Exhibit 99.1
8233 Baumgart Road Contact Mark L. Lemond
Evansville, Indiana 47725 President and Chief Executive Officer
www.shoecarnival.com or W. Kerry Jackson
(812) 867-4034 Senior Vice President, Chief Financial Officer
and Treasurer
FOR IMMEDIATE RELEASE
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SHOE CARNIVAL REPORTS SECOND QUARTER RESULTS
Evansville, Indiana, August 19, 2003 - Shoe Carnival, Inc. (Nasdaq:
SCVL) a leading retailer of value-priced footwear and accessories, today
announced sales and earnings for the second quarter ended August 2, 2003. Net
income for the second quarter of fiscal 2003 was $1.5 million, or $0.12 per
diluted share, compared with net income of $3.6 million, or $0.27 per diluted
share, in the second quarter of fiscal 2002.
Net sales for the second quarter of 2003 increased 7.9 percent to a
second quarter Company record of $134.5 million from $124.6 million last year.
Comparable store sales decreased by 3.0 percent for the 13-week period.
Gross profit margins for the second quarter of 2003 decreased to 27.5
percent from 28.7 percent last year. Selling, general and administrative
expenses, as a percentage of sales, increased to 25.5 percent from 24.0 percent
in the second quarter of 2002. New store pre-opening costs incurred in the
second quarter of 2003 were $828,000, or 0.6 percent of sales, compared with
$663,000, or 0.5 percent of sales last year. Interest costs decreased to
$176,000 in the second quarter from $200,000 last year.
Mark Lemond, president and chief executive officer stated, "Our results
came in below our expectations due to a decrease in customer traffic during the
quarter, which necessitated increased promotional activity in order to liquidate
seasonal merchandise. The lower customer traffic, combined with increased
promotional activity, resulted in lower comparable stores sales and gross profit
margins for the quarter. The increase in selling, general and administrative
expenses for the quarter, as a percentage of sales, was primarily due to the
deleveraging effect of lower comparable store sales.
"While the first half results were disappointing, it appears that the
U.S. economy and retail environment are beginning to show signs of a recovery.
We have seen an improved sales trend in the back-to-school selling period, and
if these trends continue, we expect to report better results in the second half
of 2003."
Net income for the first half of 2003 was $6.6 million, or $0.51 per
diluted share, compared with net income of $9.2 million, or $.71 per diluted
share, last year. Net sales increased 6.8 percent to $271.3 million for the
first six months from sales of $254.0 million last year. Comparable store sales
decreased 4.3 percent for the six-month period. Gross profit margin for the
first six months of 2003 decreased to 28.7 percent from 29.5 percent last year.
Selling, general and administrative expenses, as a percentage of sales,
increased to 24.7 percent in the first six months of 2003 from 23.5 percent last
year. Pre-opening costs for first six months of 2003 were $1.6 million, or 0.6
percent of sales, as compared to $1.1 million, or 0.4 percent of sales, in the
first half of 2002. Interest expense incurred in the first half of 2003
decreased to $342,000 from $464,000 in the same period in 2002.
The Company also issued guidance for the second half of 2003. With an
expectation of an improving sales trend in the second half of 2003, comparable
store sales are now expected to be in the range of flat to up two percent for
the third and fourth quarters. Earnings per diluted share are expected to range
from $0.41 to $0.46 in the third quarter and $0.15 to $0.18 in the fourth
quarter.
During the first half of 2003, 24 new stores were opened, 11 of which
were opened in the second quarter. An additional 13 stores will be opened in the
second half of 2003 bringing the total new stores to 37 for the year.
The 11 stores opened during the second quarter included locations in:
City Market/Stores
---------------------- ------------------
Colorado Springs, CO Colorado Springs/1
Knoxville, TN Knoxville/1
Brooksville, FL Tampa/5
Houston, TX Houston/2
San Antonio, TX San Antonio/1
Lansing, MI Lansing/1
Noblesville, IN Indianapolis/11
Grandville, MI Grand Rapids/7
Baton Rouge, LA Baton Rouge/2
E. Wichita, KS Wichita/2
Orlando, FL Orlando/5
Today, at 2:00 p.m. Eastern time, the Company will host a conference
call to discuss the second quarter results. The public can listen to the live
webcast of the call by visiting Shoe Carnival's Investor Relations page at
www.shoecarnival.com. While the question-and-answer session will be available to
all listeners, questions from the audience will be limited to institutional
analysts and investors. A replay of the webcast will be available on our website
for two weeks beginning approximately two hours after the conclusion of the
conference call.
This press release contains forward-looking statements that involve a
number of risks and uncertainties. A number of factors could cause our actual
results, performance, achievements or industry results to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements. These factors include, but are not
limited to: general economic conditions in the areas of the United States in
which our stores are located; changes in the overall retail environment and more
specifically in the apparel and footwear retail sectors; the potential impact of
national and international security concerns on the retail environment; changes
in our relationships with key suppliers; the impact of competition and pricing;
changes in weather patterns, consumer buying trends and our ability to identify
and respond to emerging fashion trends; risks associated with the seasonality of
the retail industry; the availability of desirable store locations at acceptable
lease terms and our ability to open new stores in a timely manner; higher than
anticipated costs associated with the closing of underperforming stores; the
inability of manufacturers to deliver products in a timely manner; and changes
in the trade relations between the United States and countries which are the
major manufacturers of footwear.
In addition, these forward-looking statements necessarily depend upon
assumptions, estimates and dates that may be incorrect or imprecise and involve
known and unknown risks, uncertainties and other factors. Accordingly, any
forward-looking statements included in this press release do not purport to be
predictions of future events or circumstances and may not be realized.
Forward-looking statements can be identified by, among other things, the use of
forward-looking terms such as "believes," "expects," "may," "will," "should,"
"seeks," "pro forma," "anticipates," "intends" or the negative of any of these
terms, or comparable terminology, or by discussions of strategy or intentions.
Given these uncertainties, we caution investors not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. We
disclaim any obligation to update any of these factors or to publicly announce
any revisions to the forward-looking statements contained in this press release
to reflect future events or developments.
Shoe Carnival is a chain of 229 footwear stores located in the Midwest,
South and Southeast. Combining value pricing with an entertaining store format,
Shoe Carnival is a leading retailer of name brand and private label footwear for
the entire family. Headquartered in Evansville, IN, Shoe Carnival trades on the
Nasdaq Stock Market under the symbol SCVL. Shoe Carnival's press releases and
annual report are available on the Company's website at www.shoecarnival.com.
Financial Tables Follow
###
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share)
(Unaudited)
13 Weeks Ended 26 Weeks Ended
August 2, August 3, August 2, August 3,
2003 2002 2003 2002
------------- -------------- ------------ -------------
Net sales $ 134,463 $ 124,626 $ 271,313 $ 254,010
Cost of sales (including buying,
distribution and occupancy costs) 97,512 88,865 193,481 179,167
------------ -------------- ------------ -------------
Gross profit 36,951 35,761 77,832 74,843
Selling, general and administrative
expenses 34,309 29,873 66,896 59,634
------------ -------------- ------------ -------------
Operating income 2,642 5,888 10,936 15,209
Interest expense 176 200 342 464
------------ -------------- ------------ -------------
Income before income taxes 2,466 5,688 10,594 14,745
Income taxes 925 2,133 3,973 5,529
------------ -------------- ------------ -------------
Net income $ 1,541 $ 3,555 $ 6,621 $ 9,216
============ ============== ============ =============
Net income per share:
Basic $ .12 $ .28 $ .52 $ .74
============ ============== ============ ============
Diluted $ .12 $ .27 $ .51 $ .71
============ ============== ============ ============
Average shares outstanding:
Basic 12,652 12,566 12,638 12,518
============ ============== ============ ============
Diluted 13,018 13,065 12,989 12,995
============ ============== ============ ============
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS
August 2, February 1, August 3,
2003 2003 2002
------------ ------------ ------------
Current Assets:
Cash and cash equivalents $ 10,190 $ 5,782 $ 6,316
Accounts receivable 1,772 1,134 954
Merchandise inventories 171,979 146,091 146,615
Deferred income tax benefit 909 901 316
Other 3,388 1,890 3,275
----------- ----------- -----------
Total Current Assets 188,238 155,798 157,476
Property and equipment-net 67,701 63,477 62,016
----------- ----------- -----------
TOTAL ASSETS $ 255,939 $ 219,275 $ 219,492
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 63,906 $ 49,847 $ 49,432
Accrued and other liabilities 10,806 9,276 10,728
Current portion of long-term debt 298 427 586
----------- ----------- -----------
Total Current Liabilities 75,010 59,550 60,746
Long-term debt 27,949 15,503 23,447
Deferred lease incentives 6,992 5,262 4,513
Accrued rent 2,623 2,458 2,242
Deferred income taxes 4,440 4,971 4,041
Other 927 640 511
----------- ----------- -----------
TOTAL LIABILITIES 117,941 88,384 95,500
SHAREHOLDERS' EQUITY 137,998 130,891 123,992
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 255,939 $ 219,275 $ 219,492
=========== =========== ===========
SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twenty-six Twenty-six
Weeks Ended Weeks Ended
August 2, 2003 August 3, 2002
-------------- --------------
Cash Flows From Operating Activities
Net income $ 6,621 $ 9,216
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 6,808 5,970
Stock option income tax benefit 106 655
Loss on retirement of assets 147 6
Deferred income taxes (539) (49)
Other 246 169
Changes in operating assets and liabilities:
Accounts receivable (854) 344
Merchandise inventories (25,888) (10,967)
Accounts payable and accrued liabilities 15,577 9,652
Other (1,478) (1,459)
------------- ------------
Net cash provided by operating activities 746 13,537
------------- ------------
Cash Flows From Investing Activities
Purchases of property and equipment (11,337) (10,693)
Lease incentives 1,936 514
Other 367 0
------------- ------------
Net cash used in investing activities (9,034) (10,179)
------------- ------------
Cash Flows From Financing Activities
Net borrowings (payments) under line of credit 12,575 (4,000)
Payments on long-term debt (259) (520)
Proceeds from issuance of stock 380 2,019
------------- ------------
Net cash provided by (used in) financing activities 12,696 (2,501)
------------- ------------
Net increase in cash and cash equivalents 4,408 857
Cash and cash equivalents at beginning of period 5,782 5,459
------------- ------------
Cash and Cash Equivalents at end of period $ 10,190 $ 6,316
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