Shoe Carnival, Inc. reported sales for the third quarter increased 12.6% to $191.5 million from $170.1 million a year ago, and jumped 10.2% on a same-store basis. Net earnings surged 188% to $7.5 million, or 59 cents a share, from $2.6 million, or 21 cents, a year ago.

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:



 

 

 

 


 
New Stores
 
Stores Closings







1st Quarter 2009


10


1







2nd Quarter 2009


2


1







3rd Quarter 2009


4


1







4th Quarter 2009

0
6







Fiscal 2009


16


9

The Company opened four stores during the third quarter including
locations in:


 

 

 

 

 

 


City


 

 


Market/Total Stores in Market








Des Moines, IA



Des Moines/3








West Melbourne, FL



Orlando/8








Chandler, AZ



Phoenix/2








Goodyear, AZ



Phoenix/2

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(In thousands, except per share)


 


 

 

Thirteen
Weeks Ended
October 31,
2009


 

Thirteen
Weeks Ended
November 1,
2008


 

Thirty-nine
Weeks Ended
October 31,
2009


 

Thirty-nine
Weeks Ended
November 1,
2008











 

Net sales



$

191,523



$

170,063



$

511,632



$

490,662


Cost of sales (including buying,










distribution and occupancy costs)



 

134,424

 


 

123,746

 


 

366,969

 


 

355,119

 

Gross profit




57,099




46,317




144,663




135,543


Selling, general and administrative expenses



 


44,880


 


 


42,389


 


 


123,956


 


 


122,373


 

Operating income




12,219




3,928




20,707




13,170


Interest income




(13

)



(62

)



(17

)



(138

)

Interest expense



 

42

 


 

42

 


 

126

 


 

111

 

Income before income taxes



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About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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