Shoe Carnival, Inc. (SCVL) shares soared over 12% on Thursday following the release of its strong second-quarter earnings report. The company beat analysts’ expectations on both sales and earnings, demonstrating continued growth in the footwear retail sector.
The company reported adjusted earnings per share of 83 cents, aligning with analysts’ expectations. However, quarterly sales of $332.696 million, representing a 12.9% increase, surpassed the consensus estimate of $330.05 million. This positive performance was driven by strong back-to-school sales, particularly in the children’s and athletic categories.
Shoe Carnival also reported a 23.7% surge in adjusted operating income to $30.5 million for the second quarter of 2024. This impressive result was attributed to double-digit growth at Shoe Station, improved performance at Shoe Carnival itself, and increased e-commerce sales.
The company’s gross profit margin climbed to 36.1%, marking the 14th consecutive quarter above 35%. While comparable store sales declined by 2.1%, this represented an improvement from the first quarter. Inventory increased to $425.5 million, influenced by the Rogan’s acquisition, but the company expects inventory levels to decrease by 5% year-over-year by the end of the fiscal year.
Shoe Carnival currently operates 430 stores and has ambitious plans to expand its footprint. The company aims to surpass 500 stores by 2028, relying on both organic growth and acquisitions.
Looking ahead, Shoe Carnival expects net sales of approximately $320 million for the third quarter, slightly below the consensus estimate of $321.5 million. The company also forecasts GAAP EPS of 70 cents for the quarter.
In addition to its third-quarter outlook, Shoe Carnival revised its 2024 guidance. The company now anticipates net sales of $1.23 billion to $1.25 billion, compared to its previous forecast of $1.21 billion to $1.25 billion and the consensus estimate of $1.243 billion. Shoe Carnival also expects adjusted EPS of $2.60 to $2.75 for the year, compared to its previous range of $2.55 to $2.75 and the consensus expectation of $2.74. The company projects comparable store sales to range from a decrease of 1.5% to an increase of 1%.
Mark Worden, President and Chief Executive Officer of Shoe Carnival, expressed confidence in the company’s long-term strategies, stating, “Our long-term strategies to increase sales and drive profitability are working, and we are well positioned to further increase shareholder value and execute on our vision to be the nation’s leading family footwear retailer.”
SCVL shares closed the day at $42.38, representing a significant 12.9% increase. This strong performance reflects investor confidence in the company’s continued growth and profitability.
