What changed in this filing

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Item 1. Financial Statements

2024-12-06 compared with 2024-09-06 · 99 added, 88 removed, 319 unchanged (37% of the section changed)

3 unchanged sentences

(In thousands, except share data)

August 3, 2024

November 2, 2024

February 3, 2024

July 29, 2023

October 28, 2023

Current Assets:

31 unchanged sentences

(In thousands, except per share data)

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Cost of sales (including buying, distribution

13 unchanged sentences

(In thousands, except per share data)

Balance at May 4, 2024

Balance at August 3, 2024

Dividends declared ($ 0.135 per share)

Employee stock purchase plan purchases

Stock-based compensation awards

Stock-based compensation expense

Balance at August 3, 2024

Balance at April 29, 2023

Balance at November 2, 2024

Balance at July 29, 2023

Dividends declared ($ 0.12 per share)

Employee stock purchase plan purchases

Stock-based compensation awards

Purchase of common stock for treasury

Stock-based compensation expense

Balance at July 29, 2023

Twenty-six Weeks Ended

Balance at October 28, 2023

Thirty-nine Weeks Ended

(In thousands, except per share data)

6 unchanged sentences

Stock-based compensation expense

Balance at August 3, 2024

Balance at November 2, 2024

Balance at January 28, 2023

4 unchanged sentences

on stock-based compensation awards

Purchase of common stock for treasury

Stock-based compensation expense

Balance at July 29, 2023

Balance at October 28, 2023

See notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

Cash Flows From Operating Activities

3 unchanged sentences

Stock-based compensation

Loss on retirement and impairment of assets, net

(Gain) Loss on retirement and impairment of assets, net

Deferred income taxes

9 unchanged sentences

Investments in marketable securities

Sales of marketable securities and other

Acquisition, net of cash acquired

3 unchanged sentences

Dividends paid

Purchase of common stock for treasury

Shares surrendered by employees to pay taxes on stock-based compensation awards

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

12 unchanged sentences

is one of the nation’s largest omnichannel family footwear retailers, selling footwear and related products through our retail stores located in 36 states within the continental United States and in Puerto Rico, as well as through our e-commerce sales channels.

We offer customers a broad assortment of primarily branded dress and casual shoes, sandals, boots and athletic footwear and accessories for men, women and children with an emphasis on national name brands through our Shoe Carnival and Shoe Station store banners.

We are an Indiana corporation that was initially formed in Delaware in 1993 and reincorporated in Indiana in 1996.

10 unchanged sentences

Note 2 - Acquisition of Rogan Shoes

On February 13, 2024, we acquired all of the stock of Rogan Shoes, Incorporated, a privately-held 53-year-old work and family footwear company incorporated in Wisconsin (“Rogan’s”) for an adjusted preliminary purchase pric e of $ 44.8 million , net of $ 2.2 million of cash acquired, of which $ 44.4 million has been paid to date from cash on hand.

The adjusted preliminary purchase price is subject to customary adjustments.

On February 13, 2 024, we acquired all of the stock of Rogan Shoes, Incorporated, a privately-held 53-year-old work and family footwear company incorporated in Wisconsin (“Rogan’s”), for an adjusted purchase price of $ 44.8 million, net of $ 2.2 million of cash acquired, which was paid with cash on hand .

This included $ 378,000 of purchase accounting adjustments which were paid in November 2024.

Additional consideration of up to $ 5.0 million may be paid by the Company subject to the achievement of three-year performance targets.

2 unchanged sentences

It immediately positioned us as the market leader in Wisconsin, and it established a store base in Minnesota, creating additional expansion opportunities.

Rogan’s is being integrated into our Shoe Station banner and our current plan is to brand and operate these stores over time using both the Rogan’s and Shoe Station trade names.

Rogan’s results were included in our consolidated financial statements since the acquisition date.

Net Sales from our newly acquired Rogan’s operations totaled $ 22.0 million in the thirteen weeks ended August 3, 2024 and $ 41.6 million from February 13, 2024 through August 3, 2024.

For the thirteen and twenty-six weeks ended August 3, 2024, acquisition-related costs of $ 97,000 and $ 418,000 , respectively, were expensed as incurred and were included in Selling, General and Administrative Exp enses.

The following table summarizes the preliminary purchase price and the allocation of the preliminary purchase price to the fair value of the assets acquired and liabilities assumed.

Net Sales from our newly acquired Rogan’s operations totaled $ 22.3 million in the thirteen weeks ended November 2, 2024 and $ 63.9 million from February 13, 2024 through November 2, 2024.

For the thirteen and thirty-nine weeks ended November 2, 2024, acquisition-related costs of $ 121,000 and $ 539,000 , respectively, were expensed as incurred and were included in Selling, General and Administrative Expenses.

We also recognized a $ 2.6 million goodwill measurement period adjustment related to adjusting our deferred income tax positions during third quarter 2024.

The following table summarizes the purchase price and the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed.

We measured these fair values using Level 3 inputs.

The excess purchase price over the fair value of net assets acquired was allocated to Goodwill.

The allocation of the purchase price shown in the table below is preliminary and subject to change based on the finalization of our detailed valuations and any subsequent change in the purchase price.

The final determination of the fair values and related impacts will be completed as soon as practicable and within the measurement period of up to one year from the acquisition date.

(In thousands)

Preliminary purchase price:

Purchase price:

Cash consideration, net of cash acquired

Fair value of contingent consideration

Total preliminary purchase price

Total purchase price

Fair value of identifiable assets and liabilities:

5 unchanged sentences

Operating lease liabilities

Deferred income taxes

Accrued and other liabilities

Total liabilities

Total fair value allocation of preliminary purchase price

Total fair value allocation of purchase price

Our fair value estimate of the Merchandise Inventories for Rogan’s was determined using the Comparative Sales and Replacement Cost methods.

13 unchanged sentences

Thirteen Weeks Ended

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

(In thousands, except per share data)

6 unchanged sentences

shares and diluted net income per share

Twenty-six Weeks Ended

August 3, 2024

July 29, 2023

Thirty-nine Weeks Ended

November 2, 2024

October 28, 2023

(In thousands, except per share data)

8 unchanged sentences

The computation of Diluted Net Income per Share is based on the weighted average number of shares outstanding plus the dilutive incremental shares that would be outstanding assuming the vesting of stock-based compensation arrangements involving restricted stock, restricted stock units and performance stock units.

No u nvested stock-based awards that will be settled in shares were excluded from the computation of Diluted Net Income per Share for the thirteen and twenty-six weeks ended August 3, 2024.

During the thirteen and twenty-six weeks ended July 29, 2023 , approximately 134,000 and 1,000 , respectively, of unvested stock-based awards that will be settled in shares were excluded from the computation of Diluted Net Income per Share because the impact would have been anti-dilutive.

No u nvested stock-based awards that will be settled in shares were excluded from the computation of Diluted Net Income per Share for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 .

Note 4 - Recently Issued Accounting Pronouncements

1 unchanged sentence

Improvements to Reportable Segment Disclosures.

The guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance updates reportable segment disclosure requirements, primarily through increased disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

10 unchanged sentences

We are continuing to evaluate the impact of this new guidance, but believe the adoption will not have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The guidance requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments in the ASU should be applied on a prospective basis, but retrospective application is permitted.

We are evaluating the impact of this new guidance, but believe the adoption will not have a material impact on our consolidated financial statements.

Note 5 - Fair Value Measurements

Financial Instruments

The following table presents financial instruments that are measured at fair value on a recurring basis at August 3, 2024, February 3, 2024 and July 29, 2023:

The following table presents financial instruments that are measured at fair value on a recurring basis at November 2, 2024, February 3, 2024 and October 28, 2023:

Fair Value Measurements

(In thousands)

As of August 3, 2024

As of November 2, 2024

Cash equivalents - money market mutual funds

5 unchanged sentences

deferred compensation

As of July 29, 2023

As of October 28, 2023

Cash equivalents - money market mutual funds

3 unchanged sentences

These Marketable Securities are designed to mitigate volatility in our Consolidated Statements of Income associated with our non-qualified deferred compensation plan.

As of August 3, 2024, these Marketable Securities were principally invested in equity-based mutual funds, consistent with the allocation in our deferred compensation plan.

As of November 2, 2024, these Marketable Securities were principally invested in equity-based mutual funds, consistent with the allocation in our deferred compensation plan.

To the extent there is a variation in invested funds compared to the total non-qualified deferred compensation plan liability, such fund variance is managed through a stable value mutual fund.

4 unchanged sentences

(In thousands)

August 3, 2024

November 2, 2024

February 3, 2024

July 29, 2023

October 28, 2023

Deferred compensation plan current liabilities

3 unchanged sentences

(In thousands)

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Deferred compensation liabilities

Employer contributions, net

Investment earnings

Investment earnings (losses)

Marketable Securities

Mark-to-market gains (1)

Mark-to-market (gains) losses (1)

Net deferred compensation expense

(1) Included in the mark-to-market activity related to equity securities still held at quarter-end, we recognized unrealized gains of $ 258,000 and $ 761,000 for the thirteen weeks ended August 3, 2024 and July 29, 2023, respectively, and $ 550,000 and $ 1.1 million for the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively.

(1) Included in the mark-to-market activity related to equity securities still held at quarter-end, we recognized an unrealized gain of $ 568,000 and an unrealized loss of $ 919,000 for the thirteen weeks ended November 2, 2024 and October 28, 2023, respectively, and unrealized gains of $ 1,118,000 and $ 141,000 for the thirty-nine weeks ended November 2, 2024 and October 28, 2023, respectively.

The fair values of Cash and Cash Equivalents, Accounts Receivable, Accounts Payable and Accrued and Other Liabilities approximate their carrying values because of their short-term nature.

6 unchanged sentences

If the Operating Lease Right-of-Use Asset is impaired, we would amortize the remaining right-of-use asset on a straight-line basis over the remaining lease term.

No impairment charges were recorded during the twenty-six weeks ended August 3, 2024 or the twenty-six weeks ended July 29, 2023 .

No impairment charges were recorded during the thirty-nine weeks ended November 2 , 2024 or the thirty-nine weeks ended October 28 , 2023 .

Note 6 - Stock-Based Compensation

2 unchanged sentences

Pursuant to the amendment and restatement, the number of shares of our common stock that are available for issuance under the Amended 2017 Plan was increased by 1.8 million additional shares, the term of the plan was extended by an additional ten years from the date of shareholder approval, and certain other design changes were made to the plan.

As of August 3, 2024, there were 1,698,379 sh ares available for issuance under the Amended 2017 Plan, assuming that all outstanding performance stock units where the performance condition has not been satisfied vest at the maximum level of performance.

As of November 2, 2024, there were 1,703,287 sh ares available for issuance under the Amended 2017 Plan, assuming that all outstanding performance stock units where the performance condition has not been satisfied vest at the maximum level of performance.

Stock-based compensation includes share-settled awards issued pursuant to the Amended 2017 Plan in the form of restricted stock units, performance stock units, and restricted and other stock awards.

Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our Employee Stock Purchase Plan and for cash-settled stock appreciation rights.

For the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023, stock-based compensation expense was comprised of the following:

For the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023, stock-based compensation expense was comprised of the following:

(In thousands)

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Share-settled equity awards

3 unchanged sentences

Income tax effect at statutory rates

Additional income tax expense (benefit) on vesting of share-settled awards

As of August 3, 2024 , approximately $ 11.3 million of unrecognized compensation expense remained related to our share-settled equity awards.

Additional income tax benefit on vesting of

share-settled awards

As of November 2, 2024 , approximately $ 9.2 million of unrecognized compensation expense remained related to our share-settled equity awards.

The cost is expected to be recognized over a weighted average period of approximately 1.4 years.

4 unchanged sentences

Outstanding at February 3, 2024

Outstanding at August 3, 2024

The total fair value at grant date of restricted stock units and performance stock units that vested during the twenty-six weeks ended August 3, 2024 and July 29, 2023 was $ 1.4 million and $ 4.8 million, respectively.

The weighted-average grant date fair value of restricted stock units and performance stock units granted during the twenty-six weeks ended July 29, 2023 was $ 24.98 .

Forfeited/Unearned

Outstanding at November 2, 2024

The total fair value at grant date of restricted stock units and performance stock units that vested during the thirty-nine weeks ended November 2, 2024 and October 28, 2023 was $ 1.4 million and $ 4.8 million, respectively.

The weighted-average grant date fair value of restricted stock units and performance stock units granted during the thirty-nine weeks ended October 28, 2023 was $ 24.98 .

There were 159,954 shares that were not earned because the performance condition for performance stock units granted in Fiscal 2023 was not satisfied.

3 unchanged sentences

Outstanding at February 3, 2024

Outstanding at August 3, 2024

No restricted stock or other stock awards vested during the twenty-six weeks ended August 3, 2024 or July 29, 2023.

The weighted average grant date fair value of restricted stock awards granted during the twenty-six weeks ended July 29, 2023 was $ 21.90 .

Outstanding at November 2, 2024

No restricted stock or other stock awards vested during the thirty-nine weeks ended November 2, 2024 or October 28, 2023.

The weighted average grant date fair value of restricted stock awards granted during the thirty-nine weeks ended October 28, 2023 was $ 21.90 .

Note 7 – Revenue

Disaggregation of Net Sales by Product Category

Net Sales and percentage of Net Sales, disaggregated by product category, for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 were as follows:

Net Sales and percentage of Net Sales, disaggregated by product category, for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 were as follows:

(In thousands)

Thirteen Weeks

Ended August 3, 2024

Ended November 2, 2024

Thirteen Weeks

Ended July 29, 2023

Ended October 28, 2023

Non-Athletics:

(In thousands)

Twenty-six Weeks

Ended August 3, 2024

Twenty-six Weeks

Ended July 29, 2023

Thirty-nine Weeks

Ended November 2, 2024

Thirty-nine Weeks

Ended October 28, 2023

Non-Athletics:

24 unchanged sentences

We recognize the related revenue when control has been transferred to the customer (i.e., when the product is picked up by the customer or shipped to the customer).

Unearned revenue related to Shoes 2U was not material to our consolidated financial statements at August 3, 2024, February 3, 2024 or July 29, 2023.

Unearned revenue related to Shoes 2U was not material to our consolidated financial statements at November 2, 2024, February 3, 2024 or October 28, 2023.

Returns and Refunds

1 unchanged sentence

This allowance is recorded as a reduction in sales with a corresponding refund liability recorded in Accrued and Other Liabilities.

The estimated cost of Merchandise Inventories is recorded as a reduction to Cost of Sales and an increase in Merchandise Inventories.

Approximately $ 962,000 of refund liabilities and $ 618,000 of right of return assets associated with estimated product returns were recorded in Accrued and Other Liabilities and Merchandise Inventories, respectively, as of August 3, 2024 and February 3, 2024.

Approximately $ 866,000 of refund liabilities and $ 503,000 of rig ht of return assets associated with estimated product returns were recorded in Accrued and Other Liabilities and Merchandise Inventories, respectively, at July 29, 2023.

The estimated cost of Merchandise Inventories is reco rded as a reduction to Cost of Sales and an increase in Merchandise Inventories.

Approximately $ 866,000 of refund liabilities and $ 503,000 of right of return assets associated with estimated product returns were recorded in Accrued and Other Liabilities and Merchandise Inventories, respectively, at October 28, 2023.

Contract Liabilities

2 unchanged sentences

We do not record breakage revenue when escheat liability to relevant jurisdictions exists.

At August 3, 2024, February 3, 2024 and July 29, 2023 , approximately $ 2.6 million, $ 2.4 million and $ 2.0 m illion of contract liabilities associated with unredeemed gift cards were recorded in Accrued and Other Liabilities, respectively.

At November 2, 2024, February 3, 2024 and October 28, 2023 , approximately $ 2.4 million, $ 2.4 million and $ 1.8 million of contract liabilities associated with unredeemed gift cards were recorded in Accrued and Other Liabilities, respectively.

We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions within two years.

6 unchanged sentences

We then recognize revenue based on an estimate of when customers redeem rewards, which incorporates an estimate of points expected to expire using historical rates.

During the thirteen and twenty-six weeks ended August 3, 2024 , approximately $ 790,000 and $ 1.6 million, respectively, of loyalty rewards were recognized in Net Sales.

During the thirteen and twenty-six weeks ended July 29, 2023 , approximately $ 1.4 million and $ 2.7 million, respectively, of loyalty rewards were recognized in Net Sales.

At August 3, 2024, February 3, 2024 and July 29, 2023 , approximately $ 574,000 , $ 481,000 and $ 950,000 , respectively, of contract liabilities associated with loyalty rewards were recorded in Accrued and Other Liabilities.

During the thirteen and thirty-nine weeks ended November 2, 2024 , approximately $ 943,000 and $ 2.5 million, respectively, of loyalty rewards were recognized in Net Sales.

During the thirteen and thirty-nine weeks ended October 28, 2023 , approximately $ 1.6 million and $ 4.3 million, respectively, of loyalty rewards were recognized in Net Sales.

At November 2, 2024, February 3, 2024 and October 28, 2023 , approximately $ 613,000 , $ 481,000 and $ 956,000 , respectively, of contract liabilities associated with loyalty rewards were recorded in Accrued and Other Liabilities.

We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions in less than one year.

1 unchanged sentence

We lease all of our physical stores, our Evansville distribution center, which has a current lease term expiring in 2034 , and other warehousing and office space.

We also enter into leases of equipment, copiers and billboards.

We also enter into leases of equipment and other assets.

Substantially all of our leases are operating leases;

1 unchanged sentence

The finance lease assets and related current liabilities and noncurrent liabilities were recorded in Other Noncurrent Assets, Accrued and Other Liabilities and Other long-term liabilities, respectively.

Leases with terms of twelve months or less are immaterial and are expensed as incurred, and we did not have any leases with related parties as of August 3, 2024.

Lease costs, including other related occupancy costs, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Leases with terms of twelve months or less are immaterial and are expensed as incurred, and we did not have any leases with related parties as of November 2, 2024.

Lease costs, including other related occupancy costs, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023:

(In thousands)

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Operating lease cost

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements