0000895447
false
0000895447
2024-05-23
2024-05-23
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 23, 2024
SHOE CARNIVAL, INC.
(Exact name of Registrant as Specified in Its Charter)
Indiana 0-21360 35-1736614
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
7500 East Columbia Street 47715
Evansville
,
Indiana
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (
812
)
867-4034
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instructions A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Name of each exchange on which registered
Symbol(s)
Common Stock, par value $0.01 per share SCVL The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s) 230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s) 240.12b-2
of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Item 2.02
Results of Operations and Financial Condition.
The following information shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or
otherwise subject to the liabilities of that Section, nor shall it be
incorporated by reference into any registration statement or other document
pursuant to the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such filing.
On May 23, 2024, Shoe Carnival, Inc. (the "Company") issued a press release
announcing its operating and financial results for its first quarter ended May
4, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits
(d)
Exhibits:
Exhibit No.
Exhibits
99.1
Earnings Release - First Quarter Ended May 4, 2024
104 Cover Page Interactive Data File, formatted in Inline Extensible Business
Reporting Language (iXBRL)
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SHOE CARNIVAL, INC.
(Registrant)
Date: May 23, 2024 By: /s/ Patrick C. Edwards
Patrick C. Edwards
Senior Vice President
Chief Financial Officer, Treasurer & Secretary
3
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EX-99.1
SHOE CARNIVAL REPORTS FIRST QUARTER FISCAL 2024 RESULTS
Evansville, Indiana, May 23, 2024 - 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
May 4, 2024.
"
Net sales exceeded the Companys expectation, increasing 6.8 percent versus
prior year to $300.4 million in the quarter.
"
EPS achieved at the high end of the Companys expectation with first quarter
2024 GAAP EPS of $0.63 and Adjusted EPS of $0.64.
"
GAAP operating income increased 7.5 percent to $22.5 million and Adjusted
operating income increased 9.8 percent to $23.0 million versus prior year.
"
Store count is at record high of 430 stores, growing by 30 stores since the
beginning of the year.
We are encouraged by the strong results delivered this quarter, with net sales
growth above our expectation, gross profit margin expansion versus prior year,
and earnings at the high end of our expectation. We gained significant market
share, with accelerating sales momentum across our business as the quarter
progressed, including double-digit growth in sandals that continued in the
quarter after the Easter holiday period, said Mark Worden, President and Chief
Executive Officer.
Our long-term strategies to grow sales and profit are working and position us
well to further increase shareholder value and achieve our vision to be the
nations leading family footwear retailer, concluded Mr. Worden.
First Quarter Operating Results
Net sales in first quarter 2024 were $300.4 million, increasing 6.8 percent
compared to first quarter 2023. The total net sales performance exceeded the
Companys expectation, with sales from the February 2024 acquisition of Rogan
Shoes, Incorporated (Rogans) in line with expectation and continued growth in
Shoe Station and ecommerce, combined with strengthening trends in Shoe
Carnival.
First quarter 2024 marked the 13
th
consecutive quarter the Companys gross profit margin exceeded 35 percent.
Gross profit margin increased to 35.6 percent in first quarter 2024 on higher
merchandise margins and leverage in buying, distribution and occupancy on the
higher sales.
First quarter 2024 SG&A increased on higher selling expenses related to Rogans
and increased marketing investments that drove the strong sales performance in
the quarter. As a percent of net sales, SG&A expenses were 28.1 percent in the
quarter as compared to 27.6 percent in first quarter 2023.
First quarter 2024 operating income totaled $22.5 million and increased 7.5
percent versus prior year driven by higher net sales and gross profit margin
expansion. Operating income in the quarter included
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$0.5 million in expenses related to the Rogans acquisition, of which $0.2
million were in cost of sales and $0.3 million were in SG&A.
First quarter 2024 net income was $17.3 million, or $0.63 per diluted share,
compared to first quarter 2023 net income of $16.5 million, or $0.60 per
diluted share (EPS).
EPS growth in first quarter 2024 compared to prior year was primarily driven
by the net sales performance and higher gross profit margin. On an adjusted
basis, excluding the $0.5 million of expenses in the quarter related to the
acquisition of Rogans, first quarter Adjusted EPS was $0.64.
Comparable store sales for the thirteen-week period ended May 4, 2024,
declined 3.4 percent compared to the thirteen-week period ended May 6, 2023.
In the quarter, comparable store sales trends significantly improved as the
quarter progressed, and demonstrated growth versus prior year late in the
quarter.
Merchandise Inventory
First quarter 2024 inventory totaled $411.6 million, an increase of
approximately $22.1 million versus first quarter 2023. The increase reflects
the impacts of Rogans inventory of approximately $40 million, acquired in
February 2024, partially offset by continued inventory efficiencies as part of
the Companys on-going inventory optimization improvement plan.
In Fiscal 2024, the second year of the Companys inventory optimization
improvement plan, the Company continues to expect further inventory
efficiencies. Consistent with previous guidance, Fiscal 2024 year end
inventory dollars are expected to be lower by approximately $20 million, or 5
percent, versus Fiscal 2023 year end, excluding the impacts of the Rogans
acquisition.
Store Count, Planned Store Growth and Modernization
As of May 4, 2024, the Company had grown to an all-time high of 430 stores,
with 371 Shoe Carnival stores, 31 Shoe Station stores and the 28 Rogans
locations acquired in February 2024.
The Company has a strategic growth roadmap in place to surpass 500 stores in
2028, inclusive of organic growth and strategic M&A activity.
The Company continued modernizing its fleet during first quarter 2024. As of
May 4, 2024, over 60 percent of the Shoe Carnival store modernization was
complete, and the Company will continue to modernize additional stores in
Fiscal 2024. The Company continues to expect total capital expenditures to be
in a range of $25 million to $35 million in Fiscal 2024 as the store
modernization program nears completion.
Share Repurchase Program
As of May 23, 2024, the Company has $50 million available for future
repurchases under its share repurchase program. During first quarter 2024, the
Company did not repurchase any shares.
Capital Management
The 2023 fiscal year end marked the 19
th
consecutive year the Company ended a year with no debt, and through first
quarter 2024, the Company continued funding its operations and growth
investments from operating cash flow and without debt. At the end of first
quarter 2024, the Company had approximately $69.5 million of cash, cash
equivalents and marketable securities and approximately $100 million in
borrowing capacity.
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Fiscal 2024 Outlook
Based on first quarter 2024 results, the Company reiterated its entire Fiscal
2024 outlook, including net sales growth in a range of 4 percent to 6 percent
versus Fiscal 2023 and Fiscal 2024 GAAP EPS in a range of $2.50 to $2.70 and
Adjusted EPS in a range of $2.55 to $2.75.
Annual Shareholder Meeting
As previously announced, the Company will hold its Annual Meeting of
Shareholders at 9:00 a.m. Eastern Time on June 25, 2024. Information about the
annual meeting and related material, including the Companys proxy statement
and annual report, can be found on the Companys website.
Conference Call
Today, at 9:00 a.m. Eastern Time, the Company will host a conference call to
discuss its first quarter results. Participants can listen to the live webcast
of the call by visiting Shoe Carnival's Investors webpage at www.shoecarnival.co
m. 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 Companys website
beginning approximately two hours after the conclusion of the conference call
and will be archived for one year.
Non-GAAP Financial Measures
The non-GAAP adjusted results for first quarter 2024 and in the Fiscal 2024
outlook discussed herein exclude purchase accounting impacts associated with
the Companys acquisition of Rogans. 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 Companys core
operations. Unaudited adjusted results are provided in addition to, and not as
alternatives for, the Companys 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 Shoe Carnival
Shoe Carnival, Inc. is one of the nations 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 23, 2024,
the Company operates 430 stores in 36 states and Puerto Rico under its Shoe
Carnival and Shoe Station banners and offers shopping at www.shoecarnival.com
and www.shoestation.com. Headquartered in Evansville, IN, Shoe Carnival, Inc.
trades on The Nasdaq Stock Market LLC under the symbol SCVL. Press releases
and annual reports are available on the Company's website at www.shoecarnival.co
m.
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Contact Information
Steve R. Alexander
Shoe Carnival
Vice President Investor Relations
(812) 867-4034
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, such as statements about our future growth, operations, cash
flows and shareholder returns, as well as our growth strategy and profit
transformation.
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 Shoe
Station banner, which includes the recently acquired stores and operations of
Rogans, within expected time frames, or at all; 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; changes in the overall retail environment and more specifically in
the apparel and footwear retail sectors; our ability to successfully utilize
the e-commerce sales channel and its 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 the 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 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; 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 including at our
distribution center located in Evansville, IN; the impact of natural
disasters, public health and 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; the duration and
spread of a public health crisis and the mitigating efforts deployed,
including the effects of government stimulus on consumer spending; 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 effectively integrate Rogans, retain
Rogans employees, and achieve the expected operating results, synergies,
efficiencies and other benefits from the Rogans acquisition within the
expected time frames, or at all; risks that the Rogans acquisition may disrupt
our current plans and operations or negatively impact our relationship with
our vendors and other suppliers; 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
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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 Companys SEC
filings, including the Companys 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, on track, 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
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SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended
May 4, 2024 April 29, 2023
Net sales $ 300,365 $ 281,184
Cost of sales (including buying, 193,565 182,667
distribution and occupancy costs)
Gross profit 106,800 98,517
Selling, general and administrative expenses 84,293 77,578
Operating income 22,507 20,939
Interest income (803 ) (478 )
Interest expense 136 66
Income before income taxes 23,174 21,351
Income tax expense 5,888 4,825
Net income $ 17,286 $ 16,526
Net income per share:
Basic $ 0.64 $ 0.61
Diluted $ 0.63 $ 0.60
Weighted average shares:
Basic 27,142 27,223
Diluted 27,408 27,505
Cash dividends declared per share $ 0.135 $ 0.100
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SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
May 4, February 3, April 29,
2024 2024 2023
ASSETS
Current Assets:
Cash and cash equivalents $ 56,919 $ 99,000 $ 32,587
Marketable securities 12,555 12,247 11,535
Accounts receivable 5,868 2,593 3,084
Merchandise inventories 411,619 346,442 389,508
Other 17,992 21,056 16,836
Total Current Assets 504,953 481,338 453,550
Property and equipment net 172,182 168,613 150,487
Operating lease right-of-use assets 345,881 333,851 312,760
Intangible assets 41,001 32,600 32,600
Goodwill 15,223 12,023 12,023
Other noncurrent assets 13,342 13,600 15,209
Total Assets $ 1,092,582 $ 1,042,025 $ 976,629
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 71,234 $ 58,274 $ 55,853
Accrued and other liabilities 21,938 16,620 21,314
Current portion of operating lease liabilities 56,025 52,981 58,077
Total Current Liabilities 149,197 127,875 135,244
Long-term portion of operating lease liabilities 313,302 301,355 279,168
Deferred income taxes 15,999 17,341 14,526
Deferred compensation 12,157 11,639 9,809
Other 4,123 426 202
Total Liabilities 494,778 458,636 438,949
Total Shareholders Equity 597,804 583,389 537,680
Total Liabilities and Shareholders Equity $ 1,092,582 $ 1,042,025 $ 976,629
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SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended
May 4, 2024 April 29, 2023
Cash Flows From Operating Activities
Net income $ 17,286 $ 16,526
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 7,385 6,697
Stock-based compensation 1,757 1,209
Loss on retirement and impairment of assets, net 117 19
Deferred income taxes 326 2,682
Non-cash operating lease expense 14,926 15,163
Other 277 180
Changes in operating assets and liabilities:
Accounts receivable (904 ) (32 )
Merchandise inventories (23,387 ) 882
Operating leases (14,916 ) (15,295 )
Accounts payable and accrued liabilities 7,886 (23,128 )
Other 6,306 (2,851 )
Net cash provided by operating activities 17,059 2,052
Cash Flows From Investing Activities
Purchases of property and equipment (10,192 ) (15,005 )
Investments in marketable securities (17 ) (21 )
Acquisition, net of cash acquired (44,577 ) 0
Net cash used in investing activities (54,786 ) (15,026 )
Cash Flow From Financing Activities
Proceeds from issuance of stock 39 57
Dividends paid (3,705 ) (2,941 )
Shares surrendered by employees to pay taxes on (688 ) (2,927 )
stock-based compensation awards
Net cash used in financing activities (4,354 ) (5,811 )
Net decrease in cash and cash equivalents (42,081 ) (18,785 )
Cash and cash equivalents at beginning of period 99,000 51,372
Cash and cash equivalents at end of period $ 56,919 $ 32,587
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SHOE CARNIVAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Thirteen % of Thirteen % of
Weeks Ended Net Weeks Ended Net
May 4, 2024 Sales April 29, 2023 Sales
Reported gross profit $ 106,800 35.6% $ 98,517 35.0%
Amortization expense related to fair value 164 0.0% 0 0.0%
adjustment to acquisition inventory
Adjusted gross profit, pre-tax $ 106,964 35.6% $ 98,517 35.0%
Reported selling, general and administrative $ 84,293 28.1% $ 77,578 27.6%
expenses
Acquisition related fees and expenses (321 ) -0.1% 0 0.0%
Adjusted selling, general and administrative $ 83,972 28.0% $ 77,578 27.6%
expenses, pre-tax
Reported operating income $ 22,507 7.5% $ 20,939 7.4%
Amortization expense related to fair value 164 0.0% 0 0.0%
adjustment to acquisition inventory
Acquisition related fees and expenses 321 0.1% 0 0.0%
Adjusted operating income, pre-tax $ 22,992 7.6% $ 20,939 7.4%
Reported income tax expense $ 5,888 1.9% $ 4,825 1.7%
Tax effect of amortization of acquisition inventory 118 0.0% 0 0.0%
fair value adjustment and acquisition related fees and
expenses
Adjusted income tax expense $ 6,006 1.9% $ 4,825 1.7%
Reported net income $ 17,286 5.8% $ 16,526 5.9%
Amortization expense related to fair value 164 0.0% 0 0.0%
adjustment to acquisition inventory
Acquisition related fees and expenses 321 0.1% 0 0.0%
Tax effect of acquisition related fees and expenses (118 ) 0.0% 0 0.0%
Adjusted net income $ 17,653 5.9% $ 16,526 5.9%
Reported net income per diluted share $ 0.63 $ 0.60
Amortization expense related to fair value 0.01 0.00
adjustment to acquisition inventory
Acquisition related fees and expenses 0.01 0.00
Tax effect of acquisition related fees and expenses (0.01 ) 0.00
Adjusted diluted net income per share $ 0.64 $ 0.60
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SHOE CARNIVAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
FOR FISCAL 2024 OUTLOOK
(Unaudited)
Low End of Fiscal High End of Fiscal
2024 Outlook 2024 Outlook
Net income per $ 2.50 $ 2.70
diluted share (GAAP)
Amortization expense related to fair value adjustment to 0.07 0.07
acquisition inventory and acquisition related fees and expenses
Tax effect of amortization of acquisition inventory fair (0.02 ) (0.02 )
value adjustment and acquisition related fees and expenses
Adjusted diluted net $ 2.55 $ 2.75
income per share
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