SHOE CARNIVAL INC
For the period ended Nov 2, 2024. Filed Dec 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 2, 2024 · Filed Dec 6, 2024
SHOE$14.54-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-08-03; filed 2024-09-06.
0000950170-24-104390
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-11-02; filed 2024-12-06.
0000950170-24-133842
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 82 current paragraphs.
44 unchanged; 29 reworded; 8 added; 9 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
On a comparable store basis, which excludes the impact of the calendar shift, Rogan’s sales and sales from other new stores, Net Sales were down 4.1%. During third quarter 2024, our comparable stores Net Sales grew in August due to our strong back-to-school performance; however, comparable stores Net Sales declined in September and October due to the impact of two hurricanes on approximately half of our stores and the shopping habits of our customer base in the affected locations and persistently warm weather, which has delayed demand for fall seasonal merchandise. In the quarter, boot sales were down 31%, reflecting approximately half of the comparable stores Net Sales decline in third quarter 2024. Comparable stores Net Sales growth in athletics partially offset these lower boot sales.
Current report
On a year-to-date basis, which now includes the material offsetting impacts of the retail calendar shift, Net Sales in 2024 totaled $939.9 million, an increase of 4.9% versus year-to-date 2023 and gross profit margin was consistent with the prior year.
Current report
As market conditions softened in September and October, we lowered selling costs at Shoe Carnival and Shoe Station stores. These lower selling expenses reflected optimized advertising spend, driven by our digital-first marketing strategy. In third quarter 2024, our selling, general, and administrative expenses (“SG&A”) were lower than third quarter 2023 by $3.9 million as these lower store selling expenses more than offset the cost of operating Rogan’s stores. While Rogan’s costs were an additional expense in third quarter 2024 compared to third quarter 2023, those cost increases were mitigated by the synergies captured during third quarter 2024 from completing the integration of Rogan’s store operations, marketing, e-commerce platforms, point-of-sale systems, merchandising and back office functions. We currently estimate that Rogan’s synergy capture will be over $1 million in Fiscal 2024, with a significant portion of that recognized in third quarter 2024.
Current report
Third quarter 2024 Operating Income totaled $24.5 million and decreased 12.2% versus third quarter 2023, primarily due to the lower Net Sales from the calendar shift and soft demand in September and October. These declines were partially offset by growth, principally from the Rogan’s acquisition and related synergies, as well as lower SG&A.
Current report
Net Sales were $306.9 million during third quarter 2024, a decrease of $13.0 million or 4.1%, compared to third quarter 2023. The decrease reflected the impact of the calendar shift moving approximately $20 million of Net Sales out of third quarter 2024. Net Sales otherwise increased $7.0 million, or 2.2%, compared to third quarter 2023. This increase was primarily due to the acquisition of Rogan’s, which added Net Sales of $22.3 million in third quarter 2024, and new store growth in the Shoe Station banner, partially offset by a comparable stores Net Sales decline of 4.1%. During third quarter 2024, our comparable stores Net Sales grew in August due to our strong back-to-school performance; however, comparable stores Net Sales declined in September and October due to the impact of two hurricanes on approximately half of our stores and the shopping habits of our customer base in the affected locations and persistently warm weather, which has delayed demand for fall seasonal merchandise. In third quarter 2024, boot sales were down 31%, reflecting approximately half of the comparable stores Net Sales decline in the quarter. E-commerce sales were approximately 11% of merchandise sales in third quarter 2024, compared to 10% in third quarter 2023.
Current report
SG&A decreased $3.9 million in third quarter 2024 to $85.9 million compared to $89.8 million in third quarter 2023. The decrease in SG&A expenses was due primarily to lower selling costs at Shoe Carnival and Shoe Station bannered stores, partially offset by the costs associated with operating the recently acquired Rogan’s stores. As a percentage of Net Sales, SG&A were 28.0% in third quarter 2024 compared to 28.1% in third quarter 2023.
Current report
Gross Profit was $337.1 million during year-to-date 2024, an increase of $15.4 million compared to year-to-date 2023. Gross profit margin was 35.9% in both year-to-date 2024 and year-to-date 2023. This consistency was driven by stable merchandise margins and stable BD&O as a percentage of Net Sales in year-to-date 2024 compared to year-to-date 2023.
Current report
Interest Income and Interest Expense
Removed paragraphs (9)
Previous report
During second quarter 2024, Net Sales grew 12.9% compared to second quarter 2023, to $332.7 million, a record level of second quarter Net Sales. The increase was led by the following key drivers:
Previous report
Rogan’s, which was acquired on February 13, 2024, delivered second quarter Net Sales of $22.0 million;
Previous report
Shoe Station banner Net Sales grew in the mid-teens, inclusive of e-commerce and new store growth; and
Previous report
Trends continued to improve at our Shoe Carnival banner, with Net Sales up mid-singles, driven by our digital-first marketing campaign and product assortment.
Previous report
On a comparable stores basis, as impacted by this calendar shift, Net Sales were down 2.1%, representing continued improvement from first quarter 2024 when comparable stores Net Sales were down 3.4% and second quarter 2023 when comparable stores Net Sales were down 6.5%. The improvement in comparable stores Net Sales in second quarter 2024 included increased Net Sales in the sandal and women’s athletics categories.
Previous report
Second quarter 2024 Operating Income totaled $30.1 million and increased 22.0% versus second quarter 2023, driven by higher Net Sales and higher gross profit margin.
Previous report
Net Sales were $332.7 million during second quarter 2024 and increased 12.9% compared to second quarter 2023. The increase was due to the acquisition of Rogan’s, which added Net Sales of $22.0 million, the effect of the calendar shift adding approximately $20 million of Net Sales to second quarter 2024 and new store growth in the Shoe Station banner, partially offset by a 2.1% decrease in comparable stores Net Sales. E-commerce sales were approximately 9% of merchandise sales in both second quarter 2024 and second quarter 2023.
Previous report
SG&A increased $9.1 million in second quarter 2024 to $89.9 million compared to $80.8 million in second quarter 2023. The increase was primarily due to higher compensation-related costs, including compensation costs related to Rogan’s, and other Rogan’s-related operating expenses. As a percentage of Net Sales, SG&A were 27.1% in second quarter 2024 compared to 27.4% in second quarter 2023.
Previous report
Gross Profit was $226.7 million during year-to-date 2024, an increase of $22.8 million compared to year-to-date 2023. Gross profit margin in year-to-date 2024 was 35.8% compared to 35.4% in year-to-date 2023. BDO costs were higher in year-to-date 2024 compared to year-to-date 2023 due to occupancy costs associated with operating more stores; however, BDO costs increased gross profit margin by 50 basis points due to the higher Net Sales in year-to-date 2024. Merchandise margin decreased 10 basis points.
Reworded paragraphs (29)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: our ability to control costs and meet our labor needs in a rising wage, inflationary, and/or supply chain constrained environment; the impact of competition and pricing, including our ability to maintain current promotional intensity levels; the effects and duration of economic downturns and unemployment rates; our ability to achieve expected operating results from, and planned growth of, our Shoe Station banner, which includes the recently acquired stores and operations of Rogan’s, within expected time frames, or at all; the potential impact of national and international security concerns, including those caused by war and terrorism, on the retail environment; general economic conditions in the areas of the continental United States and Puerto Rico where our stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; our ability to successfully utilize e-commerce sales channels and the impact on traffic and transactions in our physical stores; the success of the open-air shopping centers where many of our stores are located and the impact on our ability to attract customers to our stores; our ability to attract customers to our e-commerce sales channels and to successfully grow our omnichannel sales; the effectiveness of our inventory management, including our ability to manage key merchandise vendor relationships and direct-to-consumer initiatives; changes in our relationships with other key suppliers; changes in the political and economic environments in, the status of trade relations with, and the impact of changes in trade policies and tariffs impacting, China and other countries which are the major manufacturers of footwear; our ability to successfully manage and execute our marketing initiatives and maintain positive brand perception and recognition; our ability to successfully manage our current real estate portfolio and leasing obligations; changes in weather, including patterns impacted by climate change; changes in consumer buying trends and our ability to identify and respond to emerging fashion trends; the impact of disruptions in our distribution or information technology operations, including at our distribution center located in Evansville, IN; the impact of natural disasters, public health and political crises, civil unrest, and other catastrophic events on our operations and the operations of our suppliers, as well as on consumer confidence and purchasing in general; the duration and spread…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: our ability to control costs and meet our labor needs in a rising wage, inflationary, and/or supply chain constrained environment; the impact of competition and pricing, including our ability to maintain current promotional intensity levels; the effects and duration of economic downturns and unemployment rates; our ability to achieve expected operating results from, and planned growth of, our Shoe Station banner, which includes the recently acquired stores and operations of Rogan’s, within expected time frames, or at all; the potential impact of national and international security concerns, including those caused by war and terrorism, on the retail environment; general economic conditions in the areas of the continental United States and Puerto Rico where our stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; our ability to successfully utilize the e-commerce sales channel and its impact on traffic and transactions in our physical stores; the success of the open-air shopping centers where many of our stores are located and the impact on our ability to attract customers to our stores; our ability to attract customers to our e-commerce platform and to successfully grow our omnichannel sales; the effectiveness of our inventory management, including our ability to manage key merchandise vendor relationships and direct-to-consumer initiatives; changes in our relationships with other key suppliers; changes in the political and economic environments in, the status of trade relations with, and the impact of changes in trade policies and tariffs impacting, China and other countries which are the major manufacturers of footwear; our ability to successfully manage and execute our marketing initiatives and maintain positive brand perception and recognition; our ability to successfully manage our current real estate portfolio and leasing obligations; changes in weather, including patterns impacted by climate change; changes in consumer buying trends and our ability to identify and respond to emerging fashion trends; the impact of disruptions in our distribution or information technology operations, including at our distribution center located in Evansville, IN; the impact of natural disasters, public health and political crises, civil unrest, and other catastrophic events on our operations and the operations of our suppliers, as well as on consumer confidence and purchasing in general; the duration and spread of…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our Condensed Consolidated Financial Statements and the notes thereto included in PART I, ITEM 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 as filed with the SEC. This section of this Quarterly Report on Form 10-Q generally discusses our results for second quarter 2024 and second quarter 2023 and year-over-year comparisons between second quarter 2024 and second quarter 2023, as well as year-to-date results for, and comparisons between, the two periods.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our Condensed Consolidated Financial Statements and the notes thereto included in PART I, ITEM 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 as filed with the SEC. This section of this Quarterly Report on Form 10-Q generally discusses our results for third quarter 2024 and third quarter 2023 and year-over-year comparisons between third quarter 2024 and third quarter 2023, as well as year-to-date results for, and comparisons between, the two periods.
Previous wording
Referred to herein, second quarter 2024 is the thirteen weeks ended August 3, 2024 and second quarter 2023 is the thirteen weeks ended July 29, 2023. Also referred to herein, year-to-date 2024 is the twenty-six weeks ended August 3, 2024 and year-to-date 2023 is the twenty-six weeks ended July 29, 2023.
Current wording
Referred to herein, third quarter 2024 is the thirteen weeks ended November 2, 2024 and third quarter 2023 is the thirteen weeks ended October 28, 2023. Also referred to herein, year-to-date 2024 is the thirty-nine weeks ended November 2, 2024 and year-to-date 2023 is the thirty-nine weeks ended October 28, 2023.
Previous wording
Shoe Carnival, Inc. is one of the nation’s largest omnichannel family footwear retailers. On December 3, 2021, we began operating under two banners: Shoe Carnival and Shoe Station. On February 13, 2024, we furthered our acquisition strategy by acquiring all of the stock of Rogan Shoes, Incorporated (“Rogan’s”). The acquisition of Rogan’s added 28 physical stores (25 in Wisconsin, 2 in Minnesota, and 1 in Illinois) to our portfolio, positioned us as the market leader in Wisconsin and established a store base in Minnesota, creating additional expansion opportunities. Rogan’s is being integrated into our Shoe Station banner and our current plan is to brand and operate these stores using both the Rogan’s and Shoe Station trade names. More information about the acquisition of Rogan’s can be found in Note 2— “Acquisition of Rogan Shoes” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Current wording
Shoe Carnival, Inc. is one of the nation’s largest omnichannel family footwear retailers. On December 3, 2021, we began operating under two banners: Shoe Carnival and Shoe Station. On February 13, 2024, we furthered our acquisition strategy by acquiring all of the stock of Rogan Shoes, Incorporated (“Rogan’s”). The acquisition of Rogan’s added 28 physical stores (25 in Wisconsin, 2 in Minnesota, and 1 in Illinois) to our portfolio, positioned us as the market leader in Wisconsin and established a store base in Minnesota, creating additional expansion opportunities. As previously noted, Rogan’s is being integrated into our Shoe Station banner and our current plan is to brand and operate these stores over time using both the Rogan’s and Shoe Station trade names. More information about the acquisition of Rogan’s can be found in Note 2— “Acquisition of Rogan Shoes” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Previous wording
Our fiscal year is a 52/53 week year ending on the Saturday closest to January 31. Fiscal 2023 consisted of the 53 weeks ended February 3, 2023, while Fiscal 2024 consists of the 52 weeks ending February 1, 2025. The 53rd week in Fiscal 2023 caused a one-week shift in our fiscal calendar. As a result, each of our first three quarters in Fiscal 2024 is shifted one week later compared to Fiscal 2023. This one-week shift impacts our year-over-year sales comparisons when there are seasonal sales influences that fall near the respective quarter-end dates. To minimize the effect of this fiscal calendar shift on comparable stores Net Sales, our reported comparable stores Net Sales results for second quarter 2024 in this Quarterly Report on Form 10-Q and our other public disclosures compare the thirteen-week and twenty-six week periods ended August 3, 2024 to the thirteen-week and twenty-six week periods ended August 5, 2023. As such, changes in comparable stores Net Sales may not be consistent with changes in Net Sales reported for the fiscal period.
Current wording
Our fiscal year is a 52/53 week year ending on the Saturday closest to January 31. Fiscal 2023 consisted of the 53 weeks ended February 3, 2023, while Fiscal 2024 consists of the 52 weeks ending February 1, 2025. The 53rd week in Fiscal 2023 caused a one-week shift in our fiscal calendar. As a result, each of our first three quarters in Fiscal 2024 is shifted one week later compared to Fiscal 2023. This one-week shift impacts our year-over-year sales comparisons when there are seasonal sales influences that fall near the respective quarter-end dates. To minimize the effect of this fiscal calendar shift on comparable stores Net Sales, our reported comparable stores Net Sales results for third quarter 2024 in this Quarterly Report on Form 10-Q and our other public disclosures compare the thirteen-week and thirty-nine week periods ended November 2, 2024 to the thirteen-week and thirty-nine week periods ended November 4, 2023. As such, changes in comparable stores Net Sales may not be consistent with changes in Net Sales reported for the fiscal period.
Previous wording
Executive Summary for Second Quarter Ended August 3, 2024
Current wording
Executive Summary for Third Quarter Ended November 2, 2024
Previous wording
Due to the calendar shift described above, an important week of the back-to-school season moved into second quarter 2024 that was included in third quarter 2023. The net effect of this shift increased Net Sales in second quarter 2024 by approximately $20 million compared to second quarter 2023.
Current wording
During third quarter 2024, Net Sales of $306.9 million were down $13.0 million, or 4.1%, compared to third quarter 2023. Due to the calendar shift described above, an important week of the back-to-school season that was included in third quarter 2023 was moved into the second quarter in Fiscal 2024. The net effect of this shift decreased third quarter 2024 Net Sales by approximately $20 million compared to third quarter 2023. In third quarter 2024, Net Sales otherwise increased $7.0 million, or 2.2%, compared to third quarter 2023. This increase was led by Rogan’s, which was acquired on February 13, 2024 and delivered third quarter 2024 Net Sales of approximately $22.3 million, and new store growth from Shoe Station stores.
Previous wording
Long-term gross profit margin expansion has been a key driver of our profit transformation, led by our targeted promotional plans, buying strategies and growth of our Shoe Perks membership. During second quarter 2024, our gross profit margin was above 35% for the 14 th consecutive quarter at 36.1%, an increase of 30 basis points compared to second quarter 2023.
Current wording
Long-term gross profit margin expansion has been a key driver of our profit transformation, led by our targeted promotional plans, buying strategies and growth of our customer loyalty program, Shoe Perks. During third quarter 2024, our gross profit margin was above 35% for the 15th consecutive quarter at 36.0% and decreased approximately 80 basis points compared to third quarter 2023, primarily due to higher buying, distribution and occupancy costs (“BD&O”) from operating more stores and the deleveraging effect of the lower, shifted Net Sales during the quarter.
Previous wording
Operating Income in second quarter 2024 included $430,000 in merger and integration expenses related to the Rogan’s acquisition, of which $333,000 were in Cost of Sales and $97,000 were in Selling, General and Administrative Expenses (“SG&A”).
Current wording
Operating Income in third quarter 2024 included $369,000 in merger and integration expenses related to the Rogan’s acquisition, of which $248,000 were in Cost of Sales and $121,000 were in SG&A.
Previous wording
Second quarter 2024 Net Income was $22.6 million, or $0.82 per diluted share, compared to second quarter 2023 Net Income of $19.4 million, or $0.71 per diluted share. The increase reflected the higher Operating Income, partially offset by a higher effective tax rate. Second quarter 2024 ranked as the third best second quarter Diluted Net Income per Share in our history and was in the top ten of any historical quarter.
Current wording
Third quarter 2024 Net Income was $19.2 million, or $0.70 per diluted share, compared to third quarter 2023 Net Income of $21.9 million, or $0.80 per diluted share. The decrease reflected the lower Operating Income and a higher effective tax rate.
Previous wording
Merchandise Inventories totaled $425.5 million at the end of second quarter 2024, an increase of approximately $16.1 million compared to the end of second quarter 2023. The increase reflected Rogan’s inventory, which was approximately $40 million when acquired in February 2024, partially offset by continued inventory efficiencies as part of our ongoing inventory optimization improvement plan. Excluding the inventory acquired in the Rogan’s acquisition, Merchandise Inventories at the end of second quarter 2024 were approximately 7% lower on a dollar basis compared to the end of second quarter 2023.
Current wording
Merchandise Inventories totaled $406.6 million at the end of third quarter 2024, an increase of approximately $38.3 million compared to the end of third quarter 2023, primarily reflecting Rogan’s acquired inventory. Merchandise Inventories supporting the Shoe Carnival and Shoe Station bannered stores were approximately 1% lower on a dollar basis at the end of third quarter 2024 compared to the end of third quarter 2023.
Previous wording
At the end of second quarter 2024, we had total Cash, Cash Equivalents and Marketable Securities of $84.5 million. Cash and Cash Equivalents increased $37.1 million compared to the end of second quarter 2023, and Cash Flows from Operations in year-to-date 2024 increased $18.4 million compared to year-to-date 2023. Fiscal 2023 year end marked the 19 th consecutive year we ended the fiscal year with no debt, and in year-to-date 2024, we continued to fund our operations and growth investments, including the purchase of Rogan’s, from operating cash flows and without incurring debt. In year-to-date 2024, we have paid $44.4 million for Rogan’s and, based on the current preliminary purchase price adjustment estimates, we will owe another $445,000 in the near term. Up to $5.0 million more in consideration will be due in 2027 if three-year performance targets are met.
Current wording
At the end of third quarter 2024, we had total Cash, Cash Equivalents and Marketable Securities of $91.1 million. Cash and Cash Equivalents increased $17.3 million compared to the end of third quarter 2023, and cash flows from operations in year-to-date 2024 totaled $58.1 million. Fiscal 2023 year end marked the 19th consecutive year we ended the fiscal year with no debt, and in year-to-date 2024, we continued to fund our operations and growth investments, including the purchase of Rogan’s, from operating cash flows and without incurring debt. In year-to-date 2024, we have paid $44.4 million for Rogan’s and, based on the purchase price adjustments, we owed another $378,000 that was paid in November 2024. Up to an additional $5.0 million in consideration will be due in 2027 if three-year performance targets are met.
Previous wording
Results of Operations for Second Quarter Ended August 3, 2024 Compared to Second Quarter Ended July 29, 2023
Current wording
Results of Operations for Third Quarter Ended November 2, 2024 Compared to Third Quarter Ended October 28, 2023
Previous wording
Gross Profit was $119.9 million during second quarter 2024, an increase of $14.5 million compared to second quarter 2023. Gross profit margin in second quarter 2024 was 36.1% compared to 35.8% in second quarter 2023. The increase in gross profit margin was primarily due to improved leverage of Buying, distribution and occupancy (“BDO”) costs due to the higher Net Sales in second quarter 2024. BDO costs were higher in second quarter 2024 compared to second quarter 2023 due primarily to occupancy costs associated with operating more stores. The increase in gross profit margin was partially offset by a 50 basis point decrease in merchandise margin in second quarter 2024 compared to second quarter 2023 due to competitive intensity.
Current wording
Gross Profit was $110.4 million during third quarter 2024, a decrease of $7.3 million compared to third quarter 2023. Gross profit margin in third quarter 2024 was 36.0% compared to 36.8% in third quarter 2023. The decrease in gross profit margin was driven by BD&O, which increased in third quarter 2024 compared to third quarter 2023 due to higher occupancy costs associated with operating more stores and the deleveraging effect of lower Net Sales in third quarter 2024 compared to third quarter 2023. The decrease in gross profit margin was partially offset by a 50 basis point increase in merchandise margin in third quarter 2024 compared to third quarter 2023.
Previous wording
The effective income tax rate for second quarter 2024 was 26.3% compared to 22.3% for second quarter 2023. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events. The higher effective tax rate in second quarter 2024 compared to second quarter 2023 was due to the decrease in tax benefits from share-settled equity awards in second quarter 2024 and a state deferred tax benefit included in second quarter 2023 that did not recur in Fiscal 2024. For the full 2024 fiscal year, we expect our tax rate to be between 25.5% and 26.0% compared to the 23.7% effective tax rate recognized during the full 2023 fiscal year.
Current wording
The effective income tax rate for third quarter 2024 was 24.7% compared to 23.8% for third quarter 2023. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events. The higher effective tax rate in third quarter 2024 compared to third quarter 2023 was primarily due to discrete adjustments recorded in third quarter 2023 that did not recur in third quarter 2024. For the full 2024 fiscal year, we expect our tax rate to be between 25.6% and 26.0% compared to the 23.7% effective tax rate recognized during the full 2023 fiscal year.
Previous wording
Net Sales were $633.1 million during year-to-date 2024 and increased 9.9% compared to year-to-date 2023. The increase was due to the acquisition of Rogan’s, which added Net Sales of $41.6 million, the effect of the calendar shift adding approximately $25 million of Net Sales to year-to-date 2024 results and new store growth in the Shoe Station banner, partially offset by a 2.8% decrease in comparable stores Net Sales. E-commerce sales were approximately 9% of merchandise sales in year-to-date 2024, compared to 8% in year-to-date 2023. Year-to-date 2024 e-commerce sales were favorably impacted by the relaunch of www.shoecarnival.com in third quarter 2023 and the launch of www.shoestation.com in first quarter 2023.
Current wording
Net Sales were $939.9 million during year-to-date 2024 and increased 4.9% compared to year-to-date 2023. The increase was primarily due to the acquisition of Rogan’s, which added Net Sales of $63.9 million, and new store growth in the Shoe Station banner, partially offset by a 3.2% decrease in comparable stores Net Sales. E-commerce sales were approximately 10% of merchandise sales in year-to-date 2024, compared to 9% in year-to-date 2023. Year-to-date 2024 e-commerce sales were favorably impacted by the relaunch of www.shoecarnival.com in third quarter 2023 and the launch of www.shoestation.com in first quarter 2023.
Previous wording
SG&A increased $15.8 million, or 10.0%, in year-to-date 2024 to $174.2 million compared to $158.4 million in year-to-date 2023. The increase was due to higher compensation-related costs, including compensation costs related to Rogan’s, and other Rogan’s-related operating expenses and increased marketing investment in year-to-date 2024. As a percentage of Net Sales, SG&A were 27.5% in both year-to-date 2024 and year-to-date 2023.
Current wording
SG&A increased $11.9 million, or 4.8%, in year-to-date 2024 to $260.0 million compared to $248.1 million in year-to-date 2023. The increase was primarily due to higher compensation-related costs, including compensation costs related to Rogan’s, and other Rogan’s-related operating expenses in year-to-date 2024, partially offset by other lower selling costs at Shoe Carnival and Shoe Station stores. As a percentage of Net Sales, SG&A were 27.7% in both year-to-date 2024 and year-to-date 2023.
Previous wording
Changes in our interest income and expense increased our income before taxes by $428,000 in year-to-date 2024 compared to year-to-date 2023. This increase was primarily due to higher interest earned on invested cash balances.
Current wording
Changes in our interest income and expense increased our income before taxes by $675,000 in year-to-date 2024 compared to year-to-date 2023. This increase was primarily due to higher interest earned on invested cash balances.
Previous wording
The effective income tax rate for year-to-date 2024 was 25.9% compared to 22.4% for year-to-date 2023. The higher effective tax rate in year-to-date 2024 compared to year-to-date 2023 was due to the decrease in tax benefits from share-settled equity awards in year-to-date 2024 and a state deferred tax benefit included in second quarter 2023 that did not recur in Fiscal 2024.
Current wording
The effective income tax rate for year-to-date 2024 was 25.5% compared to 23.0% for year-to-date 2023. The higher effective tax rate in year-to-date 2024 compared to year-to-date 2023 was due to the decrease in tax benefits from share-settled equity awards in year-to-date 2024 and a state deferred tax benefit and other discrete adjustments included in year-to-date 2023 that did not recur in Fiscal 2024.
Previous wording
Our primary sources of liquidity are $84.5 million of Cash, Cash Equivalents and Marketable Securities on hand at the end of second quarter 2024, cash generated from operations and availability under our $100 million Credit Agreement. We believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are normally for working capital, which are principally inventory purchases, investments in our stores, such as new stores, modernization/remodels, relocations, rebannered stores, distribution center initiatives, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program and the financing of capital projects, including investments in new systems. As part of our growth strategy, we have also pursued strategic acquisitions of other footwear retailers.
Current wording
Our primary sources of liquidity are $91.1 million of Cash, Cash Equivalents and Marketable Securities on hand at the end of third quarter 2024, cash generated from operations and availability under our $100 million Credit Agreement. We believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are normally for working capital, which are principally inventory purchases, investments in our stores, such as rebanners and new stores, remodels and relocations, distribution center initiatives, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program and the financing of capital projects, including investments in new systems. As part of our growth strategy, we have also pursued strategic acquisitions of other footwear retailers.
Previous wording
Net cash generated from operating activities was $40.7 million in year-to-date 2024 compared to $22.4 million in year-to-date 2023. The change in operating cash flow was primarily driven by the timing of inventory, tax and prepaid contracts payments and higher earnings.
Current wording
Net cash generated from operating activities was $58.1 million in year-to-date 2024 compared to $69.4 million in year-to-date 2023. The change in operating cash flow was primarily driven by the timing of inventory and prepaid contracts payments.
Previous wording
Working capital increased on a year-over-year basis and totaled $377.1 million at August 3, 2024 compared to $330.6 million at July 29, 2023. The increase was primarily attributable to a higher cash balance and higher Merchandise Inventories levels due to the acquisition of Rogan’s. Our current ratio was 3.4 as of August 3, 2024 compared to 3.1 as of July 29, 2023.
Current wording
Working capital increased on a year-over-year basis and totaled $391.3 million at November 2, 2024 compared to $340.6 million at October 28, 2023. The increase was primarily attributable to higher Merchandise Inventories and Accounts Receivable levels due to the acquisition of Rogan’s and a higher cash balance, partially offset by higher Accounts Payable. Our current ratio was 3.9 as of November 2, 2024 compared to 3.8 as of October 28, 2023.
Previous wording
Our cash outflows for investing activities are normally for capital expenditures. During year-to-date 2024 and 2023, we expended $15.7 million and $30.6 million, respectively, for the purchase of Property and Equipment, primarily related to store modernization and opening new Shoe Station stores.
Current wording
Our cash outflows for investing activities are normally for capital expenditures. During year-to-date 2024 and 2023, we expended $24.8 million and $43.6 million, respectively, for the purchase of Property and Equipment, primarily related to store remodels and rebanners and opening four new Shoe Station stores.
Previous wording
We invest in publicly traded mutual funds designed to mitigate income statement volatility associated with our non-qualified deferred compensation plan. The balance of these Marketable Securities was $12.8 million at August 3, 2024, compared to $12.2 million at February 3, 2024 and July 29, 2023. Additional information can be found in Note 5 — “Fair Value Measurements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Current wording
We invest in publicly traded mutual funds designed to mitigate income statement volatility associated with our non-qualified deferred compensation plan. The balance of these Marketable Securities was $13.9 million at November 2, 2024, compared to $12.2 million at February 3, 2024 and $11.2 million at October 28, 2023. Additional information can be found in Note 5 — “Fair Value Measurements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.
Previous wording
During year-to-date 2024, net cash used in financing activities was $8.0 million compared to $8.5 million during year-to-date 2023. The decrease in net cash used in financing activities was primarily due to the decrease in shares surrendered by employees to pay taxes on stock-based compensation awards, partially offset by increased dividend payments.
Current wording
During year-to-date 2024, net cash used in financing activities was $11.6 million compared to $17.2 million during year-to-date 2023. The decrease in net cash used in financing activities was primarily due to the repurchase of $5.4 million of shares in year-to-date 2023 under our Board of Directors’ authorized share repurchase program compared to none in year-to-date 2024 and the decrease in shares surrendered by employees to pay taxes on stock-based compensation awards, partially offset by increased dividend payments.
Previous wording
Capital expenditures for Fiscal 2024, including actual expenditures in year-to-date 2024, are expected to be between $30 million and $35 million, with approximately $20 million to $25 million to be used for new and rebannered stores and modernization and approximately $10 million to $15 million for upgrades to our Evansville distribution center and e-commerce sales channels, various other store improvements, continued investments in technology and normal asset replacement activities. The resources allocated to projects are subject to near-term changes depending on the supply chain and potential inflationary and other macroeconomic impacts. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, relocated, and remodeled, and the amount of lease incentives, if any, received from landlords. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.
Current wording
Capital expenditures for Fiscal 2024, including actual expenditures in year-to-date 2024, are expected to be between $30 million and $35 million, with approximately $20 million to $25 million to be used for new and rebannered stores and remodels and approximately $10 million to $15 million for upgrades to our Evansville distribution center and e-commerce sales channels, various other store improvements, continued investments in technology and normal asset replacement activities. The resources allocated to projects are subject to near-term changes depending on the supply chain and potential inflationary and other macroeconomic impacts. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, rebannered, remodeled and relocated and the amount of lease incentives, if any, received from landlords. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.
Previous wording
We opened three new Shoe Station branded stores, permanently closed one Shoe Carnival branded store, and acquired 28 Rogan’s stores, which are being integrated into our Shoe Station banner, in year-to-date 2024. Increasing market penetration by adding new stores is a key component of our growth strategy. We currently have 430 stores and are targeting operating over 500 stores in 2028. We believe our current store footprint provides for growth in new markets within the United States as well as fill-in opportunities within existing markets. We aim to grow the Shoe Station banner to over 100 stores over the same time period. Since our acquisition of Shoe Station in December 2021, we have gained insights about the Shoe Station customer base and have defined markets where we believe a Shoe Station bannered store may outperform our current Shoe Carnival bannered store located in those markets. In year-to-date 2024, we have closed a Shoe Carnival bannered store and opened a Shoe Station bannered store in three test markets, and each test market has grown comparable stores Net Sales since transition. To further test and learn, we plan to close five to ten additional Shoe Carnival bannered stores in the second half of Fiscal 2024 and open Shoe Station bannered stores in those markets. Future store growth may continue to be impacted by macroeconomic uncertainty and our ability to identify desirable locations and/or acquisition partners.
Current wording
We opened four new Shoe Station branded stores, permanently closed one Shoe Carnival branded store and acquired 28 Rogan’s stores, which over time are being integrated into our Shoe Station banner, in year-to-date 2024. Increasing market penetration by adding new stores is a key component of our growth strategy. We currently have 431 stores and are targeting operating over 500 stores in 2028. We believe our current store footprint provides for growth in new markets within the United States as well as fill-in opportunities within existing markets. Since our acquisition of Shoe Station in December 2021, we have gained valuable insights about the Shoe Station customer base and have defined markets where we believe a Shoe Station bannered store may outperform our current Shoe Carnival bannered store located in those markets. The Company advanced its store rebanner growth strategy during third quarter 2024, with seven Shoe Carnival stores being rebannered to Shoe Station stores. Ten stores have now been rebannered. Through third quarter 2024, rebannered stores have outperformed expectations, and based on the successful results of the strategy to date, we plan to rebanner 25 additional Shoe Carnival stores to Shoe Station stores in the first half of Fiscal 2025. Future store growth may continue to be impacted by macroeconomic uncertainty, our ability to identify desirable locations and/or acquisition partners and increased focus on our emerging store rebanner strategy.
Previous wording
On June 25, 2024, the Board of Directors approved the payment of a second quarter 2024 cash dividend paid to our shareholders. The quarterly cash dividend of $0.135 per share was paid on July 22, 2024 to shareholders of record as of the close of business on July 8, 2024. In second quarter 2023, the dividend paid was $0.100 per share. During year-to-date 2024 and 2023, we returned $7.4 million and $5.7 million, respectively, to our shareholders through our quarterly cash dividends. The declaration and payment of any future dividends are at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.
Current wording
On September 17, 2024, the Board of Directors approved the payment of a third quarter 2024 cash dividend paid to our shareholders. The quarterly cash dividend of $0.135 per share was paid on October 21, 2024 to shareholders of record as of the close of business on October 7, 2024. In third quarter 2023, the dividend paid was $0.120 per share. During year-to-date 2024 and 2023, we returned $11.0 million and $8.9 million, respectively, to our shareholders through our quarterly cash dividends. The declaration and payment of any future dividends are at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.
Previous wording
No share repurchases have been made to date in Fiscal 2024 and no share repurchases were made during year-to-date 2023.
Current wording
No share repurchases have been made to date in Fiscal 2024. During year-to-date 2023, we repurchased 230,696 shares of common stock at a total cost of $5.4 million.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Changes in our interest income and expense increased our income before taxes by $247,000 in third quarter 2024 compared to third quarter 2023. This increase was primarily due to higher interest earned on invested cash balances.