Shoe Carnival, Inc. (Nasdaq:SCVL) a leading retailer of value-priced footwear and accessories, today announced record sales and earnings for the third quarter ended October 29, 2005. Net income for the third quarter of fiscal 2005 increased 46.3 percent to $7.2 million compared with net income of $4.9 million in the third quarter of fiscal 2004. Diluted earnings per share increased 39.5 percent to $0.53 per share from $0.38 per share last year.
Net sales for the third quarter of 2005 increased 12.3 percent to a record $182.7 million from $162.7 million last year. Comparable store sales increased by 8.3 percent for the 13-week period.
Gross profit margin for the third quarter of 2005 increased to 29.5 percent from 29.1 percent last year. Selling, general and administrative expenses, as a percentage of sales, decreased to 23.1 percent from 24.1 percent in the third quarter of 2004.
Mark Lemond, president and chief executive officer stated, "Thanks to a record breaking 21.2 percent comparable store sales increase in October, we posted the highest earnings ever in the Company's history. This broke the record set in the first quarter of this year. With two record breaking quarters in 2005, we're obviously pleased with the results so far this year."
"In the third quarter, each of our major product categories posted a comparable store sales increase. Importantly, we continue to make great progress in our initiative of strengthening our women's dress and casual business. In fact, the largest quarterly comparable store sales increases came from women's dress shoes and women's boots, both of which were up 40 percent."
"I want to commend our associates for the tremendous job they have done in dealing with the devastation and consequent relief efforts resulting from the hurricanes in Florida and along the Gulf Coast. Part of the success we had as a company in the third quarter was attributable to the strength and perseverance of our associates in these difficult times."
Net income for the first nine months of 2005 was $15.8 million, or $1.18 per diluted share, compared with net income of $11.3 million, or $0.87 per diluted share, last year. Net sales increased 10.3 percent to $492.1 million for the first nine months from sales of $446.3 million last year. Comparable store sales increased 5.5 percent for the nine-month period. Gross profit margin for the first nine months of 2005 increased to 29.1 percent from 28.7 percent last year. Selling, general and administrative expenses, as a percentage of sales, decreased to 23.8 percent in the first nine months of 2005 from 24.4 percent last year.
Shoe Carnival now anticipates an increase in comparable store sales for the fourth quarter of 3 to 5 percent. Diluted earnings per share are expected to be between $0.13 and $0.15 for the fourth quarter compared to $0.09 for the fourth quarter of 2004. Diluted earnings per share for the full year of 2005 are anticipated to be between $1.31 and $1.33.
During the first nine months of 2005, 14 new stores were opened and four were closed. Two stores were opened in the third quarter, and an additional store has opened in the fourth quarter. The Company closed three stores in the third quarter and expects to close four stores during the last quarter of this year, two of which will be closed in the last week of the fiscal year. In 2006, the Company plans to open 15 new stores and close four.
City Market/Stores
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Sioux City, IA Sioux City/1
Chesapeake, VA Norfolk/4Conference Call
Today, at 2:00 p.m. Eastern time, the Company will host a conference call to discuss the third quarter results. The public can listen to the live webcast of the call by visiting Shoe Carnival's Investor Relations page 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 our website beginning approximately two hours after the conclusion of the conference call and will be archived for one year.
Cautionary Statement Regarding Forward-Looking Information
This press release contains forward-looking statements 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 United States in which our stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; 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 hurricanes on our stores, as well as on consumer confidence and purchasing in general; risks associated with the seasonality of the retail industry; the availability of desirable store locations at acceptable lease terms and our ability to open new stores in a timely and profitable manner; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to deliver products in a timely manner; changes in the political and economic environments in the People's Republic of China, a major manufacturer of footwear; and the continued favorable trade relations between the United States and China and 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 is a chain of 266 footwear stores located in the Midwest, South and Southeast. Combining value pricing with an entertaining store format, Shoe Carnival is a leading retailer of name brand and private label footwear for the entire family. Headquartered in Evansville, IN, Shoe Carnival trades on the Nasdaq Stock Market under the symbol SCVL. Shoe Carnival's press releases and annual report are available on the Company's website at www.shoecarnival.com.
Financial Tables Follow
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share)
(Unaudited)
Thirteen Thirty-nine
Weeks Ended Weeks Ended
Thirteen October 30, Thirty-nine October 30,
Weeks Ended 2004 Weeks Ended 2004
October 29, (as restated) October 29, (as restated)
2005 (1) 2005 (1)
------------ ------------- ------------ -------------
Net sales $ 182,697 $ 162,716 $ 492,068 $ 446,308
Cost of sales
(including
buying,
distribution
and occupancy
costs) 128,815 115,421 349,089 318,394
------------ ------------- ------------ -------------
Gross profit 53,882 47,295 142,979 127,914
Selling, general
and
administrative
expenses 42,180 39,150 117,024 108,811
------------ ------------- ------------ -------------
Operating income 11,702 8,145 25,955 19,103
Interest
expense-net 100 135 361 508
------------ ------------- ------------ -------------
Income before
income taxes 11,602 8,010 25,594 18,595
Income tax
expense 4,452 3,124 9,819 7,252
------------ ------------- ------------ -------------
Net income $ 7,150 $ 4,886 $ 15,775 $ 11,343
============ ============= ============ =============
Net income per
share:
Basic $ .54 $ .38 $ 1.21 $ .89
============ ============= ============ =============
Diluted $ .53 $ .38 $ 1.18 $ .87
============ ============= ============ =============
Average shares
outstanding:
Basic 13,229 12,831 13,088 12,812
============ ============= ============ =============
Diluted 13,455 13,008 13,410 13,053
============ ============= ============ =============
(1)Prior periods have been restated to correct the Company's lease
accounting as set forth in Note 3 of our 2004 Annual Report on Form
10-K, filed with the Securities and Exchange Commission on
April 14, 2005.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 30,
October 29, January 29, 2004
2005 2005 (as restated)(1)
--------------- ---------------- ----------------
ASSETS
Current Assets:
Cash and cash
equivalents $ 5,729 $ 4,889 $ 3,789
Accounts
receivable 2,078 992 2,152
Merchandise
inventories 178,650 180,590 172,375
Deferred income
tax benefit 828 0 0
Other 2,748 1,982 2,076
--------------- ---------------- ----------------
Total Current Assets 190,033 188,453 180,392
Property and
equipment-net 69,071 68,452 69,683
--------------- ---------------- ----------------
Total Assets $ 259,104 $ 256,905 $ 250,075
=============== ================ ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 39,423 $ 62,291 $ 39,096
Accrued and other
liabilities 12,673 10,198 9,709
Deferred income
tax 0 413 725
Current portion
of long-term
debt 1 56 94
--------------- ---------------- ----------------
Total Current
Liabilities 52,097 72,958 49,624
Long-term debt 12,000 7,300 24,201
Deferred lease
incentives 6,667 6,613 6,705
Accrued rent 6,746 6,977 6,839
Deferred income
taxes 2,377 4,487 5,616
Other 2,045 1,651 1,535
--------------- ---------------- ----------------
Total Liabilities 81,932 99,986 94,520
Total Shareholders'
Equity 177,172 156,919 155,555
--------------- ---------------- ----------------
Total Liabilities
and Shareholders'
Equity $ 259,104 $ 256,905 $ 250,075
=============== ================ ================
(1)Prior periods have been restated to correct the Company's lease
accounting as set forth in Note 3 of our 2004 Annual Report on Form
10-K, filed with the Securities and Exchange Commission on
April 14, 2005.
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Thirty-nine
Thirty-nine Weeks Ended
Weeks Ended October 30, 2004
October 29, 2005 (as restated)(1)
---------------- -------------------
Cash flows from operating
activities:
Net income $ 15,775 $ 11,343
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 11,154 10,828
Stock option income tax
benefit 1,086 708
Loss on retirement of assets 413 341
Deferred income taxes (3,351) 1,745
Lease incentives 874 529
Other (470) (60)
Changes in operating assets
and liabilities:
Accounts receivable (1,240) (1,606)
Merchandise inventories 1,940 (7,265)
Accounts payable and
accrued liabilities (20,393) (12,584)
Other (766) 4,677
---------------- -------------------
Net cash provided by operating
activities 5,022 8,656
---------------- -------------------
Cash flows from investing
activities:
Purchases of property and
equipment (12,256) (11,620)
Other 223 59
---------------- -------------------
Net cash used in investing
activities (12,033) (11,561)
---------------- -------------------
Cash flows from financing
activities:
Borrowings under line of
credit 219,000 282,055
Payments on line of credit (214,300) (279,755)
Payments on long-term debt (55) (183)
Proceeds from issuance of
stock 3,206 506
---------------- -------------------
Net cash provided by financing
activities 7,851 2,623
---------------- -------------------
Net increase (decrease) in cash
and cash equivalents 840 (282)
Cash and cash equivalents at
beginning of period 4,889 4,071
---------------- -------------------
Cash and Cash Equivalents at End
of Period $ 5,729 $ 3,789
================ ===================
(1)Prior periods have been restated to correct the Company's lease
accounting as set forth in Note 3 of our 2004 Annual Report on Form
10-K, filed with the Securities and Exchange Commission on
April 14, 2005.
SOURCE: Shoe Carnival, Inc.
Shoe Carnival, Inc.
Mark L. Lemond or W. Kerry Jackson, 812-867-4034
