Shoe Carnival Inc. (SCVL, Financial) filed Quarterly Report for the period ended 2010-07-31.
Shoe Carnival Inc. has a market cap of $225.1 million; its shares were traded at around $17.08 with a P/E ratio of 9.6 and P/S ratio of 0.3. SCVL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Jim Simons of Renaissance Technologies LLC.
Selling, general and administrative expenses increased $1.8 million in the second quarter of fiscal 2010 to $40.8 million from $39.0 million in the second quarter of last year; however, our sales gain enabled us to leverage these costs as a percentage of sales by 0.9%. Incentive compensation increased $1.0 million during the second quarter of fiscal 2010, as compared to the prior year period, due to our improved financial performance. Also during the second quarter of fiscal 2010, we spent an additional $732,000 on advertising and incurred an additional $1.0 million in store operating expenses as compared to the same period last year. These increases were partially offset by a $900,000 decrease in our self-insured health care costs, as compared to the second quarter of fiscal 2009 when we experienced unusually high claim activity. The costs related to our self-insured health care programs are subject to a certain degree of volatility and can vary materially between reporting periods.
Net income for the second quarter of fiscal 2010 increased to $4.1 million, or $0.32 per diluted share, compared to $982,000, or $0.08 per diluted share, for the second quarter of fiscal 2009. Included in the $0.32 per diluted share was a $0.04 benefit resulting from the favorable resolution of a state tax position.
Net sales increased $34.8 million to $354.9 million during the six months ended July 31, 2010, a 10.9% increase over net sales of $320.1 million for the first six months of fiscal 2009. This increase was primarily due to a 10.8% gain in comparable store sales along with an $8.8 million increase in sales from new stores opened since the beginning of fiscal 2009. These increases were partially offset by a $7.2 million loss from the 13 stores that were closed since the beginning of fiscal 2009. Increased consumer demand for footwear, combined with our business model of providing a broad product assortment for the entire family at a compelling value, resulted in a significant year-over-year increase in the number of footwear units sold as well as a moderate increase in average unit price.
Selling, general and administrative expenses increased $5.9 million in the first six months of fiscal 2010 to $85.0 million from $79.1 million in the prior year comparable period; however, our sales gain enabled us to leverage these costs as a percentage of sales by 0.7%. Incentive compensation increased $4.6 million during the first six months of fiscal 2010, as compared to the same period in the prior year, due to our improved financial performance. Also, during the first quarter of fiscal 2010 we recorded a non-cash asset impairment of $1.1 million related to certain underperforming stores. We increased advertising $1.0 million year-over-year. These increases were partially offset by a $1.8 million decrease in our self-insured health care costs, as compared to the first six months of fiscal 2009 when we experienced unusually high claim activity. The costs related to our self-insured health care programs are subject to a certain degree of volatility and can vary materially between reporting periods. Depreciation decreased $784,000.
We expended $6.6 million in cash during the first six months of fiscal 2010 for the purchase of property and equipment, of which $3.5 million was for new stores, remodeling and store relocation activities. Additional capital expenditures of approximately $8 million to $9 million are expected to be made over the remainder of fiscal 2010 and include four new stores at a projected cost of approximately $1.5 million and up to $3.4 million in store remodeling and relocation costs. Additional lease incentives to be received from landlords are expected to approximate $2.1 million. As part of our long-term strategy to grow our store base and increase our distribution capabilities, we are in the process of redesigning certain elements of the material handling system in our distribution center. We anticipate capital expenditures for the distribution center to total $1.5 million in fiscal 2010, of which $1.1 million was expended through the first six months of this year. The remaining capital expenditures are expected to be incurred for various other store improvements, along with continued investments in technology and normal asset replacement activities. The actual amount of cash required for capital expenditures for store operations depends in part on the number of new stores opened, the amount of lease incentives, if any, received from landlords and the number of stores remodeled. The opening of new stores will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending in areas we target for expansion.
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Shoe Carnival Inc. has a market cap of $225.1 million; its shares were traded at around $17.08 with a P/E ratio of 9.6 and P/S ratio of 0.3. SCVL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net sales increased $12.6 million to $165.4 million during the second quarter ended July 31, 2010, an 8.2% increase over the prior year's second quarter net sales of $152.8 million. This increase was primarily due to an increase of 8.3% in comparable store sales and a $3.6 million increase in sales generated by new stores opened since the first quarter of fiscal 2009. These increases were partially offset by a $3.4 million loss in sales from the 13 stores closed since the first quarter of fiscal 2009.Selling, general and administrative expenses increased $1.8 million in the second quarter of fiscal 2010 to $40.8 million from $39.0 million in the second quarter of last year; however, our sales gain enabled us to leverage these costs as a percentage of sales by 0.9%. Incentive compensation increased $1.0 million during the second quarter of fiscal 2010, as compared to the prior year period, due to our improved financial performance. Also during the second quarter of fiscal 2010, we spent an additional $732,000 on advertising and incurred an additional $1.0 million in store operating expenses as compared to the same period last year. These increases were partially offset by a $900,000 decrease in our self-insured health care costs, as compared to the second quarter of fiscal 2009 when we experienced unusually high claim activity. The costs related to our self-insured health care programs are subject to a certain degree of volatility and can vary materially between reporting periods.
Net income for the second quarter of fiscal 2010 increased to $4.1 million, or $0.32 per diluted share, compared to $982,000, or $0.08 per diluted share, for the second quarter of fiscal 2009. Included in the $0.32 per diluted share was a $0.04 benefit resulting from the favorable resolution of a state tax position.
Net sales increased $34.8 million to $354.9 million during the six months ended July 31, 2010, a 10.9% increase over net sales of $320.1 million for the first six months of fiscal 2009. This increase was primarily due to a 10.8% gain in comparable store sales along with an $8.8 million increase in sales from new stores opened since the beginning of fiscal 2009. These increases were partially offset by a $7.2 million loss from the 13 stores that were closed since the beginning of fiscal 2009. Increased consumer demand for footwear, combined with our business model of providing a broad product assortment for the entire family at a compelling value, resulted in a significant year-over-year increase in the number of footwear units sold as well as a moderate increase in average unit price.
Selling, general and administrative expenses increased $5.9 million in the first six months of fiscal 2010 to $85.0 million from $79.1 million in the prior year comparable period; however, our sales gain enabled us to leverage these costs as a percentage of sales by 0.7%. Incentive compensation increased $4.6 million during the first six months of fiscal 2010, as compared to the same period in the prior year, due to our improved financial performance. Also, during the first quarter of fiscal 2010 we recorded a non-cash asset impairment of $1.1 million related to certain underperforming stores. We increased advertising $1.0 million year-over-year. These increases were partially offset by a $1.8 million decrease in our self-insured health care costs, as compared to the first six months of fiscal 2009 when we experienced unusually high claim activity. The costs related to our self-insured health care programs are subject to a certain degree of volatility and can vary materially between reporting periods. Depreciation decreased $784,000.
We expended $6.6 million in cash during the first six months of fiscal 2010 for the purchase of property and equipment, of which $3.5 million was for new stores, remodeling and store relocation activities. Additional capital expenditures of approximately $8 million to $9 million are expected to be made over the remainder of fiscal 2010 and include four new stores at a projected cost of approximately $1.5 million and up to $3.4 million in store remodeling and relocation costs. Additional lease incentives to be received from landlords are expected to approximate $2.1 million. As part of our long-term strategy to grow our store base and increase our distribution capabilities, we are in the process of redesigning certain elements of the material handling system in our distribution center. We anticipate capital expenditures for the distribution center to total $1.5 million in fiscal 2010, of which $1.1 million was expended through the first six months of this year. The remaining capital expenditures are expected to be incurred for various other store improvements, along with continued investments in technology and normal asset replacement activities. The actual amount of cash required for capital expenditures for store operations depends in part on the number of new stores opened, the amount of lease incentives, if any, received from landlords and the number of stores remodeled. The opening of new stores will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending in areas we target for expansion.
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