Shoe Carnival, Inc. reported sales for the second quarter slid 3.7% to $152.8 million from $158.5 million as comps declined 6.4%. Earnings inched up 0.5% to $982,000, or 8 cents per diluted share, from $977,000, or 8 cents, a year ago.
The gross profit margin for the second quarter increased 0.2% to 26.8% compared to 26.6% for the second quarter of the prior year. The merchandise margin increased 0.4%, primarily due to better inventory control. As a%age of sales, buying, distribution and occupancy costs increased 0.2% due primarily to the deleveraging effect of lower sales on occupancy costs.
Selling, general and administrative expenses for the second quarter decreased $1.7 million to $39.0 million, or 25.6% of sales, compared to $40.7 million, or 25.7% of sales, for the second quarter of 2008.
Speaking on the results, Mark Lemond, chief executive officer and president said, “We are pleased to report that we met or exceeded the majority of our internal goals for the second quarter of 2009. While consumer spending and the overall economic environment remained challenging in the second quarter, we were able to improve our year-over-year gross and operating margins and, therefore, record earnings per share equal to last year. We believe the absence of government stimulus checks, which were provided to the consumer during the second quarter of last year, had a negative impact on our second quarter comparable store sales and traffic. In addition, the sales-tax-free holidays in nine of our states shifted from the second quarter last year into the third quarter this year, which accounted for approximately two percent of the comparable store sales decline for the quarter.”
Lemond continued, “For the first three weeks of August, our comparable stores sales have increased approximately 11%, as consumers are responding well to both our athletic and non-athletic product assortments. Only about 5% of the 11% increase is due to the shift of sales-tax-free holidays out of fiscal July and into fiscal August. While there is considerable uncertainty regarding consumer discretionary spending after back-to-school, we remain optimistic about the sales trends for the remainder of the third quarter. Therefore, due to these improved trends early in the third quarter, we expect to record positive comparable store sales for the quarter.”
Net income for the first half of 2009 was $5.1 million, or 41 cents per diluted share, compared with net income of $5.8 million, or 46 cents, in the first half of last year. Net sales for the first six months were $320.1 million compared to net sales of $320.6 million for the same period last year. Comparable store sales for the twenty-six week period ended August 1, 2009 decreased 3.3%.. The gross profit margin for the first six months of 2009 was 27.4% compared to 27.8% last year. Selling, general and administrative expenses, as a percentage of sales, were 24.7% for the first six months of 2009 as compared to 24.9% last year.
Currently, the company expects to open approximately 16 new stores in fiscal 2009 and close eight stores. Store openings and closings by quarter and for the fiscal year are currently planned as follows:
New Stores Stores Closings
1st Quarter 2009 10 1
2nd Quarter 2009 2 1
3rd Quarter 2009 4 1
4th Quarter 2009 0 5
Fiscal 2009 16 8
The two stores opened during the second quarter included locations in:
City Market/Total Stores in Market
Houston, TX Houston/11
Orange Park, FL Jacksonville/3