Shoe Carnival Reports Fourth Quarter and Full Year 2007 Results

EVANSVILLE, Ind.--(BUSINESS WIRE)--March 20, 2008--Shoe Carnival, Inc. (NASDAQ: SCVL) a leading retailer of value-priced footwear and accessories, today announced sales and earnings for the fourth quarter and fiscal year ended February 2, 2008. The fourth quarter of fiscal 2007 included 13 weeks compared to 14 weeks in the fourth quarter of fiscal 2006 and the full fiscal year of 2007 included 52 weeks compared with 53 weeks in the full fiscal year of 2006.

Fourth Quarter Results

Net earnings for the thirteen-week fourth quarter were $1.1 million compared to net earnings of $5.1 million in the fourteen-week fourth quarter ended February 3, 2007. Diluted earnings per share were $0.09 per share compared to $0.37 per share last year. The extra week included in the fourth quarter of fiscal 2006, increased diluted earnings per share in that quarter by approximately $0.05.

Sales for the thirteen-week period ended February 2, 2008, were $164.3 million compared to sales of $177.2 million for the fourteen-week period ended February 3, 2007. Sales of approximately $11.5 million were recorded in the extra week of the fourth quarter of fiscal 2006. Comparable store sales for the thirteen-week period ended February 2, 2008, decreased 5.7 percent compared with the thirteen-week period ended February 3, 2007.

The gross profit margin for the fourth quarter of 2007 was 27.5 percent compared to 28.1 percent for the fourth quarter of 2006. As a percentage of sales, the merchandise margin remained unchanged from last year's fourth quarter, while buying, distribution and occupancy costs increased 0.6 percent. The increase in buying, distribution and occupancy costs, as a percentage of sales, was due primarily to the deleveraging effect of lower sales.

Selling, general and administrative expenses for the fourth quarter were $43.6 million, or 26.5 percent of sales, compared to $41.8 million, or 23.6 percent of sales, in the fourth quarter of 2006. The increase in selling, general and administrative expenses was due to operating an additional 20 stores during the quarter compared to same period last year and recording a non-cash impairment charge to assets for certain stores management has committed to close.

Operating income for the fourth quarter was $1.6 million compared to $7.9 million in the fourth quarter of 2006. Operating margin for the fourth quarter was 1.0 percent compared to 4.5 percent in the same period last year.

Fiscal 2007 Results

Net sales were $658.7 million for the fiscal year compared to net sales of $681.7 million last year. Comparable store sales for the 52-week period ended February 2, 2008, decreased 5.2 percent compared with the 52-week period ended February 3, 2007.

Net earnings for fiscal 2007 were $12.8 million, or $0.97 per diluted share, compared to net earnings of $23.8 million, or $1.73 per diluted share, last year.

Commenting on the results, Mark Lemond, chief executive officer and president said, "Fiscal 2007 proved to be a difficult period for us and footwear retailers in general. The challenging economic environment continued to directly affect our targeted moderate income consumer, and consequently, had a negative impact on both traffic and sales."

"Our merchandising and store operations teams did a commendable job of maintaining our merchandise margins in the fourth quarter and for the full fiscal year. Importantly, we ended fiscal 2007 with inventories on a per store basis almost 5 percent lower than last year."