Shoe Carnival(SCVL)2025-03-21 20:10Store Operations and Growth - As of Fiscal 2024 year end, Shoe Carnival operated 430 stores across 36 states and Puerto Rico, with comparable physical stores generating an average of 1.2 billion, an increase of 80.3 million from Rogan's acquisition[185]. - Gross Profit for Fiscal 2024 was 7.4 million increase from Fiscal 2023, with a Gross Profit margin of 35.6%, down 20 basis points from the previous year[196]. - Operating Income for Fiscal 2024 totaled 73.8 million, or 73.3 million in Fiscal 2023, aided by pandemic-related tax credits of 123.1 million in Cash, Cash Equivalents, and Marketable Securities, maintaining no debt for the 20th consecutive year[191]. Customer Engagement and Loyalty - In Fiscal 2024, Shoe Perks membership grew to 36.8 million members, a 7% increase compared to Fiscal 2023[38]. - Purchases from Shoe Perks members accounted for approximately 73% of comparable stores Net Sales in Fiscal 2024[39]. - Shoe Perks customer loyalty program members accounted for approximately 73% of comparable stores' Net Sales in Fiscal 2024[102]. Supply Chain and Inventory Management - Over 90% of merchandise was received into the Evansville distribution center during Fiscal 2024, with integration of inbound shipments for Rogan's locations effective February 2025[44]. - The company relies on a primary distribution center in Evansville, Indiana, which is critical for fulfilling merchandise to physical stores and e-commerce orders[112]. - Merchandise Inventories increased to 39.2 million from Fiscal 2023, primarily due to inventory from Rogan's acquisition[192]. Capital Expenditures and Investments - Total capital expenditures in Fiscal 2024 were 45 million and $60 million, with a focus on rebannered stores and technology upgrades[211]. Market and Competitive Landscape - The company faces significant competition in the retail footwear industry, with larger competitors potentially impacting market share[91]. - Consumer spending levels are critical to business success, with various economic factors influencing consumer confidence and demand[93]. - The company relies heavily on imported goods, primarily from China, making it vulnerable to supply chain disruptions and cost increases[95]. Risk Management and Compliance - The company is exposed to risks related to cybersecurity breaches, which could compromise customer data and negatively affect reputation and financial results[127]. - Compliance with data protection regulations is critical, as failure to protect customer information could lead to litigation and damage to reputation[126]. - The company has developed a risk-based framework for cybersecurity, considering it a top risk within its enterprise risk management protocol[144]. Employee and Workforce Management - The company employs approximately 5,500 individuals, with about 3,000 part-time employees, and has a workforce that is 63% female[72][61]. - The company has maintained a strong employee retention rate, with 68% of district managers employed for over 20 years and an average tenure of 14 years for general managers[63]. - The company faces human capital risks, including the need to attract and retain qualified personnel in a rising wage environment[131]. Strategic Initiatives - The company plans to continue its rebanner strategy, converting Shoe Carnival stores to Shoe Station stores, which is a significant part of its growth strategy[90]. - The proprietary inventory management and advanced point-of-sale systems provide real-time sales and cost of sales data, enhancing operational efficiency[50][51]. - The Ship-From-Store program allows online orders to be fulfilled from store inventory, minimizing out-of-stocks and expanding online assortment[53].