Shoe Carnival, Inc. (Nasdaq: SCVL), a leading retailer of value-priced footwear and accessories, today reported results for the second quarter ended July 28, 2012.
Second Quarter Highlights
- Net sales of $182.2 million, a 9.3 percent increase compared to the second quarter last year
- Growth in comparable store sales of 3.0 percent
- Earnings per diluted share of $0.14, flat with the prior year comparative period
- Company opened 11 new stores, including its first two stores in Puerto Rico. Pre-opening expenses were $1.2 million, a $795,000 increase when compared to the second quarter last year. This increase in expense equates to approximately $0.025 in diluted earnings per share.
Mark Lemond, President and CEO, commented, “We are in the midst of a strong athletic footwear cycle and customers continue to respond well to our athletic product assortment, generating sales at the high end of our guidance. Our sales increase combined with a consistent emphasis on controlling inventory helped us generate a higher than anticipated merchandise margin for the quarter. This resulted in our second quarter earnings exceeding the high end of our guidance.”
Financial Results and Payment of Quarterly Dividend
The Company reported net sales of $182.2 million for the second quarter of fiscal 2012, a 9.3 percent increase over net sales of $166.7 million in the second quarter of fiscal 2011. Comparable store sales increased 3.0 percent in the second quarter of fiscal 2012. Net earnings for the second quarter of fiscal 2012 increased 5.3 percent to $2.9 million over net earnings of $2.7 million in the second quarter of fiscal 2011. Due to a slight increase in diluted shares outstanding in fiscal 2012, earnings per diluted share were $0.14 in both quarters.
The gross profit margin for the second quarter of fiscal 2012 increased to 28.7 percent compared to 27.8 percent for the second quarter of fiscal 2011. The merchandise margin increased 0.7 percent, while buying, distribution and occupancy costs decreased 0.2 percent as a percentage of sales. Selling, general and administrative expenses for the second quarter increased $5.4 million to $47.6 million; as a percentage of sales these expenses increased to 26.1 percent compared to 25.3 percent in the second quarter of 2011. The increase in expense was primarily due to operating more stores, higher pre-opening expenses for new stores and increased incentive compensation. Total pre-opening expenses included in both cost of sales and selling, general and administrative expenses increased $795,000 in the second quarter to $1.2 million. These expenses increased primarily as a result of opening 11 new stores as compared to opening five stores in the second quarter last year.