Shoe Carnival reports record results for Q2

30 Aug '10

5 min read

Shoe Carnival, Inc., a leading retailer of value-priced footwear and accessories, announced net sales and earnings for the second quarter ended July 31, 2010.

Net sales for the second quarter of 2010 increased 8.2 percent to $165.4 million from $152.8 million for the second quarter of 2009. Comparable store sales for the thirteen-week period ended July 31, 2010 increased 8.3 percent.

Net earnings for the second quarter increased 319 percent to $4.1 million compared to $982,000 for the second quarter of 2009. Diluted earnings per share for the quarter increased to $0.32 compared to $0.08 in the prior year second quarter. Included in the $0.32 per diluted share was a $0.04 benefit resulting from a favorable resolution of a state tax position.

The gross profit margin for the second quarter increased 1.5 percent to 28.3 percent compared to 26.8 percent for the second quarter of the prior year. The merchandise margin increased 1.0 percent. The Company's buying, distribution and occupancy costs decreased 0.5 percent, as a percentage of sales, due to the leverage associated with comparable store sales increases.

Selling, general and administrative expenses for the second quarter increased $1.7 million to $40.8 million; however, as a percentage of sales, these expenses decreased to 24.7 percent compared to 25.6 percent in the second quarter of 2009.

Speaking on the results, Mark Lemond, president and chief executive officer said, "I am pleased to report that in the second quarter we were able to take advantage of consumer demand across each broad merchandise category and in every operations region. Our strong quarterly sales performance, when combined with a higher gross profit margin and controlled expenses, resulted in record second quarter earnings. While toning footwear was a key driver of our sales for the quarter, our non-athletic footwear, particularly sandals and other types of casual footwear for the family were also significant drivers of our sales increase."

Mr. Lemond continued, "Our continued strong financial performance and today's positive footwear industry trends give us the confidence to remain optimistic about our outlook for the back-to-school sales season, which is traditionally our most important sales and earnings period. Comparable store sales for the first three weeks of August have increased approximately 6 percent, on top of an increase of 11 percent for the same period last year."

Net sales during the first six months of 2010 increased $34.7 million to $354.9 million as compared to the same period last year. This sales increase was driven primarily by a comparable store sales increase of 10.8 percent. Net earnings for the first half of 2010 were $13.4 million, or $1.04 per diluted share, compared with net earnings of $5.1 million, or $0.41 per diluted share, in the first half of last year.

Included in the diluted earnings per share for the first six monthsthis year was a $0.06 charge for store closing and impairment costs and a $0.04 benefit resulting from a favorable resolution of a state tax position. The gross profit margin for the first six months of 2010 was 29.9 percent compared to 27.4 percent last year. Selling, general and administrative expenses, as a percentage of sales, were 24.0 percent for the first six months of 2010 as compared to 24.7 percent in the first six months of 2009.

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