Shoe Carnival(US:SCVL)2024-12-06 12:31Financial Performance - In Q3 2024, net sales were $306.9 million, a decrease of $13.0 million, or 4.1%, compared to Q3 2023[75] - The calendar shift resulted in a $20 million decrease in Q3 2024 net sales compared to Q3 2023, while underlying sales increased by $7.0 million, or 2.2%[75] - Comparable store net sales declined by 4.1% in Q3 2024, impacted by hurricanes and warm weather affecting fall merchandise demand[76] - Year-to-date 2024 comparable store net sales decreased by 3.2% compared to the same period in 2023[70] - Year-to-date 2024 Net Sales reached $939.9 million, an increase of 4.9% compared to year-to-date 2023, driven by the acquisition of Rogan's, which contributed $63.9 million[91] Gross Profit and Income - Gross profit margin decreased to 36.0% in Q3 2024 from 36.8% in Q3 2023[74] - Net income for Q3 2024 was 6.3% of net sales, down from 6.8% in Q3 2023[74] - Gross Profit for Q3 2024 was $110.4 million, down $7.3 million from Q3 2023, with a gross profit margin of 36.0%, compared to 36.8% in Q3 2023[86] - Operating Income in Q3 2024 totaled $24.5 million, a decrease of 12.2% from Q3 2023, mainly due to lower Net Sales and soft demand in September and October[81] Store Operations - The company operated 431 stores at the end of Q3 2024, with a net increase of 28 stores from the Rogan's acquisition[70] - Boot sales fell by 31%, accounting for approximately half of the decline in comparable store net sales in Q3 2024[76] - The company opened four new Shoe Station branded stores and acquired 28 Rogan's stores in year-to-date 2024, targeting over 500 stores by 2028[109] - The company plans to rebanner 25 additional Shoe Carnival stores to Shoe Station stores in the first half of Fiscal 2025[109] Expenses and Tax - Cost of sales as a percentage of net sales increased to 64.0% in Q3 2024 from 63.2% in Q3 2023[74] - Selling, General and Administrative Expenses (SG&A) decreased by $3.9 million in Q3 2024 to $85.9 million, representing 28.0% of Net Sales compared to 28.1% in Q3 2023[88] - The effective income tax rate for Q3 2024 was 24.7%, up from 23.8% in Q3 2023, with an expected full fiscal year tax rate between 25.6% and 26.0%[90] Cash and Capital Expenditures - Cash, Cash Equivalents, and Marketable Securities amounted to $91.1 million at the end of Q3 2024, with cash flows from operations totaling $58.1 million year-to-date 2024[84] - Capital expenditures for Fiscal 2024 are expected to be between $30 million and $35 million, with $20 million to $25 million allocated for new and rebannered stores[108] - The actual cash required for capital expenditures depends on the number of stores opened and lease incentives received from landlords[108] Shareholder Returns - A quarterly cash dividend of $0.135 per share was paid on October 21, 2024, an increase from $0.120 per share in the third quarter of 2023[110] - The Board of Directors authorized a share repurchase program for up to $50 million of common stock, effective January 1, 2024[111] - No share repurchases have been made in Fiscal 2024, while 230,696 shares were repurchased at a total cost of $5.4 million in year-to-date 2023[112] Acquisition and Synergies - Rogan's, acquired on February 13, 2024, contributed approximately $22.3 million to Q3 2024 net sales[75] - The company estimates that synergies from the Rogan's acquisition will exceed $1 million in Fiscal 2024, with a significant portion recognized in Q3 2024[80] E-commerce Performance - E-commerce sales represented approximately 11% of merchandise sales in Q3 2024, up from 10% in Q3 2023[85] Market Risks - The company had no borrowings outstanding during year-to-date 2024, exposing it to market risk from variable interest rates[117] - The Credit Agreement permits the payment of dividends and share repurchases, subject to certain covenants and restrictions[114] Seasonal Impact - The company has three distinct peak selling periods: Easter, back-to-school, and Christmas, which significantly impact operating results[115]