Evansville, IN—Despite a dive in its fourth quarter sales, Shoe Carnival reported Monday that its full year set record sales and earnings.
For the quarter ended Feb. 2, the footwear and accessories retailer posted net income of $3.2 million, or 16 cents a share, compared to net earnings of $3.3 million, or 16 cents a share, the year before.
While net sales rose 13.1% to $205.7 million, comparable store sales rose only 0.5%.
Gross margin widened to 29.2% from 28.3% as the merchandise margin improved. Input costs rose 12% to $145.6 million, while selling, general and administrative expenses grew 18% to $54.9 million.
“The fourth quarter was a tough one for us, but we still reported record sales and earnings after–for the year,” said Cliff Sifford, president/ceo. “After posting record earnings for the first 3 quarters of 2012, we experienced unseasonably warmer weather from the first week of November through the third week of December, and this played a major role of suppressing sales of seasonal product in the fourth quarter. Once more seasonal weather arrived in the latter part of December through January, sales of seasonal product escalated.”
The later quarter drop was heaviest in athletic footwear but Sifford blamed late changes to U.S. tax law, which meant delays in tax refunds as part of the problem.
‘April is an Opportunity for a Better Trend’
“While we are disappointed in our fourth-quarter results, we are very proud of our accomplishments in fiscal year 2012,” Sifford said. “Achieving $855 million in sales was a record. Our operating income was 14% higher than our previous record high in fiscal 2010,” and the company’s per share earrings were 4% high than the previous record in 2010.
“These results were driven primarily by our 4.5% comparable store increase along with a 63-basis-point improvement in gross margin as compared to the same period last year. The past 3 years represent the first-, second- and third-highest earnings per diluted share in the company’s history,” Sifford added.
As for its fiscal 2013 first quarter, Shoe Carnival forecast earnings of 36 cents to 44 cents on net sales of $226 million to $232 million. Analysts’ average estimate expects 57 cents a share on sales of $240 million.
Sifford said he expects first quarter comp sales to increase in the “mid-single digits.”
“Last year unseasonably warm weather early in the spring selling season shifted sales of higher margin spring footwear from the second quarter into the first quarter, driving record first-quarter results,” Sifford noted, “However, during March this year, we experienced cold, wet weather across our central and northern regions, generating comparatively slower sales of our higher margin spring sandal and athletic categories.”
Added Sifford: “We believe April is an opportunity for a better trend.”
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