Shoe Carnival Reports Lower ProfitPosted: Updated:
Evansville-based Shoe Carnival Inc. (Nasdaq: SCVL) is reporting a fiscal third-quarter profit of $10.9 million, down from $12.2 million during the comparable period the previous year. The company says sales were negatively impacted this year due to a shift in its fiscal calendar. December 3, 2013
EVANSVILLE, Ind. -- Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of value-priced footwear and accessories, today reported results for the third quarter ended November 2, 2013.
Third Quarter Financial Results
The Company reported net earnings for the third quarter ended November 2, 2013 of $10.9 million, or $0.54 per diluted share, as compared to the Company’s expectations provided on August 29, 2013 of $0.51 to $0.55 per diluted share. For the third quarter ended October 27, 2012, the Company reported net earnings of $12.2 million, or $0.60 per diluted share.
As a result of fiscal 2012 consisting of 53 weeks, each of the first three quarters in fiscal 2013 is shifted one week later when compared to fiscal 2012. This one-week shift moved an important week of back-to-school sales from the third quarter of fiscal 2012 into the second quarter this year. This shift negatively affected the Company’s net sales comparison for the third quarter of fiscal 2013, reducing sales by approximately $21.2 million.
Net sales were $235.8 million for the third quarter ended November 2, 2013, as compared to net sales of $244.4 million for the third quarter ended October 27, 2012. Comparable store sales for the thirteen-week period ended November 2, 2013 increased 0.7 percent as compared to the thirteen-week period ended November 3, 2012.
The gross profit margin for the third quarter of fiscal 2013 decreased to 30.1 percent compared to 31.3 percent for the third quarter of fiscal 2012. The merchandise margin remained unchanged while buying, distribution and occupancy expenses increased 1.2 percent as a percentage of sales. The deleveraging of occupancy expenses was primarily attributable to the shift in the fiscal calendar.
Selling, general and administrative expenses for the third quarter decreased $2.7 million to $53.2 million; as a percentage of sales, these expenses decreased to 22.5 percent compared to 22.9 percent in the third quarter of fiscal 2012.
The Company opened eight new stores during the third quarter of fiscal 2013 as compared to six stores in the third quarter of fiscal 2012.
Speaking on the results, Cliff Sifford, President and CEO, stated, “The arrival of October’s seasonably cool weather and an end to the federal government shutdown was a welcomed relief in the third quarter. October’s mid-single digit comparable store sales gain, together with August’s sales performance, more than offset our negative September sales trend. Higher merchandise margins coupled with lower expenses than were originally projected resulted in earnings at the high-end of our expectations.”
Nine Month Financial Results
Net sales during the first nine months of fiscal 2013 increased $35.2 million to $684.5 million as compared to the same period last year. Comparable store sales for the thirty-nine week period ended November 2, 2013 increased 0.7 percent as compared to the thirty-nine week period ended November 3, 2012. Net earnings for the first nine months of fiscal 2013 were $26.3 million, or $1.29 per diluted share, compared to net earnings of $26.1 million, or $1.28 per diluted share, in the first nine months of last year. The gross profit margin for the first nine months of fiscal 2013 was 29.5 percent compared to 30.4 percent last year. Selling, general and administrative expenses, as a percentage of sales, were 23.3 percent for the first nine months of fiscal 2013 compared to 23.7 percent last year. The Company opened 29 stores during the first nine months of fiscal 2013 as compared to opening 30 stores during the first nine months of last year.
Mr. Sifford concluded, “As more seasonable fall weather continued in November, sales of our fall footwear, particularly boots, increased. These favorable weather patterns along with our strong Thanksgiving promotional offering led to a comparable store sales increase for November of 7.8 percent. We believe we are well positioned to continue our positive sales trend throughout the remainder of the holiday season which would result in improved year-over-year financial results.”
Fourth Quarter Fiscal 2013 Earnings Outlook
The Company expects fourth quarter net sales to be in the range of $215 to $219 million with a comparable store sales increase in the range of 4.0 to 6.0 percent. Earnings per diluted share in the fourth quarter of fiscal 2013 are expected to be in the range of $0.18 to $0.22. In the fourteen-week fourth quarter of fiscal 2012, total net sales were $205.7 million, comparable store sales increased 0.5 percent and the Company earned $0.13 per diluted share. Earnings per diluted share for the fourth quarter of fiscal 2012 included a $0.03 reduction due to the application of the two-class method of computing earnings per share in connection with the Company’s $20.4 million special cash dividend paid in December 2012.
The Company has opened all 32 of their fiscal 2013 new stores at this time and expects to close five additional stores in the fourth quarter for a total of seven store closings for fiscal 2013. About Shoe Carnival
Shoe Carnival, Inc. is one of the nation’s largest family footwear retailers, offering a broad assortment of value priced dress, casual and athletic footwear for men, women and children with emphasis on national and regional name brands. As of December 2, 2013, the Company operates 381 stores in 32 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.
Source: Shoe Carnival Inc.