Financial Data and Key Metrics Changes - Earnings per share (EPS) for the first nine months of fiscal 2022 reached $3.17, more than double any full year of earnings in the company's 44-year history except for one [5] - Q3 EPS was $1.18, exceeding consensus expectations, with operating profit margins at 12.8%, the highest of the year [6][7] - Q3 net sales were $341.7 million, a 24.4% increase compared to Q3 2019, marking the second highest quarterly sales in the company's history [34] - Gross profit margin for Q3 was 38.3%, a 740 basis point increase compared to Q3 2019 [35] - Net income for Q3 was $32.7 million, representing a 151% increase compared to Q3 2019 [37] Business Line Data and Key Metrics Changes - Non-athletic sales were up 35.1% compared to 2019, while athletic sales stabilized with a 4.4% increase [11] - Sales in non-athletic categories were up in the mid-30s versus 2019, with children's non-athletic sales up in the high 60s [29] - The company experienced a 50/50 sales balance between athletic and non-athletic categories, shifting 700 basis points towards non-athletic compared to 2019 [23] Market Data and Key Metrics Changes - Customer count for loyalty membership surpassed 31.5 million, up approximately 35% compared to 2019 [10] - The company achieved a 21.9% increase in overall sales for the first nine months of fiscal 2022 compared to 2019 [10] Company Strategy and Development Direction - The company is modernizing its store fleet, with 41% of stores modernized as of Q3 2022, aiming for over 50% by summer 2023 [14] - Shoe Station banner is expected to exceed original sales expectations of $100 million, with sales surpassing $75 million during the first nine months of 2022 [15] - Plans to expand the store footprint to over 400 locations in 2023 and target 500-plus stores by 2026 to 2028 [21] Management's Comments on Operating Environment and Future Outlook - Management anticipates a historically high inflationary environment affecting customer disposable incomes and traffic in Q4 [13] - Despite challenges, the company is confident in achieving its EPS and strategic targets for the remainder of fiscal 2022 [41] Other Important Information - The company repurchased 451,638 shares at a total cost of $10 million during Q3 [39] - Inventory at the end of Q3 was $392.3 million, up $94.3 million compared to Q3 2019, with 40% of the increase attributed to Shoe Station [38] Q&A Session Summary Question: Can you provide the merchandise margin and BD&O leverage year-over-year? - Merchandise margin increased 760 basis points for the quarter, and BD&O was de-leveraged by 20 basis points [45] Question: Can you discuss inventory levels and optimum inventory turn? - The company is comfortable with current inventory levels and plans to achieve goals with the Shoe Station banner coming online [48] Question: How is the supply chain situation improving? - The company is seeing more consistent on-time deliveries across all categories, with improved inventory levels for Q4 [53] Question: What are the trends in athletic versus non-athletic sales? - Historically, non-athletic sales tend to increase in the fourth quarter, with a potential shift towards 60/40 non-athletic sales [57] Question: What is the expected launch date for the e-commerce platform? - The launch of ShoeStation.com is in the final testing phase, expected to launch just in time for the holiday season or early Q1 [84] Question: How are merchandise margins holding up against industry promotional activity? - The company is not seeing significant increases in promotional activity compared to competitors, maintaining strong margins [85]

[Part I - Financial Information](index=3&type=section&id=Part%20I%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q2 2022 detail the company's financial position, operations, and cash flows, showing decreased net sales and income, increased inventories, and reduced operating cash flow, incorporating the Shoe Station acquisition [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$914.5 million** driven by higher merchandise inventories, while cash and cash equivalents decreased, and total liabilities and shareholders' equity grew Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 30, 2022 | January 29, 2022 | July 31, 2021 | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $51,620 | $117,443 | $146,506 | | Merchandise inventories | $385,510 | $285,205 | $308,141 | | Total Current Assets | $476,932 | $442,032 | $493,080 | | Total Assets | $914,515 | $812,264 | $784,056 | | **Liabilities & Equity** | | | | | Total Current Liabilities | $189,242 | $153,708 | $194,389 | | Total Liabilities | $430,883 | $359,731 | $394,144 | | Total Shareholders' Equity | $483,632 | $452,533 | $389,912 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q2 2022, net sales decreased to **$312.3 million**, leading to a decline in gross profit and net income to **$28.9 million**, or **$1.04** per diluted share Income Statement Summary (in thousands, except per share data) | Metric | Thirteen Weeks Ended July 30, 2022 | Thirteen Weeks Ended July 31, 2021 | | :--- | :--- | :--- | | Net sales | $312,268 | $332,230 | | Gross profit | $113,130 | $135,752 | | Operating income | $38,789 | $59,714 | | Net income | $28,909 | $44,212 | | Diluted EPS | $1.04 | $1.54 | [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased to **$483.6 million** by July 30, 2022, driven by net income, partially offset by **$20.5 million** in stock repurchases and **$5.1 million** in dividends - For the twenty-six weeks ended July 30, 2022, the company repurchased **$20.5 million** of its common stock for treasury[18](index=18&type=chunk) - Dividends declared for the first half of 2022 amounted to **$5.1 million**, or **$0.18** per share[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities sharply decreased to **$8.9 million** for the first half of 2022 due to increased inventories, while investing and financing activities used **$47.2 million** and **$27.6 million** respectively Cash Flow Summary (in thousands) | Cash Flow Activity | Twenty-six Weeks Ended July 30, 2022 | Twenty-six Weeks Ended July 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,918 | $79,847 | | Net cash used in investing activities | ($47,169) | ($29,619) | | Net cash used in financing activities | ($27,572) | ($10,254) | | Net (decrease) increase in cash | ($65,823) | $39,974 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail financial statement policies, the Shoe Station acquisition contributing **$27.2 million** in Q2 2022 net sales, and revenue disaggregation showing a shift from athletic to non-athletic footwear - The acquisition of Shoe Station on December 3, 2021, contributed net sales of **$27.2 million** in Q2 2022 and **$53.4 million** in the first half of 2022[26](index=26&type=chunk)[27](index=27&type=chunk) Revenue by Product Category - Q2 2022 vs Q2 2021 (as % of Net Sales) | Category | Q2 2022 % | Q2 2021 % | | :--- | :--- | :--- | | Non-Athletics | 55% | 48% | | Athletics | 40% | 47% | | Accessories | 5% | 5% | Total Lease Costs (in thousands) | Period | Thirteen Weeks Ended July 30, 2022 | Thirteen Weeks Ended July 31, 2021 | | :--- | :--- | :--- | | Total Lease Cost | $19,911 | $19,343 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2022 financial results, noting decreased sales and earnings from 2021 due to inflation and supply chain issues, yet remaining above pre-pandemic levels, while highlighting the Shoe Station acquisition and ongoing store modernization [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Q2 2022 net sales decreased **6.0%** to **$312.3 million** due to a **13.8%** comparable store sales decline, while gross profit margin fell to **36.2%** due to higher costs and deleveraging - Q2 2022 net sales decreased **6.0%** YoY, driven by a **13.8%** decline in comparable store sales[75](index=75&type=chunk) - Gross profit margin decreased by **470 basis points** to **36.2%** in Q2 2022, primarily due to a **280 basis point** drop in merchandise margin and a **180 basis point** increase in buying, distribution, and occupancy costs as a percentage of sales[76](index=76&type=chunk) - Compared to pre-pandemic Q2 2019, Q2 2022 net sales increased **16.4%** and comparable store sales increased **8.0%**[68](index=68&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$62.6 million** in cash and no credit facility borrowings, projecting **$63-73 million** in capital expenditures for fiscal 2022, while operating cash flow decreased due to inventory increases - Primary sources of liquidity are **$62.6 million** in cash and securities, cash from operations, and a **$100 million** credit facility with no outstanding borrowings[83](index=83&type=chunk) - Fiscal 2022 capital expenditures are expected to be between **$63 million** and **$73 million**, primarily for new stores, relocations, and remodels[90](index=90&type=chunk) - Year-to-date 2022, the company repurchased **$20.5 million** of common stock and had **$29.5 million** remaining under its authorization[101](index=101&type=chunk) [Store Portfolio and Strategy](index=19&type=section&id=Store%20Portfolio%20and%20Strategy) The company is modernizing its store fleet by fiscal 2024 and plans to expand to **400** stores by the end of fiscal 2022, accelerating new openings to over **25** annually by fiscal 2024 - A store modernization program is underway, with a goal to complete the entire fleet by the end of **fiscal 2024**[74](index=74&type=chunk) - The company plans to reach **400** stores by the end of fiscal 2022 and add over **25** new stores annually by **fiscal 2024**[92](index=92&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk from variable interest rates on its credit facility is currently immaterial due to no outstanding borrowings and no use of derivative instruments - The primary market risk is from variable interest rates on the credit facility, but there were no borrowings outstanding in Q2 2022[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of July 30, 2022, with the Shoe Station acquisition excluded from internal control assessment for this period - Disclosure controls and procedures were deemed effective as of July 30, 2022[104](index=104&type=chunk) - The acquired Shoe Station business was excluded from the assessment of internal control over financial reporting for the period, as permitted by SEC rules[105](index=105&type=chunk) [Part II - Other Information](index=21&type=section&id=Part%20II%20Other%20Information) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported from those disclosed in the most recent Form 10-K - There were no material changes to the company's risk factors from those disclosed in the most recent Form 10-K[109](index=109&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase shares under its public program in Q2 2022, but withheld **1,580** shares for employee tax obligations, with **$29.5 million** remaining for future repurchases Issuer Purchases of Equity Securities (Q2 2022) | Period | Total Shares Purchased | Avg. Price Paid | Shares Purchased as Part of Program | Value Remaining in Program | | :--- | :--- | :--- | :--- | :--- | | May 2022 | 0 | $0 | 0 | $29,485,035 | | June 2022 | 1,580 | $24.07 | 0 | $29,485,035 | | July 2022 | 0 | $0 | 0 | $29,485,035 | - The **1,580** shares purchased were withheld for employee payroll tax withholding upon vesting of stock-based awards and were not part of the public repurchase program[111](index=111&type=chunk) [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL formatted financial data - Exhibits filed include: * Form of Restricted Stock Award Agreement * CEO and CFO Certifications (Sections 302 and 906 of Sarbanes-Oxley Act) * Inline XBRL formatted financial statements[113](index=113&type=chunk)

Shoe Carnival, Inc. (NASDAQ:SCVL) Q2 2022 Earnings Conference Call August 25, 2022 8:30 AM ET Company Participants Mark Worden – President and CEO Carl Scibetta – Chief Merchandising Officer Kerry Jackson – Chief Financial and Administrative Officer Conference Call Participants Mitch Kummetz – Seaport Research Sam Poser – Williams Trading Jim Chartier – Monness, Crespi and Hardt Operator Good morning and welcome to Shoe Carnival's Second Quarter 2022 Earnings Conference Call. Today's conference is being re ...

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 April 30, 2022 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 ...

Shoe Carnival, Inc. (NASDAQ:SCVL) Q1 2022 Earnings Conference Call May 18, 2022 8:30 AM ET Company Participants Mark Worden - President and CEO Carl Scibetta - Senior EVP and Chief Merchandising Officer Kerry Jackson - Senior EVP, CFO, CAO, and Treasurer Conference Call Participants Mitchel Kummetz - Seaport Research Samuel Poser - Williams Trading James Chartier - Monness, Crespi, Hardt Operator Good morning and welcome to Shoe Carnival’s First Quarter 2022 Earnings Conference Call. Today’s conference is b ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Shoe Carnival, Inc. is a major family footwear retailer that achieved record fiscal 2021 performance and expanded its market presence through strategic acquisition - In fiscal 2021, the company achieved record financial results, with **net sales growing by 36%** and **diluted net income per share of $5.42**[9](index=9&type=chunk)[174](index=174&type=chunk) - The company completed its first acquisition of Shoe Station for approximately **$70.7 million** in cash, adding 21 stores and expanding its customer base[12](index=12&type=chunk) Sales by Product Category (as % of Total Sales) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Non-Athletics** | **44%** | **41%** | **44%** | | Women's | 24% | 22% | 25% | | Men's | 14% | 14% | 14% | | Children's | 6% | 5% | 5% | | **Athletics** | **50%** | **53%** | **51%** | | Women's | 16% | 18% | 17% | | Men's | 20% | 22% | 20% | | Children's | 14% | 13% | 14% | | **Accessories** | **5%** | **5%** | **5%** | | **Other** | **1%** | **1%** | **0%** | - **Nike, Inc. and Skechers USA, Inc.** collectively accounted for approximately **39% of net sales** in fiscal 2021, indicating significant supplier concentration[46](index=46&type=chunk) - The growth strategy targets adding **over 10 new stores in fiscal 2022**, **over 20 in fiscal 2023**, and **over 25 annually by fiscal 2024** through organic growth and acquisitions[25](index=25&type=chunk) - The Shoe Perks loyalty program expanded to **28.5 million members** in fiscal 2021, with member purchases comprising approximately **68% of comparable net sales**[36](index=36&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces key operational, compliance, human capital, financial, and ownership risks, including supply chain disruptions and high supplier concentration - Operational and strategic risks include adverse impacts on consumer spending, ongoing effects of the COVID-19 pandemic, disruptions in imported goods, and potential difficulties integrating the Shoe Station acquisition[89](index=89&type=chunk)[90](index=90&type=chunk)[94](index=94&type=chunk)[97](index=97&type=chunk) - The business depends heavily on key suppliers, with **Nike, Inc. and Skechers USA, Inc.** accounting for approximately **39% of net sales** in fiscal 2021, creating a concentration risk[111](index=111&type=chunk) - The company faces compliance and litigation risks related to protecting customer and employee data from cybersecurity breaches, which could result in litigation, fines, and reputational damage[130](index=130&type=chunk) - A significant risk related to stock ownership is the control held by principal shareholders, as the **Weaver family beneficially owns approximately 35.5%** of the outstanding common stock[143](index=143&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[146](index=146&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) As of January 29, 2022, the company leased 393 stores and a 410,000 sq ft distribution center, while owning its corporate headquarters - As of January 29, 2022, the company leased **393 stores**, with approximately **98% of store leases** having fixed minimum rentals[147](index=147&type=chunk) - The company leases a **410,000 sq ft distribution center** in Evansville, IN, with the lease expiring in 2034 and the right to expand by 200,000 sq ft[148](index=148&type=chunk) - The corporate headquarters in Evansville, Indiana is owned by the company[149](index=149&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not expect any material adverse effect on its financial position or operations - The company is involved in legal proceedings from time to time but does not expect any to have a material adverse effect on its financial position or operations[150](index=150&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[151](index=151&type=chunk) Part II [Market for Common Equity, Stockholder Matters, and Issuer Purchases](index=27&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, completed a two-for-one stock split, and increased quarterly dividends, with no share repurchases in Q4 fiscal 2021 - The company's common stock is traded on The Nasdaq Stock Market under the symbol **"SCVL"**[153](index=153&type=chunk) - A **two-for-one stock split** was completed on July 19, 2021, with all share and per-share amounts retroactively adjusted[154](index=154&type=chunk) - During fiscal 2021, the company paid quarterly cash dividends of **$0.07 per share**, which increased by **29% to $0.09 per share** on March 10, 2022[155](index=155&type=chunk)[156](index=156&type=chunk) - No shares were repurchased under the company's share repurchase program during the fourth quarter of fiscal 2021[157](index=157&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2021 was a record year for Shoe Carnival, with all-time highs in net sales, gross profit, and diluted EPS, driven by strong comparable store sales and merchandise margins - Fiscal 2021 was a record year, achieving the highest net sales, gross profit, operating income, and diluted net income per share in company history, with diluted EPS of **$5.42** exceeding the total earned during the last six fiscal years combined[174](index=174&type=chunk) - Comparable store sales increased **35.3% in fiscal 2021** compared to fiscal 2020, and **28.3% compared to fiscal 2019**[175](index=175&type=chunk) - The company ended fiscal 2021 with **no debt** and **$132.4 million in cash**, cash equivalents, and marketable securities, even after funding the Shoe Station acquisition with cash on hand[177](index=177&type=chunk)[187](index=187&type=chunk) Historical Financial Data (in thousands, except per share data) | Fiscal Year | Net Sales | Gross Profit | Operating Income | Net Income | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | :--- | | **2021** | $1,330,394 | $526,787 | $207,654 | $154,881 | $5.42 | | **2020** | $976,765 | $279,982 | $21,865 | $15,991 | $0.56 | | **2019** | $1,036,551 | $311,869 | $54,209 | $42,914 | $1.46 | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is variable interest rates on its credit facility, but it had no borrowings in fiscal 2021 and does not use derivatives - The company is exposed to market risk from variable interest rates on its credit facility, but had no borrowings during fiscal 2021[240](index=240&type=chunk) - The company does not use interest rate derivative instruments to manage market risk exposure[240](index=240&type=chunk) [Financial Statements and Supplementary Data](index=39&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2021, including balance sheets, income statements, and cash flow statements Consolidated Balance Sheet Highlights (in thousands) | Account | Jan 29, 2022 | Jan 30, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $442,032 | $355,305 | | Cash and cash equivalents | $117,443 | $106,532 | | Merchandise inventories | $285,205 | $233,266 | | **Total Assets** | **$812,264** | **$642,747** | | **Total Current Liabilities** | $153,708 | $130,901 | | **Total Liabilities** | $359,731 | $332,571 | | **Total Shareholders' Equity** | $452,533 | $310,176 | Consolidated Statement of Income Highlights (in thousands) | Account | FY 2021 | FY 2020 | | :--- | :--- | :--- | | **Net sales** | $1,330,394 | $976,765 | | **Gross profit** | $526,787 | $279,982 | | **Operating income** | $207,654 | $21,865 | | **Net income** | **$154,881** | **$15,991** | - The independent auditor, Deloitte & Touche LLP, identified the valuation of Merchandise Inventories as a Critical Audit Matter due to significant management judgments in estimating net realizable value[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) [Changes in and Disagreements with Accountants](index=66&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[375](index=375&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's internal control over financial reporting and disclosure controls were effective as of January 29, 2022, excluding the Shoe Station acquisition - Management assessed the company's internal control over financial reporting as effective as of January 29, 2022, based on the COSO framework (2013)[378](index=378&type=chunk) - The assessment of internal controls excluded the recently acquired Shoe Station, which constituted **1.3% of net sales** and **11.9% of total assets** for the fiscal year[379](index=379&type=chunk)[388](index=388&type=chunk) - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of January 29, 2022[382](index=382&type=chunk) [Other Information](index=69&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[393](index=393&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=69&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[394](index=394&type=chunk) Part III Part III incorporates information by reference from the 2022 Proxy Statement, covering directors, executive compensation, security ownership, and related transactions [Directors, Executive Officers and Corporate Governance](index=70&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, corporate governance, and the Code of Ethics is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Shareholders[396](index=396&type=chunk) [Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Shareholders[397](index=397&type=chunk) [Security Ownership and Related Stockholder Matters](index=70&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Shareholders[398](index=398&type=chunk) [Certain Relationships, Related Transactions, and Director Independence](index=70&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Shareholders[399](index=399&type=chunk) [Principal Accounting Fees and Services](index=70&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding fees paid to and services provided by the principal accountant is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Shareholders[400](index=400&type=chunk) Part IV Part IV lists financial statements, schedules, and exhibits filed with the Form 10-K, including consolidated financial statements and required certifications [Exhibits and Financial Statement Schedules](index=71&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements included in Item 8 and provides an index of all exhibits filed with the report - This item lists the financial statements filed in Part II, Item 8 and provides an index to all exhibits filed with the Form 10-K[402](index=402&type=chunk)[404](index=404&type=chunk) [Form 10-K Summary](index=74&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that no Form 10-K summary is provided - None[410](index=410&type=chunk)

Financial Data and Key Metrics Changes - Shoe Carnival achieved record fourth quarter net sales of $313.4 million, an increase of $59.5 million or 23.4% compared to Q4 2020 [38] - Comparable store sales increased by 17.7% in Q4 2021 compared to the prior year, with brick-and-mortar sales up 22.1% [38] - Gross profit margin for Q4 2021 was 37.3%, up more than 650 basis points from Q4 2020 [39] - Earnings per diluted share for Q4 2021 increased to a record $0.72, up $0.46 from the previous year [43] - For fiscal 2022, earnings per share are expected to be in the range of $3.80 to $4.10, compared to $1.46 in fiscal 2019 [18] Business Line Data and Key Metrics Changes - Non-athletic sales grew over 20% in Q4, while athletic sales continued to grow in the low teens percentage points [27] - The company reported a balanced merchandise portfolio of 50% non-athletic and 50% athletic, positioning it well for growth [27] - Ecommerce sales grew 146% to over $160 million compared to fiscal 2019, with ecommerce margins 880 basis points higher than Q4 2020 [29] Market Data and Key Metrics Changes - The company experienced strong holiday sales despite the omicron variant, with record in-person shopping levels [10] - Comp sales in Q4 were up 25.3% compared to 2019, indicating a strong recovery and growth trajectory [28] - Inventory levels were up 19.2% on a per-store basis compared to the prior year, reflecting a strong position for spring selling [44] Company Strategy and Development Direction - The company aims to increase operating margins from historical levels of 4% to 5% to a long-term goal of exceeding 10% [12] - Shoe Carnival plans to complete its store modernization program by the end of fiscal 2024, with over 100 stores being remodeled in 2022 [15][31] - The company is moving into a growth mode, planning to add over 10 stores in 2022 and over 20 stores annually starting in 2023 [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth momentum despite macroeconomic challenges, forecasting sales growth of 4% to 7% for fiscal 2022 [11] - The company is well-positioned to capture market share due to strong vendor relationships and effective inventory management [26] - Management acknowledged potential challenges from inflation and supply chain issues but remains optimistic about navigating these hurdles [26][56] Other Important Information - The company successfully integrated Shoe Station six months ahead of schedule and plans to leverage its CRM capabilities for growth [16] - A 29% increase in the quarterly cash dividend was approved, reflecting strong cash flow and commitment to shareholder returns [45] Q&A Session Summary Question: Can you quantify the momentum through the first six weeks of Q1? - Management reported continued strength in store traffic and high single-digit growth compared to the prior year [54] Question: Why is there expected higher growth in the second half compared to the first half? - The anticipated growth is primarily due to the lapping of government stimulus funds, which impacted sales in the first half [56] Question: What structural changes have led to the new sustainable double-digit operating margin? - Key drivers include investments in advanced analytics and CRM capabilities, elimination of unprofitable promotions, and increased employee investment [58][60] Question: What are the sales increases by month in Q4? - November and December saw over 20% comp growth, while January experienced a mid-single-digit decline, outperforming expectations [68] Question: How do you foresee vendor access impacting your business this year? - Strong vendor relationships have allowed the company to maintain inventory levels and meet customer demand despite supply chain challenges [25] Question: What is the composition of new store openings between Shoe Station and Shoe Carnival? - The majority of new stores in 2022 will be Shoe Station, with plans for significant growth in both banners in the coming years [77] Question: What are the opportunities to add stronger brands between Shoe Carnival and Shoe Station? - There are distinct differences in consumer bases, but synergies in purchasing power will be leveraged where appropriate [94]

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements show substantial growth in assets, income, and shareholder equity for the period ended October 30, 2021 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Account | Oct 30, 2021 | Jan 30, 2021 | Oct 31, 2020 | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $173,364 | $106,532 | $46,740 | | Merchandise inventories | $282,014 | $233,266 | $274,264 | | Total Current Assets | $495,665 | $355,305 | $340,166 | | Total Assets | $786,509 | $642,747 | $623,343 | | **Liabilities & Equity** | | | | | Total Current Liabilities | $161,837 | $130,901 | $125,227 | | Total Liabilities | $353,963 | $332,571 | $320,126 | | Total Shareholders' Equity | $432,546 | $310,176 | $303,217 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Income Statement Performance (in thousands, except per share data) | Metric | Thirteen Weeks Ended Oct 30, 2021 | Thirteen Weeks Ended Oct 31, 2020 | Thirty-nine Weeks Ended Oct 30, 2021 | Thirty-nine Weeks Ended Oct 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $356,336 | $274,579 | $1,017,023 | $722,868 | | Gross profit | $144,056 | $87,761 | $409,966 | $201,830 | | Operating income | $62,424 | $20,163 | $179,741 | $11,300 | | Net income | $46,836 | $14,678 | $134,290 | $8,548 | | Diluted EPS | $1.64 | $0.51 | $4.69 | $0.30 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Activity | Thirty-nine Weeks Ended Oct 30, 2021 | Thirty-nine Weeks Ended Oct 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $120,478 | $170 | | Net cash used in investing activities | ($37,846) | ($9,889) | | Net cash used in financing activities | ($15,800) | ($5,440) | | **Net increase (decrease) in cash** | **$66,832** | **($15,159)** | | **Cash at end of period** | **$173,364** | **$46,740** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - On June 21, 2021, the Board of Directors authorized a two-for-one stock split, with all share and per-share amounts retroactively adjusted[25](index=25&type=chunk) - The COVID-19 pandemic significantly impacted fiscal 2020 operations, but as of October 30, 2021, no stores were closed due to the pandemic[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) Revenue by Product Category (YTD % of Net Sales) | Category | Thirty-nine Weeks Ended Oct 30, 2021 | Thirty-nine Weeks Ended Oct 31, 2020 | | :--- | :--- | :--- | | Non-Athletics | 44% | 39% | | Athletics | 50% | 55% | | Accessories and Other | 6% | 6% | - The Shoe Perks rewards program recognized **$4.5 million** in loyalty rewards in Net Sales for the first thirty-nine weeks of fiscal 2021, up from **$3.2 million** in the prior year[58](index=58&type=chunk) [Management's Discussion and Analysis (MD&A)](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported record-breaking financial results for Q3 and YTD fiscal 2021, driven by strong demand and strategic execution [Executive Summary](index=18&type=section&id=Executive%20Summary%20for%20the%20Third%20Fiscal%20Quarter%20Ended%20October%2030%2C%202021) - The third quarter of fiscal 2021 was a record-breaking period, achieving the highest net sales, gross profit, operating income, and diluted EPS in company history[74](index=74&type=chunk) - Comparable store sales increased **30.1%** versus Q3 2020 and **31.4%** versus Q3 2019, with physical store traffic up **29.9%** versus Q3 2020[75](index=75&type=chunk) - Record results were driven by strong inventory selection, a focused promotional strategy, customers returning to normal lifestyles, and a stronger economy[77](index=77&type=chunk) - The Shoe Perks customer loyalty program grew over **10%** year-over-year, reaching over **28.5 million** members[82](index=82&type=chunk) [Q3 2021 Results of Operations](index=19&type=section&id=Results%20of%20Operations%20for%20the%20Third%20Quarter%20Ended%20October%2030%2C%202021) Q3 2021 Financial Highlights | Metric | Q3 2021 | Change vs Q3 2020 | | :--- | :--- | :--- | | Net Sales | $356.3M | +29.8% | | Comparable Store Sales | - | +30.1% | | Gross Profit | $144.1M | +$56.3M | | Gross Profit Margin | 40.4% | +8.4 ppt | | SG&A as % of Sales | 22.9% | -1.8 ppt | - E-commerce sales accounted for approximately **12%** of merchandise sales in Q3 2021, compared to **13%** in Q3 2020 and **5%** in Q3 2019[78](index=78&type=chunk) - Gross profit margin significantly increased due to a **6.7 percentage point** rise in merchandise margin, driven by a focused promotional strategy that eliminated broad "buy one get one half off" offers[80](index=80&type=chunk) [YTD 2021 Results of Operations](index=20&type=section&id=Results%20of%20Operations%20for%20the%20Nine-Month%20Period%20Ended%20October%2030%2C%202021) YTD 2021 Financial Highlights | Metric | YTD 2021 | Change vs YTD 2020 | | :--- | :--- | :--- | | Net Sales | $1,017.0M | +40.7% | | Comparable Store Sales | - | +41.6% | | Gross Profit | $410.0M | +$208.1M | | Gross Profit Margin | 40.3% | +12.4 ppt | | SG&A as % of Sales | 22.6% | -3.7 ppt | [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) - The company maintained a strong liquidity position at the end of Q3 with **$191.2 million** in cash, cash equivalents, and marketable securities, and no borrowings under its **$100 million** credit facility[90](index=90&type=chunk) - Net cash provided by operating activities significantly increased to **$120.5 million** in the first nine months of fiscal 2021 from **$0.2 million** in the prior year period[91](index=91&type=chunk) - Working capital increased to **$333.8 million** as of October 30, 2021, from **$214.9 million** at October 31, 2020[92](index=92&type=chunk) [Capital Expenditures](index=21&type=section&id=Capital%20Expenditures) - Fiscal 2021 capital expenditures are projected to be between **$30 million** and **$35 million**, primarily for store relocations, remodels, and new store development[98](index=98&type=chunk) - In the first nine months of fiscal 2021, the company opened one new store and closed seven, with three additional closures expected by year-end[100](index=100&type=chunk)[101](index=101&type=chunk) [Dividends](index=22&type=section&id=Dividends) - A quarterly cash dividend of **$0.070 per share** was paid in Q3 2021, an increase from **$0.045 per share** in Q3 2020[103](index=103&type=chunk) - The company repurchased **208,662 shares** for **$7.1 million** in fiscal 2021 under its **$50 million** share repurchase program, with **$42.9 million** remaining available as of October 30, 2021[105](index=105&type=chunk)[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is from variable interest rates on the credit facility, with no borrowings in the first nine months of fiscal 2021 - The company is exposed to market risk from variable interest rates on its credit facility, but had no borrowings during the first nine months of fiscal 2021[110](index=110&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective as of October 30, 2021, with no significant internal control changes during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of October 30, 2021[111](index=111&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended October 30, 2021[112](index=112&type=chunk) Part II [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) No additional material changes to previously disclosed risk factors were reported since the fiscal year 2021 Form 10-K - No additional material changes to the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended January 30, 2021, have occurred[115](index=115&type=chunk) [Issuer Purchases of Equity Securities](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **91,594 shares** at **$34.69 per share** in Q3, with **$42.9 million** remaining for buybacks Share Repurchase Activity (Q3 2021) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Value Remaining for Purchase | | :--- | :--- | :--- | :--- | :--- | | Aug 29 - Oct 2, 2021 | 103,465 | $34.69 | 91,594 | $42,853,000 |

Shoe Carnival, Inc. (NASDAQ:SCVL) Q3 2021 Earnings Conference Call November 17, 2021 8:30 AM ET Company Participants Mark Worden - President & CEO Carl Scibetta - Chief Merchandising Officer Kerry Jackson - Chief Financial & Administrative Officer Conference Call Participants Sam Poser - Williams Trading Jim Chartier - Monness, Crespi, Hardt Operator Good morning, and welcome to Shoe Carnival's Third Quarter 2021 Earnings Conference Call. Today's conference is being recorded. It is also being broadcast via ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) 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 | (IRS Employer | | incorporation or organization) | Identification Number) | | 7500 East Columbia Street | | | Evansville, IN | 47715 | | (Address of principal executive of ices) | (Zip code) | | (812) 867-4034 | | | (Registra ...