SCVL Shoe Carnival, Inc.

Management Discussion

• 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 e-commerce sales as an extension of our physical stores.
• We continue to closely monitor and manage the impact of the COVID-19 pandemic, and the safety and well-being of our customers, employees and business partners remains our primary concern.  The COVID-19 pandemic has significantly impacted and is expected to continue to impact our operations, supply chains, overall economic conditions and consumer spending for the foreseeable future.  As guidance and mandates from governments and health officials continue to evolve, closures of our stores may continue or increase, and sales, including e-commerce sales, may be reduced.  At this time, considerable uncertainty exists regarding how the COVID-19 pandemic may affect the back-to-school and Christmas peak shopping seasons.
• In response to the COVID-19 pandemic, all of our stores were closed effective March 19, 2020 and substantially all of our stores were closed for approximately 50% of the first quarter.  Our website and mobile app continued to accept orders after March 19, 2020 and e-commerce sales increased significantly as customer buying habits shifted to our online channel.  As of June 4, 2020, approximately 97% of our stores have re-opened in states that have relaxed or cancelled stay-at-home orders. As stores have re-opened, we have experienced higher conversion ratios and higher per unit transactions, offset by reduced traffic, compared to historical trends.  Generally, since the re-opening of certain stores in late April, sales have exceeded our original fiscal 2020 plan, with some stores exceeding plan and other stores showing declines.  E-commerce sales continue to trend higher than in the prior fiscal year and above our original plan for fiscal 2020.