Shoe Carnival Earnings 2019-08-03

SCVL 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

10-Q 1 scvl-10q_20190803.htm 10-Q scvl-10q_20190803.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended August 3, 2019
or
☐		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from to

Commission File Number:	0-21360

Shoe Carnival, Inc.
(Exact name of registrant as specified in its charter)

Indiana		35-1736614
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

7500 East Columbia Street Evansville, IN		47715
(Address of principal executive offices)		(Zip code)

(812) 867-6471

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SCVL

The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer

☒ Accelerated filer

☐ Non-accelerated filer

☐ Smaller reporting company

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Number of Shares of Common Stock, par value $0.01 per share, outstanding at September 4, 2019 was 14,671,840.

SHOE CARNIVAL, INC.

INDEX TO FORM 10-Q

			Page
Part I	Financial Information

	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Income	4
		Condensed Consolidated Statements of Shareholders’ Equity	5
		Condensed Consolidated Statements of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

	Item 4.	Controls and Procedures	22

Part II	Other Information

	Item 1A.	Risk Factors	23

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

	Item 6.	Exhibits	23

	Signature		24

SHOE CARNIVAL, INC.
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands, except share data)	August 3, 2019			February 2, 2019			August 4, 2018
Assets
Current Assets:
Cash and cash equivalents	$	37,458		$	67,021		$	38,405
Accounts receivable		2,414			1,219			3,918
Merchandise inventories		336,919			257,539			336,907
Other		10,887			11,534			12,094
Total Current Assets		387,678			337,313			391,324
Property and equipment – net		70,855			70,605			77,254
Deferred income taxes		7,020			9,622			8,384
Other noncurrent assets		4,284			459			343
Operating lease right-of-use assets		223,536		0				0
Total Assets	$	693,373		$	417,999		$	477,305

Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	108,410		$	48,715		$	90,928
Accrued and other liabilities		20,179			22,069			25,659
Current portion of operating lease liabilities		46,783			0			0
Total Current Liabilities		175,372			70,784			116,587
Long-term portion of operating lease liabilities		199,592			0			0
Deferred lease incentives		0			22,171			25,006
Accrued rent		0			8,436			9,124
Deferred compensation		13,751			12,108			12,074
Other		1,098			67			750
Total Liabilities		389,813			113,566			163,541

Shareholders’ Equity:
Common stock, $.01 par value, 50,000,000 shares authorized, 20,527,905 shares, 20,529,227 shares and 20,529,227 shares issued, respectively		205			205			205
Additional paid-in capital		77,374			75,631			68,892
Retained earnings		381,012			360,443			349,549
Treasury stock, at cost, 5,821,887 shares, 5,154,243 shares and 4,440,129 shares, respectively		(155,031	)		(131,846	)		(104,882	)
Total Shareholders’ Equity		303,560			304,433			313,764
Total Liabilities and Shareholders’ Equity	$	693,373		$	417,999		$	477,305

See notes to Condensed Consolidated Financial Statements.

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited

(In thousands, except per share data)	Thirteen Weeks Ended August 3, 2019			Thirteen Weeks Ended August 4, 2018			Twenty-six Weeks Ended August 3, 2019			Twenty-six Weeks Ended August 4, 2018
Net sales	$	268,221		$	268,366		$	522,031		$	525,811
Cost of sales (including buying, distribution and occupancy costs)		186,126			184,585			364,796			364,703
Gross profit		82,095			83,781			157,235			161,108
Selling, general and administrative expenses		66,421			68,850			125,953			128,861
Operating income		15,674			14,931			31,282			32,247
Interest income		(86	)		(117	)		(417	)		(119	)
Interest expense		85			36			121			76
Income before income taxes		15,675			15,012			31,578			32,290
Income tax expense		3,843			3,237			5,873			7,560
Net income	$	11,832		$	11,775		$	25,705		$	24,730
Net income per share:
Basic	$	0.81		$	0.77		$	1.76		$	1.60
Diluted	$	0.80		$	0.76		$	1.71		$	1.59
Weighted average shares:
Basic		14,615			15,249			14,614			15,387
Diluted		14,736			15,367			14,964			15,446
Cash dividends declared per share	$	0.085		$	0.080		$	0.165		$	0.155

See notes to Condensed Consolidated Financial Statements.

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Unaudited

	Thirteen Weeks Ended
	Common Stock							Additional Paid-In			Retained			Treasury
(In thousands)	Issued		Treasury			Amount		Capital			Earnings			Stock			Total
Balance at May 4, 2019		20,528		(5,837	)	$	205	$	76,282		$	370,453		$	(155,437	)	$	291,503
Dividends declared ($0.085 per share)												(1,273	)					(1,273	)
Employee stock purchase plan purchases				2					(5	)					46			41
Restricted stock awards				13					(360	)					360			0
Stock-based compensation expense									1,457									1,457
Net income												11,832						11,832
Balance at August 3, 2019		20,528		(5,822	)	$	205	$	77,374		$	381,012		$	(155,031	)	$	303,560

Balance at May 5, 2018		20,529		(4,453	)	$	205	$	67,410		$	339,073		$	(105,178	)	$	301,510
Dividends declared ($0.08 per share)												(1,302	)					(1,302	)
Employee stock purchase plan purchases				2					6						36			42
Restricted stock awards				11					(260	)					260			0
Stock-based compensation expense									1,736									1,736
Other											3							3
Net income												11,775						11,775
Balance at August 4, 2018		20,529		(4,440	)	$	205	$	68,892		$	349,549		$	(104,882	)	$	313,764

	Twenty-Six Weeks Ended
	Common Stock								Additional Paid-In			Retained			Treasury
(In thousands)	Issued			Treasury			Amount		Capital			Earnings			Stock			Total
Balance at February 2, 2019		20,529			(5,154	)	$	205	$	75,631		$	360,443		$	(131,846	)	$	304,433
Adoption of Accounting Standards Codification 842 (see Note 7)													(2,649	)					(2,649	)
Dividends declared ($0.165 per share)													(2,487	)					(2,487	)
Employee stock purchase plan purchases					4					1						103			104
Restricted stock awards		(1	)		60					(1,664	)					1,664			0
Shares surrendered by employees to pay taxes on restricted stock					(321	)										(10,940	)		(10,940	)
Purchase of common stock for treasury					(411	)										(14,012	)		(14,012	)
Stock-based compensation expense										3,406									3,406
Net income													25,705						25,705
Balance at August 3, 2019		20,528			(5,822	)	$	205	$	77,374		$	381,012		$	(155,031	)	$	303,560

Balance at February 3, 2018		20,529			(3,582	)	$	205	$	65,458		$	326,738		$	(85,099	)	$	307,302
Adoption of Accounting Standards Codification 606													623						623
Dividends declared ($0.155 per share)													(2,542	)					(2,542	)
Employee stock purchase plan purchases					5					(5	)					112			107
Restricted stock awards					(41	)				577						(577	)		0
Shares surrendered by employees to pay taxes on restricted stock					(11	)										(275	)		(275	)
Purchase of common stock for treasury					(811	)										(19,043	)		(19,043	)
Stock-based compensation expense										2,862									2,862
Net income													24,730						24,730
Balance at August 4, 2018		20,529			(4,440	)	$	205	$	68,892		$	349,549		$	(104,882	)	$	313,764

See notes to Condensed Consolidated Financial Statements.

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)	Twenty-six Weeks Ended August 3, 2019			Twenty-six Weeks Ended August 4, 2018
Cash Flows From Operating Activities
Net income	$	25,705		$	24,730
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,395			11,219
Stock-based compensation		3,440			3,403
Loss/(gain) on retirement and impairment of assets		205			(227	)
Deferred income taxes		2,602			(202	)
Non-cash operating lease expense		20,352			0
Lease incentives		0			170
Other		1,643			(4,577	)
Changes in operating assets and liabilities:
Accounts receivable		(1,194	)		2,587
Merchandise inventories		(79,380	)		(76,407	)
Operating lease liabilities		(23,346	)		0
Accounts payable and accrued liabilities		59,565			58,562
Other		(7,970	)		(5,125	)
Net cash provided by operating activities		10,017			14,133
Cash Flows From Investing Activities
Purchases of property and equipment		(11,490	)		(2,661	)
Proceeds from sales of property and equipment		8			0
Other		0			283
Net cash used in investing activities		(11,482	)		(2,378	)
Cash Flows From Financing Activities
Borrowings under line of credit		20,000			0
Payments on line of credit		(20,000	)		0
Proceeds from issuance of stock		104			107
Dividends paid		(3,250	)		(2,393	)
Purchase of common stock for treasury		(14,012	)		(19,043	)
Shares surrendered by employees to pay taxes on restricted stock		(10,940	)		(275	)
Net cash used in financing activities		(28,098	)		(21,604	)
Net decrease in cash and cash equivalents		(29,563	)		(9,849	)
Cash and cash equivalents at beginning of period		67,021			48,254
Cash and cash equivalents at end of period	$	37,458		$	38,405
Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	121		$	76
Cash paid during period for income taxes	$	4,915		$	7,367
Capital expenditures incurred but not yet paid	$	990		$	152

See notes to Condensed Consolidated Financial Statements.

SHOE CARNIVAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1 - Basis of Presentation

In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and contain all normal recurring adjustments necessary to present fairly our financial position and the results of our operations and our cash flows for the periods presented. Certain information and disclosures normally included in the notes to Condensed Consolidated Financial Statements have been condensed or omitted according to the rules and regulations of the SEC, although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019.

Note 2 - Net Income Per Share

The following tables set forth the computation of basic and diluted earnings per share as shown on the face of the accompanying Condensed Consolidated Statements of Income:

Thirteen Weeks Ended

August 3, 2019

August 4, 2018

(In thousands, except per share data)

Basic Earnings per Share:

Net

Income

Per Share

Amount

Net

Income

Per Share

Amount

Net income

11,832

11,775

Amount allocated to participating securities

(11

)

(44

)

Net income available for basic common shares and

basic earnings per share

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$30.80	15	$452

10-Q	2019-08-03	Quarter: 2019-08-03
10-Q	2019-05-04	Quarter: 2019-05-04
10-K	2019-02-02	Annual: 2019-02-02
10-Q	2018-11-03	Quarter: 2018-11-03
10-Q	2018-08-04	Quarter: 2018-08-04
10-Q	2018-05-05	Quarter: 2018-05-05
10-K	2018-02-03	Annual: 2018-02-03
10-Q	2017-10-28	Quarter: 2017-10-28
10-Q	2017-07-29	Quarter: 2017-07-29
10-Q	2017-04-29	Quarter: 2017-04-29
10-K	2017-01-28	Annual: 2017-01-28
10-Q	2016-10-29	Quarter: 2016-10-29
10-Q	2016-07-30	Quarter: 2016-07-30
10-Q	2016-04-30	Quarter: 2016-04-30
10-K	2016-01-30	Annual: 2016-01-30
10-Q	2015-10-31	Quarter: 2015-10-31
10-Q	2015-08-01	Quarter: 2015-08-01
10-Q	2015-05-02	Quarter: 2015-05-02
10-K	2015-01-31	Annual: 2015-01-31
10-Q	2014-11-01	Quarter: 2014-11-01
10-Q	2014-08-02	Quarter: 2014-08-02
10-Q	2014-05-03	Quarter: 2014-05-03
10-K	2014-02-01	Annual: 2014-02-01

8-K	2019-09-19	Officers, Regulation FD, Exhibits
8-K	2019-08-28	Earnings, Exhibits
8-K	2019-06-13	Shareholder Vote
8-K	2019-05-22	Earnings, Exhibits
8-K	2019-04-26	Regulation FD
8-K	2019-03-26	Earnings, Exhibits
8-K	2019-03-20	Officers, Exhibits
8-K	2019-01-14	Regulation FD, Exhibits
8-K	2018-12-17	Other Events, Exhibits
8-K	2018-11-15	Earnings, Exhibits
8-K	2018-08-28	Earnings, Exhibits
8-K	2018-06-14	Shareholder Vote
8-K	2018-05-24	Earnings, Exhibits
8-K	2018-04-13	Officers, Exhibits
8-K	2018-03-27	Earnings, Exhibits
8-K	2018-01-23	Other Events

TJX	TJX Companies	66,224
ROST	Ross Stores	38,475
LB	L Brands	4,463
URBN	Urban Outfitters	2,296
ANF	Abercrombie & Fitch	1,118
GCO	Genesco	590
DLTH	Duluth Holdings	287
TLRD	Tailored Brands	257
CTRN	Citi Trends	215
DXLG	Destination Xl Group	88

EX-31.1	scvl-ex311_6.htm
EX-31.2	scvl-ex312_8.htm
EX-32.1	scvl-ex321_7.htm
EX-32.2	scvl-ex322_9.htm