Shoe Carnival’s Q3 Earnings Nearly Triple

The gross profit margin for the third quarter increased to 29.8% compared to 27.2% in the third quarter of the prior year. The merchandise margin increased 1.1% primarily as a result of improved inventory management resulting in less clearance product along with strong sales of boots which carry a higher margin. As a percentage of sales, buying, distribution and occupancy costs decreased 1.5% through a combination of higher sales and lower occupancy and distribution expenses for the quarter.

Selling, general and administrative expenses for the third quarter increased $2.5 million to $44.9 million. As a percentage of sales, these expenses decreased 1.5%.

Speaking on the results, Mark Lemond, chief executive officer and president said, “Our large selection of value priced name brand footwear resonated well with consumers resulting in the highest third quarter comparable store sales gain in the company’s history. We experienced higher than expected sales of athletic product during the back-to-school season and very strong boot sales later in the quarter. Our 10.2 percent comparable store sales gain was significantly above our expectations for a low to mid single digit comparable store sales increase for the quarter. The sales increase, combined with a higher gross profit margin and controlled expenses, resulted in our second best quarterly earnings in the company’s history.”

Lemond continued, “We are encouraged by our third quarter momentum and entered the fourth quarter with inventories well positioned to capitalize on key fashion trends. We expect the early strength in boots, particularly women’s fashion boots, to continue into the holiday season. In addition, we anticipate continued strength in the athletic category, in part, due to the favorable consumer response to wellness footwear. This type of footwear was not available in our stores last year. We remain optimistic that consumers will continue to respond well to our value proposition and currently expect our comparable store sales to increase in the range of three to five percent in the fourth quarter.”

Net income for the first nine months of 2009 was $12.6 million compared to net income of $8.4 million in the first nine months of last year. Diluted earnings per share increase 49 percent to $1.00 as compared to 67 cents a share in the first nine months of last year. Net sales for the first nine months were $511.6 million compared to net sales of $490.7 million for the same period last year. Comparable store sales increased 1.4%. The gross profit margin for the first nine months of 2009 was 28.3% compared to 27.6% last year. Selling, general and administrative expenses increased $1.6 million to $124.0 million. As a percentage of sales, these expenses decreased 0.6% to 24.3% for the first nine months of 2009.

Store Growth

The company has completed its store openings for the year with 16 new stores in the first nine months of fiscal 2009. Three stores have been closed so far this year with six additional stores expected to close in the fourth quarter. Store openings and closings by quarter and for the fiscal year are as follows: