Shoe Carnival, Inc. reported net sales of $205.7 million for the fourth quarter. Comparable store sales increased 0.5 percent for the quarter. Net earnings for the fourth quarter of fiscal 2012 were $3.2 million, or 16 cents a share, in adjusted earnings per diluted share, as compared to net
earnings of $3.3 million, or 16 cents, for the fourth
quarter of fiscal 2011.
Fourth Quarter and Full Year 2012 Highlights
Adjusted earnings per diluted share of $0.16 for the quarter ($0.13 in earnings per diluted share on a GAAP basis)
Record earnings per diluted share of $1.43 for the year, surpassing the prior record of $1.37 achieved in fiscal 2010
Company opened one store in the quarter and 31 during the year, for a 7.6 percent net square footage increase compared to the end of fiscal 2011
Company initiated its first-ever dividend, distributing $23.5 million in dividends to its shareholders during the year, and repurchased $4.7 million, or 220,000 shares, of its common stock
We were pleased with our ability to end 2012 having achieved record sales and earnings. This came during a period of accelerated growth and, as we previously announced, a fourth quarter where performance was below our expectations, said Cliff Sifford, Shoe Carnivals President and CEO. In 2013 we will focus on key initiatives to drive our growth long-term, which include enhancing our branded offerings in our womens dress and casual, adding 30 to 35 stores primarily in existing markets, leveraging our advertising in markets that are under penetrated with a re-energized marketing campaign and reinvesting in our existing store base with approximately 30 to 35 remodels and
seven relocations.
Fourth Quarter Financial Results
Net sales for the 14-week fourth quarter ended February 2, 2013 increased 13.1 percent to $205.7 million compared to net sales of $181.9 million in the 13-week fourth quarter ended January 28, 2012. Sales of approximately $10.7 million were recorded in the extra week of fiscal 2012. Comparable store sales for the 13-week period ended January 26, 2013 increased 0.5 percent compared to the 13-week period ended January 28, 2012.
The gross profit margin for the fourth quarter of fiscal 2012 increased to 29.3 percent compared to 28.3 percent for the fourth quarter of fiscal 2011. The merchandise margin increased 1.4 percent, while buying, distribution and occupancy costs increased 0.4 percent as a percentage of sales.
Selling, general and administrative expenses for the fourth quarter increased $8.4 million to $54.9 million; as a percentage of sales, these expenses increased to 26.7 percent compared to 25.5 percent in the fourth quarter of fiscal 2011.
Net earnings for the fourth quarter of fiscal 2012 were $3.2 million, or $0.16 in adjusted earnings per diluted share, as compared to net earnings of $3.3 million, or $0.16 per diluted share for the fourth quarter of fiscal 2011. GAAP earnings per diluted share for the fourth quarter of fiscal 2012 were $0.13.
While the Companys payment of a $20.4 million special cash dividend in December 2012 had no effect on fourth quarter or annual net income or annual diluted earnings per share, the results for the fourth quarter of fiscal 2012 included a $0.03 reduction in earnings per diluted share due to the application of the two-class method of computing earnings per share in connection with this dividend.
Fiscal Year 2012 Financial Results
Net sales increased 12.1 percent to $855.0 million for fiscal 2012, compared to net sales of $762.5 million for fiscal 2011. Comparable store sales for the fiscal 52-week period ended January 26, 2013 increased 4.5 percent compared to the 52-week period ended January 28, 2012. The gross profit margin for fiscal 2012 increased to 30.1 percent from 29.5 percent in fiscal 2011. Selling, general and administrative expenses, as a percentage of sales, were 24.4 percent, as compared to 24.0 percent for the prior year. Net earnings for fiscal 2012 were $29.3 million, or $1.43 per diluted share, compared to net earnings of $26.4 million, or $1.31 per diluted share in fiscal 2011.
Store Growth
During fiscal 2012, the Company opened 31 new stores including new market entries into Dallas, Texas and Puerto Rico. In addition, the Company closed seven stores to end the year at 351 stores. One store was opened in the fourth quarter of fiscal 2012 and two were closed. Total retail selling space increased to 3.8 million square feet at the end of fiscal 2012 from 3.6 million square feet at the end of fiscal 2011.
Store openings and closings by quarter and for the fiscal year were as follows:
New Stores Store Closings
1st Quarter 2012 13 3
2nd Quarter 2012 11 2
3rd Quarter 2012 6 0
4th Quarter 2012 1 2
Fiscal Year 2012 31 7
In fiscal 2013, the Company expects to open 30 to 35 new stores, relocate seven stores and close five to seven stores. The Company has completed the store openings and closings for the first quarter of fiscal 2013 with the opening of 12 new stores and relocation of three stores. In the first quarter of fiscal 2012, 13 stores were opened, two stores were relocated and three were closed.
First Quarter Fiscal 2013 Outlook
The Company expects net sales in the first quarter of fiscal 2013 to be in the range of $226 to $232 million, with a comparable store sales decrease in the range of 2.0 to 4.0 percent. Earnings per diluted share in the first quarter of fiscal 2013 are expected to be in the range of $0.36 to $0.44. In the first quarter of fiscal 2012, comparable store sales increased 7.3 percent and earnings per diluted share were $0.54.
Sifford concluded, Last year unseasonably warm weather early in the spring selling season shifted sales of higher margin spring footwear from the second quarter into the first quarter, driving record first quarter results. However, during March this year, we experienced cold, wet weather across our central and northern regions, generating comparatively slower sales of our higher margin spring sandal and athletic categories. This slow start to the spring selling season has resulted in our conservative first quarter outlook.
At the same time, we are pleased to report that our southern region has generated mid-single digit comparable store sales increases to date in the first quarter of fiscal 2013. This leaves us feeling confident that, as more seasonal weather arrives across our markets, we are well positioned with the right product assortment to meet the spring footwear needs of our customers. Due to the slow start to the spring selling season in the first quarter this year, we believe second quarter comparable store sales will increase up to mid-single digits.
