On May 23, 2024, Shoe Carnival Inc (SCVL, Financial) released its 8-K filing reporting robust financial results for the first quarter of fiscal 2024. The company, a leading retailer of footwear and accessories, achieved net sales of $300.4 million, surpassing the analyst estimate of $294.54 million. Additionally, the company reported earnings per share (EPS) of $0.63, exceeding the estimated $0.60.
Company Overview
Shoe Carnival Inc is a family footwear retailer that offers a broad assortment of dress, casual, and athletic footwear for men, women, and children, emphasizing national name brands such as Nike, Skechers, Adidas, Puma, HEYDUDE, Converse, Vans, and Crocs. The company operates as one reportable segment, leveraging a bricks-first, omnichannel approach to provide customers with easy access to a wide assortment of branded footwear for various occasions.
Performance Highlights
In the first quarter of 2024, Shoe Carnival Inc reported net sales of $300.4 million, a 6.8% increase compared to the same period last year. This performance was driven by the February 2024 acquisition of Rogan Shoes, Incorporated, and continued growth in Shoe Station and e-commerce sales. The company's gross profit margin also improved, reaching 35.6%, marking the 13th consecutive quarter above 35%.
“We are encouraged by the strong results delivered this quarter, with net sales growth above our expectation, gross profit margin expansion versus prior year, and earnings at the high end of our expectation,” said Mark Worden, President and Chief Executive Officer.
Financial Achievements
Shoe Carnival Inc's GAAP operating income increased by 7.5% to $22.5 million, while adjusted operating income rose by 9.8% to $23.0 million. The company also reported a net income of $17.3 million, or $0.63 per diluted share, compared to $16.5 million, or $0.60 per diluted share, in the first quarter of 2023. The EPS growth was primarily driven by higher net sales and an improved gross profit margin.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Sales | $300.4 million | $281.2 million |
| Gross Profit | $106.8 million | $98.5 million |
| Operating Income | $22.5 million | $20.9 million |
| Net Income | $17.3 million | $16.5 million |
| EPS | $0.63 | $0.60 |
Challenges and Strategic Initiatives
Despite the positive results, comparable store sales for the thirteen-week period ended May 4, 2024, declined by 3.4% compared to the same period last year. However, the company noted significant improvement in sales trends as the quarter progressed. Inventory levels increased to $411.6 million, reflecting the acquisition of Rogan Shoes, but the company continues to focus on inventory optimization.
Store Expansion and Modernization
Shoe Carnival Inc reached a record high of 430 stores, including 371 Shoe Carnival stores, 31 Shoe Station stores, and 28 Rogan’s locations. The company aims to surpass 500 stores by 2028 through organic growth and strategic acquisitions. Additionally, over 60% of the Shoe Carnival store modernization was completed by the end of the first quarter, with plans to continue modernization efforts throughout fiscal 2024.
Capital Management and Outlook
The company maintained a strong financial position with no debt and approximately $69.5 million in cash, cash equivalents, and marketable securities. For fiscal 2024, Shoe Carnival Inc reiterated its outlook, expecting net sales growth of 4% to 6% and GAAP EPS in the range of $2.50 to $2.70.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Shoe Carnival Inc for further details.
