- First quarter EPS of $0.95 exceeded expectations, growing 107
percent compared to 2019 pre-pandemic, driven by double-digit
operating profit margin.
- Raising 2022 EPS guidance and re-affirming sales guidance.
- Grew new customer acquisition over 10 percent compared to first
quarter 2021, resulting in over 29 million loyal customers.
Shoe Carnival, Inc. (Nasdaq: SCVL) (the "Company"), a leading
retailer of footwear and accessories for the family, today reported
results for the first quarter ended April 30, 2022.
Given the volatility during 2020 and 2021, the Company believes
the most relevant indicator of the Company’s strength is the 25.1
percent sales growth and 107 percent EPS growth achieved during
2022 versus the first quarter 2019 before the COVID-19
pandemic.
(In thousands, except per share data)
Thirteen Weeks Ended
April 30,
May 1,
May 2,
May 4,
2022
2021
2020
2019
Net sales
$
317,527
$
328,457
$
147,495
$
253,810
Change in net sales compared to 2022
-3.3
%
115.3
%
25.1
%
Gross profit
$
112,863
$
130,158
$
31,464
$
75,140
Gross profit margin
35.5
%
39.6
%
21.3
%
29.6
%
SG&A as a percentage of net sales
24.4
%
22.1
%
37.1
%
23.4
%
Net income/(loss)
$
26,897
$
43,242
$
(16,190
)
$
13,873
Diluted net income/(loss) per share
("EPS")
$
0.95
$
1.51
$
(0.58
)
$
0.46
The Company’s first quarter operating results during 2020 and
2021 were impacted by the COVID-19 pandemic. During 2020 the
Company’s retail stores were closed for over half the first quarter
due to the COVID-19 shutdown. During 2021 the Company’s first
quarter net sales grew 122.7 percent from retail stores being open
the full period, expanding market share and gains from the
government distributing over $400 billion in consumer stimulus.
“Our strategies to double our operating profit compared to the
levels before the pandemic have worked. Our first quarter results
demonstrate the structural profit transformation and increased
scale our plans have achieved compared to pre-pandemic results.
With gross profit margins in the mid-thirties, double-digit
operating profit margin and store productivity above $300 per
square foot, we are incredibly optimistic about our future growth
and long-term profit potential,” said Mark Worden, President and
Chief Executive Officer.
“Both of our store banners exceeded expectations despite the
quarter's economic headwinds and global uncertainties. Based on the
strong start versus our plans, we are raising our annual EPS
guidance and reiterating our sales growth guidance for 2022,”
concluded Mr. Worden.
Enhanced Fiscal 2022 Earnings Outlook
- Net sales are expected to increase 4 to 7 percent compared to
the prior year, on top of 36 percent growth in fiscal 2021.
- EPS is now expected to be in the range of $3.95 to $4.15
compared to previous guidance of $3.80 to $4.10 and a pre-pandemic
annual high of $1.46 in fiscal 2019.
Operating Results
First quarter 2022 net sales of $317.5 million increased 25.1
percent compared to the pre-pandemic first quarter 2019 driven by
new customer acquisition of over 25 percent versus first quarter
2019.
First quarter 2022 gross profit margin was 35.5 percent, a
nearly 600 basis point increase compared to the pre-pandemic first
quarter 2019. An increase in the merchandise margin was partially
offset by higher distribution costs due to the impact of inflation
on transportation and fuel.
Operating income for the first quarter 2022 was 11.1 percent of
net sales, a 500 basis point increase compared to the pre-pandemic
level in first quarter 2019.
First quarter 2022 net income was $26.9 million, or $0.95 per
diluted share, compared to first quarter 2019 of $13.9 million, or
$0.46 per diluted share, and $43.2 million, or $1.51 per diluted
share, in first quarter 2021.
Store Updates
Two new stores were opened in the first quarter of fiscal 2022
and no stores were closed. The Company aims to open 10 new stores
in fiscal 2022, expects no store closures, and store count to
exceed 400 stores by the end of fiscal 2022.
The Company is currently in process of modernizing its stores
and plans to have over 50 percent of stores modernized by the
summer of 2023 and the full program complete by the end of fiscal
2024. Through the first quarter of 2022, 31 percent of the
Company’s fleet is complete.
Share Repurchase Program
As of April 30, 2022, the Company had $29.5 million available
for future repurchases under its share repurchase program and
during the first quarter repurchased 682,886 shares at a total cost
of $20.5 million.
Conference Call
Today, at 8:30 a.m. Eastern Time, the Company will host a
conference call to discuss the first 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.
Annual Shareholder Meeting
As previously announced, the Company will hold its Annual
Meeting of Shareholders at 9:00 a.m. Eastern Time on June 23, 2022.
Information about the annual meeting and related material,
including the Company's proxy statement and annual report, can be
found on the Company's Investors web page.
About Shoe Carnival
Shoe Carnival, Inc. is one of the nation’s largest family
footwear retailers, offering a broad assortment of dress, casual
and athletic footwear for men, women and children with emphasis on
national name brands. As of May 18, 2022, the Company operates 395
stores in 35 states and Puerto Rico under its Shoe Carnival and
Shoe Station banners and offers shopping at www.shoecarnival.com.
Headquartered in Evansville, IN, Shoe Carnival, Inc. trades on The
Nasdaq Stock Market LLC under the symbol SCVL. Press releases and
annual report are available on the Company's website at
www.shoecarnival.com.
Cautionary Statement Regarding Forward-Looking
Information
As used herein, “we”, “our” and “us” refer to Shoe Carnival,
Inc. 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: our ability to control costs and meet our labor needs
in a rising wage, inflationary, and/or supply chain constrained
environment; the duration and spread of the COVID-19 pandemic,
mitigating efforts deployed, including the effects of government
stimulus on consumer spending, and the pandemic’s overall impact on
our operations, including our stores, supply chain and distribution
processes, economic conditions, and financial market volatility;
our ability to operate the recently acquired Shoe Station assets,
retain Shoe Station employees and achieve expected operating
results and other benefits from the Shoe Station acquisition within
expected time frames, or at all; risks that the Shoe Station
acquisition may disrupt our current plans and operations or
negatively impact our relationship with our vendors and other
suppliers; the potential impact of national and international
security concerns, including those caused by war and terrorism, on
the retail environment; general economic conditions in the areas of
the continental United States and Puerto Rico where 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; our ability to successfully
navigate the increasing use of online retailers for fashion
purchases and the impact on traffic and transactions in our
physical stores; the success of the open-air shopping centers where
many of our stores are located and its impact on our ability to
attract customers to our stores; our ability to attract customers
to our e-commerce platform and to successfully grow our omnichannel
sales; the effectiveness of our inventory management, including our
ability to manage key merchandise vendor relationships and emerging
direct-to-consumer initiatives; changes in our relationships with
other key suppliers; changes in the political and economic
environments in, the status of trade relations with, and the impact
of changes in trade policies and tariffs impacting, China and other
countries which are the major manufacturers of footwear; the impact
of competition and pricing; our ability to successfully manage and
execute our marketing initiatives and maintain positive brand
perception and recognition; our ability to successfully manage our
current real estate portfolio and leasing obligations; changes in
weather, including patterns impacted by climate change; changes in
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 impact of
natural disasters, other public health crises, political crises,
civil unrest, and other catastrophic events on our operations and
the operations of our suppliers, 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, including as a result of a
cybersecurity breach; our ability to successfully execute our
business strategy, including the availability of desirable store
locations at acceptable lease terms, our ability to identify,
consummate or effectively integrate future acquisitions, our
ability to implement and adapt to new technology and systems, 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 business plans; higher than
anticipated costs associated with the closing of underperforming
stores; the inability of manufacturers to deliver products in a
timely manner; an increase in the cost, or a disruption in the
flow, of imported goods; the impact of regulatory changes in the
United States, including minimum wage laws and regulations, and the
countries where our manufacturers are located; the resolution of
litigation or regulatory proceedings in which we are or may become
involved; continued volatility and disruption in the capital and
credit markets; future stock repurchases under our stock repurchase
program and future dividend payments; 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,” “aims,” “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
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(In thousands, except per share
data)
(Unaudited)
Thirteen
Thirteen
Weeks Ended
Weeks Ended
April 30, 2022
May 1, 2021
Net sales
$
317,527
$
328,457
Cost of sales (including buying,
distribution and occupancy costs)
204,664
198,299
Gross profit
112,863
130,158
Selling, general and administrative
expenses
77,479
72,555
Operating income
35,384
57,603
Interest income
(32
)
(4
)
Interest expense
95
119
Income before income taxes
35,321
57,488
Income tax expense
8,424
14,246
Net income
$
26,897
$
43,242
Net income per share:
Basic
$
0.96
$
1.53
Diluted
$
0.95
$
1.51
Weighted average shares:
Basic
27,996
28,258
Diluted
28,331
28,647
Cash dividends declared per share
$
0.090
$
0.070
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
April 30,
January 29,
May 1,
2022
2022
2021
ASSETS
Current Assets:
Cash and cash equivalents
$
86,179
$
117,443
$
174,643
Marketable securities
10,965
14,961
0
Accounts receivable
14,442
14,159
7,477
Merchandise inventories
345,021
285,205
268,629
Other
14,592
10,264
11,896
Total Current Assets
471,199
442,032
462,645
Property and equipment – net
110,033
88,533
62,038
Operating lease right-of-use assets
222,259
220,952
207,571
Intangible assets
32,600
32,600
0
Goodwill
11,698
11,384
0
Deferred income taxes
0
2,699
4,965
Other noncurrent assets
13,945
14,064
12,870
Total Assets
$
861,734
$
812,264
$
750,089
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable
$
116,837
$
69,092
$
102,405
Accrued and other liabilities
31,243
33,053
55,011
Current portion of operating lease
liabilities
51,287
51,563
42,895
Total Current Liabilities
199,367
153,708
200,311
Long-term portion of operating lease
liabilities
195,426
194,788
185,205
Deferred income taxes
409
0
0
Deferred compensation
10,482
10,901
11,614
Other
336
334
2,684
Total Liabilities
406,020
359,731
399,814
Total Shareholders’ Equity
455,714
452,533
350,275
Total Liabilities and Shareholders’
Equity
$
861,734
$
812,264
$
750,089
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirteen
Thirteen
Weeks Ended
Weeks Ended
April 30, 2022
May 1, 2021
Cash Flows From Operating Activities
Net income
$
26,897
$
43,242
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
4,677
4,315
Stock-based compensation
1,240
1,227
Loss on retirement and impairment of
assets, net
22
757
Deferred income taxes
3,108
670
Non-cash operating lease expense
11,998
11,434
Other
304
1,187
Changes in operating assets and
liabilities:
Accounts receivable
(283
)
(381
)
Merchandise inventories
(59,816
)
(35,363
)
Operating leases
(12,942
)
(16,682
)
Accounts payable and accrued
liabilities
41,697
61,519
Other
801
4,595
Net cash provided by operating
activities
17,703
76,520
Cash Flows From Investing Activities
Purchases of property and equipment
(26,907
)
(4,083
)
Investments in marketable securities and
other
(6
)
0
Sales of marketable securities and
other
3,040
0
Net cash used in investing activities
(23,873
)
(4,083
)
Cash Flow From Financing Activities
Proceeds from issuance of stock
45
64
Dividends paid
(2,576
)
(2,054
)
Purchase of common stock for treasury
(20,515
)
0
Shares surrendered by employees to pay
taxes on stock-based compensation awards
(2,048
)
(2,336
)
Net cash used in financing activities
(25,094
)
(4,326
)
Net (decrease) increase in cash and cash
equivalents
(31,264
)
68,111
Cash and cash equivalents at beginning of
period
117,443
106,532
Cash and cash equivalents at end of
period
$
86,179
$
174,643
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220518005353/en/
W. Kerry Jackson Shoe Carnival Investor Relations (812)
867-4034
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