Shoe Carnival Earnings 2019-11-02

SCVL 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
GCO	699	1,756	1,171	2,371	1,150	-43	35	717	49%	20.5	-2%
CHS	497	1,626	1,077	2,051	699	-10	86	447	34%	5.2	-1%
SCVL	481	693	390	1,026	305	39	74	443	30%	6.0	6%
LE	456	1,110	797	1,405	595	10	65	759	42%	11.7	1%
CATO	404	657	323	863	346	51	72	376	40%	5.2	8%
DLTH	322	434	281	593	318	12	40	344	54%	8.6	3%
TLYS	286	540	366	609	183	24	56	224	30%	4.0	4%
TLRD	258	2,675	2,670	3,169	1,318	62	276	1,393	42%	5.0	2%
CTRN	215	448	260	764	0	15	38	188	0%	5.0	3%
EXPR	184	2,053	1,494	2,067	580	-13	81	30	28%	0.4	-1%

10-Q 1 scvl-10q_20191102.htm 10-Q scvl-10q_20191102.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended November 2, 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 November 27, 2019 was 14,193,253.

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	7
		Notes to Condensed Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

	Item 4.	Controls and Procedures	23

Part II	Other Information

	Item 1A.	Risk Factors	24

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

	Item 6.	Exhibits	24

	Signature		25

SHOE CARNIVAL, INC.
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands, except share data)	November 2, 2019			February 2, 2019			November 3, 2018
Assets
Current Assets:
Cash and cash equivalents	$	33,707		$	67,021		$	39,699
Accounts receivable		2,470			1,219			2,322
Merchandise inventories		298,002			257,539			300,510
Other		10,868			11,534			11,762
Total Current Assets		345,047			337,313			354,293
Property and equipment – net		69,147			70,605			74,471
Deferred income taxes		7,678			9,622			8,866
Other noncurrent assets		3,692			459			389
Operating lease right-of-use assets		222,148		0				0
Total Assets	$	647,712		$	417,999		$	438,019

Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	66,089		$	48,715		$	56,270
Accrued and other liabilities		22,052			22,069			28,094
Current portion of operating lease liabilities		42,481			0			0
Total Current Liabilities		130,622			70,784			84,364
Long-term portion of operating lease liabilities		202,138			0			0
Deferred lease incentives		0			22,171			23,478
Accrued rent		0			8,436			8,808
Deferred compensation		13,220			12,108			11,811
Other		984			67			806
Total Liabilities		346,964			113,566			129,267

Shareholders’ Equity:
Common stock, $.01 par value, 50,000,000 shares authorized, 20,527,244 shares, 20,529,227 shares and 20,529,227 shares issued, respectively		205			205			205
Additional paid-in capital		78,859			75,631			73,103
Retained earnings		393,497			360,443			360,335
Treasury stock, at cost, 6,338,584 shares, 5,154,243 shares and 4,958,854 shares, respectively		(171,813	)		(131,846	)		(124,891	)
Total Shareholders’ Equity		300,748			304,433			308,752
Total Liabilities and Shareholders’ Equity	$	647,712		$	417,999		$	438,019

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 November 2, 2019			Thirteen Weeks Ended November 3, 2018			Thirty-nine Weeks Ended November 2, 2019			Thirty-nine Weeks Ended November 3, 2018
Net sales	$	274,645		$	269,181		$	796,676		$	794,992
Cost of sales (including buying, distribution and occupancy costs)		189,911			187,963			554,707			552,666
Gross profit		84,734			81,218			241,969			242,326
Selling, general and administrative expenses		66,584			65,202			192,537			194,063
Operating income		18,150			16,016			49,432			48,263
Interest income		(163	)		(273	)		(580	)		(392	)
Interest expense		34			37			155			113
Income before income taxes		18,279			16,252			49,857			48,542
Income tax expense		4,553			4,206			10,426			11,766
Net income	$	13,726		$	12,046		$	39,431		$	36,776
Net income per share:
Basic	$	0.95		$	0.80		$	2.71		$	2.40
Diluted	$	0.94		$	0.76		$	2.66		$	2.36
Weighted average shares:
Basic		14,404			15,071			14,544			15,282
Diluted		14,556			15,812			14,826			15,544

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, except per share data)	Issued			Treasury			Amount		Capital			Earnings			Stock			Total
Balance at August 3, 2019		20,528			(5,822	)	$	205	$	77,374		$	381,012		$	(155,031	)	$	303,560
Dividends declared ($0.085 per share)													(1,241	)					(1,241	)
Employee stock purchase plan purchases					1					1						43			44
Restricted stock awards		(1	)		7					(178	)					178			0
Shares surrendered by employees to pay taxes on restricted stock					(3	)										(100	)		(100	)
Purchase of common stock for treasury					(522	)										(16,903	)		(16,903	)
Stock-based compensation expense										1,662									1,662
Net income													13,726						13,726
Balance at November 2, 2019		20,527			(6,339	)	$	205	$	78,859		$	393,497		$	(171,813	)	$	300,748

Balance at August 4, 2018		20,529			(4,440	)	$	205	$	68,892		$	349,549		$	(104,882	)	$	313,764
Dividends declared ($0.080 per share)													(1,257	)					(1,257	)
Employee stock purchase plan purchases					1					10						31			41
Shares surrendered by employees to pay taxes on restricted stock					(1	)										(37	)		(37	)
Purchase of common stock for treasury					(519	)										(20,003	)		(20,003	)
Stock-based compensation expense										4,201									4,201
Other													(3	)					(3	)
Net income													12,046						12,046
Balance at November 3, 2018		20,529			(4,959	)	$	205	$	73,103		$	360,335		$	(124,891	)	$	308,752

See notes to Condensed Consolidated Financial Statements.

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Unaudited

	Thirty-nine Weeks Ended
	Common Stock								Additional Paid-In			Retained			Treasury
(In thousands, except per share data)	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 ($0.250 per share)													(3,728	)					(3,728	)
Employee stock purchase plan purchases					5					2						146			148
Restricted stock awards		(2	)		67					(1,842	)					1,842			0
Shares surrendered by employees to pay taxes on restricted stock					(324	)										(11,040	)		(11,040	)
Purchase of common stock for treasury					(933	)										(30,915	)		(30,915	)
Stock-based compensation expense										5,068									5,068
Net income													39,431						39,431
Balance at November 2, 2019		20,527			(6,339	)	$	205	$	78,859		$	393,497		$	(171,813	)	$	300,748

Balance at February 3, 2018		20,529			(3,582	)	$	205	$	65,458		$	326,738		$	(85,099	)	$	307,302
Adoption of Accounting Standards Codification 606													620						620
Dividends declared ($0.235 per share)													(3,799	)					(3,799	)
Employee stock purchase plan purchases					6					5						143			148
Restricted stock awards					(41	)				577						(577	)		0
Shares surrendered by employees to pay taxes on restricted stock					(12	)										(312	)		(312	)
Purchase of common stock for treasury					(1,330	)										(39,046	)		(39,046	)
Stock-based compensation expense										7,063									7,063
Net income													36,776						36,776
Balance at November 3, 2018		20,529			(4,959	)	$	205	$	73,103		$	360,335		$	(124,891	)	$	308,752

See notes to Condensed Consolidated Financial Statements.

SHOE CARNIVAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)	Thirty-nine Weeks Ended November 2, 2019			Thirty-nine Weeks Ended November 3, 2018
Cash Flows From Operating Activities
Net income	$	39,431		$	36,776
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		12,652			16,551
Stock-based compensation		5,207			7,604
Loss/(gain) on retirement and impairment of assets		767			(1,412	)
Deferred income taxes		1,944			(684	)
Non-cash operating lease expense		30,932			0
Lease incentives		0			298
Other		1,111			(6,882	)
Changes in operating assets and liabilities:
Accounts receivable		(1,251	)		4,218
Merchandise inventories		(40,463	)		(40,010	)
Operating lease liabilities		(34,306	)		0
Accounts payable and accrued liabilities		17,173			23,330
Other		(5,165	)		(2,009	)
Net cash provided by operating activities		28,032			37,780
Cash Flows From Investing Activities
Purchases of property and equipment		(15,081	)		(5,021	)
Other		8			1,489
Net cash used in investing activities		(15,073	)		(3,532	)
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		148			148
Dividends paid		(4,466	)		(3,593	)
Purchase of common stock for treasury		(30,915	)		(39,046	)
Shares surrendered by employees to pay taxes on restricted stock		(11,040	)		(312	)
Net cash used in financing activities		(46,273	)		(42,803	)
Net decrease in cash and cash equivalents		(33,314	)		(8,555	)
Cash and cash equivalents at beginning of period		67,021			48,254
Cash and cash equivalents at end of period	$	33,707		$	39,699
Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	155		$	113
Cash paid during period for income taxes

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	15	$481

10-Q	2019-12-05	Quarter: 2019-11-02
10-Q	2019-09-09	Quarter: 2019-08-03
10-Q	2019-06-11	Quarter: 2019-05-04
10-K	2019-04-02	Annual: 2019-02-02
10-Q	2018-12-07	Quarter: 2018-11-03
10-Q	2018-09-11	Quarter: 2018-08-04
10-Q	2018-06-11	Quarter: 2018-05-05
10-K	2018-04-02	Annual: 2018-02-03
10-Q	2017-12-05	Quarter: 2017-10-28
10-Q	2017-08-31	Quarter: 2017-07-29
10-Q	2017-05-31	Quarter: 2017-04-29
10-K	2017-03-29	Annual: 2017-01-28
10-Q	2016-11-30	Quarter: 2016-10-29
10-Q	2016-09-07	Quarter: 2016-07-30
10-Q	2016-06-03	Quarter: 2016-04-30
10-K	2016-04-04	Annual: 2016-01-30
10-Q	2015-12-08	Quarter: 2015-10-31
10-Q	2015-09-09	Quarter: 2015-08-01
10-Q	2015-06-10	Quarter: 2015-05-02
10-K	2015-04-16	Annual: 2015-01-31
10-Q	2014-12-11	Quarter: 2014-11-01
10-Q	2014-09-08	Quarter: 2014-08-02
10-Q	2014-06-12	Quarter: 2014-05-03
10-K	2014-04-10	Annual: 2014-02-01
10-Q	2013-09-12	Quarter: 2013-08-03
10-Q	2013-06-13	Quarter: 2013-05-04
10-K	2013-04-15	Annual: 2013-02-02
10-Q	2012-12-06	Quarter: 2012-10-27
10-Q	2012-09-06	Quarter: 2012-07-28
10-Q	2012-06-07	Quarter: 2012-04-28
10-K	2012-04-12	Annual: 2012-01-28
10-Q	2011-12-08	Quarter: 2011-10-29
10-Q	2011-09-07	Quarter: 2011-07-30
10-Q	2011-06-09	Quarter: 2011-04-30
10-K	2011-04-14	Annual: 2011-01-29
10-Q	2010-12-09	Quarter: 2010-10-30
10-Q	2010-09-09	Quarter: 2010-07-31
10-Q	2010-06-10	Quarter: 2010-05-01
10-K	2010-04-15	Annual: 2010-01-30

8-K	2019-12-12	Other Events, Exhibits
8-K	2019-11-21	Earnings, Exhibits
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

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EX-31.2	scvl-ex312_9.htm
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