0001174947-16-003434.txt : 20161130 0001174947-16-003434.hdr.sgml : 20161130 20161130161805 ACCESSION NUMBER: 0001174947-16-003434 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 40 CONFORMED PERIOD OF REPORT: 20161029 FILED AS OF DATE: 20161130 DATE AS OF CHANGE: 20161130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHOE CARNIVAL INC CENTRAL INDEX KEY: 0000895447 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-SHOE STORES [5661] IRS NUMBER: 351736614 STATE OF INCORPORATION: IN FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21360 FILM NUMBER: 162025482 BUSINESS ADDRESS: STREET 1: 7500 EAST COLUMBIA STREET CITY: EVANSVILLE STATE: IN ZIP: 47715 BUSINESS PHONE: 8128676471 MAIL ADDRESS: STREET 1: 7500 EAST COLUMBIA STREET CITY: EVANSVILLE STATE: IN ZIP: 47715 10-Q 1 scvl3rdqtr16.htm FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the quarterly period ended October 29, 2016
  or
[   ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the transition period from ____________________  to  ____________________

 

Commission File Number: 0-21360
   

Shoe Carnival, Inc.

(Exact name of registrant as specified in its charter)

 

Indiana   35-1736614
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer Identification Number)
     
7500 East Columbia Street
Evansville, IN
  47715
(Address of principal executive offices)   (Zip code)

 

(812) 867-6471
(Registrant’s telephone number, including area code)
 
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

  [X] Yes   [  ] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

  [X] Yes   [  ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

[   ] Large accelerated filer [X] Accelerated filer [   ] Non-accelerated filer [   ] Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

  [   ] Yes   [X] No

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Number of Shares of Common Stock, $.01 par value, outstanding at November 22, 2016 was 18,422,425.

 

   

 

 

SHOE CARNIVAL, INC.
INDEX TO FORM 10-Q

 

        Page
Part I Financial Information      
  Item 1. Financial Statements (Unaudited)      
  Condensed Consolidated Balance Sheets   3  
  Condensed Consolidated Statements of Income   4  
  Condensed Consolidated Statement of Shareholders’ Equity   5  
  Condensed Consolidated Statements of Cash Flows   6  
  Notes to Condensed Consolidated Financial Statements   7  
           
  Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
  12  
           
  Item 3. Quantitative and Qualitative Disclosures About Market Risk   20  
           
  Item 4. Controls and Procedures   20  
         
Part II Other Information      
  Item 1A. Risk Factors   21  
           
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   21  
           
  Item 6. Exhibits   21  
         
  Signature   23  

 

 

 2 

 

 

SHOE CARNIVAL, INC.

PART I - FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS

 

SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited

 

(In thousands, except share data) 
October 29,
2016
   January 30,
2016
   October 31,
2015
 
                
Assets               
Current Assets:               
Cash and cash equivalents  $33,509   $68,814   $49,035 
Accounts receivable   3,540    2,131    2,665 
Merchandise inventories   314,925    292,878    318,878 
Deferred income taxes   0    1,061    1,236 
Other   5,630    5,193    5,611 
Total Current Assets   357,604    370,077    377,425 
Property and equipment – net   102,932    103,386    106,374 
Deferred income taxes   8,163    7,158    5,655 
Other noncurrent assets   970    472    348 
Total Assets  $469,669   $481,093   $489,802 
                
Liabilities and Shareholders’ Equity               
Current Liabilities:               
Accounts payable  $69,986   $72,086   $75,006 
Accrued and other liabilities   18,936    15,848    18,129 
Total Current Liabilities   88,922    87,934    93,135 
Deferred lease incentives   30,320    31,971    30,595 
Accrued rent   11,465    11,224    11,221 
Deferred compensation   10,171    9,612    9,892 
Other   767    550    424 
Total Liabilities   141,645    141,291    145,267 
                
Shareholders’ Equity:               
Common stock, $.01 par value, 50,000,000 shares authorized, 20,569,198 shares, 20,604,178 shares and 20,604,178 shares issued, respectively   206    206    206 
Additional paid-in capital   64,957    66,805    65,807 
Retained earnings   314,851    294,308    291,419 
Treasury stock, at cost, 2,146,622 shares, 955,612 shares and 576,724 shares, respectively   (51,990)   (21,517)   (12,897)
Total Shareholders’ Equity   328,024    339,802    344,535 
Total Liabilities and Shareholders’ Equity  $469,669   $481,093   $489,802 

 

See notes to Condensed Consolidated Financial Statements.

 

 3 

 

SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited

 

(In thousands, except per share data)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
             
Net sales  $274,524   $269,713   $766,901   $750,302 
Cost of sales (including buying, distribution and occupancy costs)   192,514    188,396    542,105    528,022 
                     
Gross profit   82,010    81,317    224,796    222,280 
Selling, general and administrative expenses   66,558    66,144    185,399    182,200 
                     
Operating income   15,452    15,173    39,397    40,080 
Interest income   (1)   (2)   (6)   (36)
Interest expense   43    42    127    126 
                     
Income before income taxes   15,410    15,133    39,276    39,990 
Income tax expense   5,738    5,747    14,839    15,391 
                     
Net income  $9,672   $9,386   $24,437   $24,599 
                     
Net income per share:                    
Basic  $0.54   $0.47   $1.31   $1.23 
Diluted  $0.54   $0.47   $1.31   $1.23 
                     
Weighted average shares:                    
Basic   17,609    19,444    18,220    19,542 
Diluted   17,614    19,452    18,225    19,553 
                     
Cash dividends declared per share  $0.07   $0.065   $0.205   $0.19 

 

See notes to condensed consolidated financial statements.

 

 4 

 

 

SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
Unaudited

 

   Common Stock   Additional
Paid-In
   Retained    Treasury      
(In thousands)  Issued   Treasury   Amount   Capital   Earnings   Stock   Total 
Balance at January 30, 2016   20,604    (956)  $206   $66,805   $294,308   $(21,517)  $339,802 
Dividends declared ($0.205 per share)                       (3,894)        (3,894)
Stock-based compensation income tax benefit                  2              2 
Employee stock purchase plan purchases        8         (8)        194    186 
Restricted stock awards   (35)   225         (5,072)        5,072    0 
Shares surrendered by employees to pay taxes on restricted stock        (11)                  (311)   (311)
Purchase of common stock for treasury        (1,413)                  (35,428)   (35,428)
Stock-based compensation expense                  3,230              3,230 
Net income                       24,437         24,437 
Balance at October 29, 2016   20,569    (2,147)  $206   $64,957   $314,851   $(51,990)  $328,024 

 

See notes to Condensed Consolidated Financial Statements.

 

 5 

 

 

SHOE CARNIVAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited

 

(In thousands)  Thirty-nine
Weeks Ended
October 29,
2016
   Thirty-nine
Weeks Ended
October 31,
2015
 
           
Cash Flows From Operating Activities          
Net income  $24,437   $24,599 
Adjustments to reconcile net income to net          
cash provided by operating activities:          
Depreciation and amortization   17,698    17,132 
Stock-based compensation   3,438    2,595 
Loss on retirement and impairment of assets   500    958 
Deferred income taxes   56    (1,707)
Lease incentives   1,838    4,116 
Other   (3,064)   (3,597)
Changes in operating assets and liabilities:          
Accounts receivable   (1,409)   55 
Merchandise inventories   (22,047)   (31,001)
Accounts payable and accrued liabilities   (1,298)   9,699 
Other   1,303    456 
Net cash provided by operating activities   21,452    23,305 
           
Cash Flows From Investing Activities          
Purchases of property and equipment   (17,426)   (22,313)
Proceeds from notes receivable   0    250 
Net cash used in investing activities   (17,426)   (22,063)
           
Cash Flows From Financing Activities          
Proceeds from issuance of stock   186    335 
Dividends paid   (3,780)   (3,782)
Excess tax benefits from stock-based compensation   2    91 
Purchase of common stock for treasury   (35,428)   (10,181)
Shares surrendered by employees to pay taxes on restricted stock   (311)   (46)
Net cash used in financing activities   (39,331)   (13,583)
Net decrease in cash and cash equivalents   (35,305)   (12,341)
Cash and cash equivalents at beginning of period   68,814    61,376 
Cash and Cash Equivalents at end of period  $33,509   $49,035 
           
Supplemental disclosures of cash flow information:          
Cash paid during period for interest  $127   $125 
Cash paid during period for income taxes  $11,786   $15,561 
Capital expenditures incurred but not yet paid  $994   $2,494 

 

See notes to condensed consolidated financial statements.

 

 6 

 

 

SHOE CARNIVAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited

 

Note 1 - Basis of Presentation

 

In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial information and contain all normal recurring adjustments necessary to present fairly our financial position and the results of our operations and our cash flows for the periods presented. Certain information and disclosures normally included in the notes to Condensed Consolidated Financial Statements have been condensed or omitted according to the rules and regulations of the SEC, although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Condensed Consolidated Financial Statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

 

Note 2 - Net Income Per Share

 

The following tables set forth the computation of basic and diluted earnings per share as shown on the face of the accompanying Condensed Consolidated Statements of Income:

 

   Thirteen Weeks Ended 
   October 29, 2016   October 31, 2015 
   (In thousands, except per share data) 
                               
Basic Earnings per Share:  Net
Income
   Shares   Per
Share
Amount
   Net
Income
   Shares   Per
Share
Amount
 
Net income  $9,672             $9,386           
Amount allocated to participating securities   (214)             (187)          
Net income available for basic common shares and basic earnings per share  $9,458    17,609   $0.54   $9,199    19,444   $0.47 
                               
Diluted Earnings per Share:                              
Net income  $9,672             $9,386           
Amount allocated to participating securities   (214)             (187)          
Adjustment for dilutive potential common shares   0    5         0    8      
Net income available for diluted common shares and diluted earnings per share  $9,458    17,614   $0.54   $9,199    19,452   $0.47 

 

 7 

 

 

   Thirty-Nine Weeks Ended 
   October 29, 2016   October 31, 2015 
   (In thousands, except per share data)
                               
Basic Earnings per Share:  Net
Income
   Shares   Per
Share
Amount
   Net
Income
   Shares   Per
Share
Amount
 
Net income  $24,437             $24,599           
Amount allocated to participating securities   (515)             (479)          
Net income available for basic common shares and basic earnings per share  $23,922    18,220   $1.31   $24,120    19,542   $1.23 
                               
Diluted Earnings per Share:                              
Net income  $24,437             $24,599           
Amount allocated to participating securities   (515)             (479)          
Adjustment for dilutive potential common shares   0    5         0    11      
Net income available for diluted common shares and diluted earnings per share  $23,922    18,225   $1.31   $24,120    19,553   $1.23 

 

Our basic and diluted earnings per share are computed using the two-class method. The two-class method is an earnings allocation that determines net income per share for each class of common stock and participating securities according to their participation rights in dividends and undistributed earnings or losses. Non-vested restricted stock awards that include non-forfeitable rights to dividends are considered participating securities. During periods of undistributed losses, however, no effect is given to our participating securities since they do not share in the losses. Per share amounts are computed by dividing net income available to common shareholders by the weighted average shares outstanding during each period. No options to purchase shares of common stock were excluded in the computation of diluted shares for the periods presented.

 

Note 3 - Recently Issued Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on the recognition of revenue for all contracts with customers designed to improve comparability and enhance financial statement disclosures. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The underlying principle of this comprehensive model is that revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the payment to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB subsequently issued guidance which approved a one year deferral of the guidance until annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted as of the original effective date for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

In July 2015, the FASB issued guidance on simplifying the measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. The new guidance does not apply to inventory currently measured using the last-in-first-out or the retail inventory valuation methods. This guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We do not believe the guidance will have a material impact on our condensed consolidated financial position, results of operations and cash flows.

 

 8 

 

 

In November 2015, the FASB issued guidance which simplifies the classification of deferred taxes by requiring an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. We early adopted this guidance in the third quarter of fiscal 2016 and are applying this change prospectively. Prior condensed consolidated balance sheets have not been retrospectively adjusted. The adoption resulted in a $2.7 million reclassification of net deferred tax assets from current to noncurrent on our consolidated balance sheet as of October 29, 2016. The adoption did not have a material impact on our results of condensed consolidated operations and cash flows.

 

In February 2016, the FASB issued guidance which will replace most existing lease accounting guidance. This update requires an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity's leasing arrangements. This guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018. Early adoption is permitted. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

In March 2016, the FASB issued guidance intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification in the statement of cash flows and forfeitures. This guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

In August 2016, the FASB issued guidance addressing eight specific cash flow issues in an effort to reduce diversity in practice. The amended guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 31, 2017. Early adoption is permitted. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

Note 4 - Fair Value Measurements

 

The accounting standards related to fair value measurements define fair value and provide a consistent framework for measuring fair value under the authoritative literature. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect market assumptions. This guidance only applies when other standards require or permit the fair value measurement of assets and liabilities. The guidance does not expand the use of fair value measurements. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels:

 

·Level 1 – Quoted prices in active markets for identical assets or liabilities;
·Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data; and
·Level 3 – Significant unobservable inputs that are not corroborated by market data. Generally, these fair value measures are model-based valuation techniques such as discounted cash flows, and are based on the best information available, including our own data. Fair values of our long-lived assets are estimated using an income-based approach and are classified within Level 3 of the valuation hierarchy.

 

The following table presents assets that are measured at fair value on a recurring basis at October 29, 2016, January 30, 2016 and October 31, 2015. We have no material liabilities measured at fair value on a recurring or non-recurring basis.

 

 9 

 

 

   Fair Value Measurements 
(In thousands)  Level 1   Level 2   Level 3   Total
As of October 29, 2016:                    
Cash equivalents – money market account  $114   $0   $0   $114 
                     
As of January 30, 2016:                    
Cash equivalents– money market account  $5,386   $0   $0   $5,386 
                     
As of October 31, 2015:                    
Cash equivalents – money market account  $5,384   $0   $0   $5,384 

 

The fair values of cash, receivables, accounts payable, accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. From time to time, we measure certain assets at fair value on a non-recurring basis, specifically long-lived assets evaluated for impairment. These are typically store specific assets, which are reviewed for impairment whenever events or changes in circumstances indicate that recoverability of their carrying value is questionable.  If the expected, undiscounted future cash flows related to a store’s assets are less than their carrying value, an impairment loss would be recognized for the difference between estimated fair value and carrying value and recorded in selling, general and administrative expenses. We estimate the fair value of store assets using an income-based approach considering the cash flows expected over the remaining lease term for each location. These projections are primarily based on management’s estimates of store-level sales, gross margins, direct expenses, exercise of future lease renewal options and resulting cash flows and, by their nature, include judgments about how current initiatives will impact future performance. External factors, such as the local environment in which the store resides, including strip-mall traffic and competition, are evaluated in terms of their effect on sales trends. Changes in sales and operating income assumptions or unfavorable changes in external factors can significantly impact the estimated future cash flows. An increase or decrease in the projected cash flow can significantly decrease or increase the fair value of these assets, which would have an effect on the impairment recorded.

  

During the thirteen and thirty-nine weeks ended October 29, 2016, we recorded an impairment charge of $193,000 on long-lived assets held and used. Subsequent to this impairment, these long-lived assets had a remaining unamortized basis of $337,000. During the thirteen weeks ended October 31, 2015, we recorded an impairment charge of $161,000 on long-lived assets held and used. Subsequent to this impairment, these long-lived assets had a remaining unamortized basis of $69,000. During the thirty-nine weeks ended October 31, 2015, we recorded an impairment charge of $212,000 on long-lived assets held and used. Subsequent to this impairment, these long-lived assets had a remaining unamortized basis of $211,000.

 

We operate nine stores in Puerto Rico with combined net book value of long-lived assets of $4.5 million. Puerto Rico is experiencing an economic crisis characterized by a deep recession and defaults on its public sector debt. Our estimate of undiscounted cash flows indicates that the carrying amounts of long-lived assets are expected to be recovered. Our estimate of cash flows might change in future periods pending further developments in the economic environment in Puerto Rico.

 

Note 5 - Stock-Based Compensation

 

Stock-based compensation includes stock options, cash-settled stock appreciation rights (SARs) and restricted stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our employee stock purchase plan. For the thirteen and thirty-nine weeks ended October 29, 2016, stock-based compensation expense for the employee stock purchase plan was $9,000 before the income tax benefit of

 

 10 

 

 

$3,000 and $33,000 before the income tax benefit of $12,000, respectively. For the thirteen and thirty-nine weeks ended October 31, 2015, stock-based compensation expense for the employee stock purchase plan was $9,000 before the income tax benefit of $3,000 and $32,000 before the income tax benefit of $12,000, respectively.

 

The following section summarizes the share transactions for our restricted stock awards:

 

   Number of
Shares
   Weighted-
Average Grant
Date Fair
Value
 
Restricted stock at January 30, 2016   829,492   $22.13 
Granted   225,003    24.98 
Vested   (33,297)   25.66 
Forfeited   (34,980)   21.55 
Restricted stock at October 29, 2016   986,218   $22.68 

 

The weighted-average grant date fair value of stock awards granted during the thirty-nine week periods ended October 29, 2016 and October 31, 2015 was $24.98 and $24.43, respectively. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2016 was $854,000. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2015 was $106,000.

 

The following section summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

 

(In thousands)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
Stock-based compensation expense before the recognized income tax benefit  $1,295   $810   $3,197   $2,344 
Income tax benefit  $482   $308   $1,208   $902 

 

As of October 29, 2016, approximately $8.7 million of unrecognized compensation expense remained related to both our performance-based and service-based restricted stock awards. The cost is expected to be recognized over a weighted average period of approximately 2.0 years. This incorporates our current assumptions with respect to the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards.

 

The following table summarizes the SARs activity:

 

    Number of
Shares
    Weighted-
Average
Exercise Price
    Weighted-
Average
Remaining
Contractual
Term (Years)
 
Outstanding at January 30, 2016   147,550   $24.26      
Forfeited   (6,500)   24.26      
Exercised   (22,375)   24.26      
Outstanding at October 29, 2016   118,675   $24.26    3.4 
                
Exercisable at October 29, 2016   25,557   $24.26    3.4 

 

SARs were granted during the first quarter of fiscal 2015 to certain non-executive employees, such that one-third of the shares underlying the SARs will vest and become fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a five-year term from the date of grant, after which any unexercised SARs will

 

 11 

 

 

expire. Each SAR entitles the holder, upon exercise of their vested shares, to receive cash in an amount equal to the closing price of our stock on the date of exercise less the exercise price, with a maximum amount of gain defined. The SARs granted during the first quarter of fiscal 2015 were issued with a defined maximum gain of $10.00 over the exercise price of $24.26.

 

The fair value of these liability awards are remeasured, using a trinomial lattice model, at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense are recognized over the vesting period, or immediately for vested awards. The weighted-average fair value of outstanding, non-vested SAR awards as of October 29, 2016 and October 31, 2015 was $4.53 and $3.70, respectively.

 

The fair value was estimated using a trinomial lattice model with the following assumptions:

 

   October 29, 2016   October 31, 2015 
Risk free interest rate yield curve   0.18% - 1.33%   0.01% - 1.52%
Expected dividend yield   1.1%   1.0%
Expected volatility   35.06%   35.34%
Maximum life   3.4 Years    4.4 Years 
Exercise multiple   1.34    1.34 
Maximum payout  $10.00   $10.00 
Employee exit rate   2.2% - 9.0%   2.2% - 9.0%

 

The risk free interest rate was based on the U.S. Treasury yield curve in effect at the end of the reporting period. The expected dividend yield was based on our historical quarterly cash dividends, with the assumption that quarterly dividends would continue at that rate. Expected volatility was based on the historical volatility of our stock. The exercise multiple and employee exit rate were based on historical option data.

 

The following table summarizes information regarding stock-based compensation expense recognized for SARs:

 

(In thousands)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
Stock-based compensation expense before the recognized income tax benefit  $12   $24   $208   $219 
Income tax benefit  $4   $9   $79   $84 

 

As of October 29, 2016, approximately $155,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a weighted-average period of approximately 0.9 years.

 

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

 

Factors That May Affect Future Results

 

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: general economic conditions in the areas of the continental United States in which our stores are located and the impact of the ongoing economic crisis in Puerto Rico on sales at, and cash flows of, our stores located in Puerto Rico; the effects and duration of economic downturns and unemployment rates; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; our ability to generate increased sales at our stores; the potential impact of national and international security concerns on the retail environment; changes in our relationships with key suppliers; the impact of competition and pricing;

 

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our ability to successfully manage and execute our marketing initiatives and maintain positive brand perception and recognition; changes in weather patterns, 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; the effectiveness of our inventory management; the impact of hurricanes or other natural disasters on our stores, as well as on consumer confidence and purchasing in general; risks associated with the seasonality of the retail industry; the impact of unauthorized disclosure or misuse of personal and confidential information about our customers, vendors and employees; our ability to manage our third-party vendor relationships; our ability to successfully execute our growth strategy, including the availability of desirable store locations at acceptable lease terms, our ability to open new stores in a timely and profitable manner, including our entry into major new markets, and the availability of sufficient funds to implement our growth plans; higher than anticipated costs or impairment charges associated with the closing of underperforming stores; our ability to successfully grow our e-commerce sales; the inability of manufacturers to deliver products in a timely manner; changes in the political and economic environments in China, Brazil, Europe and East Asia, where the primary manufacturers of footwear are located; the impact of regulatory changes in the United States and the countries where our manufacturers are located; the continued favorable trade relations between the United States and China and the other countries which are the major manufacturers of footwear; the resolution of litigation or regulatory proceedings in which we are or may become involved; our ability to meet our labor needs while controlling costs; and future stock repurchases under our stock repurchase program and future dividend payments. For a more detailed discussion of certain risk factors see the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

 

General

 

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. FINANCIAL STATEMENTS of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended January 30, 2016 as filed with the SEC.

 

Overview of Our Business

 

Shoe Carnival, Inc. is one of the nation’s largest family footwear retailers, providing the convenience of shopping at any of our over 400 store locations or online at shoecarnival.com. Our stores combine competitive pricing with a fun and promotional, in-store marketing effort that encourages customer participation and injects fun and surprise into every shopping experience. We believe this fun and promotional atmosphere results in various competitive advantages, including increased multiple unit sales; the building of a loyal, repeat customer base; the creation of word-of-mouth advertising; and enhanced sell-through of in-season goods. A similar customer experience is reflected in our e-commerce site through special promotions and limited time sales, along with relevant fashion stories featured on our home page.

 

Our objective is to be the destination retailer-of-choice for a wide range of consumers seeking value priced, current season name brand and private label footwear. Our product assortment includes dress and casual shoes, sandals, boots and a wide assortment of athletic shoes for the entire family in four general categories - women’s, men’s, children’s and athletics. In addition to footwear, our stores carry selected accessory items such as socks, belts, shoe care items, handbags, jewelry, scarves and wallets. Our e-commerce site offers customers an opportunity to choose from a large selection of products in all of the same categories of footwear, and introduces our concept to consumers who are new to Shoe Carnival, in both existing and new markets.

 

Critical Accounting Policies

 

It is necessary for us to include certain judgments in our reported financial results.  These judgments involve estimates based in part on our historical experience and incorporate the impact of the current general economic climate and company-specific circumstances.  However, because future events and economic conditions are inherently uncertain, our actual results could differ materially from these estimates.  Our accounting policies that require more significant judgments include those with respect to merchandise inventories, valuation of long-lived

 

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assets, insurance reserves and income taxes and are discussed in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

 

There have been no material changes to our critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016. See Note 3 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on recently issued accounting pronouncements.

 

Results of Operations Summary Information

 

   Number of Stores   Store Square Footage    
   Beginning             End of   Net   End   Comparable 
Quarter Ended  Of Period   Opened   Closed   Period   Change   of Period   Store Sales 
April 30, 2016   405    3    4    404    (13,000)   4,452,000    2.7%
July 30, 2016   404    9    0    413    79,000    4,531,000    0.5%
October 29, 2016   413    3    1    415    13,000    4,544,000    (0.4)%
                                    
Year-to-date 2016   405    15    5    415    79,000    4,544,000    0.9%
                                    
May 2, 2015   400    7    6    401    15,000    4,434,000    3.0%
August 1, 2015   401    5    6    400    (9,000)   4,425,000    0.5%
October 31, 2015   400    6    2    404    40,000    4,465,000    6.0%
                                    
Year-to-date 2015   400    18    14    404    46,000    4,465,000    3.3%

 

Comparable store sales for the periods indicated include stores that have been open for 13 full months after such store’s grand opening prior to the beginning of the period, including those stores that have been relocated or remodeled. Therefore, stores opened or closed during the periods indicated are not included in comparable store sales. We include e-commerce sales in our comparable store sales. Due to our multi-channel retailer strategy, we view the e-commerce sales as an extension of our physical stores.

 

The following table sets forth our results of operations expressed as a percentage of net sales for the periods indicated:

 

   Thirteen
Weeks Ended
October 29, 2016
  Thirteen
Weeks Ended
October 31, 2015
  Thirty-Nine
Weeks Ended
October 29, 2016
  Thirty-Nine
Weeks Ended
October 31, 2015
Net sales   100.0%   100.0%   100.0%   100.0%
Cost of sales (including buying, distribution and occupancy costs)   70.1    69.9    70.7    70.4 
Gross profit   29.9    30.1    29.3    29.6 
Selling, general and administrative expenses   24.3    24.5    24.2    24.3 
Operating income   5.6    5.6    5.1    5.3 
Interest (income) expense, net   0.0    0.0    0.0    0.0 
Income before income taxes   5.6    5.6    5.1    5.3 
Income tax expense   2.1    2.1    1.9    2.0 
Net income   3.5%   3.5%   3.2%   3.3%

 

Executive Summary for Third Quarter Ended October 29, 2016

 

Our third quarter operating results were below our expectations due to slower sales in the second half of the quarter. While we recorded comparable store sales increases in athletic merchandise in each month of the third quarter, sales of our fall and winter merchandise were not as strong as the prior year, resulting in a high single-digit decline in

 

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comparable store sales in our boot categories for the quarter. Additional highlights for the third quarter of fiscal 2016 are as follows:

 

·Net sales increased $4.8 million or 1.8% in the third quarter of fiscal 2016 compared to the same period last year primarily as a result of store growth. Despite a 0.4% decrease in comparable store sales and a mid single-digit decline in store traffic during the quarter, we experienced increases in our conversion rate, average sales per transaction, average units per transaction and average unit retail. Although overall sales of men’s, women’s and children’s non-athletic product were down on a comparable store basis, particularly in our boot categories, we posted a low single-digit increase in adult athletics and we continued to produce positive results with sandals.
·Our gross profit margin decreased to 29.9% in the third quarter of fiscal 2016 from 30.1% in the prior year. Our merchandise margin increased 0.1% primarily due to margin increases on the sales of both our athletic and non-athletic product for the quarter partially offset by an increase in expense related to our multi-channel sales initiatives. Buying, distribution and occupancy costs, as a percentage of sales, increased 0.3% due to the deleveraging effect of lower same store sales and new store growth.
·We repurchased 375,631 shares of common stock during the quarter at a total cost of $10.2 million under our share repurchase program and ended the fiscal quarter with $33.5 million in cash and cash equivalents. We ended the quarter with no interest bearing debt.
·We opened three stores including two small-market stores during the third quarter of fiscal 2016, bringing our total to five small-market stores opened in fiscal 2016. In aggregate, we expect to open seven small-market stores in fiscal 2016 out of a total of 19 new store openings planned for the year. We continue to expect consistent small market unit growth over the next several years as we expand into new and existing markets. Two stores were relocated and one store was closed during the third quarter of fiscal 2016, ending the quarter with 415 stores.
·During the third quarter of fiscal 2016, we completed the launch of a new online service which gives our customers the option to buy online, pick up in store and buy online, ship to store. This feature provides the convenience of local pickup for our customers with the added benefit of driving traffic back to our stores. This launch represents our continued effort to evolve our customer experience and focus on multi-channel initiatives that we believe will better position us for long-term growth as consumer shopping habits evolve.
·During the third quarter of fiscal 2016, we increased membership in our Shoe Perks customer loyalty program by an additional 1.1 million members, which bring total membership to 12.1 million customers. For the quarter, member sales accounted for approximately 67% of our total business and members on average spent 18% more per transaction than non-members. We believe our Shoe Perks program affords us tremendous opportunity to communicate, build relationships and engage with our most loyal shoppers, which we believe will result in long-term sales gains.

 

Results of Operations for the Third Quarter Ended October 29, 2016

 

Net Sales

 

Net sales increased $4.8 million to $274.5 million during the third quarter of fiscal 2016, a 1.8% increase over the prior year's third quarter net sales of $269.7 million. Of this increase in net sales, $7.4 million was attributable to the sales generated by the 23 new stores we opened since the beginning of the third quarter of fiscal 2015. This increase was partially offset by a 0.4%, or $0.7 million, decrease in comparable store sales and a $1.9 million loss in sales from the eight stores closed since the beginning of the third quarter of fiscal 2015. Slower than anticipated sales in non-athletic footwear, particularly boots, and a mid single-digit decline in store traffic were the primary factors in our comparable store sales decrease during the third quarter.

 

Gross Profit

 

Gross profit increased to $82.0 million during the third quarter of fiscal 2016 compared to gross profit of $81.3 million for the third quarter of fiscal 2015. Our gross profit margin decreased to 29.9% compared to 30.1% in the third quarter of fiscal 2015. Our merchandise margin increased 0.1% primarily due to margin increases on the sales of both our athletic and non-athletic product for the quarter partially offset by an increase in expense related to our multi-channel sales initiatives. Buying, distribution and occupancy costs, however, increased 0.3% as a percentage of sales during the third

 

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quarter of fiscal 2016 compared to the same period last year primarily due to the deleveraging effect of lower same store sales and new store growth.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses increased $414,000 in the third quarter of fiscal 2016 to $66.6 million compared to the same prior year period. As a percentage of sales, these expenses decreased to 24.3% in the third quarter of fiscal 2016 from 24.5% in the third quarter of fiscal 2015. Significant changes in expenses between the comparative periods included the following:

 

·On an overall basis, the net change in selling, general and administrative expenses was primarily driven by increases in wages, depreciation and stock-based compensation expense and reductions in incentive compensation, employee health care and advertising expense during the third quarter of fiscal 2016 compared to the third quarter of the prior year.

·We incurred additional selling expense of $897,000 during the third quarter of fiscal 2016 compared to the third quarter of last year related to the operation of 23 new stores opened since the beginning of the third quarter of fiscal 2015, net of expense reductions associated with the closure of eight stores since the beginning of the same period.
·Stock-based compensation expense increased $473,000 in the third quarter of fiscal 2016 compared to the same period last year. This was primarily attributable to performance and service-based stock awards granted in fiscal 2016. 
·Incentive compensation decreased $790,000 in the third quarter of fiscal 2016 compared to the same period last year. This decrease was primarily attributable to lower financial performance against the defined metrics associated with our performance-based compensation in the third quarter of fiscal 2016.

 

Pre-opening costs included in selling, general and administrative expenses were $351,000 in the third quarter of fiscal 2016 compared to $500,000 in the third quarter last year. We opened three new stores in the third quarter of fiscal 2016 compared to six new stores in the third quarter of fiscal 2015. Pre-opening costs, such as advertising, payroll and supplies, incurred prior to the opening of a new store are charged to expense in the period in which they are incurred. The total amount of pre-opening expense incurred will vary by store depending on the specific market and the promotional activities involved.

 

Store closing costs in selling, general and administrative expenses were $335,000, or 0.1% as a percentage of sales, in the third quarter of fiscal 2016. Store closing costs were $611,000, or 0.2% as a percentage of sales, in the third quarter last year. One store was closed in the third quarter of fiscal 2016 compared to two stores in the third quarter of fiscal 2015.

 

Income Taxes

 

The effective income tax rate for the third quarter of fiscal 2016 was 37.2% as compared to 38.0% for the same time period in fiscal 2015. Our provision for income tax expense is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events.

 

Results of Operations for Nine Month Period Ended October 29, 2016

 

Net Sales

 

Net sales increased $16.6 million to $766.9 million during the nine-month period ended October 29, 2016, a 2.2% increase compared to net sales of $750.3 million for the nine-month period ended October 31, 2015. Of the $16.6 million increase in net sales, approximately $18.6 million was attributable to the 35 new stores we opened since the beginning of fiscal 2015 and $7.2 million was attributable to our 0.9% increase in comparable store sales for the nine-month period ended October 29, 2016. These increases were partially offset by a loss of $9.2 million in sales from the 20 stores closed since the beginning of fiscal 2015.

 

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Gross Profit

 

Gross profit increased to $224.8 million during the first nine months of fiscal 2016 compared to gross profit of $222.3 million in the first nine months of fiscal 2015. Our gross profit margin decreased to 29.3% compared to 29.6% in the first nine months of fiscal 2015. Our merchandise margin decreased 0.4% primarily due to expenses related to our multi-channel sales initiatives. Buying, distribution and occupancy costs decreased 0.1% as a percentage of sales during the first nine months of fiscal 2016 compared to the same period last year primarily due a decrease in outbound freight costs.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses increased $3.2 million in the first nine months of fiscal 2016 to $185.4 million compared to the same prior year period. As a percentage of sales, these expenses decreased to 24.2% in the first nine months of fiscal 2016 from 24.3% in the third quarter of fiscal 2015. Significant changes in expenses between the comparative periods included the following:

 

·On an overall basis, the net change in selling, general and administrative expenses was primarily driven by increases in wages, other employee benefits and stock-based compensation expense and reductions in incentive compensation, employee health care and fixed asset write-offs during the first nine months of fiscal 2016 compared to the first nine months of the prior year.
·We incurred additional selling expense of $1.0 million during the first nine months of fiscal 2016 compared to the first nine months of last year related to the operation of 35 new stores opened since the beginning of fiscal 2015, net of expense reductions associated with the closure of 20 stores since the beginning of the same period.
·Stock-based compensation expense increased $843,000 in the first nine months of fiscal 2016 compared to the same period last year. This was primarily attributable to management assumptions related to the timing and probability of the vesting of performance-based stock awards and the net impact of the related adjustments on stock-based compensation expense and grants of awards in fiscal 2016.
·Incentive compensation decreased $1.4 million in the first nine months of fiscal 2016 compared to the same period last year. This decrease was primarily attributable to lower financial performance against the defined metrics associated with our performance-based compensation in the first nine months of fiscal 2016.

 

In the first nine months of fiscal 2016, pre-opening costs included in selling, general and administrative expenses were $815,000, or 0.1% as a percentage of sales, compared to $1.1 million, or 0.2% as a percentage of sales, in the same period last year. Pre-opening costs, such as advertising, payroll and supplies, incurred prior to the opening of a new store are charged to expense in the period in which they are incurred. The total amount of pre-opening expense incurred will vary by store depending on the specific market and the promotional activities involved.

 

Store closing costs and non-cash impairment charges included in selling, general and administrative expenses were $631,000, or 0.1% as a percentage of sales, in the first nine months of fiscal 2016. Store closing costs and non-cash impairment charges of long-lived assets were $1.8 million, or 0.2% as a percentage of sales, in the first nine months of last year. We closed five stores in the first nine months of fiscal 2016 and 14 stores were closed in the first nine months of fiscal 2015.

 

Income Taxes

 

The effective income tax rate for the first nine months of fiscal 2016 was 37.8% compared to 38.5% for the same period in fiscal 2015. Our provision for income tax expense is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events.

 

Liquidity and Capital Resources

 

We anticipate that our existing cash and cash flows from operations will be sufficient to fund our planned store expansion along with other capital expenditures, working capital needs, potential dividend payments, potential share repurchases under our share repurchase program, and various other commitments and obligations, as they arise, for at least the next 12 months.

 

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Cash Flow - Operating Activities

 

Our net cash provided by operating activities was $21.5 million in the first nine months of fiscal 2016 compared to $23.3 million in the first nine months of fiscal 2015. These amounts reflect our income from operations adjusted for non-cash items and working capital changes. The year-over-year decrease in operating cash flow was primarily driven by a reduction in merchandise inventories and the timing of payments for accounts payable and accrued liabilities.

 

Working capital decreased to $268.7 million at October 29, 2016, from $284.3 million at October 31, 2015, primarily due to decreases in cash and inventory partially offset by a decrease in accounts payable compared to the third quarter of the prior year. The current ratio was 4.0 as of October 29, 2016, compared to 4.1 at October 31, 2015.

 

Cash Flow - Investing Activities

 

Our cash outflows for investing activities are primarily for capital expenditures. During the first nine months of fiscal 2016, we expended $17.4 million for the purchase of property and equipment, of which $12.9 million was for new stores, remodeling and relocations. During the first nine months of fiscal 2015, we expended $22.3 million for the purchase of property and equipment, of which $15.0 million was for new stores, remodeling and relocations. The remaining capital expenditures in both periods were for continued investments in technology and normal asset replacement activities.

 

Cash Flow - Financing Activities

 

Cash outflows for financing activities are primarily for cash dividend payments and share repurchases. Shares of our common stock can be either acquired as part of a publicly announced repurchase program or withheld by us in connection with employee payroll tax withholding upon the vesting of restricted stock awards. Our cash inflows from financing activities have represented proceeds from the issuance of shares as a result of stock option exercises and purchases under our Employee Stock Purchase Plan.

 

During the first nine months of fiscal 2016, net cash used in financing activities was $39.3 million compared to net cash used in financing activities of $13.6 million in the first nine months of fiscal 2015. The increase in cash used in financing activities between the two respective periods was primarily attributable to the $35.4 million of common stock repurchased under our share repurchase program during the first nine months of fiscal 2016, compared to the $10.2 million repurchased in the first nine months of fiscal 2015.

 

Capital Expenditures

 

Capital expenditures for fiscal 2016, including actual expenditures during the first nine months, are expected to be between $21 million and $22 million, with approximately $16 million to be used for new stores, relocations and remodels. Lease incentives to be received from landlords during fiscal 2016, including actual amounts received during the first nine months, are expected to be approximately $4 to $5 million. The actual amount of cash required for capital expenditures for store operations depends in part on the number of new stores opened and relocated, the amount of lease incentives, if any, received from landlords and the number of stores remodeled.

 

Store Openings and Closings

 

We utilize a formalized review process in our evaluation of potential new store sites as well as for decisions surrounding leases on existing store locations. Our approach is both qualitative and quantitative in nature. We look to continually enhance this process and utilize real estate specific software tools for portfolio analysis. These enhancements aid us in identifying the best possible locations for future expansion and identifying potential store closings and relocations. We believe this will enable us to realize positive long-term financial performance of our portfolio.

 

In fiscal 2016, we anticipate opening 19 new stores, including seven small-market stores. We opened 15 stores in the first nine months of fiscal 2016, including five small-market stores. Pre-opening expenses, including rent, freight, advertising, salaries and supplies, are expected to total approximately $1.7 million for fiscal 2016, or an average of $87,000 per store. During fiscal 2015, we opened 20 new stores and expended $1.9 million on pre-opening expenses, or an average of $96,000 per store. The opening of new stores is dependent upon, among other things, the

 

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availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending in areas we target for expansion.

 

We closed five stores during the first nine months of fiscal 2016. Fourteen stores were closed during the first nine months of fiscal 2015. Currently, we have four additional store closings scheduled for the fourth quarter of fiscal 2016. The timing and actual amount of expense recorded in closing a store can vary significantly depending in part on the period in which management commits to a closing plan, the remaining basis in the fixed assets to be disposed of at closing and the cost incurred in terminating the lease. We will continue to review our annual store growth rate based on our view of the internal and external opportunities and challenges in the marketplace.

 

Dividends

 

On September 8, 2016, our Board of Directors approved the payment of our third quarter cash dividend to our shareholders.  The dividend of $0.07 per share was paid on October 17, 2016 to shareholders of record as of the close of business on October 3, 2016.

 

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.

 

Credit Facility

 

Our unsecured credit agreement provides for up to $50.0 million in cash advances and commercial and standby letters of credit with borrowing limits based on eligible inventory. It contains covenants which stipulate: (1) Total Shareholders’ Equity, adjusted for the effect of any share repurchases, will not fall below that of the prior fiscal year-end; (2) the ratio of funded debt plus rent to EBITDA plus rent will not exceed 2.5 to 1.0; and (3) cash dividends for a fiscal year will not exceed 30% of condensed consolidated net income for the immediately preceding fiscal year, and in no event may the total distributions in any fiscal year exceed 25% of the prior year’s ending net worth. We were in compliance with these covenants as of October 29, 2016. Should a default condition be reported, the lenders may preclude additional borrowings and call all loans and accrued interest at their discretion. There were no borrowings outstanding under the credit facility and letters of credit outstanding were $1.0 million at October 29, 2016. As of October 29, 2016, $49.0 million was available to us for additional borrowings under the credit facility.

 

Share Repurchase Program

 

On December 9, 2015, our Board of Directors authorized a new share repurchase program for up to $50 million of outstanding common stock, effective January 1, 2016. The purchases may be made in the open market or through privately negotiated transactions, from time-to-time through December 31, 2016, and in accordance with applicable laws, rules and regulations. On January 21, 2016, we entered into a stock repurchase plan for the purpose of repurchasing shares of our common stock in accordance with guidelines specified under Rule 10b5-1 of the Exchange Act. After its expiration, we entered into another such plan on June 28, 2016 (collectively, the “Rule 10b5-1 Plans”). The Rule 10b5-1 Plans were established pursuant to, and as part of, our share repurchase program and permit shares to be repurchased in accordance with pre-determined criteria when repurchases would otherwise be prohibited, such as during self-imposed blackout periods, or under insider trading laws. The share repurchase program may be amended, suspended or discontinued at any time and does not commit us to repurchase shares of our common stock. We have funded, and intend to continue to fund, the share repurchase program from cash on hand, and any shares acquired will be available for stock-based compensation awards and other corporate purposes. The actual number and value of the shares to be purchased will depend on the performance of our stock price and other market conditions.

 

During the third quarter of fiscal 2016, we repurchased 375,631 shares of common stock at a total cost of $10.2 million under the new share repurchase program. As of October 29, 2016, approximately 1.6 million shares at an aggregate cost of $39.7 million had been repurchased under the new share repurchase program. The amount that remained available under the share repurchase program at October 29, 2016 was $10.3 million.

 

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Seasonality and Quarterly Results

 

Our quarterly results of operations have fluctuated, and are expected to continue to fluctuate in the future, primarily as a result of seasonal variances and the timing of sales and costs associated with opening new stores. Non-capital expenditures, such as advertising and payroll, incurred prior to the opening of a new store are charged to expense as incurred. Therefore, our results of operations may be adversely affected in any quarter in which we incur pre-opening expenses related to the opening of new stores.

 

We have three distinct peak selling periods: Easter, back-to-school and Christmas. To prepare for our peak shopping seasons, we must order and keep in stock significantly more merchandise than we would carry during other parts of the year. Any unanticipated decrease in demand for our products during these peak shopping seasons could require us to sell excess inventory at a substantial markdown, which could reduce our net sales and gross margins and negatively affect our profitability. Our operating results depend significantly upon the sales generated during these periods.

 

ITEM  3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are exposed to market risk in that the interest payable under our credit facility is based on variable interest rates and therefore is affected by changes in market rates. We do not use interest rate derivative instruments to manage exposure to changes in market interest rates. We had no borrowings under our credit facility during the first nine months of fiscal 2016 or fiscal 2015.

 

ITEM 4.  CONTROLS AND PROCEDURES

 

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of October 29, 2016, that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

There has been no significant change in our internal control over financial reporting that occurred during the quarter ended October 29, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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SHOE CARNIVAL, INC.
PART II - OTHER INFORMATION

 

ITEM 1A.   RISK FACTORS

 

You should carefully consider the risks and uncertainties we describe both in this Quarterly Report on Form 10-Q and in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended January 30, 2016 before deciding to invest in, or retain, shares of our common stock. If any of these risks or uncertainties actually occur, we may not be able to conduct our business as currently planned and our financial condition, results of operations or cash flows could be materially and adversely affected. There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Issuer Purchases of Equity Securities

 

             Total Number   Approximate 
             Of Shares   Dollar Value 
             Purchased   of Shares 
             as Part   that May Yet 
   Total Number   Average   of Publicly   Be Purchased 
   of Shares   Price Paid   Announced   Under 
Period  Purchased (1)   per Share   Programs (2)   Programs (2) 
                     
July 31, 2016 to August 27, 2016   0   $0.00    0   $20,474,000 
August 28, 2016 to October 1, 2016   375,631   $27.13    375,631   $10,285,000 
October 2, 2016 to October 29, 2016   0   $0.00    0   $10,285,000 
    375,631         375,631      

 

(1)No shares were withheld by us in the third quarter in connection with employee payroll tax withholding upon the vesting of restricted stock awards.

 

(2)On December 9, 2015, our Board of Directors authorized a new share repurchase program for up to $50 million of our outstanding common stock, effective January 1, 2016 and expiring on December 31, 2016.

 

ITEM 6.   EXHIBITS

 

        Incorporated by Reference To    
Exhibit
No.
  Description   Form   Exhibit   Filing
Date
  Filed
Herewith
3-A   Amended and Restated Articles of Incorporation of Registrant   8-K     3-A     06/14/2013    
3-B   By-laws of Registrant, as amended to date   8-K     3-B     06/14/2013    

 

 21 

 

 

EXHIBITS - Continued
Exhibit
No.
    Incorporated by Reference To  
  Description Form Exhibit Filing
Date
Filed
Herewith
31.1   Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002       X
31.2   Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002       X
32.1   Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       X
32.2   Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       X
101   The following materials from Shoe Carnival, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 29, 2016, formatted in XBRL (Extensible Business Reporting Language): (1) Condensed Consolidated Balance Sheets, (2) Condensed Consolidated Statements of Income, (3) Condensed Consolidated Statement of Shareholders’ Equity, (4) Condensed Consolidated Statements of Cash Flows, and (5) Notes to Condensed Consolidated Financial Statements.       X

 

 22 

 

 

SHOE CARNIVAL, INC.

 


SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed, on its behalf by the undersigned thereunto duly authorized.

 

Date:  November 30, 2016 SHOE CARNIVAL, INC.
(Registrant)           

 

 

By:   /s/ W. Kerry Jackson
W. Kerry Jackson
Senior Executive Vice President,
Chief Operating and Financial Officer and Treasurer

(Duly Authorized Officer and Principal Financial Officer)

 

 23 

EX-31.1 2 scvlexhibit31_1.htm EX-31.1

Exhibit 31.1

 

SHOE CARNIVAL, INC.
CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Clifton E. Sifford, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Shoe Carnival, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
  (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
  (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date:  November 30, 2016 By:  /s/ Clifton E. Sifford
Clifton E. Sifford
President and
Chief Executive Officer

 

 

 

EX-31.2 3 scvlexhibit31_2.htm EX-31.2

Exhibit 31.2

 

SHOE CARNIVAL, INC.
CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, W. Kerry Jackson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Shoe Carnival, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
  (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
  (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date:  November 30, 2016 By:  /s/ W. Kerry Jackson
W. Kerry Jackson
Senior Executive Vice President,
Chief Operating and Financial Officer and Treasurer

 

 

 

EX-32.1 4 scvlexhibit32_1.htm EX-32.1

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350,
AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Shoe Carnival, Inc. (the "Company") on Form 10-Q for the period ending October 29, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Clifton E. Sifford, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date:  November 30, 2016 By:  /s/ Clifton E. Sifford
Clifton E. Sifford
President and
Chief Executive Officer

 

 

 

 

EX-32.2 5 scvlexhibit32_2.htm EX-32.2

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350,
AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Shoe Carnival, Inc. (the "Company") on Form 10-Q for the period ending October 29, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I W. Kerry Jackson, Senior Executive Vice President, Chief Operating and Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date:  November 30, 2016 By:  /s/ W. Kerry Jackson
W. Kerry Jackson
Senior Executive Vice President,
Chief Operating and Financial Officer and Treasurer

 

 

 

 

 

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Nov. 22, 2016
Document and Entity Information [Abstract]    
Document Type 10-Q  
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Document Period End Date Oct. 29, 2016  
Entity Registrant Name SHOE CARNIVAL INC  
Entity Central Index Key 0000895447  
Current Fiscal Year End Date --01-28  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q3  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   18,422,425
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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Oct. 29, 2016
Jan. 30, 2016
Oct. 31, 2015
Current Assets:      
Cash and cash equivalents $ 33,509 $ 68,814 $ 49,035
Accounts receivable 3,540 2,131 2,665
Merchandise inventories 314,925 292,878 318,878
Deferred income taxes 0 1,061 1,236
Other 5,630 5,193 5,611
Total Current Assets 357,604 370,077 377,425
Property and equipment - net 102,932 103,386 106,374
Deferred income taxes 8,163 7,158 5,655
Other noncurrent assets 970 472 348
Total Assets 469,669 481,093 489,802
Current Liabilities:      
Accounts payable 69,986 72,086 75,006
Accrued and other liabilities 18,936 15,848 18,129
Total Current Liabilities 88,922 87,934 93,135
Deferred lease incentives 30,320 31,971 30,595
Accrued rent 11,465 11,224 11,221
Deferred compensation 10,171 9,612 9,892
Other 767 550 424
Total Liabilities 141,645 141,291 145,267
Shareholders' Equity:      
Common stock, $.01 par value, 50,000,000 shares authorized, 20,569,198 shares, 20,604,178 shares and 20,604,178 shares issued, respectively 206 206 206
Additional paid-in capital 64,957 66,805 65,807
Retained earnings 314,851 294,308 291,419
Treasury stock, at cost, 2,146,622 shares, 955,612 shares and 576,724 shares, respectively (51,990) (21,517) (12,897)
Total Shareholders' Equity 328,024 339,802 344,535
Total Liabilities and Shareholders' Equity $ 469,669 $ 481,093 $ 489,802
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Oct. 31, 2015
Statement of Financial Position [Abstract]      
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Common stock, shares authorized 50,000,000 50,000,000 50,000,000
Common stock, shares issued 20,569,198 20,604,178 20,604,178
Treasury shares, shares 2,146,622 955,612 576,724
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shares in Thousands, $ in Thousands
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Oct. 29, 2016
Oct. 31, 2015
Oct. 29, 2016
Oct. 31, 2015
Income Statement [Abstract]        
Net sales $ 274,524 $ 269,713 $ 766,901 $ 750,302
Cost of sales (including buying, distribution and occupancy costs) 192,514 188,396 542,105 528,022
Gross profit 82,010 81,317 224,796 222,280
Selling, general and administrative expenses 66,558 66,144 185,399 182,200
Operating income 15,452 15,173 39,397 40,080
Interest income (1) (2) (6) (36)
Interest expense 43 42 127 126
Income before income taxes 15,410 15,133 39,276 39,990
Income tax expense 5,738 5,747 14,839 15,391
Net income $ 9,672 $ 9,386 $ 24,437 $ 24,599
Net income per share:        
Basic $ 0.54 $ 0.47 $ 1.31 $ 1.23
Diluted $ 0.54 $ 0.47 $ 1.31 $ 1.23
Weighted average shares:        
Basic 17,609 19,444 18,220 19,542
Diluted 17,614 19,452 18,225 19,553
Cash dividends declared per share $ 0.07 $ 0.065 $ 0.205 $ 0.19
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shares in Thousands, $ in Thousands
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Total
Balance at Jan. 30, 2016 $ 206 $ 66,805 $ 294,308 $ (21,517) $ 339,802
Balance, shares at Jan. 30, 2016 20,604     (956)  
Dividends declared ($0.205 per share) (3,894) (3,894)
Stock-based compensation income tax benefit 2 2
Employee stock purchase plan purchases (8) $ 194 186
Employee stock purchase plan purchases, shares       8  
Restricted stock awards   (5,072)   $ 5,072 0
Restricted stock awards, shares (35)     225  
Shares surrendered by employees to pay taxes on restricted stock $ (311) (311)
Shares surrendered by employees to pay taxes on restricted stock, shares       (11)  
Purchase of common stock for treasury $ (35,428) (35,428)
Purchase of common stock for treasury, shares       (1,413)  
Stock-based compensation expense   3,230     3,230
Net income 24,437 24,437
Balance at Oct. 29, 2016 $ 206 $ 64,957 $ 314,851 $ (51,990) $ 328,024
Balance, shares at Oct. 29, 2016 20,569     (2,147)  
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Oct. 29, 2016
Oct. 31, 2015
Oct. 29, 2016
Oct. 31, 2015
Statement of Stockholders' Equity [Abstract]        
Cash dividends declared per share $ 0.07 $ 0.065 $ 0.205 $ 0.19
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Cash Flows From Operating Activities    
Net income $ 24,437 $ 24,599
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 17,698 17,132
Stock-based compensation 3,438 2,595
Loss on retirement and impairment of assets 500 958
Deferred income taxes 56 (1,707)
Lease incentives 1,838 4,116
Other (3,064) (3,597)
Changes in operating assets and liabilities:    
Accounts receivable (1,409) 55
Merchandise inventories (22,047) (31,001)
Accounts payable and accrued liabilities (1,298) 9,699
Other 1,303 456
Net cash provided by operating activities 21,452 23,305
Cash Flows From Investing Activities    
Purchases of property and equipment (17,426) (22,313)
Proceeds from notes receivable 0 250
Net cash used in investing activities (17,426) (22,063)
Cash Flows From Financing Activities    
Proceeds from issuance of stock 186 335
Dividends paid (3,780) (3,782)
Excess tax benefits from stock-based compensation 2 91
Purchase of common stock for treasury (35,428) (10,181)
Shares surrendered by employees to pay taxes on restricted stock (311) (46)
Net cash used in financing activities (39,331) (13,583)
Net decrease in cash and cash equivalents (35,305) (12,341)
Cash and cash equivalents at beginning of period 68,814 61,376
Cash and Cash Equivalents at end of period 33,509 49,035
Supplemental disclosures of cash flow information:    
Cash paid during period for interest 127 125
Cash paid during period for income taxes 11,786 15,561
Capital expenditures incurred but not yet paid $ 994 $ 2,494
XML 19 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Basis of Presentation
9 Months Ended
Oct. 29, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Note 1 - Basis of Presentation

 

In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial information and contain all normal recurring adjustments necessary to present fairly our financial position and the results of our operations and our cash flows for the periods presented. Certain information and disclosures normally included in the notes to Condensed Consolidated Financial Statements have been condensed or omitted according to the rules and regulations of the SEC, although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Condensed Consolidated Financial Statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
Net Income Per Share
9 Months Ended
Oct. 29, 2016
Earnings Per Share, Basic [Abstract]  
Net Income Per Share

Note 2 - Net Income Per Share

 

The following tables set forth the computation of basic and diluted earnings per share as shown on the face of the accompanying Condensed Consolidated Statements of Income:

 

   Thirteen Weeks Ended 
   October 29, 2016   October 31, 2015 
   (In thousands, except per share data) 
                               
Basic Earnings per Share:  Net
Income
   Shares   Per
Share
Amount
   Net
Income
   Shares   Per
Share
Amount
 
Net income  $9,672             $9,386           
Amount allocated to participating securities   (214)             (187)          
Net income available for basic common shares and basic earnings per share  $9,458    17,609   $0.54   $9,199    19,444   $0.47 
                               
Diluted Earnings per Share:                              
Net income  $9,672             $9,386           
Amount allocated to participating securities   (214)             (187)          
Adjustment for dilutive potential common shares   0    5         0    8      
Net income available for diluted common shares and diluted earnings per share  $9,458    17,614   $0.54   $9,199    19,452   $0.47 

 

 

   Thirty-Nine Weeks Ended 
   October 29, 2016   October 31, 2015 
   (In thousands, except per share data)
                               
Basic Earnings per Share:  Net
Income
   Shares   Per
Share
Amount
   Net
Income
   Shares   Per
Share
Amount
 
Net income  $24,437             $24,599           
Amount allocated to participating securities   (515)             (479)          
Net income available for basic common shares and basic earnings per share  $23,922    18,220   $1.31   $24,120    19,542   $1.23 
                               
Diluted Earnings per Share:                              
Net income  $24,437             $24,599           
Amount allocated to participating securities   (515)             (479)          
Adjustment for dilutive potential common shares   0    5         0    11      
Net income available for diluted common shares and diluted earnings per share  $23,922    18,225   $1.31   $24,120    19,553   $1.23 

 

Our basic and diluted earnings per share are computed using the two-class method. The two-class method is an earnings allocation that determines net income per share for each class of common stock and participating securities according to their participation rights in dividends and undistributed earnings or losses. Non-vested restricted stock awards that include non-forfeitable rights to dividends are considered participating securities. During periods of undistributed losses, however, no effect is given to our participating securities since they do not share in the losses. Per share amounts are computed by dividing net income available to common shareholders by the weighted average shares outstanding during each period. No options to purchase shares of common stock were excluded in the computation of diluted shares for the periods presented.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
Recently Issued Accounting Pronouncements
9 Months Ended
Oct. 29, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Recently Issued Accounting Pronouncements

Note 3 - Recently Issued Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on the recognition of revenue for all contracts with customers designed to improve comparability and enhance financial statement disclosures. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The underlying principle of this comprehensive model is that revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the payment to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB subsequently issued guidance which approved a one year deferral of the guidance until annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted as of the original effective date for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

In July 2015, the FASB issued guidance on simplifying the measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. The new guidance does not apply to inventory currently measured using the last-in-first-out or the retail inventory valuation methods. This guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We do not believe the guidance will have a material impact on our condensed consolidated financial position, results of operations and cash flows.

 

In November 2015, the FASB issued guidance which simplifies the classification of deferred taxes by requiring an entity to classify deferred tax liabilities and assets as noncurrent within a classified statement of financial position. We early adopted this guidance in the third quarter of fiscal 2016 and are applying this change prospectively. Prior condensed consolidated balance sheets have not been retrospectively adjusted. The adoption resulted in a $2.7 million reclassification of net deferred tax assets from current to noncurrent on our consolidated balance sheet as of October 29, 2016. The adoption did not have a material impact on our results of condensed consolidated operations and cash flows.

 

In February 2016, the FASB issued guidance which will replace most existing lease accounting guidance. This update requires an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity's leasing arrangements. This guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018. Early adoption is permitted. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

In March 2016, the FASB issued guidance intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification in the statement of cash flows and forfeitures. This guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

 

In August 2016, the FASB issued guidance addressing eight specific cash flow issues in an effort to reduce diversity in practice. The amended guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 31, 2017. Early adoption is permitted. We are evaluating the impact of this guidance on our condensed consolidated financial position, results of operations and cash flows.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value Measurements
9 Months Ended
Oct. 29, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 4 - Fair Value Measurements

 

The accounting standards related to fair value measurements define fair value and provide a consistent framework for measuring fair value under the authoritative literature. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect market assumptions. This guidance only applies when other standards require or permit the fair value measurement of assets and liabilities. The guidance does not expand the use of fair value measurements. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels:

 

·Level 1 – Quoted prices in active markets for identical assets or liabilities;
·Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data; and
·Level 3 – Significant unobservable inputs that are not corroborated by market data. Generally, these fair value measures are model-based valuation techniques such as discounted cash flows, and are based on the best information available, including our own data. Fair values of our long-lived assets are estimated using an income-based approach and are classified within Level 3 of the valuation hierarchy.

 

The following table presents assets that are measured at fair value on a recurring basis at October 29, 2016, January 30, 2016 and October 31, 2015. We have no material liabilities measured at fair value on a recurring or non-recurring basis.

 

 

   Fair Value Measurements 
(In thousands)  Level 1   Level 2   Level 3   Total
As of October 29, 2016:                    
Cash equivalents – money market account  $114   $0   $0   $114 
                     
As of January 30, 2016:                    
Cash equivalents– money market account  $5,386   $0   $0   $5,386 
                     
As of October 31, 2015:                    
Cash equivalents – money market account  $5,384   $0   $0   $5,384 

 

The fair values of cash, receivables, accounts payable, accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. From time to time, we measure certain assets at fair value on a non-recurring basis, specifically long-lived assets evaluated for impairment. These are typically store specific assets, which are reviewed for impairment whenever events or changes in circumstances indicate that recoverability of their carrying value is questionable.  If the expected, undiscounted future cash flows related to a store’s assets are less than their carrying value, an impairment loss would be recognized for the difference between estimated fair value and carrying value and recorded in selling, general and administrative expenses. We estimate the fair value of store assets using an income-based approach considering the cash flows expected over the remaining lease term for each location. These projections are primarily based on management’s estimates of store-level sales, gross margins, direct expenses, exercise of future lease renewal options and resulting cash flows and, by their nature, include judgments about how current initiatives will impact future performance. External factors, such as the local environment in which the store resides, including strip-mall traffic and competition, are evaluated in terms of their effect on sales trends. Changes in sales and operating income assumptions or unfavorable changes in external factors can significantly impact the estimated future cash flows. An increase or decrease in the projected cash flow can significantly decrease or increase the fair value of these assets, which would have an effect on the impairment recorded.

  

During the thirteen and thirty-nine weeks ended October 29, 2016, we recorded an impairment charge of $193,000 on long-lived assets held and used. Subsequent to this impairment, these long-lived assets had a remaining unamortized basis of $337,000. During the thirteen weeks ended October 31, 2015, we recorded an impairment charge of $161,000 on long-lived assets held and used. Subsequent to this impairment, these long-lived assets had a remaining unamortized basis of $69,000. During the thirty-nine weeks ended October 31, 2015, we recorded an impairment charge of $212,000 on long-lived assets held and used. Subsequent to this impairment, these long-lived assets had a remaining unamortized basis of $211,000.

 

We operate nine stores in Puerto Rico with combined net book value of long-lived assets of $4.5 million. Puerto Rico is experiencing an economic crisis characterized by a deep recession and defaults on its public sector debt. Our estimate of undiscounted cash flows indicates that the carrying amounts of long-lived assets are expected to be recovered. Our estimate of cash flows might change in future periods pending further developments in the economic environment in Puerto Rico.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation
9 Months Ended
Oct. 29, 2016
Share-based Compensation [Abstract]  
Stock-Based Compensation

Note 5 - Stock-Based Compensation

 

Stock-based compensation includes stock options, cash-settled stock appreciation rights (SARs) and restricted stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our employee stock purchase plan. For the thirteen and thirty-nine weeks ended October 29, 2016, stock-based compensation expense for the employee stock purchase plan was $9,000 before the income tax benefit of $3,000 and $33,000 before the income tax benefit of $12,000, respectively. For the thirteen and thirty-nine weeks ended October 31, 2015, stock-based compensation expense for the employee stock purchase plan was $9,000 before the income tax benefit of $3,000 and $32,000 before the income tax benefit of $12,000, respectively.

 

The following section summarizes the share transactions for our restricted stock awards:

 

   Number of
Shares
   Weighted-
Average Grant
Date Fair
Value
 
Restricted stock at January 30, 2016   829,492   $22.13 
Granted   225,003    24.98 
Vested   (33,297)   25.66 
Forfeited   (34,980)   21.55 
Restricted stock at October 29, 2016   986,218   $22.68 

 

The weighted-average grant date fair value of stock awards granted during the thirty-nine week periods ended October 29, 2016 and October 31, 2015 was $24.98 and $24.43, respectively. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2016 was $854,000. The total fair value at grant date of previously non-vested stock awards that vested during the first nine months of fiscal 2015 was $106,000.

 

The following section summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

 

(In thousands)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
Stock-based compensation expense before the recognized income tax benefit  $1,295   $810   $3,197   $2,344 
Income tax benefit  $482   $308   $1,208   $902 

 

As of October 29, 2016, approximately $8.7 million of unrecognized compensation expense remained related to both our performance-based and service-based restricted stock awards. The cost is expected to be recognized over a weighted average period of approximately 2.0 years. This incorporates our current assumptions with respect to the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards.

 

The following table summarizes the SARs activity:

 

    Number of
Shares
    Weighted-
Average
Exercise Price
    Weighted-
Average
Remaining
Contractual
Term (Years)
 
Outstanding at January 30, 2016   147,550   $24.26      
Forfeited   (6,500)   24.26      
Exercised   (22,375)   24.26      
Outstanding at October 29, 2016   118,675   $24.26    3.4 
                
Exercisable at October 29, 2016   25,557   $24.26    3.4 

 

SARs were granted during the first quarter of fiscal 2015 to certain non-executive employees, such that one-third of the shares underlying the SARs will vest and become fully exercisable on each of the first three anniversaries of the date of the grant and were assigned a five-year term from the date of grant, after which any unexercised SARs will expire. Each SAR entitles the holder, upon exercise of their vested shares, to receive cash in an amount equal to the closing price of our stock on the date of exercise less the exercise price, with a maximum amount of gain defined. The SARs granted during the first quarter of fiscal 2015 were issued with a defined maximum gain of $10.00 over the exercise price of $24.26.

 

The fair value of these liability awards are remeasured, using a trinomial lattice model, at each reporting period until the date of settlement. Increases or decreases in stock-based compensation expense are recognized over the vesting period, or immediately for vested awards. The weighted-average fair value of outstanding, non-vested SAR awards as of October 29, 2016 and October 31, 2015 was $4.53 and $3.70, respectively.

 

The fair value was estimated using a trinomial lattice model with the following assumptions:

 

   October 29, 2016   October 31, 2015 
Risk free interest rate yield curve   0.18% - 1.33%   0.01% - 1.52%
Expected dividend yield   1.1%   1.0%
Expected volatility   35.06%   35.34%
Maximum life   3.4 Years    4.4 Years 
Exercise multiple   1.34    1.34 
Maximum payout  $10.00   $10.00 
Employee exit rate   2.2% - 9.0%   2.2% - 9.0%

 

The risk free interest rate was based on the U.S. Treasury yield curve in effect at the end of the reporting period. The expected dividend yield was based on our historical quarterly cash dividends, with the assumption that quarterly dividends would continue at that rate. Expected volatility was based on the historical volatility of our stock. The exercise multiple and employee exit rate were based on historical option data.

 

The following table summarizes information regarding stock-based compensation expense recognized for SARs:

 

(In thousands)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
Stock-based compensation expense before the recognized income tax benefit  $12   $24   $208   $219 
Income tax benefit  $4   $9   $79   $84 

 

As of October 29, 2016, approximately $155,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a weighted-average period of approximately 0.9 years.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
Net Income Per Share (Tables)
9 Months Ended
Oct. 29, 2016
Net income per share:  
Schedule of the Computation of Basic and Diluted Earnings Per Share

The following tables set forth the computation of basic and diluted earnings per share as shown on the face of the accompanying Condensed Consolidated Statements of Income:

 

   Thirteen Weeks Ended 
   October 29, 2016   October 31, 2015 
   (In thousands, except per share data) 
                               
Basic Earnings per Share:  Net
Income
   Shares   Per
Share
Amount
   Net
Income
   Shares   Per
Share
Amount
 
Net income  $9,672             $9,386           
Amount allocated to participating securities   (214)             (187)          
Net income available for basic common shares and basic earnings per share  $9,458    17,609   $0.54   $9,199    19,444   $0.47 
                               
Diluted Earnings per Share:                              
Net income  $9,672             $9,386           
Amount allocated to participating securities   (214)             (187)          
Adjustment for dilutive potential common shares   0    5         0    8      
Net income available for diluted common shares and diluted earnings per share  $9,458    17,614   $0.54   $9,199    19,452   $0.47 

 

 

   Thirty-Nine Weeks Ended 
   October 29, 2016   October 31, 2015 
   (In thousands, except per share data)
                               
Basic Earnings per Share:  Net
Income
   Shares   Per
Share
Amount
   Net
Income
   Shares   Per
Share
Amount
 
Net income  $24,437             $24,599           
Amount allocated to participating securities   (515)             (479)          
Net income available for basic common shares and basic earnings per share  $23,922    18,220   $1.31   $24,120    19,542   $1.23 
                               
Diluted Earnings per Share:                              
Net income  $24,437             $24,599           
Amount allocated to participating securities   (515)             (479)          
Adjustment for dilutive potential common shares   0    5         0    11      
Net income available for diluted common shares and diluted earnings per share  $23,922    18,225   $1.31   $24,120    19,553   $1.23 

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value Measurements (Tables)
9 Months Ended
Oct. 29, 2016
Fair Value Disclosures [Abstract]  
Schedule of Assets Measured at Fair Value on a Recurring Basis

The following table presents assets that are measured at fair value on a recurring basis at October 29, 2016, January 30, 2016 and October 31, 2015. We have no material liabilities measured at fair value on a recurring or non-recurring basis.

 

   Fair Value Measurements 
(In thousands)  Level 1   Level 2   Level 3   Total
As of October 29, 2016:                    
Cash equivalents – money market account  $114   $0   $0   $114 
                     
As of January 30, 2016:                    
Cash equivalents– money market account  $5,386   $0   $0   $5,386 
                     
As of October 31, 2015:                    
Cash equivalents – money market account  $5,384   $0   $0   $5,384 

 

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation (Tables)
9 Months Ended
Oct. 29, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Restricted Stock Awards Transactions

The following section summarizes the share transactions for our restricted stock awards:

 

   Number of
Shares
   Weighted-
Average Grant
Date Fair
Value
 
Restricted stock at January 30, 2016   829,492   $22.13 
Granted   225,003    24.98 
Vested   (33,297)   25.66 
Forfeited   (34,980)   21.55 
Restricted stock at October 29, 2016   986,218   $22.68 

 

Summary of SARs Activity

The following table summarizes the SARs activity:

 

    Number of
Shares
    Weighted-
Average
Exercise Price
    Weighted-
Average
Remaining
Contractual
Term (Years)
 
Outstanding at January 30, 2016   147,550   $24.26      
Forfeited   (6,500)   24.26      
Exercised   (22,375)   24.26      
Outstanding at October 29, 2016   118,675   $24.26    3.4 
                
Exercisable at October 29, 2016   25,557   $24.26    3.4 

 

Schedule of SARs Assumptions

The fair value was estimated using a trinomial lattice model with the following assumptions:

 

   October 29, 2016   October 31, 2015 
Risk free interest rate yield curve   0.18% - 1.33%   0.01% - 1.52%
Expected dividend yield   1.1%   1.0%
Expected volatility   35.06%   35.34%
Maximum life   3.4 Years    4.4 Years 
Exercise multiple   1.34    1.34 
Maximum payout  $10.00   $10.00 
Employee exit rate   2.2% - 9.0%   2.2% - 9.0%

 

Restricted Stock [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Stock Compensation Expense

The following section summarizes information regarding stock-based compensation expense recognized for restricted stock awards:

 

(In thousands)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
Stock-based compensation expense before the recognized income tax benefit  $1,295   $810   $3,197   $2,344 
Income tax benefit  $482   $308   $1,208   $902 

 

Stock Appreciation Rights (SARs) [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Stock Compensation Expense

The following table summarizes information regarding stock-based compensation expense recognized for SARs:

 

(In thousands)  Thirteen
Weeks Ended
October 29,
2016
   Thirteen
Weeks Ended
October 31,
2015
   Thirty-Nine
Weeks Ended
October 29,
2016
   Thirty-Nine
Weeks Ended
October 31,
2015
 
Stock-based compensation expense before the recognized income tax benefit  $12   $24   $208   $219 
Income tax benefit  $4   $9   $79   $84 

 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Net Income Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Oct. 29, 2016
Oct. 31, 2015
Basic Earnings per Share:        
Net income $ 9,672 $ 9,386 $ 24,437 $ 24,599
Amount allocated to participating securities (214) (187) (515) (479)
Net income available for basic common shares and basic earnings per share $ 9,458 $ 9,199 $ 23,922 $ 24,120
Net income available for basic common shares and basic earnings per share, Shares 17,609 19,444 18,220 19,542
Net income available for basic common shares and basic earnings per share, Per Share Amount $ 0.54 $ 0.47 $ 1.31 $ 1.23
Diluted Earnings per Share:        
Net income $ 9,672 $ 9,386 $ 24,437 $ 24,599
Amount allocated to participating securities (214) (187) (515) (479)
Adjustment for dilutive potential common shares $ 0 $ 0 $ 0 $ 0
Adjustment for dilutive potential common shares, Shares 5 8 5 11
Net income available for diluted common shares and diluted earnings per share $ 9,458 $ 9,199 $ 23,922 $ 24,120
Net income available for diluted common shares and diluted earnings per share, Shares 17,614 19,452 18,225 19,553
Net income available for diluted common shares and diluted earnings per share, Per Share Amount $ 0.54 $ 0.47 $ 1.31 $ 1.23
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Recently Issued Accounting Pronouncements (Details)
$ in Millions
Oct. 29, 2016
USD ($)
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Net deferred tax assets $ 2.7
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value Measurements (Narrative) (Details) - USD ($)
3 Months Ended 9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Oct. 29, 2016
Oct. 31, 2015
Fair Value Disclosures [Abstract]        
Long-lived assets, impairment charges $ 193,000 $ 161,000 $ 193,000 $ 212,000
Remaining unamortized basis $ 337,000 $ 69,000 337,000 $ 211,000
Net book value of long-lived assets     $ 4,500,000  
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value Measurements (Schedule of Assets Measure at Fair Value on Recurring Basis) (Details) - USD ($)
$ in Thousands
Oct. 29, 2016
Jan. 30, 2016
Oct. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Cash equivalents - money market account $ 114 $ 5,386 $ 5,384
Level 1 [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Cash equivalents - money market account 114 5,386 5,384
Level 2 [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Cash equivalents - money market account 0 0 0
Level 3 [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Cash equivalents - money market account $ 0 $ 0 $ 0
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation (Narrative) (Details) - USD ($)
3 Months Ended 9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Oct. 29, 2016
Oct. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense - ESPP $ 9,000 $ 9,000 $ 33,000 $ 32,000
Income tax benefit - ESPP 3,000 $ 3,000 12,000 12,000
Total fair value of non-vested stock awards     $ 854,000 $ 106,000
Restricted Stock [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Weighted average grant date fair value of awards     $ 24.98 $ 24.43
Unrecognized share-based compensation expense 8,700,000   $ 8,700,000  
Unrecognized compensation cost, recognition period     2 years  
Stock Appreciation Rights (SARs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Weighted average grant date fair value of awards     $ 4.53 $ 3.70
Unrecognized share-based compensation expense $ 155,000   $ 155,000  
Unrecognized compensation cost, recognition period     10 months 24 days  
Vesting period       3 years
Expiration period       5 years
Defined maximum gain     $ 10.00 $ 10.00
Exercise price       $ 24.26
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation (Summary of Restricted Stock Awards Transactions) (Details) - Restricted Stock [Member] - $ / shares
9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Number of Shares    
Restricted stock at January 30, 2016 829,492  
Granted 225,003  
Vested (33,297)  
Forfeited (34,980)  
Restricted stock at October 29, 2016 986,218  
Weighted-Average Grant Date Fair Value    
Restricted stock at January 30, 2016 $ 22.13  
Granted 24.98 $ 24.43
Vested 25.66  
Forfeited 21.55  
Restricted stock at October 29, 2016 $ 22.68  
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation (Summary of Restricted Stock Awards and SARs Compensation Expense) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Oct. 29, 2016
Oct. 31, 2015
Restricted Stock [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense before the recognized income tax benefit $ 1,295 $ 810 $ 3,197 $ 2,344
Income tax benefit 482 308 1,208 902
Stock Appreciation Rights (SARs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense before the recognized income tax benefit 12 24 208 219
Income tax benefit $ 4 $ 9 $ 79 $ 84
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation (Summary of SARs Activity) (Details) - Stock Appreciation Rights (SARs) [Member]
9 Months Ended
Oct. 29, 2016
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Outstanding at January 30, 2016 | shares 147,550
Forfeited | shares (6,500)
Exercised | shares (22,375)
Outstanding at October 29, 2016 | shares 118,675
Exercisable at October 29, 2016 | shares 25,557
Outstanding at January 30, 2016 | $ / shares $ 24.26
Forfeited | $ / shares 24.26
Exercised | $ / shares 24.26
Outstanding at October 29, 2016 | $ / shares 24.26
Exercisable at October 29, 2016 | $ / shares $ 24.26
Outstanding at October 29, 2016 3 years 4 months 24 days
Exercisable at October 29, 2016 3 years 4 months 24 days
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock-Based Compensation (Schedule of SARs Assumptions) (Details) - Stock Appreciation Rights (SARs) [Member] - $ / shares
9 Months Ended
Oct. 29, 2016
Oct. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk free interest rate yield curve, minimum 0.18% 0.01%
Risk free interest rate yield curve, maximum 1.33% 1.52%
Expected dividend yield 1.10% 1.00%
Expected volatility 35.06% 35.34%
Maximum life 3 years 4 months 24 days 4 years 4 months 24 days
Exercise multiple 1.34 1.34
Maximum payout $ 10.00 $ 10.00
Minimum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Employee exit rate 2.20% 2.20%
Maximum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Employee exit rate 9.00% 9.00%
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