Shoe Carnival Inc. reported earnings declined 22.8 percent in the first quarter to $8.2 million, or 48 cents a share.

First Quarter Highlights

  • Net sales decreased 2.7 percent to $253.4 million
  • Comparable store sales decreased 3.9 percent
  • Earnings per diluted share of 48 cents
  • Repurchased 767,000 shares of common stock at a total cost of $19.2 million under share repurchase program
  • Inventory was down 1 percent on a per-store basis

Cliff Sifford, Shoe Carnival’s president and chief executive officer, commented, “While February was a very challenging month due to the delay in the tax refunds, we are encouraged by the improvement in our sales as we progressed through the quarter. Comparable store sales for March and April combined, which includes the shift in the Easter selling season, were up low single digits. Our focus on inventory management resulted in higher merchandise margins and a per-store reduction in inventory for the quarter. We continue to manage our inventory effectively while keeping our product offering fresh and relevant. Looking forward, our consistently strong financial position provides the financial flexibility to support our future strategies and further enhance shareholder value over time as a result of our dividend and share repurchase programs.”

First Quarter Financial Results
The company reported net sales of $253.4 million for the first quarter of fiscal 2017, a 2.7 percent decrease, compared to net sales of $260.5 million for the first quarter of fiscal 2016. Comparable store sales decreased 3.9 percent in the first quarter of fiscal 2017.

Gross profit margin for the first quarter of fiscal 2017 decreased to 28.5 percent compared to 29 percent in the first quarter of fiscal 2016. Merchandise margin increased 0.3 percent and was offset by buying, distribution and occupancy expenses, which increased 0.8 percent as a percentage of net sales compared to the first quarter of fiscal 2016.

Selling, general and administrative expenses (“SG&A”) for the first quarter of fiscal 2017 increased $0.7 million to $58.9 million. As a percentage of net sales, these expenses increased to 23.3 percent compared to 22.4 percent in the first quarter of fiscal 2016.

Net income for the first quarter of fiscal 2017 was $8.2 million, or 48 cents per diluted share. For the first quarter of fiscal 2016, the company reported net income of $10.7 million, or 56 cents per diluted share.

Store Openings And Closings
The company expects to open approximately 19 stores and close approximately 18 to 20 stores during fiscal 2017 compared to opening 19 stores and closing nine stores during fiscal 2016.

Expected store openings and closings by quarter for the fiscal year are as follows:

The company expects fiscal 2017 net sales to be in the range of $1.002 billion to $1.018 billion, with comparable store sales flat to down low single digits. Earnings per diluted share for the fiscal year are expected to be in the range of $1.30 to $1.45. Fiscal 2016 earnings per diluted share were $1.28 and adjusted earnings per diluted share were $1.40.

Photo courtesy Shoe Carnival