Shoe Carnival Reports Fourth Quarter and Fiscal 2023 Results
-
Net sales achieved at the high end of the Company’s expectation, totaling
$280.2 million in fourth quarter 2023 and$1.176 billion in Fiscal 2023. -
EPS achieved at the mid-range of the Company’s expectation with fourth quarter 2023 GAAP EPS of
$0.57 and Adjusted EPS of$0.59 ; Fiscal 2023 GAAP EPS of$2.68 and Adjusted EPS of$2.70 . - Initiating Fiscal 2024 outlook with net sales expected to grow approximately 5.0 percent at the mid-point of guidance.
-
Increasing Rogan’s synergy expectation to approximately
$2.5 million annually and accelerating integration to fully capture in Fiscal 2025. -
Dividend increase of 12.5 percent, representing an increased annualized dividend rate to
$0.54 , approved inMarch 2024 .
“I would like to thank our dedicated team members and vendor partners for their support in driving growth during the key holiday period and setting us up for continued growth in 2024. With the acquisition of Rogan’s, we are now at an all-time high of 429 stores. Rogan’s will be immediately accretive to our results in 2024 and the level of accretion is expected to meaningfully increase in 2025. The integration progress to date has been encouraging and we are raising the full synergy expectation to
Fourth Quarter Operating Results
The Company’s financial results for fourth quarter 2023 were consistent with the preliminary results previously announced.
Net sales in fourth quarter 2023 were
Comparable store sales, in line with the Company’s expectation, declined 9.4 percent in the quarter primarily due to soft trends prior to the December holiday period and weather disruptions in January.
Fourth quarter 2023 marked the 12th consecutive quarter the Company’s gross profit margin exceeded 35 percent. Gross profit margin decreased to 35.6 percent in fourth quarter 2023 on lower merchandise margins and buying, distribution and occupancy deleveraging on lower sales.
Fourth quarter 2023 SG&A included approximately
Fourth quarter 2023 net income was
EPS results in fourth quarter 2023 were in line with the Company’s expectation, primarily driven by net sales performance in the quarter that was at the high end of the Company’s expectation and sustained gross profit margin performance. On an adjusted basis, excluding the approximately
Merchandise Inventory
The Company’s inventory optimization improvement plan delivered ahead of expectation in Fiscal 2023, with inventory
Acquisition of Rogan’s, Planned Store Growth and Store Modernization
On
As previously announced, the Company has an 18-month integration plan in place. Based on progress to date, the Company is increasing its full synergy expectation to approximately
As of
The Company continued to modernize its fleet. As of
Dividend and Share Repurchase Program
In
As of
Capital Management
The 2023 fiscal year end marked the 19th consecutive year the Company ended a year with no debt, fully funding its operations and investments from operating cash flow. At the end of Fiscal 2023, the Company had approximately
Long-Term Profit Transformation
As part of its long-term growth strategy, the Company has invested significantly in CRM capabilities, e-commerce infrastructure, modernization of its store fleet, and acquisitions as key drivers of profitable growth. Since 2019, EPS has increased 84 percent, gross profit margin expanded 570 basis points, and net sales grew 13 percent.
The Fiscal 2024 outlook builds on this sales growth and profit transformation led by the Company’s acquisition strategy, sustained gross profit margin, and increased omnichannel sales.
Fiscal 2024 Outlook
The Company is initiating its financial outlook for Fiscal 2024 and notes that its Fiscal 2024 is a 52-week year and compares to a 53-week year in Fiscal 2023.
The Company expects to grow net sales in Fiscal 2024 led by the recent Rogan’s acquisition, continued strength of the
Below is additional information regarding the Company’s Fiscal 2024 outlook.
Comparable Store Sales: Expected to be in a range of down 3.0 percent to up 1.0 percent versus Fiscal 2023.
Gross Profit Margin: Expected to be approximately even with Fiscal 2023.
Selling, General and Administrative Expenses (“SG&A”): As a percent of net sales, SG&A is expected to be approximately 40 basis points higher than Fiscal 2023. Approximately 20 basis points of the increase is due to expected purchase accounting, transaction and integration costs related to the Rogan’s acquisition and the balance of the increase is primarily driven by approximately
Income Tax Rate: Expected to be approximately 26 percent in Fiscal 2024, representing an increase of 230 basis points versus Fiscal 2023 and a negative impact of approximately of
GAAP EPS: Fiscal 2024 EPS on a GAAP basis is expected to be in a range of
Non-GAAP EPS (“Adjusted EPS”): Excluding the expected purchase accounting, transaction and integration costs related to the Rogan’s acquisition, Adjusted EPS is expected to be in a range of
Record Date and Date of Annual Shareholder Meeting
The Company announced that
Conference Call
Today, at
Non-GAAP Financial Measures
The non-GAAP adjusted results for fourth quarter 2023, Fiscal 2023 and in the Fiscal 2024 outlook discussed herein exclude transaction expenses included in SG&A associated with the Rogan’s acquisition related to deal formation and legal and accounting advice and purchase accounting and integration expenses. These adjusted results are provided to enhance the user's overall understanding of the Company's historical operations and financial performance and future projections. Specifically, the Company believes the adjusted results provide investors with relevant comparisons of the Company’s core operations. Unaudited adjusted results are provided in addition to, and not as alternatives for, the Company’s reported results and guidance determined in accordance with generally accepted accounting principles. A reconciliation of these non-GAAP measures to the Company's GAAP results and guidance appears below in the tables entitled "Reconciliation of GAAP to Non-GAAP Financial Measures" with respect to adjusted net income and adjusted EPS results in fourth quarter 2023 and Fiscal 2023 and entitled “Reconciliation of GAAP to Non-GAAP Financial Measures for Fiscal 2024 Outlook” with respect to adjusted EPS in the Fiscal 2024 outlook.
About
Cautionary Statement Regarding Forward-Looking Information
As used herein, “we”, “our” and “us” refer to
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: our ability to control costs and meet our labor needs in a rising wage, inflationary, and/or supply chain constrained environment; the impact of competition and pricing, including our ability to maintain current promotional intensity levels; the effects and duration of economic downturns and unemployment rates; our ability to achieve expected operating results from, and planned growth of, our
Financial Tables Follow
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Fourteen |
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Thirteen |
|
|
Fifty-Three |
|
|
Fifty-Two |
|
||||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
280,169 |
|
|
$ |
290,779 |
|
|
$ |
1,175,882 |
|
|
$ |
1,262,235 |
|
Cost of sales (including buying, distribution
|
|
|
180,462 |
|
|
|
179,457 |
|
|
|
754,492 |
|
|
|
794,071 |
|
Gross profit |
|
|
99,707 |
|
|
|
111,322 |
|
|
|
421,390 |
|
|
|
468,164 |
|
Selling, general and administrative expenses |
|
|
79,738 |
|
|
|
82,628 |
|
|
|
327,885 |
|
|
|
321,720 |
|
Operating income |
|
|
19,969 |
|
|
|
28,694 |
|
|
|
93,505 |
|
|
|
146,444 |
|
Interest income |
|
|
(1,173 |
) |
|
|
(407 |
) |
|
|
(2,917 |
) |
|
|
(972 |
) |
Interest expense |
|
|
74 |
|
|
|
70 |
|
|
|
282 |
|
|
|
294 |
|
Income before income taxes |
|
|
21,068 |
|
|
|
29,031 |
|
|
|
96,140 |
|
|
|
147,122 |
|
Income tax expense |
|
|
5,548 |
|
|
|
7,421 |
|
|
|
22,792 |
|
|
|
37,054 |
|
Net income |
|
$ |
15,520 |
|
|
$ |
21,610 |
|
|
$ |
73,348 |
|
|
$ |
110,068 |
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.57 |
|
|
$ |
0.80 |
|
|
$ |
2.69 |
|
|
$ |
4.00 |
|
Diluted |
|
$ |
0.57 |
|
|
$ |
0.79 |
|
|
$ |
2.68 |
|
|
$ |
3.96 |
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
27,117 |
|
|
|
27,152 |
|
|
|
27,231 |
|
|
|
27,543 |
|
Diluted |
|
|
27,328 |
|
|
|
27,456 |
|
|
|
27,407 |
|
|
|
27,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends declared per share |
|
$ |
0.12 |
|
|
$ |
0.09 |
|
|
$ |
0.44 |
|
|
$ |
0.36 |
|
|
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In thousands) |
||||||||
(Unaudited) |
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|
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ASSETS |
|
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
99,000 |
|
|
$ |
51,372 |
|
Marketable securities |
|
|
12,247 |
|
|
|
11,601 |
|
Accounts receivable |
|
|
2,593 |
|
|
|
3,052 |
|
Merchandise inventories |
|
|
346,442 |
|
|
|
390,390 |
|
Other |
|
|
21,056 |
|
|
|
13,308 |
|
Total Current Assets |
|
|
481,338 |
|
|
|
469,723 |
|
Property and equipment – net |
|
|
168,613 |
|
|
|
141,435 |
|
Operating lease right-of-use assets |
|
|
333,851 |
|
|
|
318,612 |
|
Intangible assets |
|
|
32,600 |
|
|
|
32,600 |
|
|
|
|
12,023 |
|
|
|
12,023 |
|
Other noncurrent assets |
|
|
13,600 |
|
|
|
15,388 |
|
Total Assets |
|
$ |
1,042,025 |
|
|
$ |
989,781 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
58,274 |
|
|
$ |
78,850 |
|
Accrued and other liabilities |
|
|
16,620 |
|
|
|
20,281 |
|
Current portion of operating lease liabilities |
|
|
52,981 |
|
|
|
58,154 |
|
Total Current Liabilities |
|
|
127,875 |
|
|
|
157,285 |
|
Long-term portion of operating lease liabilities |
|
|
301,355 |
|
|
|
285,074 |
|
Deferred income taxes |
|
|
17,341 |
|
|
|
11,844 |
|
Deferred compensation |
|
|
11,639 |
|
|
|
9,840 |
|
Other |
|
|
426 |
|
|
|
170 |
|
Total Liabilities |
|
|
458,636 |
|
|
|
464,213 |
|
Total Shareholders’ Equity |
|
|
583,389 |
|
|
|
525,568 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
1,042,025 |
|
|
$ |
989,781 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Fifty-Three |
|
|
Fifty-Two |
|
||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||
|
|
|
|
|
|
|
||
Cash Flows From Operating Activities |
|
|
|
|
|
|
||
Net income |
|
$ |
73,348 |
|
|
$ |
110,068 |
|
Adjustments to reconcile net income to net
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
28,794 |
|
|
|
23,196 |
|
Stock-based compensation |
|
|
4,887 |
|
|
|
5,434 |
|
Loss (Gain) on retirement and impairment of assets, net |
|
|
130 |
|
|
|
(501 |
) |
Deferred income taxes |
|
|
5,497 |
|
|
|
14,543 |
|
Non-cash operating lease expense |
|
|
54,998 |
|
|
|
47,766 |
|
Other |
|
|
728 |
|
|
|
962 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
459 |
|
|
|
11,410 |
|
Merchandise inventories |
|
|
43,948 |
|
|
|
(106,192 |
) |
Operating lease liabilities |
|
|
(59,129 |
) |
|
|
(48,992 |
) |
Accounts payable and accrued liabilities |
|
|
(22,214 |
) |
|
|
925 |
|
Other |
|
|
(8,690 |
) |
|
|
(8,181 |
) |
Net cash provided by operating activities |
|
|
122,756 |
|
|
|
50,438 |
|
|
|
|
|
|
|
|
||
Cash Flows From Investing Activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(56,281 |
) |
|
|
(77,293 |
) |
Investments in marketable securities |
|
|
(403 |
) |
|
|
(976 |
) |
Sales of marketable securities |
|
|
598 |
|
|
|
3,040 |
|
Other |
|
|
1,447 |
|
|
|
1,195 |
|
Net cash used in investing activities |
|
|
(54,639 |
) |
|
|
(74,034 |
) |
|
|
|
|
|
|
|
||
Cash Flow From Financing Activities |
|
|
|
|
|
|
||
Proceeds from issuance of stock |
|
|
183 |
|
|
|
187 |
|
Dividends paid |
|
|
(12,190 |
) |
|
|
(9,972 |
) |
Purchase of common stock for treasury |
|
|
(5,445 |
) |
|
|
(30,515 |
) |
Shares surrendered by employees to pay taxes on
|
|
|
(3,037 |
) |
|
|
(2,175 |
) |
Net cash used in financing activities |
|
|
(20,489 |
) |
|
|
(42,475 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
47,628 |
|
|
|
(66,071 |
) |
Cash and cash equivalents at beginning of year |
|
|
51,372 |
|
|
|
117,443 |
|
Cash and cash equivalents at end of year |
|
$ |
99,000 |
|
|
$ |
51,372 |
|
|
||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
||||||||
(In thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
|
|||||||
|
Fourteen Weeks Ended |
|
% of
|
Fifty-three Weeks Ended |
|
% of
|
||
|
|
|
|
|
|
|
||
Reported net income |
$ |
15,520 |
|
5.5% |
$ |
73,348 |
|
6.2% |
Acquisition-related fees and expenses |
|
806 |
|
0.3% |
|
806 |
|
0.1% |
Tax effect of acquisition-related fees and expenses |
|
(196 |
) |
0.0% |
|
(196 |
) |
0.0% |
Adjusted net income |
$ |
16,130 |
|
5.8% |
$ |
73,958 |
|
6.3% |
|
|
|
|
|
|
|
||
Reported net income per diluted share |
$ |
0.57 |
|
|
$ |
2.68 |
|
|
Acquisition-related fees and expenses |
|
0.03 |
|
|
|
0.03 |
|
|
Tax effect of acquisition-related fees and expenses |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
Adjusted diluted net income per share |
$ |
0.59 |
|
|
$ |
2.70 |
|
|
|
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
||||||
FOR FISCAL 2024 OUTLOOK |
||||||
(Unaudited) |
||||||
|
Low End of Fiscal
|
|
High End of Fiscal
|
|
||
Net income per diluted share (GAAP) |
$ |
2.50 |
|
$ |
2.70 |
|
Acquisition-related purchase accounting and transaction and
|
|
0.07 |
|
|
0.07 |
|
Tax effect of acquisition-related purchase accounting and
|
(0.02 |
) |
(0.02 |
) |
||
Adjusted diluted net income per share |
$ |
2.55 |
|
$ |
2.75 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321031626/en/
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