Shoe Carnival (SCVL) Tops Q3 EPS by 33c, Revenues Miss

Shoe Carnival (NASDAQ: SCVL) reported Q3 EPS of $1.03, $0.33 better than the analyst estimate of $0.70. Revenue for the quarter came in at $274.6 million versus the consensus estimate of $275.58 million.

Third Quarter Highlights

• Net sales were $274.6 million
• Net income and diluted net income per share were all-time records of $14.7 million and $1.03 per share, respectively
• Gross profit increased $3.0 million to a record $87.8 million and gross profit margin increased 110 basis points to 32 percent compared to the third quarter of fiscal 2019
• Comparable store sales increased 0.9 percent, on top of a 3.5 percent comparable store sales increase in the third quarter of fiscal 2019
• E-commerce sales increased over 150 percent compared to the third quarter of fiscal 2019
• Membership in our Shoe Perks customer loyalty program approached 10 percent growth compared to the prior year bringing total membership in the program to nearly 26 million
• Cash and cash equivalents were $46.7 million with no outstanding debt as of October 31, 2020

“Our strong fiscal third quarter results clearly demonstrated the strength and dedication of our team’s ability to execute on our strategic initiatives. We achieved same store sales growth and delivered the most profitable quarter in Shoe Carnival’s history, despite the extended back-to-school season. This would not have been possible without the hard work of our Shoe Carnival team members, our incredibly solid vendor partnerships, and dedicated customers,” commented Cliff Sifford, Shoe Carnival’s Vice Chairman and Chief Executive Officer.

“Our disciplined focus on financial flexibility and the strength of our business model continue to fuel our market leading performance notwithstanding the ongoing disruption caused by the global pandemic. We are excited about our market share gains in the quarter and believe our enduring competitive advantages position us for future growth,” concluded Mr. Sifford.

Fiscal 2020 Earnings Outlook

We continue to closely monitor and manage the impact of the COVID-19 pandemic and take action to maintain financial flexibility and keep our employees and customers safe. The COVID-19 pandemic is expected to continue to affect macroeconomic conditions and consumer spending in the retail sector. Considerable uncertainty exists surrounding the impact the pandemic may have on the Company’s sales and operations for the remainder of the fiscal year, including during the peak holiday shopping period. As a result, the Company is not providing guidance for fiscal year 2020.

Store Openings and Closings

One new store was opened in the third quarter of fiscal 2020 and no stores were closed. For the first nine months of fiscal 2020, the Company has opened three stores and closed 12 stores. The Company expects a total of four store openings and 13 store closings during fiscal 2020 compared to one store opening and six store closings in fiscal 2019.

Share Repurchase Program

As of October 31, 2020, the Company had $43.1 million available for future repurchases under its share repurchase program. Due to the volatility this year, no shares have been repurchased in fiscal 2020, and the Company does not anticipate repurchasing any shares in fiscal 2020 but will continue to reevaluate further share repurchases on an ongoing basis.

For earnings history and earnings-related data on Shoe Carnival (SCVL) click here.

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