On September 5, 2024, Shoe Carnival Inc (SCVL, Financial) released its 8-K filing reporting robust results for the second quarter of fiscal 2024, ending August 3, 2024. The company, a leading retailer of family footwear, achieved record net sales and earnings per share (EPS) that surpassed both company expectations and analyst estimates.
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.
Q2 2024 Financial Highlights
Net sales for the quarter reached $332.7 million, a 12.9% increase compared to the same period last year, exceeding the company's expectations. This growth was driven by strong performance in the Shoe Station segment, continued strengthening trends in Shoe Carnival, and increases in e-commerce sales. The recent acquisition of Rogan Shoes, Incorporated also contributed to the sales growth.
GAAP EPS for the quarter was $0.82, while adjusted EPS was $0.83, both falling short of the analyst estimate of $0.84. GAAP operating income increased by 22.0% to $30.1 million, and adjusted operating income rose by 23.7% to $30.5 million compared to the prior year.
“Customer engagement continued to exceed our expectations and sales momentum accelerated rapidly during our most important shopping event of the year, the Back-to-School season. We achieved a net sales record this quarter, surpassing all previous second quarter sales in our company’s history. Gross profit margin expanded versus prior year, we gained significant market share, and we delivered earnings above our guidance in the quarter.” said Mark Worden, President and Chief Executive Officer.
Income Statement and Key Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $332.7 million | $294.6 million |
| Gross Profit | $119.9 million | $105.5 million |
| Operating Income | $30.1 million | $24.7 million |
| Net Income | $22.6 million | $19.4 million |
| EPS (Diluted) | $0.82 | $0.71 |
Gross profit margin increased by 30 basis points to 36.1%, marking the 14th consecutive quarter that the company's gross profit margin exceeded 35%. Selling, general, and administrative (SG&A) expenses as a percentage of net sales decreased to 27.1% from 27.4% in the prior year, reflecting improved leverage on higher sales.
Balance Sheet and Cash Flow
As of the end of Q2 2024, Shoe Carnival Inc reported total assets of $1.12 billion, with cash and cash equivalents of $71.6 million. The company maintained its debt-free status, continuing to fund operations and growth investments from operating cash flow. Year-to-date operating cash flow totaled $40.7 million, a significant increase from $22.4 million in the prior year.
Outlook and Strategic Initiatives
Based on the strong year-to-date performance and positive momentum during the Back-to-School season, Shoe Carnival Inc has increased its fiscal 2024 sales guidance to a range of $1.23 billion to $1.25 billion, representing growth of 5% to 6% compared to fiscal 2023. The company also raised its GAAP EPS guidance to a range of $2.55 to $2.70 and adjusted EPS to a range of $2.60 to $2.75.
Shoe Carnival Inc continues to execute its strategic growth roadmap, aiming to surpass 500 stores by 2028 through organic growth and strategic mergers and acquisitions. The company remains committed to enhancing shareholder value and solidifying its position as the nation's leading family footwear retailer.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Shoe Carnival Inc for further details.
