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. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting ~~company”~~company��, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

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, par value $0.01 per share, outstanding at ~~December 1, 2020~~August 27, 2021 was ~~14,103,570.~~28,238,450.

(In thousands, except share data)	October 31, 2020			February 1, 2020			November 2, 2019			July 31, 2021			January 30, 2021			August 1, 2020
Assets
Current Assets:
Cash and cash equivalents	$	46,740		$	61,899		$	33,707		$	146,506		$	106,532		$	76,885
Marketable securities											17,431			0			0
Accounts receivable		8,435			2,724			2,470			7,871			7,096			6,844
Merchandise inventories		274,264			259,495			298,002			308,141			233,266			298,856
Other		10,727			5,529			10,868			13,131			8,411			13,419
Total Current Assets		340,166			329,647			345,047			493,080			355,305			396,004
Property and equipment – net		63,434			67,781			69,147			65,871			62,325			65,043
Deferred income taxes		6,283			7,833			7,678			4,135			5,635			7,289
Other noncurrent assets		11,802			8,106			3,692			12,498			13,843			10,589
Operating lease right-of-use assets		201,658			215,007			222,148			208,472			205,639			210,593
Total Assets	$	623,343		$	628,374		$	647,712		$	784,056		$	642,747		$	689,518

Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	50,897		$	60,665		$	66,089		$	96,494		$	57,717		$	129,641
Accrued and other liabilities		25,346			18,695			22,052			50,126			24,390			20,863
Current portion of operating lease liabilities		48,984			43,146			42,481			47,769			48,794			45,376
Total Current Liabilities		125,227			122,506			130,622			194,389			130,901			195,880
Long-term portion of operating lease liabilities		179,335			194,108			202,138			185,555			182,622			189,411
Deferred compensation		14,600			13,345			13,220			11,440			16,008			14,249
Other		964			1,052			984			2,760			3,040			991
Total Liabilities		320,126			331,011			346,964			394,144			332,571			400,531

Shareholders’ Equity:
Common stock, $.01 par value, 50,000,000 shares authorized, 20,524,601 shares, 20,524,601 shares and 20,527,244 shares issued, respectively		205			205			205
Common stock, $0.01 par value, 50,000,000 shares authorized and 41,049,190 shares issued in each period, respectively											410			410			410
Additional paid-in capital		78,104			79,914			78,859			78,330			78,737			77,183
Retained earnings		400,505			395,761			393,497			490,069			406,655			387,119
Treasury stock, at cost, 6,421,031 shares, 6,516,875 shares and 6,338,584 shares, respectively		(175,597	)		(178,517	)		(171,813	)
Treasury stock, at cost, 12,810,740 shares, 12,839,472 shares and 12,846,874 shares, respectively											(178,897	)		(175,626	)		(175,725	)
Total Shareholders’ Equity		303,217			297,363			300,748			389,912			310,176			288,987
Total Liabilities and Shareholders’ Equity	$	623,343		$	628,374		$	647,712		$	784,056		$	642,747		$	689,518

(In thousands, except per share data)	Thirteen Weeks Ended October 31, 2020			Thirteen Weeks Ended November 2, 2019			Thirty-nine Weeks Ended October 31, 2020			Thirty-nine Weeks Ended November 2, 2019			Thirteen Weeks Ended July 31, 2021			Thirteen Weeks Ended August 1, 2020			Twenty-six Weeks Ended July 31, 2021			Twenty-six Weeks Ended August 1, 2020
Net sales	$	274,579		$	274,645		$	722,868		$	796,676		$	332,230		$	300,794		$	660,687		$	448,289
Cost of sales (including buying, distribution and occupancy costs)		186,818			189,911			521,038			554,707			196,478			218,189			394,777			334,220
Gross profit		87,761			84,734			201,830			241,969			135,752			82,605			265,910			114,069	��
Selling, general and administrative expenses		67,598			66,584			190,530			192,537			76,038			68,207			148,593			122,932
Operating income		20,163			18,150			11,300			49,432
Operating income/(loss)														59,714			14,398			117,317			(8,863	)
Interest income		(2	)		(163	)		(95	)		(580	)		(2	)		(4	)		(6	)		(93	)
Interest expense		119			34			293			155			119			118			238			174
Income before income taxes		20,046			18,279			11,102			49,857
Income tax expense		5,368			4,553			2,554			10,426
Net income	$	14,678		$	13,726		$	8,548		$	39,431
Net income per share:
Income/(loss) before income taxes														59,597			14,284			117,085			(8,944	)
Income tax expense/(benefit)														15,385			4,224			29,631			(2,814	)
Net income/(loss)													$	44,212		$	10,060		$	87,454		$	(6,130	)
Net income/(loss) per share:
Basic	$	1.04		$	0.95		$	0.61		$	2.71		$	1.56		$	0.36		$	3.09		$	(0.22	)
Diluted	$	1.03		$	0.94		$	0.60		$	2.66		$	1.54		$	0.35		$	3.05		$	(0.22	)
Weighted average shares:
Basic		14,090			14,404			14,057			14,544			28,323			28,175			28,290			28,080
Diluted		14,266			14,556			14,225			14,826			28,652			28,429			28,643			28,080

	Thirteen Weeks Ended																				Thirteen Weeks Ended
	Common Stock								Additional Paid-In			Retained			Treasury						Common Stock							Additional Paid-In			Retained			Treasury
(In thousands, except per share data)	Issued			Treasury			Amount		Capital			Earnings			Stock			Total			Issued		Treasury			Amount		Capital			Earnings			Stock			Total
Balance at August 1, 2020		20,525			(6,423	)	$	205	$	77,324		$	387,119		$	(175,661	)	$	288,987
Dividends declared ($0.090 per share)													(1,292	)					(1,292	)
Balance at May 1, 2021																						41,049		(12,703	)	$	410	$	77,041		$	447,875		$	(175,051	)	$	350,275
Dividends declared ($0.070 per share)																																(2,018	)					(2,018	)
Employee stock purchase plan purchases																								1					15						13			28
Restricted stock awards																								8					(112	)					112			0
Purchase of common stock for treasury																								(117	)										(3,971	)		(3,971	)
Stock-based compensation expense																													1,386									1,386
Net income																																44,212						44,212
Balance at July 31, 2021																						41,049		(12,811	)	$	410	$	78,330		$	490,069		$	(178,897	)	$	389,912

Balance at May 2, 2020																						41,049		(12,872	)	$	410	$	76,769		$	378,352		$	(176,073	)	$	279,458
Dividends declared ($0.045 per share)																																(1,293	)					(1,293	)
Employee stock purchase plan purchases					2					1						46			47					3					(4	)					46			42
Restricted stock awards										(27	)					27			0					24					(329	)					329			0
Shares surrendered by employees to pay taxes on restricted stock																(9	)		(9	)				(2	)										(27	)		(27	)
Stock-based compensation expense										806									806										747									747
Net income													14,678						14,678													10,060						10,060
Balance at October 31, 2020		20,525			(6,421	)	$	205	$	78,104		$	400,505		$	(175,597	)	$	303,217

Balance at August 3, 2019		20,528			(5,822	)	$	205	$	77,374		$	381,012		$	(155,031	)	$	303,560
Dividends declared ($0.085 per share)													(1,241	)					(1,241	)
Employee stock purchase plan purchases					1					1						43			44
Restricted stock awards		(1	)		7					(178	)					178			0
Shares surrendered by employees to pay taxes on restricted stock					(3	)										(100	)		(100	)
Purchase of common stock for treasury					(522	)										(16,903	)		(16,903	)
Stock-based compensation expense										1,662									1,662
Net income													13,726						13,726
Balance at November 2, 2019		20,527			(6,339	)	$	205	$	78,859		$	393,497		$	(171,813	)	$	300,748
Balance at August 1, 2020																						41,049		(12,847	)	$	410	$	77,183		$	387,119		$	(175,725	)	$	288,987

Thirty-nine Weeks Ended

Common Stock

Additional
Paid-In

Retained

Treasury

(In thousands, except per share data)

Issued

Treasury

Amount

Capital

Earnings

Stock

Total

Balance at February 1, 2020

20,525

(6,517
)

$
205

$
79,914

$
395,761

$
(178,517
)

$
297,363

Dividends declared ($0.265 per share)

(3,804
)

(3,804
)
Employee stock purchase plan purchases

7

(37
)

189

152

Restricted stock awards

161

(4,467
)

4,467

0

Shares surrendered by employees to pay taxes
   on restricted stock

(72
)

(1,736
)

(1,736
)
Stock-based compensation expense

2,694

2,694

Net income

8,548

8,548

Balance at October 31, 2020

20,525

(6,421
)

$
205

$
78,104

$
400,505

$
(175,597
)

$
303,217

Balance at February 2, 2019

20,529

(5,154
)

$
205

$
75,631

$
360,443

$
(131,846
)

$
304,433

Adoption of Accounting Standards Codification
   Topic 842, Leases

(2,649
)

(2,649
)
Dividends declared ($0.250 per share)

(3,728
)

(3,728
)
Employee stock purchase plan purchases

5

2

146

148

Restricted stock awards

(2
)

67

(1,842
)

1,842

0

Shares surrendered by employees to pay taxes
   on restricted stock

(324
)

(11,040
)

(11,040
)
Purchase of common stock for treasury

(933
)

(30,915
)

(30,915
)
Stock-based compensation expense

5,068

5,068

Net income

39,431

39,431

Balance at November 2, 2019

20,527

(6,339
)

$
205

$
78,859

$
393,497

$
(171,813
)

$
300,748

	Twenty-six Weeks Ended
	Common Stock							Additional Paid-In			Retained			Treasury
(In thousands, except per share data)	Issued		Treasury			Amount		Capital			Earnings			Stock			Total
Balance at January 30, 2021		41,049		(12,839	)	$	410	$	78,737		$	406,655		$	(175,626	)	$	310,176
Dividends declared ($0.140 per share)												(4,040	)					(4,040	)
Employee stock purchase plan purchases				3					46						46			92
Restricted stock awards				218					(2,990	)					2,990			0
Shares surrendered by employees to pay taxes on restricted stock				(76	)										(2,336	)		(2,336	)
Purchase of common stock for treasury				(117	)										(3,971	)		(3,971	)
Stock-based compensation expense									2,537									2,537
Net income												87,454						87,454
Balance at July 31, 2021		41,049		(12,811	)	$	410	$	78,330		$	490,069		$	(178,897	)	$	389,912

Balance at February 1, 2020		41,049		(13,034	)	$	410	$	79,773		$	395,761		$	(178,581	)	$	297,363
Dividends declared ($0.088 per share)												(2,512	)					(2,512	)
Employee stock purchase plan purchases				10					(38	)					143			105
Restricted stock awards				321					(4,440	)					4,440			0
Shares surrendered by employees to pay taxes on restricted stock				(144	)										(1,727	)		(1,727	)
Stock-based compensation expense									1,888									1,888
Net loss												(6,130	)					(6,130	)
Balance at August 1, 2020		41,049		(12,847	)	$	410	$	77,183		$	387,119		$	(175,725	)	$	288,987

(In thousands)	Thirty-nine Weeks Ended October 31, 2020			Thirty-nine Weeks Ended November 2, 2019			Twenty-six Weeks Ended July 31, 2021			Twenty-six Weeks Ended August 1, 2020
Cash Flows From Operating Activities
Net income	$	8,548		$	39,431
Adjustments to reconcile net income to net cash provided by operating activities:
Net income/(loss)							$	87,454		$	(6,130	)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation and amortization		12,034			12,652			8,926			7,866
Stock-based compensation		2,881			5,207			2,686			1,892
Loss on retirement and impairment of assets		2,427			767			1,034			2,289
Deferred income taxes		1,550			1,944			1,499			544
Non-cash operating lease expense		31,087			30,932			21,214			20,844
Other		494			1,111			1,845			334
Changes in operating assets and liabilities:
Accounts receivable		(5,711	)		(1,251	)		(775	)		(4,120	)
Merchandise inventories		(14,769	)		(40,463	)		(74,875	)		(39,361	)
Operating leases		(26,673	)		(34,306	)		(22,140	)		(18,898	)
Accounts payable and accrued liabilities		(2,544	)		17,173			53,236			71,373
Other		(9,154	)		(5,165	)		(257	)		(10,425	)
Net cash provided by operating activities		170			28,032			79,847			26,208
Cash Flows From Investing Activities
Purchases of property and equipment		(10,083	)		(15,081	)		(12,137	)		(7,206	)
Investments in marketable securities and other								(17,482	)		0
Other		194			8			0			194
Net cash used in investing activities		(9,889	)		(15,073	)		(29,619	)		(7,012	)
Cash Flows From Financing Activities
Borrowings under line of credit		24,903			20,000			0			24,903
Payments on line of credit		(24,903	)		(20,000	)		0			(24,903	)
Proceeds from issuance of stock		152			148			92			105
Dividends paid		(3,856	)		(4,466	)		(4,039	)		(2,588	)
Purchase of common stock for treasury		0			(30,915	)		(3,971	)		0
Shares surrendered by employees to pay taxes on restricted stock		(1,736	)		(11,040	)		(2,336	)		(1,727	)
Net cash used in financing activities		(5,440	)		(46,273	)		(10,254	)		(4,210	)
Net decrease in cash and cash equivalents		(15,159	)		(33,314	)
Net increase in cash and cash equivalents								39,974			14,986
Cash and cash equivalents at beginning of period		61,899			67,021			106,532			61,899
Cash and cash equivalents at end of period	$	46,740		$	33,707		$	146,506		$	76,885
Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	276		$	155		$	238		$	156
Cash paid during period for income taxes	$	1,812		$	6,277		$	16,784		$	1,501
Capital expenditures incurred but not yet paid	$	808		$	510		$	941		$	1,390
Dividends declared but not yet paid	$	113		$	151		$	135		$	88

Shoe Carnival, Inc. is one of the nation’s largest family footwear retailers, providing customers the convenience of shopping at any of our store locations or online. We offer customers a broad assortment of ~~moderately priced~~ dress, casual and athletic footwear and accessories for men, women and children with an emphasis on national name brands. We differentiate our retail concept from our competitors by our distinctive, fun and promotional marketing efforts. We are an Indiana corporation that was initially formed in Delaware in 1993 and reincorporated in Indiana in 1996. References to “Shoe Carnival,” “we,” “us,” “our” and the “Company” in this Quarterly Report on Form 10-Q refer to Shoe Carnival, Inc. and its subsidiaries.

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 fairly present 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 as permitted by 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 Consolidated Financial Statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020.~~January 30, 2021.

On June 21, 2021, our Board of Directors authorized a two-for-one stock split of the shares of our common stock, which was effected in the form of a dividend. The stock split entitled each shareholder of record at the close of business on July 6, 2021 to receive one additional share of common stock for each share of common stock owned as of that date and was paid on July 19, 2021. Upon the completion of the stock split, our outstanding shares increased from approximately 14.1 million shares to approximately 28.2 million shares. In accordance with the provisions of our 2017 Equity Incentive Plan (the “2017 Plan”) and our Employee Stock Purchase Plan, and as determined by the Compensation Committee of our Board of Directors, the following, among other items, were adjusted to equitably reflect the effect of the two-for-one stock split:

All share and per share amounts in this quarterly report on Form 10-Q give effect to the stock split and have been adjusted retroactively for all periods presented.

The following tables set forth the computation of basic and diluted net ~~income~~income/(loss) per share as shown on the face of the accompanying Condensed Consolidated Statements of Income:

	Thirteen Weeks Ended													Thirteen Weeks Ended
	October 31, 2020						November 2, 2019							July 31, 2021						August 1, 2020
			(In thousands, except per share data)													(In thousands, except per share data)
Basic Net Income per Share:	Net Income		Shares		Per Share Amount		Net Income			Shares		Per Share Amount		Net Income		Shares		Per Share Amount		Net Income		Shares		Per Share Amount
Net income	$	14,678					$	13,726
Conversion of stock-based compensation arrangements		0						(12	)
Net income available for basic common shares and basic net income per share	$	14,678		14,090	$	1.04	$	13,714			14,404	$	0.95	$	44,212		28,323	$	1.56	$	10,060		28,175	$	0.36
Diluted Net Income per Share:
Net income	$	14,678					$	13,726						$	44,212					$	10,060
Conversion of stock-based compensation arrangements		0		176				(12	)		152
Conversion of share-based compensation arrangements															0		329				0		254
Net income available for diluted common shares and diluted net income per share	$	14,678		14,266	$	1.03	$	13,714			14,556	$	0.94	$	44,212		28,652	$	1.54	$	10,060		28,429	$	0.35

Thirty-nine Weeks Ended

October 31, 2020

November 2, 2019

(In thousands, except per share data)

Basic Net Income per Share:

Net
Income

Shares

Per Share
Amount

Net
Income

Shares

Per Share
Amount

Net income

$
8,548

$
39,431

Conversion of share-based compensation
   arrangements

0

(66
)

Net income available for basic common shares
   and basic net income per share

$
8,548

14,057

$
0.61

$
39,365

14,544

$
2.71

Diluted Net Income per Share:

Net income

$
8,548

$
39,431

Conversion of share-based compensation
   arrangements

0

168

(65
)

282

Net income available for diluted common
   shares and diluted net income per share

$
8,548

14,225

$
0.60

$
39,366

14,826

$
2.66

	Twenty-six Weeks Ended
	July 31, 2021						August 1, 2020
			(In thousands, except per share data)
Basic Net Income/(Loss) per Share:	Net Income		Shares		Per Share Amount		Net Loss			Shares		Per Share Amount
Net income/(loss) available for basic common shares and basic net income/(loss) per share	$	87,454		28,290	$	3.09	$	(6,130	)		28,080	$	(0.22	)
Diluted Net Income/(Loss) per Share:
Net income/(loss)	$	87,454					$	(6,130	)
Conversion of share-based compensation arrangements		0		353				0			0
Net income/(loss) available for diluted common shares and diluted net income/(loss) per share	$	87,454		28,643	$	3.05	$	(6,130	)		28,080	$	(0.22	)

The computation of basic net ~~income~~income/(loss) per share of common stock is based on the weighted average number of common shares outstanding during the period. The computation of diluted net ~~income~~income/(loss) 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 share-settled compensation arrangements involving restricted stock, ~~awards,~~ restricted stock units and performance stock units. A small portion of these awards that were outstanding at the beginning of fiscal 2020 ~~and vested during the thirty-nine weeks ended October 31, 2020,~~ had a non-forfeitable right to dividends. ~~The~~NaN unvested share-settled awards were excluded from the computation of diluted net ~~income~~income/(loss) per share ~~excluded~~for the thirteen and twenty-six weeks ended July 31, 2021, or the thirteen weeks ended August 1, 2020. During the twenty-six weeks ended August 1, 2020, approximately ~~2,000~~162,000 unvested share-settled awards ~~for~~were excluded from the ~~third quarter of fiscal 2020 and 3,000 unvested share-settled equity awards for the first nine months of fiscal 2020~~computation because the impact would behave been anti-dilutive. ~~For the other periods presented, all unvested share-settled equity awards were dilutive.~~

The Financial Accounting Standards Board issued guidance related to reference rate reform, which addresses contract modifications that may be necessary due to the expected discontinuance of LIBOR as a broadly used reference rate. The guidance was effective immediately but is only available for contract modifications made through December 31, 2022. Our credit facility currently allows for LIBOR-based borrowings and, as amended in 2020, contains provisions providing for a benchmark replacement in the event LIBOR is discontinued. We will adopt this guidance when LIBOR is discontinued and do not expect the adoption will have a material impact on our consolidated financial statements or related disclosures.

Note 4 – Risk and Uncertainties Associated with the COVID-19 ~~Impacts~~Pandemic

Our operations have been significantly disrupted by the outbreak of a novel strain of coronavirus (“COVID-19”). On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The U.S. Government, as well as the vast majority of states and local municipalities, have taken unprecedented measures to control the spread of COVID-19 and to provide stimulus as a mitigating measure to deteriorating economic conditions and increasing unemployment.

The COVID-19 pandemic began significantly impacting our operations, sales and costs beginning in the first quarter of fiscal 2020. Impacts included the temporary closure of our physical stores effective March 19, 2020, reduced foot traffic and sales, deteriorating economic conditions for our customer base, and some disruption to our global supply chain. We began reopening physical stores in accordance with applicable public health guidelines in late ~~April.~~April 2020. By the beginning of the second quarter of fiscal ~~quarter,~~2020, approximately ~~50 percent~~50% of our stores were reopened, and by early June 2020, substantially all of our stores had reopened. Our ~~website and mobile app have~~e-commerce platform has been fully operational during the pandemic with ~~digital~~e-commerce orders generally fulfilled by our store locations. ~~As of October 31, 2020, we do~~

We did not have any stores closed as of July 31, 2021 or for extended periods during the first six months of fiscal 2021 due to the ~~pandemic; however, the~~pandemic. The COVID-19 pandemic will likely continue to impact our financial condition and results of operations for the foreseeable future.

The accounting guidance related to fair value measurements defines fair value and provides 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 guidance requires or permits 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:

The following table presents financial instruments that are measured at fair value on a recurring basis at ~~October~~July 31, ~~2020, February~~2021, January 30, 2021 and August 1, ~~2020 and November 2, 2019.~~2020.

	Fair Value Measurements								Fair Value Measurements
(In thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
As of October 31, 2020
As of July 31, 2021
Cash equivalents - money market mutual funds	$	48,883	$	0	$	0	$	48,883	$	132,514	$	0	$	0	$	132,514
As of February 1, 2020
Marketable securities - mutual funds that fund deferred compensation										17,431		0		0		17,431
Total									$	149,945	$	0	$	0	$	149,945
As of January 30, 2021
Cash equivalents - money market mutual funds	$	48,080	$	0	$	0	$	48,080	$	97,519	$	0	$	0	$	97,519
As of November 2, 2019
As of August 1, 2020
Cash equivalents - money market mutual funds	$	21,046	$	0	$	0	$	21,046	$	69,963	$	0	$	0	$	69,963

During the second quarter of fiscal 2021, we invested approximately $17.5 million in publicly traded mutual funds with readily determinable fair values. These marketable securities are designed to mitigate volatility in our Condensed Consolidated Statements of Income associated with our non-qualified deferred compensation plan. As of July 31, 2021, these marketable securities were principally invested in equity-based mutual funds, consistent with the allocation in our deferred compensation plan. As of July 31, 2021, the balance in our deferred compensation plan was $17.5 million, of which $6.1 million was in Accrued and other liabilities based on scheduled payments due within the next 12 months and $11.4 million was in Deferred compensation. We classify these marketable securities as current assets because we have the ability to convert the securities into cash at our discretion and these marketable securities are not held in a rabbi trust.

The fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their carrying values because of their short-term nature.

We periodically evaluate our long-lived assets for impairment if events or circumstances indicate that the carrying value may not be recoverable. The carrying value of long-lived assets is considered impaired when the carrying value of the assets exceeds the expected future cash flows to be derived from their use. Assets are grouped, and the evaluation is performed, at the lowest level for which there are identifiable cash flows, which is generally at a store level. Store level asset groupings typically include property and equipment and operating lease right-of-use assets. If the estimated, undiscounted future cash flows for a store are determined to be less than the carrying value of the store’s assets, an impairment loss is recorded for the difference between estimated fair value and carrying value. Assets subject to impairment are adjusted to estimated fair value and, if applicable, an impairment loss is recorded in selling, general and administrative expenses. 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.

We estimate the fair value of our long-lived assets using store specific cash flow assumptions discounted by a rate commensurate with the risk involved with such assets while incorporating marketplace assumptions. Our estimates are derived from 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, exercise of future lease renewal options and the store’s contribution to cash flows and, by their nature, include judgments about how current initiatives will impact future performance. We estimate the fair value of operating lease right-of-use assets using the market value of rents applicable to the leased asset, discounted using the remaining lease term.

External factors, such as the local environment in which the store is located, including store 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 impact the fair value of these assets, which may have an effect on the impairment recorded. If actual operating results or market conditions differ from those anticipated, the carrying value of certain of our assets may prove unrecoverable and we may incur additional impairment charges in the future.

During the thirteen and twenty-six weeks ended ~~October~~July 31, ~~2020,~~2021, we recorded an impairment ~~charge~~charges of ~~$211,000~~$243,000 and $967,000 associated with one ~~store.~~store and three stores, respectively. During the ~~thirty-nine~~thirteen and twenty-six weeks ended ~~October 31,~~August 1, 2020, we recorded impairment charges of ~~$2.7~~$182,000 and $2.5 million associated with ~~nine stores. During the thirteen weeks ended~~ ~~November 2~~, 2019, we recorded impairment charges of $561,000 related to three stores. During the thirty-nine weeks ended November 2, 2019, we recorded an impairment charges of $604,000 associated with four stores. one store and eight stores, respectively. These charges were included in selling, general and administrative expenses. NaN impairments of operating right-of-use assets have been recorded in any of these periods.

AtStock-based compensation includes share-settled awards issued pursuant to our ~~2017 annual meeting of shareholders, our shareholders~~shareholder approved ~~a new equity incentive plan, the~~ Shoe Carnival, Inc. 2017 Equity Incentive Plan ~~(the “2017 Plan”), which replaced our 2000 Stock Option and Incentive Plan, as amended (the “2000 Plan”). Under~~in the ~~2017 Plan, we may issue stock units, restricted stock, stock appreciation rights, stock options and other stock-based awards to eligible participants. According to the terms~~form of the 2017 Plan, no further awards may be made under the 2000 Plan. A maximum of 1,000,000 shares of our common stock are available for issuance and sale under the 2017 Plan. In addition, any shares of our common stock subject to an award granted under the 2017 Plan, or to an award granted under the 2000 Plan that was outstanding on the date our shareholders approved the 2017 Plan, that expires, is cancelled or forfeited, or is settled for cash will, to the extent of such cancellation, forfeiture, expiration or cash settlement, automatically become available for future awards under the 2017 Plan.

~~Stock-based compensation includes~~ restricted stock units, ~~and~~ performance stock units, and restricted ~~stock awards, and cash-settled stock appreciation rights.~~stock. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our ~~employee~~Employee Stock Purchase Plan and for cash-settled stock ~~purchase plan.~~appreciation rights. For the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, 2021, stock-based compensation expense for the Employee Stock Purchase Plan was $5,000 before the income tax benefit of $1,000 and $16,000 before the income tax benefit of $4,000, respectively. For the thirteen and twenty-six weeks ended August 1, 2020, stock-based compensation expense for the ~~employee stock purchase plan~~Employee Stock Purchase Plan was ~~$8,000~~$7,000 before the income tax benefit of $2,000 and ~~$27,000~~$18,000 before the income tax benefit of $6,000, respectively. For the thirteen and thirty-nine weeks ended November 2, 2019, stock-based compensation expense for the employee stock purchase plan was $8,000 before the income tax benefit of $2,000 and $25,000 before the income tax benefit of $5,000, respectively.

The following table summarizes transactions for our restricted stock units and performance stock ~~units pursuant to our stock-based compensation plans:~~units:

The total fair value at grant date of restricted stock units and performance stock units that vested during the ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, 2021 and August 1, 2020 ~~and November 2, 2019~~ was ~~$4.4~~$3.1 million and ~~$2.3~~$4.4 million, respectively. The weighted-average grant date fair value of restricted stock units and performance stock units granted during the ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, 2021 and August 1, 2020 was $28.21 and ~~November 2, 2019 was $14.88 and $31.29,~~$7.44, respectively.

The following table summarizes transactions for our restricted stock ~~awards pursuant to our stock-based compensation plans:~~and other stock awards:

	Number of Shares			Weighted- Average Grant Date Fair Value		Number of Shares			Weighted- Average Grant Date Fair Value
Restricted stock at February 1, 2020		67,435		$	24.23
Restricted stock at January 30, 2021							0		$	0.00
Granted		12,045			24.91		8,162			32.65
Vested		(52,619	)		24.20		(802	)		33.04
Forfeited or expired		(14,816	)		24.37		0			0.00
Restricted stock at October 31, 2020		12,045		$	24.91
Restricted stock at July 31, 2021							7,360		$	32.61

The weighted-average grant date fair value of restricted stock and other stock awards granted during the twenty-six weeks ended July 31, 2021 and August 1, 2020 was $32.65 and $12.46, respectively. The total fair value at grant date of restricted stock and other stock awards that vested during the ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, 2021 and August 1, 2020 was $26,000 and ~~November 2, 2019 was~~ $1.3 million, and $17.0 million, respectively. The weighted-average grant date fair value of restricted stock awards granted during the thirty-nine weeks ended October 31, 2020 and November 2, 2019 was $24.91 and $26.58, respectively.

The following table summarizes information regarding stock-based compensation expense recognized for all share-settled equity awards (restricted stock units, performance stock units and restricted stock awards):

(In thousands)	Thirteen Weeks Ended October 31, 2020		Thirteen Weeks Ended November 2, 2019		Thirty-nine Weeks Ended October 31, 2020		Thirty-nine Weeks Ended November 2, 2019		Thirteen Weeks Ended July 31, 2021			Thirteen Weeks Ended August 1, 2020			Twenty-six Weeks Ended July 31, 2021			Twenty-six Weeks Ended August 1, 2020
Stock-based compensation expense before the recognized income tax effect	$	797	$	1,655	$	2,667	$	5,043	$	1,381		$	740		$	2,521		$	1,870
Income tax effect	$	213	$	412	$	613	$	1,055
Income tax effect at statutory rate									$	(357	)	$	(219	)	$	(638	)	$	(588	)
Additional income tax (benefit)/expense on vesting of awards									$	(5	)	$	33		$	(885	)	$	79

Included in the thirty-nine week period ended October 31, 2020 was a tax expense of $81,000 in connection with the vesting of stock-based compensation. The thirty-nine week period ended November 2, 2019 included a tax benefit in connection with the vesting of stock-based compensation of approximately $2.0 million. As of ~~October~~July 31, ~~2020,~~2021 approximately ~~$2.6~~$6.2 million of unrecognized compensation expense remained related to our ~~restricted stock units, performance stock units and service-based restricted stock~~share-settled equity awards. The cost is expected to be recognized over a weighted average period of approximately ~~1.4~~1.2 years.

Cash-settled stock appreciation rights (“SARs”) are granted to certain non-executive employees. Each SAR entitles holders, 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 ~~2020~~2021 will vest and become fully exercisable on March 31, ~~2021~~2022 and any unexercised SARs will expire on March 31, ~~2023.~~2024. SARs granted during the first quarter of fiscal 2020 vested and became fully exercisable on March 31, 2021. The remaining unexercised SARs from the first quarter fiscal 2020 grant were exercised in the second quarter of fiscal 2021. SARs granted during the first quarter of fiscal 2019 vested and became fully exercisable on March 31, ~~2020 and any~~2020. The remaining unexercised SARs ~~will expire on March 31, 2022.~~from the first quarter fiscal 2019 grant were exercised in the first quarter of fiscal 2021. The SARs issued have a defined maximum gain of ~~$10.00~~$5.00 over the exercise price of ~~$13.79~~$30.94 for awards granted in fiscal ~~2020 and over the exercise price of $34.95 for awards granted in fiscal 2019.~~2021.

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding at February 1, 2020		43,200		$	34.95
Outstanding at January 30, 2021									88,400		$	7.61
Granted		43,000			13.79				93,800			30.94
Forfeited or expired		(3,400	)		32.46				(2,800	)		30.94
Exercised		(2,400	)		34.95				(88,400	)		7.61
Outstanding at October 31, 2020		80,400		$	23.74		1.9
Outstanding at July 31, 2021									91,000		$	30.94		2.7

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~~July 31, ~~2020~~2021 was ~~$8.54.~~$2.76.

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

	October 31, 2020		November 2, 2019		July 31, 2021		August 1, 2020
Risk free interest rate yield curve	0.08% - 0.38%		1.53% - 1.58%		0.05% - 0.69%		0.09% - 0.21%
Expected dividend yield	1.2%		1.0%		0.8%		1.5%
Expected volatility	64.09%		50.03%		63.14%		65.03%
Maximum life	1.9 Years		2.4 Years		2.7 Years		2.2 Years
Exercise multiple		1.29		1.29		1.05		1.29
Maximum payout	$	10.00	$	10.00	$	5.00	$	5.00
Employee exit rate	2.2% - 9.0%		2.2% - 9.0%		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 common stock. The exercise multiple and employee exit rate were calculated based on historical ~~option~~ data.

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

(In thousands)	Thirteen Weeks Ended October 31, 2020		Thirteen Weeks Ended November 2, 2019		Thirty-nine Weeks Ended October 31, 2020		Thirty-nine Weeks Ended November 2, 2019		Thirteen Weeks Ended July 31, 2021			Thirteen Weeks Ended August 1, 2020			Twenty-six Weeks Ended July 31, 2021			Twenty-six Weeks Ended August 1, 2020
Stock-based compensation expense before the recognized income tax effect	$	183	$	104	$	187	$	139	$	74		$	91		$	149		$	4
Income tax effect	$	49	$	26	$	43	$	29
Income tax effect at statutory rate									$	(19	)	$	(27	)	$	(38	)	$	(1	)

As of ~~October~~July 31, ~~2020,~~2021, approximately ~~$145,000~~$167,000 in unrecognized compensation expense remained related to non-vested SARs. This expense is expected to be recognized over a period of approximately ~~0.4~~0.7 years.

Revenue is disaggregated by product category below. Net sales and percentage of net sales for the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, ~~2020~~2021 and ~~November 2, 2019~~August 1, 2020 were as follows:

(In thousands)	Thirteen Weeks Ended October 31, 2020				Thirteen Weeks Ended November 2, 2019				Thirteen Weeks Ended July 31, 2021				Thirteen Weeks Ended August 1, 2020
Non-Athletics:
Women’s	$	54,164	20	%	$	61,126	22	%	$	83,141	25	%	$	65,167	22	%
Men’s		34,676	13			35,446	13			51,678	16			42,319	14
Children’s		15,145	5			14,713	5			22,553	7			16,544	6
Total		103,985	38			111,285	40			157,372	48			124,030	42

Athletics:
Women’s		50,935	19			46,742	17			49,648	15			55,961	19
Men’s		59,355	22			56,112	20			66,902	20			72,941	24
Children’s		43,662	16			46,081	17			39,925	12			31,417	10
Total		153,952	57			148,935	54			156,475	47			160,319	53

Accessories and Other		16,642	5			14,425	6			18,383	5			16,445	5

Total	$	274,579	100	%	$	274,645	100	%	$	332,230	100	%	$	300,794	100	%

(In thousands)	Thirty-nine Weeks Ended October 31, 2020				Thirty-nine Weeks Ended November 2, 2019				Twenty-six Weeks Ended July 31, 2021				Twenty-six Weeks Ended August 1, 2020
Non-Athletics:
Women’s	$	148,252	21	%	$	187,834	24	%	$	158,672	24	%	$	94,088	21	%
Men’s		95,710	13			111,417	14			95,960	15			61,034	14
Children’s		38,698	5			40,649	5			45,846	7			23,553	5
Total		282,660	39			339,900	43			300,478	46			178,675	40

Athletics:
Women’s		139,808	19			139,457	18			108,243	16			88,873	20
Men’s		163,757	23			166,253	21			132,626	20			104,401	23
Children’s		95,743	13			112,605	14			82,503	12			52,081	12
Total		399,308	55			418,315	53			323,372	48			245,355	55

Accessories and Other		40,900	6			38,461	4			36,837	6			24,259	5

Total	$	722,868	100	%	$	796,676	100	%	$	660,687	100	%	$	448,289	100	%

We operate as a multi-channel, family footwear retailer and provide the convenience of shopping at our physical stores or shopping online through our e-commerce ~~and mobile platforms.~~platform. As part of our multi-channel strategy, we offer Shoes 2U, a program that enables us to ship product to a customer’s home or selected store if the product is not in stock at a particular store. We also offer “buy online, pick up in store” services for our customers. “Buy online, pick up in store” provides the convenience of local pickup for our customers.

For our physical stores, we satisfy our performance obligation and control is transferred at the point of sale when the customer takes possession of the products. This also includes the “buy online, pick up in store” scenario described above and includes sales made via our Shoes 2U program when customers choose to pick up their goods at a physical store. For sales made through our e-commerce ~~site or mobile app~~platform in which the customer chooses home delivery, we transfer control and recognize revenue when the product is ~~shipped from our stores or distribution center.~~shipped. This also includes sales made via our Shoes 2U program when the customer chooses home delivery.

We offer our customers sales incentives including coupons, discounts, and free merchandise. Sales are recorded net of such incentives and returns and allowances. If an incentive involves free merchandise, that merchandise is recorded as a zero sale and the cost is included in cost of sales. Gift card revenue is recognized at the time of redemption. When a customer makes a purchase as part of our rewards program, we allocate the transaction price between the goods purchased and the loyalty reward points and recognize the loyalty revenue based on estimated customer redemptions.

The transaction price is the amount of consideration we expect to receive from our customers and is reduced by any stated promotional discounts at the time of purchase. The transaction price may be variable due to terms that permit customers to exchange or return products for a ~~refund within a limited period of time.~~refund. The implicit contract with the customer reflected in the transaction receipt states the final terms of the sale, including the description, quantity, and price of each product purchased. The customer agrees to a stated price in the contract that does not vary over the term of the contract and may include revenue to offset shipping costs. Taxes imposed by governmental authorities such as sales taxes are excluded from net sales.

Our physical stores accept various forms of payment from customers at the point of sale. These include cash, checks, credit/debit cards and gift cards. Our e-commerce ~~and mobile platforms accept~~platform accepts credit/debit cards, PayPal, Apple Pay, Klarna and gift cards as forms of payment. Payments made for products are generally collected when control passes to the customer, either at the point of sale or at the time the customer order is shipped. For Shoes 2U transactions, customers may order the product at the point of sale. For these transactions, customers pay in advance and unearned revenue is recorded as a contract liability. 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 our Shoes 2U program was not material to our Condensed Consolidated Financial Statements at ~~October~~July 31, ~~2020, February~~2021, January 30, 2021 or August 1, ~~2020 and November 2, 2019.~~2020.

~~Customers can exchange or return products for a refund within a limited period of time.~~ We have established ~~a returns~~an allowance based upon historical experience in order to estimate ~~these~~return and refund transactions. 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 inventory is recorded as a reduction to cost of sales and an increase in merchandise inventories. Approximately $740,000 of refund liabilities and $495,000 of right of return assets associated with estimated product returns were recorded in accrued and other liabilities as of July 31, 2021 and January 30, 2021. Approximately $718,000 of refund liabilities and $500,000 of right of return assets associated with estimated product returns were recorded in accrued and other liabilities at ~~each of October 31, 2020 and February~~August 1, 2020.~~Approximately $600,000 of refund liabilities and $410,000 of right of return assets associated with estimated product returns were recorded in accrued and other liabilities at November 2, 2019.~~

~~We offer gift cards in our stores and through our e-commerce and mobile platforms. When~~The issuance of a gift card ~~is issued, the issuance~~ is recorded as an increase to contract liabilities ~~at the time of issuance~~ and a decrease to contract liabilities when a customer redeems a gift card. Estimated breakage is determined based on historical breakage percentages and recognized as revenue based on expected gift card usage. We do not record breakage revenue when escheat liability to relevant jurisdictions exists. At ~~October~~July 31, ~~2020, February~~2021, January 30, 2021 and August 1, 2020, ~~and November 2, 2019,~~ approximately ~~$1.2 million,~~ $1.5 million, $1.7 million and ~~$1.1~~$1.3 million of contract liabilities associated with unredeemed gift cards were recorded in ~~accrued~~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. Breakage revenue associated with our gift cards of ~~$27,000~~$38,000 and ~~$69,000~~$80,000 was recognized in net sales during the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, ~~2020,~~2021, respectively. Breakage revenue associated with our gift cards of ~~$29,000~~$23,000 and ~~$91,000~~$42,000 was recognized in net sales during the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~November 2, 2019,~~August 1, 2020, respectively.

Our Shoe Perks rewards program allows customers to accrue points and provides customers with the opportunity to earn rewards. Points under Shoe Perks are earned primarily by making purchases ~~either in-store or~~ through any of our ~~online platform.~~multi-channel points of sale. Once a certain threshold of accumulated points is reached, the customer earns a reward certificate, which is redeemable atthrough any of our ~~stores or online.~~sales channels.

When a Shoe Perks customer makes a purchase, we allocate the transaction price between the goods purchased and the loyalty reward points earned based on the relative standalone selling price. The portion allocated to the points program is recorded as a contract liability for rewards that are expected to be redeemed. 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 ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, ~~2020,~~2021, approximately ~~$1.3~~$1.6 million and ~~$3.2~~$2.9 million, respectively, of loyalty rewards were recognized in net sales. During the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~November 2, 2019,~~August 1, 2020, approximately ~~$632,000~~$922,000 and ~~$1.5~~$1.9 million, respectively, of loyalty rewards were recognized in net sales.At ~~October~~July 31, ~~2020, February~~2021, January 30, 2021 and August 1, 2020, approximately $1.1 million, $755,000 and ~~November 2, 2019, approximately $828,000, $679,000 and $533,000, respectively,~~$827,000 of contract liabilities associated with loyalty rewards were recorded in ~~accrued~~Accrued and other ~~liabilities.~~liabilities, respectively. We expect the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions in less than one year.

~~On April 16, 2020, we entered into a third amendment (the “Third Amendment”) of our existing credit agreement (the “Credit Agreement”). Pursuant to the Third Amendment, we (1)~~ exercised the full $50.0 million accordion feature, which increased the revolving commitment under the Credit Agreement from $50.0 million to $100.0 million, and increased the swing line sublimit from $10.0 million to $15.0 million; (2) granted a security interest in our inventory to the lenders; and (3) increased the maximum ratio of funded debt plus three times rent expense to EBITDA (as defined in the Credit Agreement) plus rent expense from 2.5 to 1.0 to 3.0 to 1.0. In addition, the Third Amendment, among other things, increased certain LIBOR margins applicable to borrowings under the Credit Agreement, increased the commitment fee charged on the unused portion of the lenders’ commitment and made customary updates to certain representations, covenants and other terms contained in the Credit Agreement.

~~On July 20, 2020, we entered into a fourth amendment (the “Fourth Amendment”) to our Credit Agreement.~~ Pursuant to the Fourth Amendment, we (1) eliminated the covenant involving the ratio of funded debt plus three times rent expense to EBITDA (as defined in the Credit Agreement) plus rent expense for the fiscal quarters ending on or about July 31, 2020; October 31, 2020; and January 31, 2021; (2) amended the definition of LIBOR to establish a minimum LIBOR rate of 0.75% per annum; and (3) established increased reporting requirements to the lenders through January 31, 2021.

The Credit Agreement, as amended, contains covenants which stipulate: (1) Total Shareholders’ Equity (as defined in the Credit Agreement) will not fall below $250.0 million at the end of each fiscal quarter; (2) the ratio of funded debt plus three times rent expense to EBITDA (as defined in the Credit Agreement) plus rent expense will not exceed 3.0 to 1.0, except for the fiscal quarters ending on or about July 31, 2020; October 31, 2020; and January 31, 2021; (3) the aggregate amount of cash dividends for a fiscal year will not exceed $10.0 million; and (4) distributions in the form of redemptions of Equity Interests (as defined in the Credit Agreement) can be made solely with cash on hand so long as before and immediately after such distributions there are no revolving loans outstanding under the Credit Agreement. Should a default condition be reported, the lenders may preclude additional borrowings and call all loans and accrued interest at their discretion. We were in compliance with these covenants at October 31, 2020.

The credit facility bears interest, at our option, at (1) the agent bank’s prime rate as defined in the Credit Agreement plus 1.0%, with the prime rate defined as the greater of (a) the Federal Fund rate plus 0.50% or (b) the interest rate announced from time to time by the agent bank as its “prime rate” or (2) LIBOR plus 1.50% to 2.50%, depending on our achievement of certain performance criteria. If the stated LIBOR rate is less than 0.75%, the LIBOR rate for purposes of calculating the interest rate under the credit facility shall be 0.75%. A commitment fee is charged at 0.30% to 0.40% per annum, depending on our achievement of certain performance criteria, on the unused portion of the lenders’ commitment. The Credit Agreement expires on March 27, 2022.

NaN borrowings were outstanding under the Credit Agreement as of October 31, 2020, February 1, 2020 or November 2, 2019. There were 0 borrowings outstanding during the thirteen weeks ended October 31, 2020 and November 2, 2019. The maximum borrowings outstanding during the thirty-nine weeks ended October 31, 2020 and November 2, 2019 were $8.7 million and $20.0 million, respectively. As of October 31, 2020, there were $1.2 million in letters of credit outstanding and $98.8 million available to us for borrowing under the Credit Agreement.

We lease all of our physical stores and our single distribution center, which has a current lease term ~~of 15 years,~~ expiring in 2034. We also enter into leases of equipment, copiers and billboards. All of our leases are operating leases. 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 ~~October~~July 31, ~~2020.~~

In response to the COVID-19 pandemic and related government restrictions impacting our operations, we began seeking relief from our landlords while our stores were temporarily closed to customers. On April 10, 2020, the Financial Accounting Standards Board staff issued a question-and-answer document providing guidance for lease concessions provided to lessees in response to the effects of COVID-19. Such guidance allows lessees to make an election to forgo the evaluation of the enforceable rights and obligations of the original lease contract and whether a lease concession provided by a lessor should be accounted for as a lease modification in the event the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Based on the nature of the agreements reached with many of our landlords, we have accounted for lease concessions as if they were part of the enforceable rights and obligations of the existing lease contracts and did not account for the concessions as lease modifications. When agreements with landlords to defer rent payments were reached, amounts that would have otherwise been due were reclassified as operating lease liabilities, all of which are reflected in the current portion of operating lease liabilities on our Condensed Consolidated Balance Sheet as of October 31, 2020. For negotiations with landlords that did not result in lease concessions, we have increased accounts payable for rents that are due. We have continued to recognize lease expense on a straight-line basis for our leases over the related lease terms.2021.

Lease costs, including related common area maintenance (“CAM”), property taxes, and insurance, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~October~~July 31, ~~2020~~2021 and ~~November 2, 2019:~~August 1, 2020:

(In thousands)	Thirteen Weeks Ended October 31, 2020		Thirteen Weeks Ended November 2, 2019		Thirty-nine Weeks Ended October 31, 2020		Thirty-nine Weeks Ended November 2, 2019		Thirteen Weeks Ended July 31, 2021		Thirteen Weeks Ended August 1, 2020		Twenty-six Weeks Ended July 31, 2021		Twenty-six Weeks Ended August 1, 2020
Operating lease cost	$	13,432	$	13,700	$	40,047	$	41,094	$	13,489	$	13,389	$	26,752	$	26,614
Variable lease cost		490		447		1,464		874		993		787		1,641		974
CAM, property taxes and insurance		4,888		4,935		15,023		15,119		4,861		5,147		9,629		10,136
Total	$	18,810	$	19,082	$	56,534	$	57,087	$	19,343	$	19,323	$	38,022	$	37,724

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

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: the duration and spread of the COVID-19 ~~outbreak,~~pandemic, mitigating efforts deployed, byincluding the effects of government ~~agencies and the public at large, and the overall impact from such outbreak~~stimulus on ~~the operations of our stores, economic conditions, financial market volatility,~~ consumer spending, and the pandemic’s overall impact on our operations, including our stores, supply chain and distribution ~~processes;~~processes, economic conditions, and financial market volatility; general economic conditions in the areas of the continental United States ~~in which~~and Puerto Rico where 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;~~located; 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;~~sales; our ability to successfully navigate the increasing use of online retailers for fashion purchases and the impact on traffic and transactions in our physical stores; the success of the open-air shopping centers where our stores are located and its impact on our ability to attract customers to our stores; our ability to attract customers to our e-commerce ~~website and mobile app~~platform and to successfully grow our multi-channel sales; the potential impact of national and international security concerns on the retail environment; the effectiveness of our inventory management, including our ability to manage key merchandise vendor relationships and emerging direct-to-consumer initiatives; changes in our relationships with other key suppliers; our ability to control costs and meet our labor needs in a rising wage and/or inflationary environment; changes in the political and economic environments in, the status of trade relations with, and the impact of changes in trade policies and tariffs impacting, China and other countries which are the major manufacturers of footwear; the impact of competition and pricing; our ability to successfully manage and execute our marketing initiatives and maintain positive brand perception and recognition; our ability to successfully manage our current real estate portfolio and leasing obligations; changes in weather, including patterns impacted by climate change; changes in 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 natural disasters, other public health crises, political crises, civil unrest, and other catastrophic events on our ~~stores~~operations and the operations of our suppliers, 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, including as a result of a ~~cyber-security~~cybersecurity breach; ~~our ability to manage our third-party vendor relationships;~~ our ability to successfully execute our business strategy, including the availability of desirable store locations at acceptable lease terms, our ability to implement and adapt to new technology and systems, 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 business plans; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to deliver products in a timely manner; an increase in the cost, or a disruption in the flow, of imported goods; the impact of regulatory changes in the United States, including minimum wage laws and regulations, and the countries where our manufacturers are located; the resolution of litigation or regulatory proceedings in which we are or may become involved; continued volatility and disruption in the capital and credit markets; ~~and~~ future stock repurchases under our stock repurchase program and future dividend payments. For a more detailed discussion of risk factors impacting us, see the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020,~~January 30, 2021, and “Risk Factors” in Part II, Item 1A of our Quarterly ~~Reports~~Report on Form 10-Q for the ~~quarters~~quarter ended May ~~2, 2020 and August~~ 1, ~~2020,~~2021 and in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) 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 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020~~January 30, 2021 as filed with the SEC.

Shoe Carnival, Inc. is one of the nation’s largest family footwear retailers, providing customers the convenience of shopping at any of our store locations, our mobile app or online at www.shoecarnival.com. Our stores combine competitive pricing with a promotional, high-energy in-store environment that encourages customer participation and injects fun and excitement into every shopping experience. We believe our distinctive shopping experience gives us 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 and mobile app~~platform through special promotions and limited time sales.

Our objective is to be the ~~destination~~multi-channel retailer-of-choice for ~~value-priced,~~ on-trend branded and private label ~~footwear.~~footwear for the entire family. Our product assortment, whether shopping in a physical store or on our e-commerce platform, includes dress and casual shoes, sandals, boots and a wide assortment of athletic ~~shoes for the entire family.~~shoes. Our average physical store carries shoes in four general categories – women’s, men’s, children’s and athletics, as well as a broad range of ~~accessories such as socks, belts, shoe care items, handbags, hats, sport bags, backpacks and wallets.~~accessories. Footwear is organized by category and brand, creating strong brand

statements within the aisles. These brand statements are underscored by branded signage on endcaps and in-line signage throughout the store. Our signage may highlight a vendor’s product offerings or sales promotions, or may highlight seasonal or lifestyle statements by grouping similar footwear from multiple vendors. Over 100 of our physical stores have strongly branded Nike shops that highlight Nike products within the stores, and we expect to add at least 100 more Nike shops to our physical stores through 2023. Our e-commerce ~~site~~platform offers customers ~~a large~~the same assortment of ~~products~~merchandise in all categories of footwear with ~~an increased depth of sizes and colors that may not be available~~expanded options in ~~all stores.~~certain instances.

We use judgment in reporting our financial results. This judgment involves estimates based in part on our historical experience and incorporates 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 assets, leases, ~~insurance reserves~~ and income taxes. The accounting policies that require more significant judgment are discussed in our Annual Report on Form 10-K for the fiscal year ended ~~February 1, 2020. There~~January 30, 2021, and there have been no material changes to ~~our~~those critical accounting ~~policies and estimates discussed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020.~~

Number of Stores

Store Square Footage

Beginning

End of

Net

End

Comparable

Quarter Ended

Of Period

Opened

Closed

Period

Change

of Period

Store Sales

May 2, 2020

392

0

2

390

(22,000
)

4,198,000

(42.3
)%
August 1, 2020

390

2

10

382

(66,000
)

4,132,000

12.6
%
October 31, 2020

382

1

0

383

10,000

4,142,000

0.9
%

Year-to-date

392

3

12

383

(78,000
)

4,142,000

(8.8
)%

May 4, 2019

397

0

2

395

(22,000
)

4,246,000

(0.2
)%
August 3, 2019

395

0

2

393

(16,000
)

4,230,000

1.4
%
November 2, 2019

393

1

1

393

1,000

4,231,000

3.5
%

Year-to-date

397

1

5

393

(37,000
)

4,231,000

1.6
%

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 strategy, we view 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:~~

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 a top priority. The COVID-19 pandemic has significantly impacted, and is expected to continue to impact, our operations, supply chains, distribution processes, and overall economic conditions and consumer spending for the foreseeable future. As guidance and mandates from governments and health officials continue to evolve, closures of some or all our stores may reoccur, and sales, including e-commerce sales, may be reduced. The COVID-19 pandemic delayed and extended the back-to-school shopping period and, at this time, uncertainty remains regarding how the COVID-19 pandemic may affect the Christmas shopping period.

In response to the COVID-19 pandemic, all of our physical stores were temporarily closed effective March 19, 2020. Our ~~website and mobile app~~e-commerce platform continued to ~~accept orders after March 19, 2020,~~operate, and our e-commerce sales ~~have~~ increased significantly in fiscal 2020 as customers shifted purchases to our online channel. We began reopening our physical stores in accordance with applicable public health guidelines in late ~~April.~~April 2020. Thus substantially all of our physical stores were closed for approximately 50% of the first fiscal quarter of 2020. By the beginning of ~~our~~the second quarter of fiscal ~~quarter,~~2020, approximately ~~50 percent~~50% of our stores were reopened, and by early June 2020, substantially all of our stores had reopened. As stores have reopened, we experienced increases in conversion and total average transaction despite reduced traffic due to the COVID-19 pandemic. In our markets, back-to-school shopping continued into October, as many school districts in our markets delayed their back-to-school start dates. We dodid not have any stores closed as of July 31, 2021 or for extended periods during the first six months of fiscal 2021 due to the ~~pandemic as~~pandemic.

	Number of Stores								Store Square Footage
	Beginning						End of		Net			End		Comparable
Quarter Ended	Of Period		Opened		Closed		Period		Change			of Period		Store Sales⁽¹⁾
May 1, 2021		383		0		6		377		(46,000	)		4,100,000		125.8	%
July 31, 2021		377		1		0		378		12,000			4,112,000		11.4	%

Year-to-date		383		1		6		378		(34,000	)		4,112,000		48.8	%

May 2, 2020		392		0		2		390		(22,000	)		4,198,000		(42.3	)%
August 1, 2020		390		2		10		382		(66,000	)		4,132,000		12.6	%

Year-to-date		392		2		12		382		(88,000	)		4,132,000		(14.0	)%

~~We have undertaken a number of actions to mitigate the financial impact of the COVID-19 pandemic, preserve capital and keep our customers and employees safe. These actions include:~~

~~Year-to-date in fiscal 2020, we impaired nine and closed 12 physical stores and recorded $3.5 million in impairment charges and closing costs.~~ 16

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

Given the ~~uncertainties surrounding~~significant impact of the COVID-19 pandemic on our fiscal 2020 second quarter and year-to-date results, we have included certain comparisons in this MD&A between fiscal 2021 and fiscal 2019 to provide further context regarding our fiscal 2021 results of operations.

The shares outstanding and net income per share information throughout this MD&A has been adjusted retroactively for all periods presented as a result of a 2-for-1 stock split that was paid as a dividend on July 19, 2021 to shareholders of record on July 6, 2021. See Note 1 — “Basis of Presentation” in the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional ~~impairments and closures may result in future periods.~~information on the stock split.

Executive Summary for the ~~Third~~Second Fiscal Quarter Ended ~~October~~July 31, ~~2020~~2021

~~Our third quarter sales have historically been impacted by back-to-school shopping and the transition to fall seasonal shopping. Our sales patterns in the third~~The second quarter of fiscal ~~2020 have been significantly impacted by~~2021 was another record-breaking quarter. Results for the COVID-19 pandemic, which caused a delay in the timing of back-to-school start dates in the markets we serve. As a result, we saw sales shift from August into September and October, and we ended the third quarter with a 0.9 percent increase in comparable store sales. We achieved this comparable store sales gain despite approximately 10 percent of schools in our markets not having returned to in-person learning at the end of the period. Our third quarter comparable store increase was primarily driven by a high-single digit increase in adult athletics and increases in seasonal sandals and men’s work boots. In the thirdsecond quarter of fiscal ~~2020, we posted record levels~~2021 were the highest in terms of quarterly net sales, gross profit, ~~net~~operating income and diluted net income per ~~share.~~share in our history, surpassing previous records set in the first quarter of fiscal 2021. Through the first six months of fiscal 2021, our diluted net income per share of $3.05 exceeded the diluted net income per share earned during the fiscal years of 2020 and 2019 combined.

Comparable store sales in the second quarter of fiscal 2021 increased 11.4% compared to the second quarter of fiscal 2020 and increased 25.5% compared to the second quarter of fiscal 2019. In the second quarter of fiscal 2020, we were still reopening a portion of our physical stores throughout May that were closed due to the pandemic. As our physical stores and the U.S. economy reopened, we experienced a significant increase in sales; however, sales in July 2020 were negatively impacted by delays in back-to-school shopping. Our sales in fiscal 2020 were also more significantly weighted towards our e-commerce platform due to the pandemic. Fiscal 2019 is considered a more normal year as it was not impacted by COVID-19.

We believe our inventory selection, more focused promotional strategy, a stronger economy (inclusive of the impacts of government stimulus) and the return of a more normal back-to-school shopping season positively impacted our fiscal 2021 second quarter results. During the second quarter of fiscal 2021, physical store traffic increased 23.1% compared to the second quarter of fiscal 2020 and neared the pre-pandemic levels in the second quarter of fiscal 2019. Sales generated from our physical stores increased 25.8% for the second quarter of fiscal 2021 compared to the second quarter of fiscal 2020 and 19.0% compared to the second quarter of fiscal 2019. Sales generated from our e-commerce platform decreased 44.4% compared to the second quarter of fiscal 2020 but increased 140% compared to the second quarter of fiscal 2019. E-commerce sales were approximately 10% of merchandise sales in the second quarter of fiscal 2021, down from 20% in the second quarter of fiscal 2020, but up from 5% in the second quarter of fiscal 2019.

All of our non-athletic product categories had comparable store sale increases ranging from double digits to low triple-digits compared to the second quarter of fiscal 2020. As expected, decreases in the men’s and women’s athletic categories occurred. Athletic categories were elevated in the second quarter of fiscal 2020 consistent with more active life-style choices responsive to the COVID-19 pandemic. Compared to the second quarter of fiscal 2019, all product categories, including athletics and children’s non-athletics, showed double digit comparable store sale increases. This increase was driven by higher average per unit prices across all categories, and overall, more units sold.

Highlights for the ~~third~~second quarter of fiscal ~~2020~~2021 and a brief discussion of some key initiatives are as follows:

Results of Operations for the ~~Third~~Second Quarter Ended ~~October~~July 31, ~~2020~~2021

Net sales were ~~$274.6~~a record $332.2 million during the ~~third~~second quarter of fiscal 2021 and increased 10.5% compared to the second quarter of fiscal 2020. Comparable stores sales increased 11.4% compared to the second quarter of fiscal 2020. Compared to the second quarter of fiscal 2020, physical store sales increased 25.8%, and e-commerce sales decreased 44.4%. E-commerce sales represented approximately 10% of merchandise sales in the second quarter of fiscal 2021.

Net sales were ~~generally flat~~positively impacted by continued demand for our merchandise, a more normal beginning to the back-to-school shopping season, and a stronger economy (including impacts from consumer-based government stimulus). Additionally, a portion of our stores were closed during May 2020 due to the pandemic. Net sales in the second quarter of fiscal 2021 were favorably impacted by increased conversion and average transaction price compared to the ~~third~~second quarter offiscal 2020, with traffic nearing the ~~prior year. Comparable stores sales increased 0.9 percent, with e-commerce sales increasing over 150 percent compared to the prior year and representing 13 percent of total sales~~pre-pandemic levels in the ~~third quarter.~~

Gross profit was a record $87.8 million during the third quarter, an increase of $3.0 million compared to the prior year. Gross profit margin in the third quarter increased to 32.0 percent compared to 30.9 percent in the thirdsecond quarter of fiscal 2019. The increase in ~~gross~~average transaction price was primarily driven by our more focused promotional activity.

Gross profit was ~~primarily due to our broad assortment of inventory and our ability to effectively replenish fast-selling product, such as sandals and athletics,~~a record $135.8 million during the second quarter ~~which enabled us~~of fiscal 2021, an increase of $53.1 million compared to ~~be less promotional.~~the second quarter of fiscal 2020. Gross profit margin in the second quarter of fiscal 2021 increased to 40.9% compared to 27.5% in the second quarter of fiscal 2020 and 30.6% in the second quarter of fiscal 2019. Merchandise margin increased 13.3 percentage points compared to the second quarter of fiscal 2020 and 9.6 percentage points compared to the second quarter of fiscal 2019. Our more focused promotional strategy drove a higher merchandise margin compared to both fiscal 2020 and 2019. A more standard product mix sold during the second quarter of fiscal 2021 further increased merchandise margin compared to fiscal 2020. With respect to product mix, the second quarter of fiscal 2020 had a heavier mix of adult athletic sales, which typically sell at lower margins compared to other footwear categories.

As a percentage of sales, our buying, distribution and occupancy costs were slightly down compared to the second quarter of fiscal 2020 as higher freight and distribution labor costs mostly offset the leveraging effect of higher sales.

SG&A increased $7.8 million in the second quarter of fiscal 2021 to $76.0 million compared to $68.2 million in the second quarter of fiscal 2020. As a percentage of net sales, increased 1.6 percent compared to the prior year quarter due to the lower promotional activity. This 1.6 percent increase included offsetting shipping-related costs associated with e-commerce sales that were higher as a percentage of salesSG&A was relatively consistent at 22.9% in the ~~current year compared to the prior year. Our buying, distribution and occupancy costs increased 0.5 percent as a percentage of net sales compared to the third~~second quarter of fiscal ~~2019 primarily due~~2021 compared to ~~higher distribution expense. Investments~~22.7% in ~~our distribution center during fiscal 2020 resulted in higher implementation costs related to software, depreciation and labor during~~ the ~~third~~second quarter of fiscal 2020 and lower than the 24.8% recorded in the second quarter of fiscal 2019. The increase in SG&A in the second quarter of fiscal 2021 compared to the ~~prior year quarter.~~

~~SG&A expense was $67.6 million during the third quarter, an increase of $1.0 million compared to the third~~second quarter of fiscal ~~2019 primarily due to higher advertising~~2020 correlates with our continued record performance, with increases in store level wages and ~~e-commerce related operating expenses.~~ store level incentive compensation comprising a majority of the increase.

The effective income tax rate for the ~~third~~second quarter of fiscal ~~2020~~2021 was ~~26.8 percent as~~25.8% compared to ~~24.9 percent~~29.6% for the same period in fiscal ~~2019.~~2020. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events. The ~~lower~~higher tax rate in the prior year ~~quarter~~ was primarily ~~driven by the~~due to a reversal of a ~~valuation allowance associated with our Puerto Rico operations.~~net operating loss carryback recorded in the first quarter of fiscal 2020 due to improved financial performance. For the full 2021 fiscal year, ~~of 2020,~~ we expect our tax rate to be ~~approximately 25 percent compared~~comparable to ~~our 21.6 percent~~the 25.8% effective tax rate inrecognized during the full 2020 fiscal ~~2019.~~ year.

Results of Operations for the ~~Nine-Month~~Six-Month Period Ended ~~October~~July 31, ~~2020~~2021

~~Year-to-date net~~Net sales were ~~$722.9~~$660.7 million year-to-date in fiscal 2021, a ~~9.3 percent decrease compared to~~47.4% increase over the prior year’s year-to-date net sales of ~~$796.7~~$448.3 million. The ~~decrease~~overall increase in net sales was primarily due to the temporary closure of our physical stores for approximately ~~50 percent~~50% of the first quarter of fiscal 2020 as a result of the COVID-19 ~~pandemic. The decrease in physical store~~pandemic, with some stores closed through May 2020. Comparable stores sales ~~was partially offset by a more than 200 percent increase in year-to-date e-commerce sales as our customers shifted~~increased 48.8% compared to ~~online shopping amid government mandated stay-at-home orders~~the first six months of fiscal 2020 and ~~continued health concerns.~~increased 28.1% compared to the first six months of fiscal 2019.

~~Year-to-date gross~~Gross profit was $265.9 million during the first six months of fiscal 2021, an increase of $151.8 million compared to the first six months of fiscal 2020. Gross profit margin in the first six months of fiscal 2021 increased to 40.3% compared to 25.4% in fiscal 2020 ~~decreased to 27.9 percent compared to 30.4 percent~~and 30.1% in fiscal 2019. ~~The decrease was~~Merchandise margin increased 11.9 percentage points compared to fiscal 2020 and 8.8 percentage points compared to fiscal 2019. Our more focused promotional strategies throughout fiscal 2021 drove a higher merchandise margin compared to both fiscal 2020 and 2019. A more standard product mix sold principally during the second quarter of fiscal 2021 further increased our merchandise margin compared to fiscal 2020.

As a percentage of sales, our buying, distribution and occupancy costs decreased 2.9 percentage points compared to fiscal 2020 and 1.4 percentage points compared to fiscal 2019 primarily due to ~~higher shipping-related costs associated with~~ the ~~increase in e-commerce sales, increased distribution costs resulting from our investments in our distribution center, and the deleveraging~~leveraging effect of ~~lower sales, primarily on occupancy costs, which are generally fixed in nature.~~increased sales.

SG&A ~~expense was $190.5~~increased $25.7 million ~~on a year-to-date basis, a decrease~~to $148.6 million in the first six months of ~~$2.0 million~~fiscal 2021 compared to $122.9 million in fiscal 2020. As a percentage of net sales, SG&A was leveraged to 22.5% in the first six months of fiscal 2021 compared to 27.4% in fiscal 2020 and 24.1% in fiscal 2019. ~~The primary factors attributable~~

Compared to the ~~decrease were lower store~~first six months of fiscal 2020, the increase in SG&A primarily correlated with our record performance, in terms of increased performance-based incentive compensation, general wages and variable costs that change with sales, such as ~~a result of employee~~credit card fees. SG&A also increased due to market return volatility on our deferred compensation plan, higher stock-based compensation, and the CARES Act payroll retention tax credits ~~related~~recognized in fiscal 2020. Store level wages, incentives paid to store level employees, and annual performance-based compensation comprised the ~~CARES Act and reductions in stock-based~~majority of the increase. Our performance year-to-date has exceeded annual fiscal 2021 performance targets; therefore, virtually all annual performance-based compensation expense and depreciation and amortization expense. This overall decrease in SG&A expense was partially offset by increases in contracted services associated with e-commerce fulfillment, impairment charges on long-lived assets and advertising expense. expected for the full year has been recognized.

The effective income tax rate year-to-date for fiscal 2021 was 25.3%. In fiscal 2020, ~~was 23.0 percent~~income taxes were a benefit as ~~compared to 20.9 percent for the same period in fiscal 2019. The primary reason for the change in our effective tax rate was the $1.9 million tax benefit related to the vesting~~a result of ~~stock-based compensation recognized in the first quarter of fiscal 2019~~a year-to-date pre-tax loss and the timing of ~~other~~favorable discrete tax adjustments.

Our primary sources of liquidity are $163.9 million of cash, ~~and~~ cash equivalents and marketable securities on hand ~~receipts~~at the end of the second fiscal quarter of 2021, cash generated from ~~customers~~operations, and availability under our $100 million credit facility. While the continued economic uncertainty and future effects on customer behavior caused by the COVID-19 pandemic ~~make~~makes our operating cash flow less predictable, we believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are for working capital, ~~needs,~~ which are principally inventory purchases, ~~store~~investments in our stores, such as new stores, remodels and relocations, distribution center initiatives, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program, and the financing of capital projects, including investments in new ~~systems, and various other commitments and obligations. We have voluntarily suspended repurchases under our share repurchase program to preserve liquidity during the COVID-19 pandemic.~~systems.

Net cash generated from operating activities was ~~$0.2~~$79.8 million ~~on a year-to-date basis~~ in the first six months of fiscal ~~2020~~2021 compared to ~~net cash generated from operating activities of $28.0~~$26.2 million during the ~~same prior year period.~~first six months of fiscal 2020. The ~~decrease~~increase in operating cash flow was primarily driven by ~~lower earnings.~~higher cash receipts on increased sales, partially offset by inventory purchases and payments for operating expenses and income taxes.

Working capital ~~was nearly flat~~increased on a year-over-year basis, totaling ~~$214.9~~$298.7 million at ~~October~~July 31, ~~2020~~2021 and ~~$214.4~~$200.1 million at ~~November 2, 2019.~~August 1, 2020. The increase was primarily attributable to increased cash and marketable securities positions. Our current ratio was ~~2.7~~2.5 as of ~~October~~July 31, ~~2020~~2021 compared to ~~2.6~~2.0 as of ~~November 2, 2019.~~August 1, 2020.

Our cash outflows for investing activities are ~~primarily~~normally for capital expenditures. WeDuring the first six months of fiscal 2021, we expended ~~$10.1~~$12.1 million ~~on a year-to-date basis in~~for the purchase of property and equipment, primarily related to our store portfolio modernization plan. During the first six months of fiscal 2020, we expended $7.2 million for the purchase of property and equipment, primarily related to investments in ~~our distribution center, new stores and remodels~~technology and normal asset replacement activities. ~~For~~

During the ~~same prior year period,~~second quarter of fiscal 2021, we ~~expended $15.1~~also invested approximately $17.5 million ~~for~~in publicly traded mutual funds designed to mitigate income statement volatility associated with our nonqualified deferred compensation plan. As of July 31, 2021, the ~~purchase of property and equipment,~~balance in our deferred compensation plan was $17.5 million, of which ~~approximately $7.0~~$6.1 million was ~~for the purchase of our corporate headquarters~~classified as a current liability in Accrued and ~~the remainder was for continued investments in technology and normal asset replacement activities.~~other liabilities.

Our cash outflows for financing activities are ~~primarily~~typically for cash dividend payments, share repurchases ~~and~~or payments on our credit facility. 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 equity awards. Our cash inflows from financing activities ~~have represented purchases~~generally reflect stock issuances to employees under our Employee Stock Purchase Plan and borrowings under our credit facility.

~~Net~~During the first six months of fiscal 2021, net cash used in financing activities was ~~$5.4~~$10.3 million ~~on a year-to-date basis in fiscal 2020~~ compared to ~~$46.3~~$4.2 million induring the ~~same prior year period.~~first six months of fiscal 2020. The ~~decrease~~increase in net cash used in financing activities was primarily due to ~~reduced stock buybacks under~~the repurchase of $4.0 million of shares in the second quarter of fiscal 2021 associated with our Board of Directors’ authorized share repurchase ~~program~~program. In fiscal 2021 we also increased our dividend payments and ~~fewer~~more shares were withheld upon the vesting of equity ~~awards during~~awards. During the first ~~quarter~~six months of fiscal ~~2020 compared to the first quarter of fiscal 2019. Year-to-date in fiscal 2020,~~2021, we ~~borrowed and repaid $24.9 million~~did not borrow or repay funds under our credit facility. ~~We had no outstanding borrowings under our credit facility at October 31, 2020. During the same period in fiscal 2019, we borrowed and repaid $20.0 million under our credit facility.~~

Letters of credit outstanding were ~~$1.2 million~~$700,000 at ~~October~~July 31, ~~2020.~~ 2021, and our borrowing capacity was $99.3 million.

Our credit facility requires us to maintain compliance with various financial ~~covenants, the most restrictive of which are disclosed in~~covenants. See Note 7 – “Debt” to our Notes to ~~Condensed~~ Consolidated Financial Statements contained in ~~Part I, Item 1~~PART II, ITEM 8 of ~~this Quarterly~~our Annual Report on Form ~~10-Q.~~10-K for the fiscal year ended January 30, 2021 for a further discussion of our credit facility and its covenants. We were in compliance with these covenants as of ~~October~~July 31, ~~2020.~~2021.

Capital expenditures for fiscal ~~2020,~~2021, including actual expenditures for the ~~nine~~first six months ~~ended October 31, 2020,~~of fiscal 2021, are expected to be between ~~$14~~$30 million and ~~$15~~$35 million, with approximately $8$24 million to $9$26 million to be used for a new ~~stores,~~store, relocations and remodels and approximately $2 million to $4 million for upgrades to our distribution ~~center.~~center and e-commerce platform. The remaining capital expenditures are expected to be incurred for various other store improvements, continued investments in technology and normal asset replacement activities. The resources allocated to these projects are subject to near-term changes depending on the impacts associated with the COVID-19 ~~pandemic.~~pandemic and ongoing supply chain disruptions. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, the number of stores relocated, the amount of lease incentives, if any, received from landlords and the number of stores remodeled. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.

We continually analyze our store portfolio and the potential for new stores based on our view of internal and external opportunities and challenges in the marketplace. Increasing market penetration by opening new stores has historically been a key component of our long-term growth strategy, and we continue to focus on generating positive long-term financial performance ~~for~~from our store portfolio. We expect to pursue opportunities for store growth across large and mid-size markets as we leverage customer data from our customer relationship management program and more attractive real estate options become available. In fiscal ~~2020,~~2021, we opened ~~four~~one new ~~stores~~ store

within our existing ~~35-state~~ geographic footprint and do not anticipate opening any more stores this fiscal year. We anticipate store growth will return after fiscal 2021.

When we identify a store that produces, or may potentially produce, low or negative contribution, we either renegotiate lease terms, relocate or close the store. In instances when underperformance indicates the carrying value of a store’s assets may not be recoverable, we impair the store. Although store closings could reduce our overall net sales volume, we believe this strategy will realize long-term improvement in operating income and diluted net income per share. Depending upon the results of lease negotiations with certain landlords of underperforming stores, we may increase or decrease the number of store closures in future periods. We closed six stores in the first six months of fiscal 2021 and expect to close three ~~of which were opened~~additional stores by the end of the ~~third quarter and~~current fiscal year.

Our future store strategies may continue to be impacted by the ~~remaining store was opened in November. We closed 12 stores during~~current economic uncertainty associated with the ~~nine months ended October 31, 2020 and closed one additional store in November. No additional store openings or closings are expected for fiscal 2020.~~COVID-19 pandemic.

On ~~September 15, 2020, our~~June 10, 2021, the Board of Directors approved the payment of our ~~third~~second quarter cash dividend to our shareholders. The ~~third quarter~~quarterly cash dividend of ~~$0.090~~$0.070 per share was paid on ~~October~~July 19, ~~2020~~2021 to ~~our~~ shareholders of record as of the close of business on ~~October 5, 2020.~~ July 6, 2021. In fiscal ~~2019,~~2020, the ~~third~~second quarter dividend was ~~$0.085~~$0.045 per share. During the ~~nine months ended October 31,~~first half of fiscal 2021 and 2020, ~~and November 2, 2019,~~ we returned ~~$3.9~~$4.0 million and ~~$4.5~~$2.6 million, respectively, to our shareholders through our quarterly cash dividends.

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. Our credit ~~facility~~agreement permits the payment of cash dividends as long as no default or event of default exists under the credit agreement both immediately before and immediately after giving effect to the cash dividends, and the aggregate amount of cash dividends for a fiscal year dodoes not exceed ~~$10.0~~$10 million. See Note 7 – “Debt” to our Notes to ~~Condensed~~ Consolidated Financial Statements contained in ~~Part I, Item 1~~PART II, ITEM 8 of ~~this Quarterly~~our Annual Report on Form ~~10-Q~~10-K for the fiscal year ended January 30, 2021 for a further discussion of our credit facility and its covenants.

On December ~~12, 2019,~~15, 2020, our Board of Directors authorized a ~~new~~ share repurchase program for up to $50.0 million of outstanding common stock, effective January 1, ~~2020.~~2021 (the “2021 Share Repurchase Program”). The purchases may be made in the open market or through privately negotiated transactions from time-to-time through December 31, ~~2020~~2021 and in accordance with applicable laws, rules and regulations. The ~~share repurchase program~~2021 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~~repurchases 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. ~~We purchased approximately 184,000 shares at an aggregate cost of $6.9 million under this share repurchase program in fiscal 2019.~~

NoDue to uncertainty related to the COVID-19 pandemic, share repurchases have been limited in fiscal 2021 and no repurchases were made in fiscal ~~2020, and~~2020. Shares totaling 117,068 shares were repurchased during the second quarter of fiscal 2021 at a cost of $4.0 million. We will continue to evaluate the repurchase of shares under the 2021 Share Repurchase Program given the uncertainty associated with the COVID-19 pandemic, we do not anticipate repurchasing any shares under our share repurchase program in fiscal 2020. However, we expect to reevaluate further share repurchases on an ongoing basis. As of October 31, 2020, we had $43.1 million available for future repurchases.

The new share repurchase program replaced the prior $50.0 million share repurchase program that was authorized in December 2018 and expired in accordance with its terms on December 31, 2019. At its expiration, we had purchased approximately 933,000 shares at an aggregate cost of $30.9 million under the prior repurchase program.uncertainty.

Our credit facility stipulates that distributions in the form of redemptions of Equity Interests (as defined in the credit agreement) can be made solely with cash on hand so long as before and immediately after such distributions there are no revolving loans outstanding under the credit agreement. See Note 7 – “Debt” to our Notes to Consolidated Financial Statements contained in ~~Part I, Item 1~~PART II, ITEM 8 of ~~this Quarterly~~our Annual Report on Form ~~10-Q~~10-K for the fiscal year ended January 30, 2021 for a further discussion of our credit facility and its covenants.

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 and closing underperforming stores.

We have three distinct peak selling periods: Easter, back-to-school and Christmas. Our operating results depend significantly upon the sales generated during these periods. To prepare for our peak shopping seasons, we must order and keep in stock significantly more merchandise than we would carry during other ~~parts~~periods of the year. We experienced reduced sales during the fiscal 2020 Easter season as a result of the COVID-19 pandemic. We canceled any seasonal merchandise that had a short selling window and moved seasonal merchandise with longer selling periods to later shipping dates, as applicable. The back-to-school shopping period in fiscal 2020 started later and lasted longer than previous years in many of our markets. In addition, approximately 10 percent of school districts in the markets where we operate have not yet returned to in-person learning, which decreased our sales in those markets. Any ~~other~~ unanticipated decrease in demand for our products during these peak shopping seasons in future periods could require us to sell excess inventory at a substantial markdown, which could reduce our net sales and gross ~~margins~~profit and negatively affect our profitability.

We continually analyze our store portfolio and the potential for new stores based on our view of the internal and external opportunities and challenges in the marketplace. In fiscal 2021 and beyond, we expect to pursue opportunities for store growth across large and mid-size markets as we leverage customer data from our customer relationship management program and more attractive real estate options become available.

When stores are identified that produce, or may potentially in the future produce, low or negative contribution, we either renegotiate lease terms, relocate it, or close it. Even though store closings could reduce our overall net sales volume, we believe this strategyWhether Christmas shopping will realize long-term improvement in operating income and diluted net income per share. Depending upon the results of lease negotiations with certain landlords of underperforming stores, we may increase or decrease the number of store closures in future periods.

Non-capital expenditures, such as advertising and payroll incurred prior to the opening of a new store, are charged to expense as incurred. The timing and actual amount of expense recorded in closing an individual 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 amount of any lease buyout. 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 or incur store closing costs related to the closure of existing stores.

~~Our future store strategies may also continue to~~ be impacted by COVID-19 remains uncertain given the ~~current economic uncertainty associated with~~recent increase in cases, increased discussion of social distancing and mask mandates, and continued supply chain disruptions. The Christmas shopping season impacts our fourth quarter sales and earnings results.

See Note 3 — “Recently Issued Accounting Pronouncements” in the ~~COVID-19 pandemic.~~ accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements that may have an impact on our condensed consolidated financial statements when adopted.

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. ~~For the first nine months of fiscal 2020, the weighted average~~We had no borrowings ~~outstanding were approximately $341,000. Based upon~~under our ~~average borrowing rates under the~~ credit facility during the first ~~nine~~six months of fiscal ~~2020, an increase of 100 basis points (one percentage point) in such rates would have increased interest expense by approximately $3,000.~~2021.

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of ~~October~~July 31, ~~2020,~~2021, 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 have been no significant changes in our internal control over financial reporting that occurred during the quarter ended ~~October~~July 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth below, 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 ~~February 1, 2020~~January 30, 2021 and our Quarterly ~~Reports~~Report on Form 10-Q for the ~~first and second quarters of fiscal 2020. In addition, the COVID-19 pandemic could exacerbate or trigger other risks discussed in our Annual Report on Form 10-K for the fiscal year~~quarter ended ~~February~~May 1, ~~2020, any of which could materially affect our business, financial condition and results of operations.~~2021.

The risk factor entitled ~~“The COVID-19 pandemic~~“Adverse impacts on consumer spending may ~~further adversely affect~~significantly harm our ~~operations” in our Annual Report on Form-10-K~~business” has been updated to read as follows:

Adverse impacts on consumer spending may significantly harm our business.The ~~COVID-19 pandemic has adversely impacted, and may continue to adversely impact,~~success of our business ~~and our results~~depends to a significant extent upon the level of ~~operations.~~

~~Our operations and~~consumer spending. A number of factors may affect the ~~markets in which~~level of consumer spending on merchandise that we operate, procure merchandise and raise capital are currently experiencing significant disruption and financial market volatility associated with an outbreak of a novel strain of coronavirus (“COVID-19”). The World Health Organization has declared COVID‑19 a pandemic. The U.S. Government, as well as state and local governments, have taken unprecedented measures to control the spread of COVID-19 and to provide stimulus as a mitigating measure to deteriorating economic conditions and increasing unemployment. Many businesses, schools, andoffer, including, among other institutions have closed to further the practice of “social distancing” as a method to slow the outbreak. Our business and results of operations have been significantly impacted by the temporary closure of our physical stores effective March 19, 2020 and reduced foot traffic and sales prior to such time. Beginning in late April, we began reopening stores in accordance with applicable health guidelines, and by the end of the second quarter of fiscal 2020, all of our stores were reopened. As guidance and mandates from governments and public health officials continue to evolve, closures to some, or all, of our store and other operations may reoccur. Our stock price and the stock prices of our peer companies have been volatile. The extent of the impact of the COVID‑19 pandemic on our operational and financial performance will depend on future developments, including, but not limited to:

~~Since our stores have reopened to our customers, our customers~~The merchandise we sell generally consists of discretionary items. Adverse economic conditions and ~~store employees are exposed to certain safety risks. While we have taken measures to control these risks,~~ ~~the unpredictable nature of COVID-19~~unemployment rates, and any related decrease in consumer confidence and spending may result in ~~unexpected outcomes. For example, if~~reduced consumer demand for discretionary items. The federal stimulus payments made directly to consumers as a result of the ~~protocols established cease to work, or are not followed,~~COVID-19 pandemic likely had a positive impact on our net sales, including in the ~~health~~first six months of fiscal 2021. The amount of any future stimulus payments and ~~safety~~duration of ~~our employees and customers could be at risk. A future outbreak in our stores, distribution center, or corporate headquarters~~the impact of such payments is uncertain. Reduced consumer demand could result in ~~temporary or sustained workforce shortages or store or facility closures. Inadequate response by us, perceived or otherwise, could impact~~reduced traffic in our ~~costs, our reputation, and/or our ability to recruit a qualified workforce.~~

~~Should the COVID-19 pandemic continue to cause financial market volatility and/or adverse changes in economic conditions~~physical stores and ~~consumer spending; increased operational risks and disruptions~~ to our ~~supply chain~~e-commerce platform; a limit to the prices we can charge for our merchandise; inventory markdowns; increased selling and ~~distribution processes; or periods of temporary closures of our~~promotional expenses; and the need to close underperforming stores, ~~to reoccur, our costs may increase, our sales and gross profit may decline and our stock price may decrease, any of~~ which could ~~negatively impact~~result in higher than anticipated closing costs. Any of these impacts could have a material adverse effect on our business, results of operations ~~cash flows,~~ and financial condition.

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.

☒		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended ~~October~~July 31, ~~2020~~2021
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)

			Page
Part I	Financial Information

	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Income	4
		Condensed Consolidated Statements 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	1615

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2322

	Item 4.	Controls and Procedures	2322

Part II	Other Information

	Item 1A.	Risk Factors	2423

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2423

	Item 6.	Exhibits	2524

	Signature		2625

	Number of Shares			Weighted- Average Grant Date Fair Value
Restricted stock units and performance stock units at February 1, 2020		263,135		$	29.44
Granted		158,439			14.88
Vested		(164,099	)		26.80
Forfeited or expired		(1,717	)		31.94
Restricted stock units and performance stock units at October 31, 2020		255,758		$	22.10

	Thirty-nine Weeks Ended
	Common Stock								Additional Paid-In			Retained			Treasury
(In thousands, except per share data)	Issued			Treasury			Amount		Capital			Earnings			Stock			Total
Balance at February 1, 2020		20,525			(6,517	)	$	205	$	79,914		$	395,761		$	(178,517	)	$	297,363
Dividends declared ($0.265 per share)													(3,804	)					(3,804	)
Employee stock purchase plan purchases					7					(37	)					189			152
Restricted stock awards					161					(4,467	)					4,467			0
Shares surrendered by employees to pay taxes on restricted stock					(72	)										(1,736	)		(1,736	)
Stock-based compensation expense										2,694									2,694
Net income													8,548						8,548
Balance at October 31, 2020		20,525			(6,421	)	$	205	$	78,104		$	400,505		$	(175,597	)	$	303,217

Balance at February 2, 2019		20,529			(5,154	)	$	205	$	75,631		$	360,443		$	(131,846	)	$	304,433
Adoption of Accounting Standards Codification Topic 842, Leases													(2,649	)					(2,649	)
Dividends declared ($0.250 per share)													(3,728	)					(3,728	)
Employee stock purchase plan purchases					5					2						146			148
Restricted stock awards		(2	)		67					(1,842	)					1,842			0
Shares surrendered by employees to pay taxes on restricted stock					(324	)										(11,040	)		(11,040	)
Purchase of common stock for treasury					(933	)										(30,915	)		(30,915	)
Stock-based compensation expense										5,068									5,068
Net income													39,431						39,431
Balance at November 2, 2019		20,527			(6,339	)	$	205	$	78,859		$	393,497		$	(171,813	)	$	300,748

Period	Total Number of Shares Purchased⁽¹⁾		Average Price Paid per Share		Total Number Of Shares Purchased as Part of Publicly Announced Programs ⁽²⁾		Approximate Dollar Value of Shares that May Yet Be Purchased Under Programs ⁽²⁾
August 2, 2020 to August 29, 2020		0	$	0		0	$	43,148,000
August 30, 2020 to October 3, 2020		281	$	33.58		0	$	43,148,000
October 4, 2020 to October 31, 2020		0	$	0		0	$	43,148,000
		281				0

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number Of Shares Purchased as Part of Publicly Announced Programs ⁽¹⁾		Approximate Dollar Value of Shares that May Yet Be Purchased Under Programs ⁽¹⁾
May 2, 2021 to May 29, 2021		0	$	0		0	$	50,000,000
May 30, 2021 to July 3, 2021		0	$	0		0	$	50,000,000
July 4, 2021 to July 31, 2021		117,068	$	33.92		117,068	$	46,029,000
		117,068				117,068

		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
10.1	Shoe Carnival, Inc. Amended and Restated 2016 Executive Incentive Compensation Plan	8-K	10.1	09/17/2020
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 31, 2020, formatted in Inline XBRL (Inline Extensible Business Reporting Language): (1) Condensed Consolidated Balance Sheets, (2) Condensed Consolidated Statements of Income, (3) Condensed Consolidated Statements of Shareholders’ Equity, (4) Condensed Consolidated Statements of Cash Flows, and (5) Notes to Condensed Consolidated Financial Statements.				X
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)				X

Date: ~~December 4, 2020~~September 3, 2021	SHOE CARNIVAL, INC.
	(Registrant)