Shoe Carnival Reports Strong Q1 Growth

Shoe Carnival, Inc. has reported its first-quarter fiscal 2024 results, showcasing notable growth and achievements. The company's net sales exceeded expectations, increasing by 6.8 percent to $300.4 million, and its EPS achieved the high end of expectations at $0.63 for GAAP EPS and $0.64 for adjusted EPS. Additionally, GAAP operating income increased by 7.5 percent to $22.5 million, with adjusted operating income also rising by 9.8 percent to $23.0 million compared to the prior year.

The company's store count has reached a record high of 430 stores, growing by 30 stores since the beginning of the year. The acquisition of Rogan Shoes, Incorporated in February 2024 contributed to this growth.

Notably, the gross profit margin increased to 35.6 percent in the first quarter of 2024, marking the 13th consecutive quarter where the company’s gross profit margin exceeded 35 percent. This increase was attributed to higher merchandise margins and leverage in buying, distribution, and occupancy on the higher sales.

While comparable store sales for the thirteen-week period ended May 4, 2024, declined by 3.4 percent compared to the same period in 2023, the company saw significant improvement in comparable store sales trends as the quarter progressed, with growth demonstrated versus the prior year late in the quarter.

The first quarter of 2024 saw the merchandise inventory totaling $411.6 million, reflecting an increase of approximately $22.1 million versus the first quarter of 2023. The increase was impacted by the acquisition of Rogan’s inventory of approximately $40 million, partially offset by continued inventory efficiencies as part of the company’s ongoing inventory optimization improvement plan.

Shoe Carnival has also experienced significant store growth, with plans to surpass 500 stores by 2028. As of May 4, 2024, over 60 percent of the Shoe Carnival store modernization was complete, with the company expecting total capital expenditures to be in a range of $25 million to $35 million in fiscal 2024 as the store modernization program nears completion.

In terms of capital management, the company ended the 2023 fiscal year with no debt, and through the first quarter of 2024, continued funding its operations and growth investments from operating cash flow and without debt. As of the end of the first quarter of 2024, the company had approximately $69.5 million of cash, cash equivalents, and marketable securities, and approximately $100 million in borrowing capacity.

Based on the first quarter 2024 results, the company reaffirmed its entire fiscal 2024 outlook, including net sales growth in a range of 4 percent to 6 percent versus fiscal 2023 and fiscal 2024 GAAP EPS in a range of $2.50 to $2.70 and adjusted EPS in a range of $2.55 to $2.75.

As a result of these announcements, the company's shares have moved 3.2% on the market, and are now trading at a price of $35.5. If you want to know more, read the company's complete 8-K report here.

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