Shoe Carnival Inc. (SCVL, Financial) filed Quarterly Report for the period ended 2009-10-31.
Shoe Carnival, Inc. is a high volume, value-oriented retailer offamily footwear. They adhere to a highly promotional marketing concept that enables them to be competitive in the retail markets they enter. They provide a selection and variety of footwear normally associated with a ``category killer`` superstore in an exciting retail environment. Shoe Carnival Inc. has a market cap of $255 million; its shares were traded at around $19.7 with a P/E ratio of 22.3 and P/S ratio of 0.4. Shoe Carnival Inc. had an annual average earning growth of 5.7% over the past 10 years.
Selling, general and administrative expenses increased $2.5 million in the third quarter of fiscal 2009 to $44.9 million; however, our third quarter sales gain enabled us to leverage these costs as a percentage of sales by 1.5%. The $2.5 million increase between the comparable periods was primarily the result of incurring an additional $1.7 million in expense for incentive compensation along with an increase of $1.3 million in employee benefits. Included in employee benefits is our non-qualified deferred compensation plan. During the third quarter of fiscal 2008, we recorded a $742,000 loss on investments for this plan due to a decline in the stock markets. For the third quarter of fiscal 2009, we recorded earnings on investments for this plan of $89,000 resulting in an increase in expense between the two comparative periods of $831,000. Even though we operated an additional seven stores at the end of the third quarter of fiscal 2009, we were able to achieve significant expense savings in a number of categories, including depreciation.
Net sales increased $20.9 million to $511.6 million during the nine months ended October 31, 2009, from net sales of $490.7 million in the comparable prior year period. The increase in sales resulted from a $25.9 million increase in sales generated by new stores opened since the beginning of fiscal 2008 in addition to a 1.4% comparable store sales gain. These increases were partially offset by an $11.3 million loss in sales resulting from closing 14 stores since the beginning of fiscal 2008.
Selling, general and administrative expenses increased $1.6 million in the first nine months of fiscal 2009 to $124.0 million, or 24.3% of sales; however, the sales gain for the first nine months of fiscal 2009 enabled us to leverage these costs, as a percentage of sales, by 0.6%. The increase in expense between the two comparative periods was primarily the result of a $2.1 million increase in employee benefits along with incurring an additional $1.6 million in incentive compensation. Included in employee benefits is our non-qualified deferred compensation plan. During the first nine months of fiscal 2008, we recorded a loss on investments for this plan of $890,000 due to the decline in the stock markets. For the first nine months of fiscal 2009, we recorded earnings on investments for this plan of $391,000 resulting in an increase in expense between the two comparative periods of $1.3 million. Even though we operated additional stores during the first nine months of fiscal 2009 compared to the prior year period, we were able to reduce store-level expenses. Expense reductions resulted primarily from decreases in depreciation and advertising and recording lower store closing costs.
During the first nine months of fiscal 2009, we expended $8.7 million in cash for the purchase of property and equipment. Of this expenditure, $6.3 million was used for new stores, store remodeling and store relocation projects. An additional $1.1 million was used to begin the remediation of our distribution center's material handling system. The remaining capital expenditures were used primarily for information technology and miscellaneous equipment purchases. We anticipate capital expenditures of approximately $1.3 million to $2.3 million will be made during the fourth quarter of fiscal 2009. We currently anticipate recognizing an additional $400,000 in landlord incentives through the end of fiscal 2009 to bring our total to $2.1 million for fiscal 2009.
During the first nine months of fiscal 2009, we opened 16 new stores averaging 9,700 square feet and have completed our new store openings for the fiscal year. On a per-store basis, the initial inventory investment averaged $484,000, capital expenditures averaged $359,000 and lease incentives received from landlords averaged $100,000. Pre-opening expenses such as advertising, salaries and supplies, have averaged approximately $55,000 per store.
Read the The complete ReportSCVL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Chuck Royce of ROYCE & ASSOCIATES.
Shoe Carnival, Inc. is a high volume, value-oriented retailer offamily footwear. They adhere to a highly promotional marketing concept that enables them to be competitive in the retail markets they enter. They provide a selection and variety of footwear normally associated with a ``category killer`` superstore in an exciting retail environment. Shoe Carnival Inc. has a market cap of $255 million; its shares were traded at around $19.7 with a P/E ratio of 22.3 and P/S ratio of 0.4. Shoe Carnival Inc. had an annual average earning growth of 5.7% over the past 10 years.
Highlight of Business Operations:
Net sales increased $21.4 million to $191.5 million during the third quarter ended October 31, 2009, a 12.6% increase from the prior year's third quarter net sales of $170.1 million. The increase in sales resulted from a 10.2% comparable store sales gain plus an $8.6 million increase in sales generated by new stores opened since the beginning of the third quarter of fiscal 2008. These increases were partially offset by a $3.5 million loss in sales resulting from the closing of 12 stores over the past four quarters.Selling, general and administrative expenses increased $2.5 million in the third quarter of fiscal 2009 to $44.9 million; however, our third quarter sales gain enabled us to leverage these costs as a percentage of sales by 1.5%. The $2.5 million increase between the comparable periods was primarily the result of incurring an additional $1.7 million in expense for incentive compensation along with an increase of $1.3 million in employee benefits. Included in employee benefits is our non-qualified deferred compensation plan. During the third quarter of fiscal 2008, we recorded a $742,000 loss on investments for this plan due to a decline in the stock markets. For the third quarter of fiscal 2009, we recorded earnings on investments for this plan of $89,000 resulting in an increase in expense between the two comparative periods of $831,000. Even though we operated an additional seven stores at the end of the third quarter of fiscal 2009, we were able to achieve significant expense savings in a number of categories, including depreciation.
Net sales increased $20.9 million to $511.6 million during the nine months ended October 31, 2009, from net sales of $490.7 million in the comparable prior year period. The increase in sales resulted from a $25.9 million increase in sales generated by new stores opened since the beginning of fiscal 2008 in addition to a 1.4% comparable store sales gain. These increases were partially offset by an $11.3 million loss in sales resulting from closing 14 stores since the beginning of fiscal 2008.
Selling, general and administrative expenses increased $1.6 million in the first nine months of fiscal 2009 to $124.0 million, or 24.3% of sales; however, the sales gain for the first nine months of fiscal 2009 enabled us to leverage these costs, as a percentage of sales, by 0.6%. The increase in expense between the two comparative periods was primarily the result of a $2.1 million increase in employee benefits along with incurring an additional $1.6 million in incentive compensation. Included in employee benefits is our non-qualified deferred compensation plan. During the first nine months of fiscal 2008, we recorded a loss on investments for this plan of $890,000 due to the decline in the stock markets. For the first nine months of fiscal 2009, we recorded earnings on investments for this plan of $391,000 resulting in an increase in expense between the two comparative periods of $1.3 million. Even though we operated additional stores during the first nine months of fiscal 2009 compared to the prior year period, we were able to reduce store-level expenses. Expense reductions resulted primarily from decreases in depreciation and advertising and recording lower store closing costs.
During the first nine months of fiscal 2009, we expended $8.7 million in cash for the purchase of property and equipment. Of this expenditure, $6.3 million was used for new stores, store remodeling and store relocation projects. An additional $1.1 million was used to begin the remediation of our distribution center's material handling system. The remaining capital expenditures were used primarily for information technology and miscellaneous equipment purchases. We anticipate capital expenditures of approximately $1.3 million to $2.3 million will be made during the fourth quarter of fiscal 2009. We currently anticipate recognizing an additional $400,000 in landlord incentives through the end of fiscal 2009 to bring our total to $2.1 million for fiscal 2009.
During the first nine months of fiscal 2009, we opened 16 new stores averaging 9,700 square feet and have completed our new store openings for the fiscal year. On a per-store basis, the initial inventory investment averaged $484,000, capital expenditures averaged $359,000 and lease incentives received from landlords averaged $100,000. Pre-opening expenses such as advertising, salaries and supplies, have averaged approximately $55,000 per store.
Read the The complete ReportSCVL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Chuck Royce of ROYCE & ASSOCIATES.
