Fri, Jun 6, 11:31 AM (17 days ago)
**Shoe Carnival, Inc. (SCVL) Q1 2025 Financial Summary** Shoe Carnival, Inc. (SCVL) reported a mixed quarter with revenue declining but strategic investments in growth. Here are the key points: **Financial Performance:** - **Revenue:** $277.7 million, down 7.5% YoY due to a 10% decline in Shoe Carnival banner sales, partially offset by a 4.9% increase in Shoe Station banner sales. - **Gross Profit Margin:** 34.5%, down from 35.6% YoY due to deleveraging effects of lower sales. - **Operating Income:** $11.97 million, down from $22.51 million YoY, impacted by rebanner strategy costs. - **Net Income:** $9.34 million, or $0.34 per diluted share, down from $17.29 million, or $0.63 per diluted share, YoY. - **Cash Flow:** Net cash used in operating activities was $9.6 million, compared to $17.1 million provided in Q1 2024. **Strategic Initiatives:** - **Rebanner Strategy:** Accelerated rebanner strategy to transform Shoe Carnival stores into Shoe Station stores, aiming for 80% of the fleet to operate as Shoe Station by March 2027. - **Acquisitions:** Completed the acquisition of Rogan’s, adding 28 stores and positioning the company as a market leader in Wisconsin and Minnesota. - **Capital Expenditures:** $13.3 million spent on property and equipment, primarily for store rebanners and remodels. **Liquidity and Capital Resources:** - **Cash Position:** $78.48 million in cash and cash equivalents, with $99.0 million available under the credit facility. - **Dividends:** Increased quarterly dividend by 11.1% to $0.15 per share. - **Share Repurchases:** Authorized a $50.0 million share repurchase program for 2025, with no shares repurchased to date. **Outlook and Uncertainties:** - **Economic Headwinds:** Industry-wide declines in family footwear sales, impacting the Shoe Carnival banner. - **Strategic Investments:** Continued investment in rebanner strategy and store growth, expected to impact near-term profitability but position the company for long-term success. - **Seasonality:** Dependence on peak selling periods (Easter, back-to-school, Christmas) for significant sales and profitability. **Future Operations Impact:** - **Rebanner Strategy:** Expected to impact annual operating income by $20-$25 million in 2025 due to store closing costs, amortization, and other related expenses. - **Capital Expenditures:** Projected to be between $45 million and $60 million for 2025, with a significant portion allocated to rebannered stores and distribution center upgrades. Shoe Carnival, Inc. is navigating industry challenges through strategic investments and a focus on transforming its store base to drive long-term growth and profitability.