Shoe Carnival Reports Second Quarter Fiscal 2024 Results
-
Net sales in the quarter exceeded the Company’s expectation, increasing 12.9 percent versus prior year to
$332.7 million . -
EPS also exceeded the Company’s expectation with second quarter 2024 GAAP EPS of
$0.82 and Adjusted EPS of$0.83 . -
GAAP operating income increased 22.0 percent to
$30.1 million and Adjusted operating income increased 23.7 percent to$30.5 million versus prior year. - Fiscal 2024 sales guidance range is increased to growth of 5 percent to 6 percent.
“Customer engagement continued to exceed our expectations and sales momentum accelerated rapidly during our most important shopping event of the year, the Back-to-School season. We achieved a net sales record this quarter, surpassing all previous second quarter sales in our company’s history. Gross profit margin expanded versus prior year, we gained significant market share, and we delivered earnings above our guidance in the quarter,” said
“Our Back-to-School results were very strong with comparable sales growth achieved in August, driven by the children’s and athletic categories. Our long-term strategies to increase sales and drive profitability are working, and we are well positioned to further increase shareholder value and execute on our vision to be the nation’s leading family footwear retailer,” concluded
Second Quarter Operating Results
Net sales in second quarter 2024 were
Gross profit margin increased 30 basis points to 36.1 percent in second quarter 2024 primarily on leverage in buying, distribution and occupancy on the higher sales. Second quarter 2024 marked the 14th consecutive quarter the Company’s gross profit margin exceeded 35 percent.
As a percent of net sales, SG&A expenses in the quarter were 27.1 percent as compared to 27.4 percent in second quarter 2023, reflecting 30 basis points of leverage on the higher sales. Second quarter 2024 SG&A included higher expenses primarily related to the addition of Rogan’s.
Second quarter 2024 operating income totaled
Second quarter 2024 net income was
EPS growth in second quarter 2024 compared to prior year was 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
Second quarter 2024 inventory totaled
Consistent with previous guidance, Fiscal 2024 year end inventory dollars are expected to be lower by approximately
Store Count and Planned Store Growth
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.
Share Repurchase Program
As of
Capital Management and Cash Flow
The 2023 fiscal year end marked the 19th consecutive year the Company ended a year with no debt, and through second quarter 2024, the Company continued funding its operations and growth investments from operating cash flow and without debt.
Operating cash flow year to date 2024 totaled
Third Quarter 2024 Update
Sales accelerated during the peak Back-to-School season and continued through the month of August. The Company achieved low-single digit comparable store sales growth for Fiscal
The Company currently expects third quarter 2024 net sales to be approximately
The Company currently expects GAAP EPS to be approximately
Fiscal 2024 Outlook
Based on year-to-date results and the comparable store sales growth achieved during Back-to-School, the Company is increasing guidance ranges as follows:
Comparable Store Sales: Increased range to down 1.5 percent to up 1 percent versus Fiscal 2023 with expected growth of flat to up 5 percent for combined Q3 and Q4 of Fiscal 2024 compared to prior year. (Prior guidance range down 3 percent to up 1 percent)
GAAP EPS: Increased range to
Non-GAAP EPS (“Adjusted EPS”): Increased range to
The Company notes that its Fiscal 2024 is a 52-week year and compares to a 53-week year in Fiscal 2023 and, combined with the impact of the retail calendar shift versus prior year, results in the loss of approximately
Conference Call
Today, at
Non-GAAP Financial Measures
The non-GAAP adjusted results for second 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 |
|
|
Twenty-six |
|
|
Twenty-six |
|
||||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
332,696 |
|
|
$ |
294,615 |
|
|
$ |
633,061 |
|
|
$ |
575,799 |
|
Cost of sales (including buying, distribution and occupancy costs) |
|
|
212,753 |
|
|
|
189,150 |
|
|
|
406,318 |
|
|
|
371,817 |
|
Gross profit |
|
|
119,943 |
|
|
|
105,465 |
|
|
|
226,743 |
|
|
|
203,982 |
|
Selling, general and administrative expenses |
|
|
89,864 |
|
|
|
80,803 |
|
|
|
174,157 |
|
|
|
158,381 |
|
Operating income |
|
|
30,079 |
|
|
|
24,662 |
|
|
|
52,586 |
|
|
|
45,601 |
|
Interest income |
|
|
(672 |
) |
|
|
(433 |
) |
|
|
(1,475 |
) |
|
|
(911 |
) |
Interest expense |
|
|
137 |
|
|
|
71 |
|
|
|
273 |
|
|
|
137 |
|
Income before income taxes |
|
|
30,614 |
|
|
|
25,024 |
|
|
|
53,788 |
|
|
|
46,375 |
|
Income tax expense |
|
|
8,041 |
|
|
|
5,583 |
|
|
|
13,929 |
|
|
|
10,408 |
|
Net income |
|
$ |
22,573 |
|
|
$ |
19,441 |
|
|
$ |
39,859 |
|
|
$ |
35,967 |
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.83 |
|
|
$ |
0.71 |
|
|
$ |
1.47 |
|
|
$ |
1.32 |
|
Diluted |
|
$ |
0.82 |
|
|
$ |
0.71 |
|
|
$ |
1.45 |
|
|
$ |
1.31 |
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
27,159 |
|
|
|
27,336 |
|
|
|
27,151 |
|
|
|
27,280 |
|
Diluted |
|
|
27,500 |
|
|
|
27,410 |
|
|
|
27,452 |
|
|
|
27,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends declared per share |
|
$ |
0.135 |
|
|
$ |
0.100 |
|
|
$ |
0.270 |
|
|
$ |
0.200 |
|
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|||
Current Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
71,633 |
|
|
$ |
99,000 |
|
|
$ |
34,562 |
|
Marketable securities |
|
|
12,831 |
|
|
|
12,247 |
|
|
|
12,218 |
|
Accounts receivable |
|
|
5,519 |
|
|
|
2,593 |
|
|
|
3,961 |
|
Merchandise inventories |
|
|
425,462 |
|
|
|
346,442 |
|
|
|
409,342 |
|
Other |
|
|
21,651 |
|
|
|
21,056 |
|
|
|
25,281 |
|
Total Current Assets |
|
|
537,096 |
|
|
|
481,338 |
|
|
|
485,364 |
|
Property and equipment – net |
|
|
170,717 |
|
|
|
168,613 |
|
|
|
159,186 |
|
Operating lease right-of-use assets |
|
|
337,926 |
|
|
|
333,851 |
|
|
|
339,598 |
|
Intangible assets |
|
|
40,990 |
|
|
|
32,600 |
|
|
|
32,600 |
|
|
|
|
15,376 |
|
|
|
12,023 |
|
|
|
12,023 |
|
Other noncurrent assets |
|
|
12,922 |
|
|
|
13,600 |
|
|
|
14,433 |
|
Total Assets |
|
$ |
1,115,027 |
|
|
$ |
1,042,025 |
|
|
$ |
1,043,204 |
|
|
|
|
|
|
|
|
|
|
|
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|||
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
73,916 |
|
|
$ |
58,274 |
|
|
$ |
77,429 |
|
Accrued and other liabilities |
|
|
30,204 |
|
|
|
16,620 |
|
|
|
19,999 |
|
Current portion of operating lease liabilities |
|
|
55,870 |
|
|
|
52,981 |
|
|
|
57,335 |
|
Total Current Liabilities |
|
|
159,990 |
|
|
|
127,875 |
|
|
|
154,763 |
|
Long-term portion of operating lease liabilities |
|
|
304,578 |
|
|
|
301,355 |
|
|
|
307,326 |
|
Deferred income taxes |
|
|
15,187 |
|
|
|
17,341 |
|
|
|
14,631 |
|
Deferred compensation |
|
|
12,564 |
|
|
|
11,639 |
|
|
|
10,596 |
|
Other |
|
|
4,213 |
|
|
|
426 |
|
|
|
369 |
|
Total Liabilities |
|
|
496,532 |
|
|
|
458,636 |
|
|
|
487,685 |
|
Total Shareholders’ Equity |
|
|
618,495 |
|
|
|
583,389 |
|
|
|
555,519 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
1,115,027 |
|
|
$ |
1,042,025 |
|
|
$ |
1,043,204 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Twenty-six |
|
|
Twenty-six |
|
||
|
|
Weeks Ended |
|
|
Weeks Ended |
|
||
|
|
|
|
|
|
|
||
Cash Flows From Operating Activities |
|
|
|
|
|
|
||
Net income |
|
$ |
39,859 |
|
|
$ |
35,967 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
15,116 |
|
|
|
13,822 |
|
Stock-based compensation |
|
|
3,574 |
|
|
|
2,326 |
|
Loss on retirement and impairment of assets, net |
|
|
215 |
|
|
|
59 |
|
Deferred income taxes |
|
|
(486 |
) |
|
|
2,787 |
|
Non-cash operating lease expense |
|
|
28,307 |
|
|
|
27,627 |
|
Other |
|
|
810 |
|
|
|
251 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(561 |
) |
|
|
(909 |
) |
Merchandise inventories |
|
|
(37,177 |
) |
|
|
(18,952 |
) |
Operating leases |
|
|
(29,223 |
) |
|
|
(27,181 |
) |
Accounts payable and accrued liabilities |
|
|
20,498 |
|
|
|
(927 |
) |
Other |
|
|
(190 |
) |
|
|
(12,518 |
) |
Net cash provided by operating activities |
|
|
40,742 |
|
|
|
22,352 |
|
|
|
|
|
|
|
|
||
Cash Flows From Investing Activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(15,722 |
) |
|
|
(30,629 |
) |
Investments in marketable securities |
|
|
(35 |
) |
|
|
(41 |
) |
Acquisition, net of cash acquired |
|
|
(44,384 |
) |
|
|
0 |
|
Net cash used in investing activities |
|
|
(60,141 |
) |
|
|
(30,670 |
) |
|
|
|
|
|
|
|
||
Cash Flow From Financing Activities |
|
|
|
|
|
|
||
Proceeds from issuance of stock |
|
|
92 |
|
|
|
110 |
|
Dividends paid |
|
|
(7,372 |
) |
|
|
(5,675 |
) |
Shares surrendered by employees to pay taxes on stock-based compensation awards |
|
|
(688 |
) |
|
|
(2,927 |
) |
Net cash used in financing activities |
|
|
(7,968 |
) |
|
|
(8,492 |
) |
Net decrease in cash and cash equivalents |
|
|
(27,367 |
) |
|
|
(16,810 |
) |
Cash and cash equivalents at beginning of period |
|
|
99,000 |
|
|
|
51,372 |
|
Cash and cash equivalents at end of period |
|
$ |
71,633 |
|
|
$ |
34,562 |
|
|
|||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||
(In thousands, except per share data) |
|||||||||||
(Unaudited) |
|||||||||||
|
Thirteen
|
|
% of
|
Thirteen
|
|
% of
|
|||||
|
|
|
|
|
|
|
|||||
Reported gross profit |
$ |
119,943 |
|
36.1% |
$ |
105,465 |
|
35.8% |
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
333 |
|
0.1% |
|
0 |
|
0.0% |
|||
Adjusted gross profit, pre-tax |
$ |
120,276 |
|
36.2% |
$ |
105,465 |
|
35.8% |
|||
|
|
|
|
|
|
|
|||||
Reported selling, general and administrative expenses |
$ |
89,864 |
|
27.1% |
$ |
80,803 |
|
27.4% |
|||
Acquisition related fees and expenses |
|
(97 |
) |
0.0% |
|
0 |
|
0.0% |
|||
Adjusted selling, general and administrative expenses, pre-tax |
$ |
89,767 |
|
27.1% |
$ |
80,803 |
|
27.4% |
|||
|
|
|
|
|
|
|
|||||
Reported operating income |
$ |
30,079 |
|
9.0% |
$ |
24,662 |
|
8.4% |
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
333 |
|
0.1% |
|
0 |
|
0.0% |
|||
Acquisition related fees and expenses |
|
97 |
|
0.0% |
|
0 |
|
0.0% |
|||
Adjusted operating income, pre-tax |
$ |
30,509 |
|
9.1% |
$ |
24,662 |
|
8.4% |
|||
|
|
|
|
|
|
|
|||||
Reported income tax expense |
$ |
8,041 |
|
2.4% |
$ |
5,583 |
|
1.9% |
|||
Tax effect of amortization of acquisition inventory fair value adjustment and acquisition related fees and expenses |
|
105 |
|
0.0% |
|
0 |
|
0.0% |
|||
Adjusted income tax expense |
$ |
8,146 |
|
2.4% |
$ |
5,583 |
|
1.9% |
|||
|
|
|
|
|
|
|
|||||
Reported net income |
$ |
22,573 |
|
6.8% |
$ |
19,441 |
|
6.6% |
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
333 |
|
0.1% |
|
0 |
|
0.0% |
|||
Acquisition related fees and expenses |
|
97 |
|
0.0% |
|
0 |
|
0.0% |
|||
Tax effect of acquisition related fees and expenses |
|
(105 |
) |
0.0% |
|
0 |
|
0.0% |
|||
Adjusted net income |
$ |
22,898 |
|
6.9% |
$ |
19,441 |
|
6.6% |
|||
|
|
|
|
|
|
|
|||||
Reported net income per diluted share |
$ |
0.82 |
|
|
$ |
0.71 |
|
|
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
0.01 |
|
|
|
0.00 |
|
|
|||
Acquisition related fees and expenses |
|
0.00 |
|
|
|
0.00 |
|
|
|||
Tax effect of acquisition related fees and expenses |
|
0.00 |
|
|
|
0.00 |
|
|
|||
Adjusted diluted net income per share |
$ |
0.83 |
|
|
$ |
0.71 |
|
|
|
|||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||
(In thousands, except per share data) |
|||||||||||
(Unaudited) |
|||||||||||
|
Twenty-six
|
|
% of
|
Twenty-six
|
|
% of Net
|
|||||
|
|
|
|
|
|
|
|||||
Reported gross profit |
$ |
226,743 |
|
35.8% |
$ |
203,982 |
|
35.4% |
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
497 |
|
0.1% |
|
0 |
|
0.0% |
|||
Adjusted gross profit, pre-tax |
$ |
227,240 |
|
35.9% |
$ |
203,982 |
|
35.4% |
|||
|
|
|
|
|
|
|
|||||
Reported selling, general and administrative expenses |
$ |
174,157 |
|
27.5% |
$ |
158,381 |
|
27.5% |
|||
Acquisition related fees and expenses |
|
(417 |
) |
-0.1% |
|
0 |
|
0.0% |
|||
Adjusted selling, general and administrative expenses, pre-tax |
$ |
173,740 |
|
27.4% |
$ |
158,381 |
|
27.5% |
|||
|
|
|
|
|
|
|
|||||
Reported operating income |
$ |
52,586 |
|
8.3% |
$ |
45,601 |
|
7.9% |
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
497 |
|
0.1% |
|
0 |
|
0.0% |
|||
Acquisition related fees and expenses |
|
417 |
|
0.1% |
|
0 |
|
0.0% |
|||
Adjusted operating income, pre-tax |
$ |
53,500 |
|
8.5% |
$ |
45,601 |
|
7.9% |
|||
|
|
|
|
|
|
|
|||||
Reported income tax expense |
$ |
13,929 |
|
2.2% |
$ |
10,408 |
|
1.8% |
|||
Tax effect of amortization of acquisition inventory fair value adjustment and acquisition related fees and expenses |
|
222 |
|
0.1% |
|
0 |
|
0.0% |
|||
Adjusted income tax expense |
$ |
14,151 |
|
2.3% |
$ |
10,408 |
|
1.8% |
|||
|
|
|
|
|
|
|
|||||
Reported net income |
$ |
39,859 |
|
6.3% |
$ |
35,967 |
|
6.3% |
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
497 |
|
0.1% |
|
0 |
|
0.0% |
|||
Acquisition related fees and expenses |
|
417 |
|
0.1% |
|
0 |
|
0.0% |
|||
Tax effect of acquisition related fees and expenses |
|
(222 |
) |
-0.1% |
|
0 |
|
0.0% |
|||
Adjusted net income |
$ |
40,551 |
|
6.4% |
$ |
35,967 |
|
6.3% |
|||
|
|
|
|
|
|
|
|||||
Reported net income per diluted share |
$ |
1.45 |
|
|
$ |
1.31 |
|
|
|||
Amortization expense related to fair value adjustment to acquisition inventory |
|
0.02 |
|
|
|
0.00 |
|
|
|||
Acquisition related fees and expenses |
|
0.02 |
|
|
|
0.00 |
|
|
|||
Tax effect of acquisition related fees and expenses |
|
(0.01 |
) |
|
|
0.00 |
|
|
|||
Adjusted diluted net income per share |
$ |
1.48 |
|
|
$ |
1.31 |
|
|
|
|||||||||
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) |
$ |
2.55 |
|
|
$ |
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 |
$ |
2.60 |
|
|
$ |
2.75 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240905470646/en/
Vice President Investor Relations
(812) 867-4034
Source: