SCVL
$32.77
Shoe Carnival
($1.25)
(3.67%)
Earnings Details
2nd Quarter July 2021
Wednesday, August 25, 2021 6:30:00 AM
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Summary

Shoe Carnival Beats

Shoe Carnival (SCVL) reported 2nd Quarter July 2021 earnings of $1.54 per share on revenue of $332.2 million. The consensus earnings estimate was $0.55 per share on revenue of $292.6 million. The Earnings Whisper number was $0.76 per share. Revenue grew 10.5% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $1.10 to $1.15 per share on revenue of $307.0 million to $315.0 million. The current consensus earnings estimate is $0.62 per share on revenue of $284.68 million for the quarter ending October 31, 2021. The company also said it expects fiscal year earnings of $4.35 to $4.50 per share on revenue of $1.21 billion to $1.23 billion. The current consensus earnings estimate is $3.11 per share on revenue of $1.16 billion for the year ending January 31, 2022.

Shoe Carnival is a family footwear retailer, offers customers an assortment of moderately priced dress, casual and athletic footwear for men, women and children.

Results
Reported Earnings
$1.54
Earnings Whisper
$0.76
Consensus Estimate
$0.55
Reported Revenue
$332.2 Mil
Revenue Estimate
$292.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Shoe Carnival Reports Second Quarter Fiscal 2021 Results

Reports Record Quarterly Sales, Net Income and Diluted EPS of $1.54
Diluted EPS for Six-Months Ended July 31, 2021 Exceeds the Combined Diluted EPS for the Last Two Fiscal Years
Guides Fiscal 2021 to Record Annual Earnings
Completes Two-for-One Stock Split

EVANSVILLE, Ind.--(BUSINESS WIRE)--Shoe Carnival, Inc. (Nasdaq: SCVL) (the “Company”), a leading retailer of footwear and accessories for the family, today reported results for the second quarter and six months ended July 31, 2021.

Second Quarter Highlights

  • Record quarterly net income of $44.2 million and record diluted net income per share of $1.54 (adjusted for the two-for-one stock split effected July 20, 2021)
  • Record quarterly net sales of $332.2 million and quarterly comparable store sales increase of 11.4 percent
  • Record quarterly gross profit of $135.8 million and record quarterly gross profit margin of 40.9 percent
  • Shoe Perks customer loyalty program membership increased over 10 percent compared to the prior year with total membership approaching 28 million
  • Cash, cash equivalents, and investments were $163.9 million with no outstanding debt as of July 31, 2021

“Our best in class merchandising strategy, innovative store operations and powerful data analytics derived from our CRM program continued to drive outstanding financial results and increases in new customer acquisition. Our business fundamentals are the strongest they have ever been, which gives us the confidence to lean forward and aggressively plan for continued growth through the remainder of the year. I am incredibly proud of our amazing personnel and their unwavering commitment, which is on display seven days a week in all our stores,” said Cliff Sifford, Shoe Carnival’s Vice Chairman and Chief Executive Officer.

“As I hand the reins over to Mark Worden to enhance Shoe Carnival’s leadership position in the family footwear channel, I have never been more confident. Our team is smart, customer-centric, and ready to take Shoe Carnival to new levels. Our execution over the last twelve months gives us conviction as we forge ahead even in an uncertain environment. To our amazing workforce, thank you for your dedication to operational excellence. I am eternally grateful to our customers, employees, shareholders, and everyone else who has made my tenure so wonderful. I look forward as Vice Chairman of the Board to watching the Company continue to execute its growth strategies and drive value for all of its stakeholders,” concluded Mr. Sifford.

Mark Worden, President and Incoming Chief Executive Officer added, “The Shoe Carnival team delivered spectacular results, posting record sales and EPS growth, which included our highest operating profit on record, during the fiscal second quarter. This momentum has continued through the first three weeks of August, with comparable store sales increasing 23 percent and product margins increasing nearly 11 percentage points when compared to August 2019. Given our strong performance in the first half of the year, we are raising our full year guidance, as well as offering our view of the fiscal third quarter.”

Mr. Worden concluded, “I would like to thank Cliff for his innumerable contributions to Shoe Carnival, as well as his leadership and partnership over the last three years. Cliff has built an incredible organization and established a strong foundation for us to build upon. I wish him all the best as he transitions into his new role.”

Second Quarter Financial Results

On June 21, 2021, the Company’s Board of Directors authorized a two-for-one stock split of the shares of the Company’s common stock, which was effected in the form of a dividend. The stock split entitled each shareholder of record at the close of business on July 6, 2021, to receive one additional share of common stock for each share owned as of that date, and was paid on July 19, 2021. Upon the completion of the stock split, the Company’s outstanding shares increased from approximately 14.1 million shares to approximately 28.2 million shares. The financial information included with this press release has been adjusted to reflect the completion of the stock split.

The Company reported net sales of $332.2 million for the second quarter of fiscal 2021, a 10.5 percent increase compared to net sales of $300.8 million for the second quarter of fiscal 2020. The increase resulted from continued broad-based demand for the Company’s product offerings, a more normalized beginning to the back-to-school season, improving macroeconomic factors in the U.S. and the easing of COVID-19 restrictions.

Gross profit margin for the second quarter of fiscal 2021 increased 13.4 percentage points to 40.9 percent compared to 27.5 percent in the prior year. Merchandise margin increased 13.3 percentage points, as consumer demand for product offerings continued to strengthen, which resulted in less promotional activity compared to the second quarter of fiscal 2020. Buying, distribution and occupancy expenses declined slightly as a percentage of net sales compared to the second quarter of fiscal 2020 as higher freight and distribution labor costs mostly offset the leveraging effect of higher sales.

Selling, general and administrative expenses (“SG&A”) for the second quarter of fiscal 2021 increased $7.8 million to $76.0 million. As a percentage of net sales, these expenses increased 0.2 percentage points to 22.9 percent. The increase in SG&A primarily correlates with the Company’s continued record performance, with increases in store level wages and incentive compensation comprising a majority of the increase.

Net income for the second quarter of fiscal 2021 was $44.2 million, or $1.54 per diluted share. For the second quarter of fiscal 2020, the Company reported net income of $10.1 million, or $0.35 per diluted share.

Six Month Financial Results

Net sales for the first six months of fiscal 2021 were $660.7 million compared to $448.3 million in the first six months of fiscal 2020. Comparable store sales increased 48.8 percent for the first six months of fiscal 2021.

The gross profit margin for the first six months of fiscal 2021 was 40.3 percent compared to 25.4 percent in the same period last year. Selling, general and administrative expenses for the first six months increased $25.7 million to $148.6 million. As a percentage of net sales, these expenses decreased to 22.5 percent compared to 27.4 percent in the first six months of fiscal 2020.

Net income for the first six months of fiscal 2021 was $87.5 million, or $3.05 per diluted share, compared to a net loss of $6.1 million, or a loss of $0.22 per diluted share, for the first six months of fiscal 2020.

Store Updates

One new store opened in the second quarter of fiscal 2021 and no stores were closed. For the first six months of fiscal 2021, the Company has opened one store and closed six stores. The Company expects to close three additional stores during the remainder of fiscal 2021 compared to a total of four store openings and 13 store closings in fiscal 2020.

The Company is currently in the process of modernizing its stores and plans to modernize approximately 100 stores by the spring of 2022, with the goal of modernizing two-thirds of its store fleet in the next three-to-five years.

Fiscal 2021 Outlook

Based on third quarter results to date and expected continued strength in gross profit margin for the remainder of the quarter, the Company currently anticipates diluted net income per share in the range of $1.10 to $1.15 and net sales in the range of $307 million to $315 million for the third quarter of fiscal 2021. For full year fiscal 2021, the Company currently anticipates diluted net income per share in the range of $4.35 to $4.50 and net sales in the range of $1.21 billion to $1.23 billion.

Share Repurchase Program

In the second quarter of fiscal 2021, the Company repurchased 117,068 shares of common stock at a total cost $4.0 million. As of July 31, 2021, the Company had $46.0 million available for future repurchases under its share repurchase program. The Company will continue to evaluate the repurchase of shares under the repurchase program during the remainder of fiscal 2021.

Conference Call

Today, at 8:30 a.m. Eastern Time, the Company will host a conference call to discuss the second 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 a broad assortment of dress, casual and athletic footwear for men, women and children with emphasis on national name brands. As of August 25, 2021, the Company operates 378 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.

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. As used herein, “we”, “our” and “us” refer to Shoe Carnival, Inc. 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 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; 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 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 multi-channel sales; the potential impact of national and international security concerns on the retail environment; 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; our ability to control costs and meet our labor needs in a rising wage and/or inflationary environment; 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 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 and Quarterly Reports on Form 10-Q.

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

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Thirteen

 

 

Thirteen

 

 

Twenty-six

 

 

Twenty-six

 

 

 

Weeks Ended

 

 

Weeks Ended

 

 

Weeks Ended

 

 

Weeks Ended

 

 

 

July 31,

2021

 

 

August 1,

2020

 

 

July 31,

2021

 

 

August 1,

2020

 

Net sales

 

$

332,230

 

 

$

300,794

 

 

$

660,687

 

 

$

448,289

 

Cost of sales (including buying, distribution

and occupancy costs)

 

 

196,478

 

 

 

218,189

 

 

 

394,777

 

 

 

334,220

 

Gross profit

 

 

135,752

 

 

 

82,605

 

 

 

265,910

 

 

 

114,069

 

Selling, general and administrative expenses

 

 

76,038

 

 

 

68,207

 

 

 

148,593

 

 

 

122,932

 

Operating income/(loss)

 

 

59,714

 

 

 

14,398

 

 

 

117,317

 

 

 

(8,863

)

Interest income

 

 

(2

)

 

 

(4

)

 

 

(6

)

 

 

(93

)

Interest expense

 

 

119

 

 

 

118

 

 

 

238

 

 

 

174

 

Income/(loss) before income taxes

 

 

59,597

 

 

 

14,284

 

 

 

117,085

 

 

 

(8,944

)

Income tax expense/(benefit)

 

 

15,385

 

 

 

4,224

 

 

 

29,631

 

 

 

(2,814

)

Net income/(loss)

 

$

44,212

 

 

$

10,060

 

 

$

87,454

 

 

$

(6,130

)

Net income/(loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.56

 

 

$

0.36

 

 

$

3.09

 

 

$

(0.22

)

Diluted

 

$

1.54

 

 

$

0.35

 

 

$

3.05

 

 

$

(0.22

)

Weighted average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,323

 

 

 

28,175

 

 

 

28,290

 

 

 

28,080

 

Diluted

 

 

28,652

 

 

 

28,429

 

 

 

28,643

 

 

 

28,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.070

 

 

$

0.045

 

 

$

0.140

 

 

$

0.088

 

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

July 31,

 

 

January 30,

 

 

August 1,

 

 

 

2021

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

146,506

 

 

$

106,532

 

 

$

76,885

 

Marketable securities

 

 

17,431

 

 

 

0

 

 

 

0

 

Accounts receivable

 

 

7,871

 

 

 

7,096

 

 

 

6,844

 

Merchandise inventories

 

 

308,141

 

 

 

233,266

 

 

 

298,856

 

Other

 

 

13,131

 

 

 

8,411

 

 

 

13,419

 

Total Current Assets

 

 

493,080

 

 

 

355,305

 

 

 

396,004

 

Property and equipment – net

 

 

65,871

 

 

 

62,325

 

 

 

65,043

 

Deferred income taxes

 

 

4,135

 

 

 

5,635

 

 

 

7,289

 

Other noncurrent assets

 

 

12,498

 

 

 

13,843

 

 

 

10,589

 

Operating lease right-of-use assets

 

 

208,472

 

 

 

205,639

 

 

 

210,593

 

Total Assets

 

$

784,056

 

 

$

642,747

 

 

$

689,518

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

96,494

 

 

$

57,717

 

 

$

129,641

 

Accrued and other liabilities

 

 

50,126

 

 

 

24,390

 

 

 

20,863

 

Current portion of operating lease liabilities

 

 

47,769

 

 

 

48,794

 

 

 

45,376

 

Total Current Liabilities

 

 

194,389

 

 

 

130,901

 

 

 

195,880

 

Long-term portion of operating lease liabilities

 

 

185,555

 

 

 

182,622

 

 

 

189,411

 

Deferred compensation

 

 

11,440

 

 

 

16,008

 

 

 

14,249

 

Other

 

 

2,760

 

 

 

3,040

 

 

 

991

 

Total Liabilities

 

 

394,144

 

 

 

332,571

 

 

 

400,531

 

Total Shareholders’ Equity

 

 

389,912

 

 

 

310,176

 

 

 

288,987

 

Total Liabilities and Shareholders’ Equity

 

$

784,056

 

 

$

642,747

 

 

$

689,518

 

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Twenty-six

 

 

Twenty-six

 

 

 

Weeks Ended

 

 

Weeks Ended

 

 

 

July 31, 2021

 

 

August 1, 2020

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

87,454

 

 

$

(6,130

)

Adjustments to reconcile net income/(loss) to net

cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

8,926

 

 

 

7,866

 

Stock-based compensation

 

 

2,686

 

 

 

1,892

 

Loss on retirement and impairment of assets, net

 

 

1,034

 

 

 

2,289

 

Deferred income taxes

 

 

1,499

 

 

 

544

 

Non-cash operating lease expense

 

 

21,214

 

 

 

20,844

 

Other

 

 

1,845

 

 

 

334

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(775

)

 

 

(4,120

)

Merchandise inventories

 

 

(74,875

)

 

 

(39,361

)

Operating leases

 

 

(22,140

)

 

 

(18,898

)

Accounts payable and accrued liabilities

 

 

53,236

 

 

 

71,373

 

Other

 

 

(257

)

 

 

(10,425

)

Net cash provided by operating activities

 

 

79,847

 

 

 

26,208

 

 

 

 

 

 

 

 

 

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(12,137

)

 

 

(7,206

)

Investments in marketable securities and other

 

 

(17,482

)

 

 

0

 

Other

 

 

0

 

 

 

194

 

Net cash used in investing activities

 

 

(29,619

)

 

 

(7,012

)

 

 

 

 

 

 

 

 

 

Cash Flow From Financing Activities

 

 

 

 

 

 

 

 

Borrowings under line of credit

 

 

0

 

 

 

24,903

 

Payments on line of credit

 

 

0

 

 

 

(24,903

)

Proceeds from issuance of stock

 

 

92

 

 

 

105

 

Dividends paid

 

 

(4,039

)

 

 

(2,588

)

Purchase of common stock for treasury

 

 

(3,971

)

 

 

0

 

Shares surrendered by employees to pay taxes on

restricted stock

 

 

(2,336

)

 

 

(1,727

)

Net cash used in financing activities

 

 

(10,254

)

 

 

(4,210

)

Net increase in cash and cash equivalents

 

 

39,974

 

 

 

14,986

 

Cash and cash equivalents at beginning of period

 

 

106,532

 

 

 

61,899

 

Cash and cash equivalents at end of period

 

$

146,506

 

 

$

76,885

 

 

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

Source: Shoe Carnival, Inc.