Shoe Carnival Inc. reported first-quarter profits climbed 58.5 percent as comps grew 1.3 percent and gross margins expanded 150 basis points.
First Quarter Highlights
- Net sales increased 1.6 percent to $257.4 million compared to the first quarter last year
- Comparable store sales increased 1.3 percent
- Earnings per diluted share increased 72.9 percent to $0.83
- Repurchased 810,613 shares of common stock at a total cost of $19.0 million under share repurchase program
- Inventory was down 1.6 percent on a per-store basis
Cliff Sifford, Shoe Carnival’s president and chief executive officer, commented, “We are pleased with our start to the year. Our comparable store sales increase reflects the continuation of a strong athletic and athleisure trend as well as solid sales results from our spring footwear categories, particularly as the weather became warmer later in the first quarter. These sales results, along with our favorable inventory position and our team’s ability to manage expenses, helped us generate a 31 percent increase in operating income. Based on these results, we are raising both the low and high end of our diluted earnings per share guidance for fiscal year 2018. We believe we are well-positioned as we move through the year with a compelling assortment of on-trend family footwear at the right price.”
First Quarter Financial Results
Net sales of $257.4 million increased 1.6 percent for the first quarter ended May 5, 2018, compared to net sales of $253.4 million for the first quarter ended April 29, 2017. Comparable store sales for the thirteen-week period ended May 5, 2018 increased 1.3 percent compared to the thirteen-week period ended May 6, 2017.
Gross profit margin for the first quarter of fiscal 2018 increased 150 basis points to 30.0 percent compared to 28.5 percent in the first quarter of fiscal 2017. Merchandise margin increased 0.7 percent and buying, distribution and occupancy expenses decreased 0.8 percent as a percentage of net sales compared to the first quarter of fiscal 2017.
Selling, general and administrative expenses for the first quarter of fiscal 2018 increased $1.1 million to $60.0 million. As a percentage of net sales, these expenses remained flat at 23.3 percent compared to the first quarter of fiscal 2017.
Net income for the first quarter of fiscal 2018 was $13.0 million, or $0.83 per diluted share. For the first quarter of fiscal 2017, the company reported net income of $8.2 million, or $0.48 per diluted share.
Fiscal 2018 Outlook
The company is updating the fiscal 2018 outlook as follows:
Net sales in the range of $1.013 billion to $1.020 billion, with comparable store sales up low single digits;
Earnings per diluted share in the range of $1.90 to $2.05. Fiscal 2017 earnings per diluted share were $1.15 and adjusted earnings per diluted share were $1.49.
Previously, the retailer had expected EPS in the range of $1.85 to $2.00 and comparable store sales to be flat to up low-single digits. The revenue guidance was previously $1.013 billion to $1.023 billion.