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Shoe Carnival Reports Third Quarter 2012 Results

  Shoe Carnival Reports Third Quarter 2012 Results

         Company Reports Record Quarterly Earnings per Diluted Share

Business Wire

EVANSVILLE, Ind. -- November 19, 2012

Shoe Carnival, Inc. (Nasdaq: SCVL) a leading retailer of value-priced footwear
and accessories, today reported results for the third quarter ended October
27, 2012.

Third Quarter Highlights

  *Net sales of $244.4 million, a 13.4 percent increase, compared to the
    third quarter last year
  *Comparable store sales increased 6.2 percent
  *Quarterly earnings per diluted share of $0.60 represented a 15.4% increase
    over the previous record earnings per diluted share of $0.52, which was
    achieved in the third quarter of fiscal 2011
  *Company opened six new stores, including two additional stores in Puerto
    Rico

“Our team did a great job in positioning us for a highly successful
back-to-school season. We achieved comparable store sales at the high end of
our guidance and record earnings. Our strong financial performance was the
result of a marketing effort that resonated with our core consumer. We
showcased the fashion trends currently driving footwear demand and reached
additional customers through the opening of stores in new and existing
markets,” stated Cliff Sifford, President and CEO.

Financial Results

The Company reported net sales of $244.4 million for the third quarter of
fiscal 2012, a 13.4 percent increase, compared to net sales of $215.5 million
in the third quarter of fiscal 2011. Comparable store sales increased 6.2
percent in the third quarter of fiscal 2012.

The gross profit margin for the third quarter of fiscal 2012 increased to 31.3
percent compared to 30.2 percent for the third quarter of fiscal 2011. The
merchandise margin increased 0.6 percent, while buying, distribution and
occupancy costs decreased 0.5 percent as a percentage of sales.

Selling, general and administrative expenses for the third quarter increased
$7.6 million to $55.9 million; as a percentage of sales, these expenses
increased to 22.9 percent compared to 22.4 percent in the third quarter of
fiscal 2011. The increase in expense was primarily due to operating more
stores and increased incentive compensation versus the third quarter last
year.

The effective tax rate for the third quarter of fiscal 2012 increased to 40.2
percent from 37.8 percent in the third quarter last year. This increase was
attributable to the non-deductibility of executive compensation related to the
retirement of our former chief executive officer during the third quarter. The
increase in the tax rate reduced earnings per diluted share by approximately
2.5 cents.

Net earnings for the third quarter increased to $12.2 million, or $0.60 per
diluted share, from net earnings of $10.5 million, or $0.52 per diluted share
in the third quarter of last year.

Mr. Sifford continued, “As we enter the fourth quarter, we believe Shoe
Carnival is well positioned to capitalize on holiday sales, starting with
Black Friday. Our team has worked especially hard to deliver to the consumer
compelling reasons to visit our stores, and our e-commerce site, on this
important retail shopping day. We have increased our hours of operation and we
believe we have positioned our ‘door buster’ promotions, giveaways and coupons
to be exceptionally competitive. For an early look at our
Day-After-Thanksgiving product offerings, please visit www.shoecarnival.com.”

Net sales during the first nine months of fiscal 2012 increased $68.7 million
to $649.3 million as compared to the same period last year. Comparable store
sales increased 5.7 percent. The gross profit margin for the first nine months
of fiscal 2012 was 30.4 percent compared to 29.8 percent last year. Selling,
general and administrative expenses, as a percentage of sales were 23.7
percent for the first nine months of fiscal 2012 compared to 23.4 percent last
year. Net earnings for the first nine months of fiscal 2012 were $26.1
million, or $1.28 per diluted share, compared to net earnings of $23.1
million, or $1.15 per diluted share, in the first nine months of last year.

Fourth Quarter Fiscal 2012 Outlook

The Company expects fourth quarter net sales to be in the range of $215 to
$220 million with a comparable store sales increase in the range of 2 to 4
percent. Earnings per diluted share in the fourth quarter of fiscal 2012 are
expected to be in the range of $0.19 to $0.23. In the fourth quarter of fiscal
2011, comparable store sales decreased 3.0 percent and the Company earned
$0.16 per diluted share.

For fiscal 2012, the Company expects net sales to be in the range of $864 to
$869 million with a comparable store sales increase in the range of 4.8 to 5.3
percent. Earnings per diluted share for fiscal 2012 are expected to be in the
range of $1.47 to $1.51. For fiscal 2011, comparable store sales increased 0.7
percent and earnings per diluted share were $1.31.

The fourth quarter of fiscal 2012 includes 14 weeks compared to 13 weeks in
the fourth quarter of fiscal 2011 and the full fiscal year of 2012 includes 53
weeks compared with 52 weeks in the full fiscal year of 2011. The Company’s
sales and earnings guidance for the fourth quarter of fiscal 2012 includes the
effect of this additional week.

Store Growth

The Company completed its new store openings in early November and expects to
close two stores during the fourth quarter to end fiscal 2012 with 351 stores
in operation. Store openings and closings by quarter are as follows:

                         
Fiscal 2012    New Stores   Store Closings
1^st quarter   13           3
2^nd quarter   11           2
3^rd quarter   6            0
4^th quarter   1            2
Fiscal year    31           7
                            

The six new stores opened during the third quarter include locations in:

                               
                                  Total Stores in
City               Market         the Market
Aguadilla, PR      Puerto Rico    4
Carolina, PR       Puerto Rico    4
Greenwood, SC      Greenville     6
St. Charles, MO    St. Louis      13
Warsaw, IN         South Bend     2
Williamsport, PA   Williamsport   1
                                  

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 a broad assortment of moderately priced dress, casual and athletic
footwear for men, women and children with emphasis on national and regional
name brands. As of November 19, 2012, the Company operates 352 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.

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. 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:
general economic conditions in the areas of the continental United States and
Puerto Rico in which 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 at our stores; the potential impact of
national and international security concerns on the retail environment;
changes in our relationships with key suppliers; the impact of competition and
pricing; changes in weather patterns, 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 effectiveness of
our inventory management; the impact of hurricanes or other natural disasters
on our stores, as well as on consumer confidence and purchasing in general;
risks associated with the seasonality of the retail industry; our ability to
successfully execute our growth strategy, including the availability of
desirable store locations at acceptable lease terms, 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 growth
plans; higher than anticipated costs associated with the closing of
underperforming stores; our ability to successfully grow our e-commerce
business; the inability of manufacturers to deliver products in a timely
manner; changes in the political and economic environments in China, Brazil,
Europe and East Asia, where the primary manufacturers of footwear are located;
the impact of regulatory changes in the United States and the countries where
our manufacturers are located; and the continued favorable trade relations
between the United States and China and the other countries which are the
major manufacturers of footwear.

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.


SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share)

                        Thirteen     Thirteen     Thirty-nine  Thirty-nine
                         Weeks Ended   Weeks Ended  Weeks Ended   Weeks Ended
                         October 27,   October 29,  October 27,   October 29,
                         2012          2011         2012          2011
                                                                   
                                                                   
Net sales                $ 244,434     $ 215,472     $ 649,254     $ 580,594

Cost of sales
(including buying,        167,999     150,317     451,951     407,306 
distribution and
occupancy costs)
                                                                   
                                                                   
Gross profit               76,435        65,155        197,303       173,288

Selling, general and
administrative            55,875      48,276      154,074     136,160 
expenses
                                                                   
                                                                   
Operating income           20,560        16,879        43,229        37,128
Interest income            (4      )     (17     )     (29     )     (66     )
Interest expense          69          68          203         200     
                                                                   
                                                                   
Income before income       20,495        16,828        43,055        36,994
taxes
Income tax expense        8,247       6,355       16,928      13,887  
                                                                   
                                                                   
Net income               $ 12,248     $ 10,473     $ 26,127     $ 23,107  
                                                                   
Net income per share:
Basic                    $ 0.60       $ 0.52       $ 1.29       $ 1.16    
Diluted                  $ 0.60       $ 0.52       $ 1.28       $ 1.15    
                                                                   
Weighted average
shares:
Basic                     19,951      19,597      19,922      19,471  
Diluted                   20,003      19,748      19,996      19,656  
                                                                   
Cash dividends           $ 0.05       $ 0.00       $ 0.10       $ 0.00    
declared per share
                                                     


SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

                                      October 27,  January 28,  October 29,
                                       2012          2012          2011
                                                                   
ASSETS
Current Assets:
Cash and cash equivalents              $  67,134     $  70,602     $  52,997
Accounts receivable                       3,174         2,621         3,029
Merchandise inventories                   277,418       237,655       245,131
Deferred income taxes                     3,261         2,496         2,830
Other                                    4,675        2,887        3,664
                                                                   
Total Current Assets                      355,662       316,261       307,651
Property and equipment-net                76,907        69,232        67,899
Deferred income taxes                     153           0             0
Other noncurrent assets                  880          1,069        1,252
                                                                   
Total Assets                           $  433,602    $  386,562    $  376,802
                                                                   
                                                                   
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable                       $  66,326     $  61,238     $  54,088
Accrued and other liabilities            24,828       14,522       16,722
                                                                   
Total Current Liabilities                 91,154        75,760        70,810
Deferred lease incentives                 16,355        12,964        11,576
Accrued rent                              7,100         6,029         5,759
Deferred income taxes                     0             1,930         1,566
Deferred compensation                     5,957         6,054         5,791
Other                                    402          141          892
                                                                   
Total Liabilities                         120,968       102,878       96,394
Total Shareholders' Equity               312,634      283,684      280,408
                                                                   
Total Liabilities and Shareholders'    $  433,602    $  386,562    $  376,802
Equity



SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                                          Thirty-nine       Thirty-nine
                                           Weeks Ended        Weeks Ended
                                           October 27, 2012   October 29, 2011
                                                              
                                                              
Cash flows from operating activities:
Net income                                 $   26,127         $   23,107
Adjustments to reconcile net income to
net
cash provided by operating activities:
Depreciation and amortization                  11,800             10,737
Stock-based compensation                       3,557              2,413
Loss on retirement and impairment of           485                532
assets
Deferred income taxes                          (2,848    )        2,342
Lease incentives                               4,692              4,128
Other                                          (734      )        (426      )
Changes in operating assets and
liabilities:
Accounts receivable                            (552      )        (1,379    )
Merchandise inventories                        (39,763   )        (32,202   )
Accounts payable and accrued liabilities       14,653             1,283
Other                                         760              (430      )
                                                              
                                                              
Net cash provided by operating                18,177           10,105    
activities
                                                              
                                                              
Cash flows from investing activities:
Purchases of property and equipment            (20,844   )        (17,794   )
Proceeds from sale of property and             0                  5
equipment
Proceeds from notes receivable                200              100       
                                                              
                                                              
Net cash used in investing activities         (20,644   )       (17,689   )
                                                              
                                                              
Cash flows from financing activities:
Proceeds from issuance of stock                2,149              1,751
Dividends paid                                 (2,045    )        0
Excess tax benefits from stock-based           770                1,274
compensation
Purchase of common stock for treasury          (1,859    )        0
Shares surrendered by employees to pay        (16       )       (2,637    )
taxes on restricted stock
                                                              
                                                              
Net cash (used in) provided by financing      (1,001    )       388       
activities
                                                              
                                                              
Net decrease in cash and cash                  (3,468    )        (7,196    )
equivalents
Cash and cash equivalents at beginning        70,602           60,193    
of period
                                                              
                                                              
Cash and Cash Equivalents at End of        $   67,134        $   52,997    
Period


Contact:

Shoe Carnival, Inc.
812-867-6471
Cliff Sifford
President, Chief Executive Officer and
Chief Merchandising Officer
or
W. Kerry Jackson
Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Treasurer
www.shoecarnival.com