Shoe Carnival’s Q1 Net Declines

Cliff Sifford, President and CEO, stated, “Our first quarter was challenging, as we experienced colder, wetter weather through March than the same time period a year ago. However, our sales trend improved significantly in April with the arrival of warm weather, which helped us mitigate our comparable store sales decline for the quarter to less than one percent and better than we anticipated. As a result, we concluded the quarter with earnings above our expectations.“

First Quarter Financial Results

The Company reported net sales of $232.3 million for the first quarter ended May 4, 2013, a 4.3 percent increase, as compared to net sales of $222.6 million for the first quarter ended April 28, 2012. Comparable store sales for the thirteen-week period ended May 4, 2013 decreased 0.8 percent as compared to the thirteen-week period ended May 5, 2012.

The gross profit margin for the first quarter of fiscal 2013 decreased to 29.5 percent compared to 30.8 percent for the first quarter of fiscal 2012. The merchandise margin decreased 0.9 percent, while buying, distribution and occupancy costs increased 0.4 percent as a percentage of sales.

Selling, general and administrative expenses for the first quarter increased $2.8 million to $53.4 million; as a percentage of sales, these expenses increased to 22.9 percent compared to 22.7 percent in the first quarter of 2012. The increase in expense was primarily due to operating more stores versus the first quarter last year.

Net earnings for the first quarter were $9.5 million, or $0.47 per diluted share, as compared to net earnings of $11.0 million, or $0.54 per diluted share, in the first quarter last year.

Mr. Sifford concluded, �€�We are pleased to report that the positive sales trend experienced later in the first quarter of 2013 continues today across all departments. We remain optimistic with the continued positive performance of our athletic categories on top of a strong performance in 2012, which gives us confidence as we prepare for the very important back-to-school season.�€�

Second Quarter Fiscal 2013 Earnings Outlook

The Company expects second quarter net sales to be in the range of $217 to $220 million with a comparable store sales increase in the range of 3.0 to 5.0 percent. Earnings per diluted share in the second quarter of fiscal 2013 are expected to be in the range of $0.26 to $0.30. In the second quarter of fiscal 2012, comparable store sales increased 3.0 percent and the Company earned $0.14 per diluted share.

The second quarter of fiscal 2013 ends on August 3rd, which is one week later than the second quarter ended last year. The one-week shift in the calendar moves an important week of back-to-school sales into the second quarter of fiscal 2013, which the Company expects will result in higher sales and earnings when compared to the second quarter last year.

Store Growth