EVANSVILLE, Ind.–(BUSINESS WIRE)–Shoe Carnival, Inc. , a leading retailer of moderately priced footwear and accessories, today reported results for the third quarter and nine months ended October 31,
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 of October 31, 2020Our 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 Shoe Carnival team members, our incredibly solid vendor partnerships, and dedicated customers,” commented Cliff Sifford, Shoe Carnival’s Vice Chairman and Chief Executive Officer.
“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 Mr. Sifford.
Third Quarter Financial Results
The Company reported net sales of $274.6 million for the third quarter, which was flat compared to the third quarter of fiscal 2019. Comparable store sales increased 0.9 percent. E-commerce sales increased over 150 percent and represented more than 13 percent of total sales in the third quarter of fiscal 2020.
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 $1.0 million to $67.6 million. As a percentage of net sales, these expenses increased to 24.7 percent compared to 24.3 percent in the third quarter of fiscal 2019.
Net income for the third quarter of fiscal 2020 was $14.7 million, or $1.03 per diluted share. For the third quarter of fiscal 2019, the Company reported net income of $13.7 million, or $0.94 per diluted share.
Nine Month Financial Results
Net sales for the first nine months of fiscal 2020 were $722.9 million compared to $796.7 million in the first nine months of fiscal 2019. Comparable store sales decreased 8.8 percent for the first nine months of fiscal 2020. The decrease in sales was due to temporary store closures in the first half of the year due to the global pandemic.
Net income for the first nine months of fiscal 2020 was $8.5 million, or $0.60 per diluted share, compared to net income of $39.4 million, or $2.66 per diluted share, for the first nine months of fiscal 2019. Included in the first nine months of fiscal 2019 was a tax benefit of approximately $1.9 million, or $0.13 per diluted share, associated with the vesting of equity-based compensation that was recorded in the first quarter of fiscal 2019.
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 $2.0 million to $190.5 million. As a percentage of net sales, these expenses increased to 26.3 percent compared to 24.2 percent in the first nine months of fiscal 2019 primarily due to the deleveraging effect of lower sales.
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 October 31, 2020, the Company had $43.1 million available for future repurchases under its share repurchase program. Due to the volatility this year, no shares have been repurchased in fiscal 2020, and the Company does not anticipate repurchasing any shares in fiscal 2020 but will continue to reevaluate further share repurchases on an ongoing basis.
Conference Call
Today, at 4:30 p.m. Eastern Time, the Company will host a conference call to discuss the third 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 customers a broad assortment of moderately priced dress, casual and athletic footwear for men, women and children with emphasis on national name brands. As of November 18, 2020, the Company operates 383 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.
