Shoe Carnival Reports First Quarter Fiscal 2024 Results
-
Net sales exceeded the Company’s expectation, increasing 6.8 percent versus prior year to
$300.4 million in the quarter. -
EPS achieved at the high end of the Company’s expectation with first quarter 2024 GAAP EPS of
$0.63 and Adjusted EPS of$0.64 . -
GAAP operating income increased 7.5 percent to
$22.5 million and Adjusted operating income increased 9.8 percent to$23.0 million versus prior year. - Store count is at record high of 430 stores, growing by 30 stores since the beginning of the year.
“We are encouraged by the strong results delivered this quarter, with net sales growth above our expectation, gross profit margin expansion versus prior year, and earnings at the high end of our expectation. We gained significant market share, with accelerating sales momentum across our business as the quarter progressed, including double-digit growth in sandals that continued in the quarter after the Easter holiday period,” said
“Our long-term strategies to grow sales and profit are working and position us well to further increase shareholder value and achieve our vision to be the nation’s leading family footwear retailer,” concluded
First Quarter Operating Results
Net sales in first quarter 2024 were
First quarter 2024 marked the 13th consecutive quarter the Company’s gross profit margin exceeded 35 percent. Gross profit margin increased to 35.6 percent in first quarter 2024 on higher merchandise margins and leverage in buying, distribution and occupancy on the higher sales.
First quarter 2024 SG&A increased on higher selling expenses related to Rogan’s and increased marketing investments that drove the strong sales performance in the quarter. As a percent of net sales, SG&A expenses were 28.1 percent in the quarter as compared to 27.6 percent in first quarter 2023.
First quarter 2024 operating income totaled
First quarter 2024 net income was
EPS growth in first quarter 2024 compared to prior year was primarily driven by the net sales performance and higher gross profit margin. On an adjusted basis, excluding the
Comparable store sales for the thirteen-week period ended
Merchandise Inventory
First quarter 2024 inventory totaled
In Fiscal 2024, the second year of the Company’s inventory optimization improvement plan, the Company continues to expect further inventory efficiencies. Consistent with previous guidance, Fiscal 2024 year end inventory dollars are expected to be lower by approximately
Store Count, Planned Store Growth and Modernization
As of
The Company has a strategic growth roadmap in place to surpass 500 stores in 2028, inclusive of organic growth and strategic M&A activity.
The Company continued modernizing its fleet during first quarter 2024. As of
Share Repurchase Program
As of
Capital Management
The 2023 fiscal year end marked the 19th consecutive year the Company ended a year with no debt, and through first quarter 2024, the Company continued funding its operations and growth investments from operating cash flow and without debt. At the end of first quarter 2024, the Company had approximately
Fiscal 2024 Outlook
Based on first quarter 2024 results, the Company reiterated its entire Fiscal 2024 outlook, including net sales growth in a range of 4 percent to 6 percent versus Fiscal 2023 and Fiscal 2024 GAAP EPS in a range of
Annual Shareholder Meeting
As previously announced, the Company will hold its Annual Meeting of Shareholders at
Conference Call
Today, at
Non-GAAP Financial Measures
The non-GAAP adjusted results for first quarter 2024 and in the Fiscal 2024 outlook discussed herein exclude purchase accounting impacts associated with the Company’s acquisition of Rogan’s. These impacts include the amortization expense included in cost of sales associated with the fair value adjustment to acquisition inventory and expenses included in SG&A 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" 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
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||
(In thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
|
Thirteen |
|
|
Thirteen |
|
||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||
|
|
|
|
|
|
|
||
Net sales |
|
$ |
300,365 |
|
|
$ |
281,184 |
|
Cost of sales (including buying,
|
|
|
193,565 |
|
|
|
182,667 |
|
Gross profit |
|
|
106,800 |
|
|
|
98,517 |
|
Selling, general and administrative expenses |
|
|
84,293 |
|
|
|
77,578 |
|
Operating income |
|
|
22,507 |
|
|
|
20,939 |
|
Interest income |
|
|
(803 |
) |
|
|
(478 |
) |
Interest expense |
|
|
136 |
|
|
|
66 |
|
Income before income taxes |
|
|
23,174 |
|
|
|
21,351 |
|
Income tax expense |
|
|
5,888 |
|
|
|
4,825 |
|
Net income |
|
$ |
17,286 |
|
|
$ |
16,526 |
|
Net income per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
0.64 |
|
|
$ |
0.61 |
|
Diluted |
|
$ |
0.63 |
|
|
$ |
0.60 |
|
Weighted average shares: |
|
|
|
|
|
|
||
Basic |
|
|
27,142 |
|
|
|
27,223 |
|
Diluted |
|
|
27,408 |
|
|
|
27,505 |
|
|
|
|
|
|
|
|
||
Cash dividends declared per share |
|
$ |
0.135 |
|
|
$ |
0.100 |
|
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|||
Current Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
56,919 |
|
|
$ |
99,000 |
|
|
$ |
32,587 |
|
Marketable securities |
|
|
12,555 |
|
|
|
12,247 |
|
|
|
11,535 |
|
Accounts receivable |
|
|
5,868 |
|
|
|
2,593 |
|
|
|
3,084 |
|
Merchandise inventories |
|
|
411,619 |
|
|
|
346,442 |
|
|
|
389,508 |
|
Other |
|
|
17,992 |
|
|
|
21,056 |
|
|
|
16,836 |
|
Total Current Assets |
|
|
504,953 |
|
|
|
481,338 |
|
|
|
453,550 |
|
Property and equipment – net |
|
|
172,182 |
|
|
|
168,613 |
|
|
|
150,487 |
|
Operating lease right-of-use assets |
|
|
345,881 |
|
|
|
333,851 |
|
|
|
312,760 |
|
Intangible assets |
|
|
41,001 |
|
|
|
32,600 |
|
|
|
32,600 |
|
|
|
|
15,223 |
|
|
|
12,023 |
|
|
|
12,023 |
|
Other noncurrent assets |
|
|
13,342 |
|
|
|
13,600 |
|
|
|
15,209 |
|
Total Assets |
|
$ |
1,092,582 |
|
|
$ |
1,042,025 |
|
|
$ |
976,629 |
|
|
|
|
|
|
|
|
|
|
|
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|||
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
71,234 |
|
|
$ |
58,274 |
|
|
$ |
55,853 |
|
Accrued and other liabilities |
|
|
21,938 |
|
|
|
16,620 |
|
|
|
21,314 |
|
Current portion of operating lease liabilities |
|
|
56,025 |
|
|
|
52,981 |
|
|
|
58,077 |
|
Total Current Liabilities |
|
|
149,197 |
|
|
|
127,875 |
|
|
|
135,244 |
|
Long-term portion of operating lease liabilities |
|
|
313,302 |
|
|
|
301,355 |
|
|
|
279,168 |
|
Deferred income taxes |
|
|
15,999 |
|
|
|
17,341 |
|
|
|
14,526 |
|
Deferred compensation |
|
|
12,157 |
|
|
|
11,639 |
|
|
|
9,809 |
|
Other |
|
|
4,123 |
|
|
|
426 |
|
|
|
202 |
|
Total Liabilities |
|
|
494,778 |
|
|
|
458,636 |
|
|
|
438,949 |
|
Total Shareholders’ Equity |
|
|
597,804 |
|
|
|
583,389 |
|
|
|
537,680 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
1,092,582 |
|
|
$ |
1,042,025 |
|
|
$ |
976,629 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Thirteen |
|
|
Thirteen |
|
||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||
|
|
|
|
|
|
|
||
Cash Flows From Operating Activities |
|
|
|
|
|
|
||
Net income |
|
$ |
17,286 |
|
|
$ |
16,526 |
|
Adjustments to reconcile net income to net
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
7,385 |
|
|
|
6,697 |
|
Stock-based compensation |
|
|
1,757 |
|
|
|
1,209 |
|
Loss on retirement and impairment of assets, net |
|
|
117 |
|
|
|
19 |
|
Deferred income taxes |
|
|
326 |
|
|
|
2,682 |
|
Non-cash operating lease expense |
|
|
14,926 |
|
|
|
15,163 |
|
Other |
|
|
277 |
|
|
|
180 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(904 |
) |
|
|
(32 |
) |
Merchandise inventories |
|
|
(23,387 |
) |
|
|
882 |
|
Operating leases |
|
|
(14,916 |
) |
|
|
(15,295 |
) |
Accounts payable and accrued liabilities |
|
|
7,886 |
|
|
|
(23,128 |
) |
Other |
|
|
6,306 |
|
|
|
(2,851 |
) |
Net cash provided by operating activities |
|
|
17,059 |
|
|
|
2,052 |
|
|
|
|
|
|
|
|
||
Cash Flows From Investing Activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(10,192 |
) |
|
|
(15,005 |
) |
Investments in marketable securities |
|
|
(17 |
) |
|
|
(21 |
) |
Acquisition, net of cash acquired |
|
|
(44,577 |
) |
|
|
0 |
|
Net cash used in investing activities |
|
|
(54,786 |
) |
|
|
(15,026 |
) |
|
|
|
|
|
|
|
||
Cash Flow From Financing Activities |
|
|
|
|
|
|
||
Proceeds from issuance of stock |
|
|
39 |
|
|
|
57 |
|
Dividends paid |
|
|
(3,705 |
) |
|
|
(2,941 |
) |
Shares surrendered by employees to pay taxes on
|
|
|
(688 |
) |
|
|
(2,927 |
) |
Net cash used in financing activities |
|
|
(4,354 |
) |
|
|
(5,811 |
) |
Net decrease in cash and cash equivalents |
|
|
(42,081 |
) |
|
|
(18,785 |
) |
Cash and cash equivalents at beginning of period |
|
|
99,000 |
|
|
|
51,372 |
|
Cash and cash equivalents at end of period |
|
$ |
56,919 |
|
|
$ |
32,587 |
|
|
||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
||||||||
(In thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
Thirteen
|
|
% of
|
Thirteen
|
|
% of
|
||
|
|
|
|
|
|
|
||
Reported gross profit |
$ |
106,800 |
|
35.6% |
$ |
98,517 |
|
35.0% |
Amortization expense related to fair value
|
|
164 |
|
0.0% |
|
0 |
|
0.0% |
Adjusted gross profit, pre-tax |
$ |
106,964 |
|
35.6% |
$ |
98,517 |
|
35.0% |
|
|
|
|
|
|
|
||
Reported selling, general and administrative
|
$ |
84,293 |
|
28.1% |
$ |
77,578 |
|
27.6% |
Acquisition related fees and expenses |
|
(321 |
) |
-0.1% |
|
0 |
|
0.0% |
Adjusted selling, general and administrative
|
$ |
83,972 |
|
28.0% |
$ |
77,578 |
|
27.6% |
|
|
|
|
|
|
|
||
Reported operating income |
$ |
22,507 |
|
7.5% |
$ |
20,939 |
|
7.4% |
Amortization expense related to fair value
|
|
164 |
|
0.0% |
|
0 |
|
0.0% |
Acquisition related fees and expenses |
|
321 |
|
0.1% |
|
0 |
|
0.0% |
Adjusted operating income, pre-tax |
$ |
22,992 |
|
7.6% |
$ |
20,939 |
|
7.4% |
|
|
|
|
|
|
|
||
Reported income tax expense |
$ |
5,888 |
|
1.9% |
$ |
4,825 |
|
1.7% |
Tax effect of amortization of acquisition inventory
|
|
118 |
|
0.0% |
|
0 |
|
0.0% |
Adjusted income tax expense |
$ |
6,006 |
|
1.9% |
$ |
4,825 |
|
1.7% |
|
|
|
|
|
|
|
||
Reported net income |
$ |
17,286 |
|
5.8% |
$ |
16,526 |
|
5.9% |
Amortization expense related to fair value
|
|
164 |
|
0.0% |
|
0 |
|
0.0% |
Acquisition related fees and expenses |
|
321 |
|
0.1% |
|
0 |
|
0.0% |
Tax effect of acquisition related fees and expenses |
|
(118 |
) |
0.0% |
|
0 |
|
0.0% |
Adjusted net income |
$ |
17,653 |
|
5.9% |
$ |
16,526 |
|
5.9% |
|
|
|
|
|
|
|
||
Reported net income per diluted share |
$ |
0.63 |
|
|
$ |
0.60 |
|
|
Amortization expense related to fair value
|
|
0.01 |
|
|
|
0.00 |
|
|
Acquisition related fees and expenses |
|
0.01 |
|
|
|
0.00 |
|
|
Tax effect of acquisition related fees and expenses |
|
(0.01 |
) |
|
|
0.00 |
|
|
Adjusted diluted net income per share |
$ |
0.64 |
|
|
$ |
0.60 |
|
|
|
|||||||
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 |
|
Amortization expense related to fair value adjustment to acquisition inventory and acquisition related fees and expenses |
|
0.07 |
|
|
|
0.07 |
|
Tax effect of amortization of acquisition inventory fair value adjustment and acquisition related fees and expenses |
|
(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/20240523891542/en/
Vice President Investor Relations
(812) 867-4034
Source: