For the quarter ended May, 3, the value-priced footwear and accessories retailer posted net income of $9.2 million, or 45 cents a share, compared with net earnings of $9.5 million, or 47 cents a share, a year ago. Analysts’ average estimate was for 49 cents a share.
‘Enhanced Brand Awareness’
Net revenue was up 1.5% to $235.8 million, while analysts’ expected $238.3 million in sales. Comparable store sales decreased 1.7%.
The gross profit margin for the first quarter of fiscal 2014 remained flat at 29.5%. The merchandise margin increased 0.5% while buying, distribution and occupancy expenses increased 0.5 % as a percentage of sales. Selling, general and administrative expenses for increased $1 million to $54.4 million.
“Our continued focus on store growth led to a first quarter net sales increase of 1.5%,” said Cliff Sifford, president/ceo. “However, severe weather and higher utility and health care costs adversely impacted our consumer contributing to our comparable store sales decline. Despite the difficult quarter, we were pleased with the initial response to our first-ever national television advertising campaign. While achieving brand recognition in new markets takes time, we did see an immediate increase in online traffic and sales in large markets such as New York City and Los Angeles where we do not currently have a store presence. Longer term, as we enter new markets we expect to benefit from enhanced brand awareness. In the second quarter we will have record store growth with the opening of 16 stores, including our first entry into Miami, Florida and upstate New York.”
Looking forward to the second quarter, the company forecasts net sales of $223 million to $228 million and earnings of 12 to 16 cents a share. Included in the earnings estimate is an increase in store pre-opening costs of about 5 cents due to the expectation of opening 16 stores in the second quarter this year compared with opening eight stores in the second quarter of last year.
Analysts expect Shoe Carnival to earn 27 cents a share on revenue of $232.85 million for the second quarter.