Shoe Carnival Inc. reported net sales increased $4.8 million to $274.5 million, compared to $269.7 million in the third quarter of fiscal 2015.

Earnings per diluted share for the third quarter were 54 cents a share, compared to earnings per diluted share of 47 cents for the third quarter of fiscal 2015.  Wall Street’s consensus estimate had been 56 cents a share on sales of $278.3 million.

“Our third quarter operating results were below our expectations due to slower sales of seasonal merchandise in the second half of the quarter,” said Cliff Sifford, Shoe Carnival’s president and CEO. “We generated a comparable store sales increase in athletic merchandise in each month of the quarter, although this was offset by a high-single-digit comparable store sales decline in our boot categories.”

Sifford continued, “The slow sales of boots and other seasonal merchandise continued through November. While we achieved high-single-digit comparable store sales increases in our athletic categories in November, the decline in sales of boots and other seasonal merchandise resulted in a comparable-store sales decline of 3.3 percent for November. We now expect our fourth-quarter comparable-stores sales to range from a decrease of 1 percent to an increase of 1 percent. We will accelerate our promotional activity on seasonal merchandise with the goal of driving sales and ending the season with inventories in line with our plan.”

Third Quarter Financial Results
The company reported net sales of $274.5 million for the third quarter of fiscal 2016, a 1.8 percent increase compared to net sales of $269.7 million for the third quarter of fiscal 2015. Comparable-store sales decreased 0.4 percent in the third quarter of fiscal 2016.

Gross profit margin for the third quarter of fiscal 2016 decreased slightly to 29.9 percent compared to 30.1 percent in the third quarter of fiscal 2015. Merchandise margin increased 0.1 percent, and buying, distribution and occupancy expenses increased 0.3 percent as a percentage of sales as compared to the third quarter of fiscal 2015.

Selling, general and administrative expenses for the third quarter of fiscal 2016 increased $0.4 million to $66.6 million. As a percentage of sales, these expenses decreased to 24.3 percent from 24.5 percent in the third quarter of fiscal 2015.

Net earnings for the third quarter of fiscal 2016 were $9.7 million, or 54 cents per diluted share. For the third quarter of fiscal 2015, the company reported net earnings of $9.4 million, or 47 cents per diluted share.

Nine Month Financial Results
Net sales during the first nine months of fiscal 2016 increased $16.6 million to $766.9 million compared to the same period last year. Comparable-store sales for the 39-week period ended October 29, 2016 increased 0.9 percent.

Net earnings for the first nine months of fiscal 2016 were $24.4 million, or $1.31 per diluted share, compared to net earnings of $24.6 million, or $1.23 per diluted share, in the first nine months of last year. Gross profit margin for the first nine months of fiscal 2016 was 29.3 percent compared to 29.6 percent last year. Selling, general and administrative expenses, as a percentage of sales, were 24.2 percent for the first nine months of fiscal 2016 compared to 24.3 percent in the same period last fiscal year. The company opened 15 stores and closed five stores during the first nine months of fiscal 2016, compared to opening 18 stores and closing 14 stores during the first nine months of fiscal 2015.

Share Repurchase Program
In the third quarter of fiscal 2016, the company repurchased approximately 376,000 shares of its common stock at an average price of $27.13 per share, for a total cost of $10.2 million. As of October 29, 2016, the company had $10.3 million available for future repurchases under its $50 million share repurchase authorization.

Fiscal 2016 Outlook
The company updated its annual sales and diluted earnings per share outlook for fiscal 2016. Net sales are now expected to be in the range of $1.002 billion to $1.006 billion, with a comparable-store sales increase ranging from approximately 0.5 percent to 0.9 percent. Earnings per diluted share for the fiscal year are expected to be in the range of $1.46 to $1.51. Fiscal 2015 earnings per diluted share were $1.45.

Store Growth
The company expects to open 19 new stores, including seven small-market stores, and close nine stores in fiscal 2016.

Photo courtesy Shoe Carnival