Shoe Carnival Reports Third Quarter Fiscal 2020 Results
Reports Record Quarterly Net Income, Diluted Net Income Per Share and Gross Profit
Reports Comparable Store Sales Increase of 0.9 Percent
Third Quarter Highlights
-
Net sales were
$274.6 million -
Net income and diluted net income per share were all-time records of
$14.7 million and$1.03 per share, respectively -
Gross profit increased
$3.0 million to a record$87.8 million and gross profit margin increased 110 basis points to 32 percent compared to the third quarter of fiscal 2019 - Comparable store sales increased 0.9 percent, on top of a 3.5 percent comparable store sales increase in the third quarter of fiscal 2019
- E-commerce sales increased over 150 percent compared to the third quarter of fiscal 2019
- Membership in our Shoe Perks customer loyalty program approached 10 percent growth compared to the prior year bringing total membership in the program to nearly 26 million
-
Cash and cash equivalents were
$46.7 million with no outstanding debt as ofOctober 31, 2020
“Our strong fiscal third quarter results clearly demonstrated the strength and dedication of our team’s ability to execute on our strategic initiatives. We achieved same store sales growth and delivered the most profitable quarter in Shoe Carnival’s history, despite the extended back-to-school season. This would not have been possible without the hard work of our
“Our disciplined focus on financial flexibility and the strength of our business model continue to fuel our market leading performance notwithstanding the ongoing disruption caused by the global pandemic. We are excited about our market share gains in the quarter and believe our enduring competitive advantages position us for future growth,” concluded
Third Quarter Financial Results
The Company reported net sales of
Gross profit margin for the third quarter of fiscal 2020 increased to 32.0 percent compared to 30.9 percent in the third quarter of fiscal 2019. Merchandise margin increased 1.6 percent and buying, distribution and occupancy expenses increased 0.5 percent as a percentage of net sales compared to the third quarter of fiscal 2019. The increase in merchandise margin was primarily due to lower promotional activity during the quarter. The increase in buying, distribution and occupancy costs as a percentage of sales was primarily due to higher distribution expense.
Selling, general and administrative expenses for the third quarter of fiscal 2020 increased
Net income for the third quarter of fiscal 2020 was
Nine Month Financial Results
Net sales for the first nine months of fiscal 2020 were
Net income for the first nine months of fiscal 2020 was
The gross profit margin for the first nine months of fiscal 2020 was 27.9 percent compared to 30.4 percent in the same period last year. Selling, general and administrative expenses for the first nine months decreased
Fiscal 2020 Earnings Outlook
We continue to closely monitor and manage the impact of the COVID-19 pandemic and take action to maintain financial flexibility and keep our employees and customers safe. The COVID-19 pandemic is expected to continue to affect macroeconomic conditions and consumer spending in the retail sector. Considerable uncertainty exists surrounding the impact the pandemic may have on the Company’s sales and operations for the remainder of the fiscal year, including during the peak holiday shopping period. As a result, the Company is not providing guidance for fiscal year 2020.
Store Openings and Closings
One new store was opened in the third quarter of fiscal 2020 and no stores were closed. For the first nine months of fiscal 2020, the Company has opened three stores and closed 12 stores. The Company expects a total of four store openings and 13 store closings during fiscal 2020 compared to one store opening and six store closings in fiscal 2019.
Share Repurchase Program
As of
Conference Call
Today, at
About
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
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
|
||||||||||||||||
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 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
274,579 |
|
|
$ |
274,645 |
|
|
$ |
722,868 |
|
|
$ |
796,676 |
|
Cost of sales (including buying, distribution and occupancy costs) |
|
|
186,818 |
|
|
|
189,911 |
|
|
|
521,038 |
|
|
|
554,707 |
|
Gross profit |
|
|
87,761 |
|
|
|
84,734 |
|
|
|
201,830 |
|
|
|
241,969 |
|
Selling, general and administrative expenses |
|
|
67,598 |
|
|
|
66,584 |
|
|
|
190,530 |
|
|
|
192,537 |
|
Operating income |
|
|
20,163 |
|
|
|
18,150 |
|
|
|
11,300 |
|
|
|
49,432 |
|
Interest income |
|
|
(2 |
) |
|
|
(163 |
) |
|
|
(95 |
) |
|
|
(580 |
) |
Interest expense |
|
|
119 |
|
|
|
34 |
|
|
|
293 |
|
|
|
155 |
|
Income before income taxes |
|
|
20,046 |
|
|
|
18,279 |
|
|
|
11,102 |
|
|
|
49,857 |
|
Income tax expense |
|
|
5,368 |
|
|
|
4,553 |
|
|
|
2,554 |
|
|
|
10,426 |
|
Net income |
|
$ |
14,678 |
|
|
$ |
13,726 |
|
|
$ |
8,548 |
|
|
$ |
39,431 |
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.04 |
|
|
$ |
0.95 |
|
|
$ |
0.61 |
|
|
$ |
2.71 |
|
Diluted |
|
$ |
1.03 |
|
|
$ |
0.94 |
|
|
$ |
0.60 |
|
|
$ |
2.66 |
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
14,090 |
|
|
|
14,404 |
|
|
|
14,057 |
|
|
|
14,544 |
|
Diluted |
|
|
14,266 |
|
|
|
14,556 |
|
|
|
14,225 |
|
|
|
14,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.090 |
|
|
$ |
0.085 |
|
|
$ |
0.265 |
|
|
$ |
0.250 |
|
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
46,740 |
|
|
$ |
61,899 |
|
|
$ |
33,707 |
|
Accounts receivable |
|
|
8,435 |
|
|
|
2,724 |
|
|
|
2,470 |
|
Merchandise inventories |
|
|
274,264 |
|
|
|
259,495 |
|
|
|
298,002 |
|
Other |
|
|
10,727 |
|
|
|
5,529 |
|
|
|
10,868 |
|
Total Current Assets |
|
|
340,166 |
|
|
|
329,647 |
|
|
|
345,047 |
|
Property and equipment – net |
|
|
63,434 |
|
|
|
67,781 |
|
|
|
69,147 |
|
Deferred income taxes |
|
|
6,283 |
|
|
|
7,833 |
|
|
|
7,678 |
|
Other noncurrent assets |
|
|
11,802 |
|
|
|
8,106 |
|
|
|
3,692 |
|
Operating lease right-of-use assets |
|
|
201,658 |
|
|
|
215,007 |
|
|
|
222,148 |
|
Total Assets |
|
$ |
623,343 |
|
|
$ |
628,374 |
|
|
$ |
647,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
50,897 |
|
|
$ |
60,665 |
|
|
$ |
66,089 |
|
Accrued and other liabilities |
|
|
25,346 |
|
|
|
18,695 |
|
|
|
22,052 |
|
Current portion of operating lease liabilities |
|
|
48,984 |
|
|
|
43,146 |
|
|
|
42,481 |
|
Total Current Liabilities |
|
|
125,227 |
|
|
|
122,506 |
|
|
|
130,622 |
|
Long-term portion of operating lease liabilities |
|
|
179,335 |
|
|
|
194,108 |
|
|
|
202,138 |
|
Deferred compensation |
|
|
14,600 |
|
|
|
13,345 |
|
|
|
13,220 |
|
Other |
|
|
964 |
|
|
|
1,052 |
|
|
|
984 |
|
Total Liabilities |
|
|
320,126 |
|
|
|
331,011 |
|
|
|
346,964 |
|
Total Shareholders’ Equity |
|
|
303,217 |
|
|
|
297,363 |
|
|
|
300,748 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
623,343 |
|
|
$ |
628,374 |
|
|
$ |
647,712 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Thirty-nine |
|
|
Thirty-nine |
|
||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||
|
|
|
|
|
|
|
||
Cash Flows From Operating Activities |
|
|
|
|
|
|
|
|
Net income |
|
$ |
8,548 |
|
|
$ |
39,431 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
12,034 |
|
|
|
12,652 |
|
Stock-based compensation |
|
|
2,881 |
|
|
|
5,207 |
|
Loss on retirement and impairment of assets, net |
|
|
2,427 |
|
|
|
767 |
|
Deferred income taxes |
|
|
1,550 |
|
|
|
1,944 |
|
Non-cash operating lease expense |
|
|
31,087 |
|
|
|
30,932 |
|
Other |
|
|
494 |
|
|
|
1,111 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(5,711 |
) |
|
|
(1,251 |
) |
Merchandise inventories |
|
|
(14,769 |
) |
|
|
(40,463 |
) |
Operating leases |
|
|
(26,673 |
) |
|
|
(34,306 |
) |
Accounts payable and accrued liabilities |
|
|
(2,544 |
) |
|
|
17,173 |
|
Other |
|
|
(9,154 |
) |
|
|
(5,165 |
) |
Net cash provided by operating activities |
|
|
170 |
|
|
|
28,032 |
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(10,083 |
) |
|
|
(15,081 |
) |
Other |
|
|
194 |
|
|
|
8 |
|
Net cash used in investing activities |
|
|
(9,889 |
) |
|
|
(15,073 |
) |
|
|
|
|
|
|
|
|
|
Cash Flow 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 |
|
|
152 |
|
|
|
148 |
|
Dividends paid |
|
|
(3,856 |
) |
|
|
(4,466 |
) |
Purchase of common stock for treasury |
|
|
0 |
|
|
|
(30,915 |
) |
Shares surrendered by employees to pay taxes on restricted stock |
|
|
(1,736 |
) |
|
|
(11,040 |
) |
Net cash used in financing activities |
|
|
(5,440 |
) |
|
|
(46,273 |
) |
Net decrease in cash and cash equivalents |
|
|
(15,159 |
) |
|
|
(33,314 |
) |
Cash and cash equivalents at beginning of period |
|
|
61,899 |
|
|
|
67,021 |
|
Cash and cash equivalents at end of period |
|
$ |
46,740 |
|
|
$ |
33,707 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20201118005997/en/
Vice Chairman and Chief Executive Officer, or
Senior Executive Vice President, Chief Financial and Administrative Officer and Treasurer
www.shoecarnival.com
(812) 867-4034
Source:
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) 867-4034