 | |||||
Deferred income taxes | 1,154 | 957 | 852 | |||||
Other | 9,093 | 5,991 | 12,876 | |||||
Total Current Assets | 401,236 | 359,129 | 387,870 | |||||
Property and equipment – net | 105,817 | 101,294 | 100,648 | |||||
Deferred income taxes | 7,003 | 4,227 | 7,164 | |||||
Other noncurrent assets | 381 | 366 | 432 | |||||
Total Assets | $ | 514,437 | $ | 465,016 | $ | 496,114 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 95,934 | $ | 67,999 | $ | 105,721 | ||
Accrued and other liabilities | 20,740 | 15,123 | 19,396 | |||||
Total Current Liabilities | 116,674 | 83,122 | 125,117 | |||||
Deferred lease incentives | 30,411 | 29,908 | 26,426 | |||||
Accrued rent | 11,137 | 10,505 | 10,115 | |||||
Deferred compensation | 10,313 | 9,901 | 9,105 | |||||
Other | 370 | 382 | 202 | |||||
Total Liabilities | 168,905 | 133,818 | 170,965 | |||||
Total Shareholders’ Equity | 345,532 | 331,198 | 325,149 | |||||
Total Liabilities and Shareholders’ Equity | $ | 514,437 | $ | 465,016 | $ | 496,114 | ||
SHOE CARNIVAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||
Twenty-six |
Twenty-six |
||||||
Cash Flows From Operating Activities | |||||||
Net income | $ | 15,213 | $ | 11,735 | |||
Adjustments to reconcile net income to net | |||||||
cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 11,378 | 9,518 | |||||
Stock-based compensation | 1,752 | 1,812 | |||||
Loss on retirement and impairment of assets | 422 | 267 | |||||
Deferred income taxes | (2,973 | ) | (3,382 | ) | |||
Lease incentives | 2,628 | 3,060 | |||||
Other | (1,804 | ) | (42 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 230 | 529 | |||||
Merchandise inventories | (61,160 | ) | (52,847 | ) | |||
Accounts payable and accrued liabilities | 34,369 | 47,439 | |||||
Other | (3,116 | ) | (8,918 | ) | |||
Net cash (used in) provided by operating activities | (3,061 | ) | 9,171 | ||||
Cash Flows From Investing Activities | |||||||
Purchases of property and equipment | (16,679 | ) | (19,730 | ) | |||
Proceeds from notes receivable | 250 | 250 | |||||
Net cash used in investing activities | (16,429 | ) | (19,480 | ) | |||
Cash Flows From Financing Activities | |||||||
Proceeds from issuance of stock | 128 | 155 | |||||
Dividends paid | (2,497 | ) | (2,430 | ) | |||
Excess tax benefits from stock-based compensation | 32 | 35 | |||||
Purchase of common stock for treasury | 0 | (3,000 | ) | ||||
Shares surrendered by employees to pay taxes on restricted stock | (46 | ) | (18 | ) | |||
Net cash used in financing activities | (2,383 | ) | (5,258 | ) | |||
Net decrease in cash and cash equivalents | (21,873 | ) | (15,567 | ) | |||
Cash and cash equivalents at beginning of period | 61,376 | 48,253 | |||||
Cash and Cash Equivalents at End of Period | $ | 39,503 | $ | 32,686 |
Contacts
Shoe Carnival, Inc.
Cliff Sifford
President, Chief
Executive Officer and Chief Merchandising Officer
or
W. Kerry
Jackson
Senior Executive Vice President, Chief Operating and
Financial Officer and Treasurer
(812) 867-6471