Shoe Carnival, Inc. had sales for the first quarter ended May 2, 2009 of $167.3 million compared to sales of $162.1 million for the prior year first quarter, an increase of 3.2%. Comparable store sales declined 0.3%.
Net earnings for the thirteen-week first quarter were $4.1 million, or 33 cents per diluted share, compared to net earnings of $4.8 million, or 38 cents per diluted share, for the thirteen-week prior year first quarter ended May 3, 2008.
The gross profit margin for the first quarter was 27.9% compared to 29.0% for the first quarter of the prior year. The merchandise margin decreased 1.3% primarily due to the aggressive liquidation of product within our women's non-athletic category. As a percentage of sales, buying, distribution and occupancy costs decreased 0.2%.
Selling, general and administrative expenses for the first quarter were $40.1 million, or 24.0% of sales, compared to $39.3 million, or 24.2% of sales, for the first quarter of 2008.
Speaking on the results, Mark Lemond, chief executive officer and president said, “We are pleased to report first quarter comparable store sales were relatively flat with last year. Sales of our athletic footwear, including both children's and adult, recorded a mid-single digit increase. Our customer continued to react to the value pricing of our adult dress and casual product, especially during the clearance period of February through early March. Consequently, our sales for the quarter were better than expected, but our merchandise margin was below our initial plan. However, during the warmer month of April, our womens non-athletic product, particularly sandals, began to sell well and the merchandise margin stabilized.
“At the end of the first quarter, our per-store inventories were 8.4% below last year, which we feel is an appropriate level. Therefore, we do not expect to continue to significantly lower inventory during the remainder of fiscal 2009 relative to the prior year.
“We were able to leverage selling, general and administrative expenses as a percentage of sales and, through aggressive expense control, hold the total dollar increase to $733,000, despite opening 10 new stores and operating 20 more stores than last year at the end of the first quarter.”
Lemond continued, “As we look forward, we recognize that our targeted moderate income customer will continue to be impacted by the economic downturn and sales within the retail sector may continue to experience downward pressure. Therefore, we will continue to manage our business conservatively, maintaining tight control over both our inventories and our cost structure.”
Currently, the company expects to open approximately 15 new stores in fiscal 2009 and close ten 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||3||2|
|4th Quarter 2009||0||6|
The ten stores opened during the first quarter included locations in:
|City||Market/Total Stores in Market|
|Norman, OK||Oklahoma City/4|
|Washington, UT||Salt Lake City/5|
|Orem, UT||Salt Lake City/5|
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share)
May 2, 2009
May 3, 2008
Cost of sales (including buying,
Selling, general and administrative
|Income before income taxes||6,545||7,761|
|Income tax expense||2,413||2,977|
|Net income per share:|