Shoe Carnival, Inc. (NASDAQ:SCVL) Q2 2023 Earnings Call Transcript

Page 3 of 3

Mitch Kummetz : Okay. And then maybe last 1 for Carl. When you were going through your kind of category performance in the quarter, I thought I heard you say that boots weren’t very good. I don’t think of 2Q as being much of a good quarter. But are you getting any early reads on boots as you’ve gotten into kind of August and back-to-school. And kind of remind me how you’re thinking about boots for the back half of the year.

Carl Scibetta: Mitch, we’re not seeing a lot of action write-down in boots during Q2 and early Q3, we did see an uptick in Western, which typically happens at this time, especially with a lot of the festivals in the whole Taylor Swift stadium concert thing. That typically is short-lived. We are hearing, although experiencing in a very small way, some early sales on combat, which is frankly a little surprising to us. But that’s about it. It’s — with the weather and the — frankly, the lack of some new fashion there, we’re not seeing anything too much at this point.

Operator: And we have another follow-up question from Sam Poser of Williams Trading.

Sam Poser: Carl, you said that the adult athletic business was down low single digits. Your inventory had improved. Can you give us some idea of like stock-to-sales ratio there? Is the inventory down low single digits as well? Is it up — double — I mean, just some ratio of that relationship?

Carl Scibetta: Here’s what I would say, Sam. As we came out of second quarter, the inventory levels in athletic were higher than a year ago with sales down at a down low singles. That had to do all with the timing of deliveries last year and the fact that we didn’t deliver a lot of that athletic inventory until late August, early September. So a comparison really wouldn’t be fair at this point. I’ll say we feel real comfortable with our athletic inventory is going forward as we move through Q3 and the end of the year.

Sam Poser: And then to follow up one more time. The — you mentioned that skate and running were soft and court and basketball were good. our can business really get that much better with state and running soft? And do you see any light at the end of that tunnel.

Carl Scibetta: I would say that we’re seeing some improvement. We certainly are performance running business, where we have access to the hot brands that has turned and is very strong. We’re seeing small improvements the category. At this point, we don’t see any improvement in scale. I will say at Shoe Carnival, a large percentage of our athletic business is done in basketball and court likely the biggest percentage in the channel. And that business is very strong, and we’ll continue to ride that until the other businesses come back.

Sam Poser: And then lastly, Erik, what about — given where the stock is and everything else, I mean, where are you spending on share buyback and so on these days?

Carl Scibetta: Thanks, Sam. Our priorities, as you know, we invested in the business, then dividends. And then lastly, if there’s an opportunistic position, we’ll look at the stock buybacks. We still have the $50 million that was authorized at the beginning of the year. So that’s going to — that’s an opportunity for us. So we will be continuing to evaluate it.

Operator: There are further questions at this time. I would now like to turn the call back to the management team for closing remarks.

Mark Worden : Thank you all so much for joining today’s call. I look forward to discussing Q3 results later this year. And as I mentioned at the top of the call, Steve Alexander has recently joined us to support our Investor Relations function. Please reach out to him with any questions or follow-ups you might have.

Carl Scibetta : Thanks, Mark. Thanks again to everyone for joining the call today. I’m all day. I look forward to speaking with you and hopefully meeting you in person going forward. Thanks very much again for joining the call.

Operator: This concludes today’s conference call. You may now disconnect.

Follow Shoe Carnival Inc (NASDAQ:SCVL)

Page 3 of 3