Shoe Carnival Stock (SCVL) Gains as Q3 Results Digested

Shoe Carnival, Inc. (NASDAQ: SCVL) has reported its financial results for the third quarter, presenting a mixed picture that included an earnings beat but also a miss on revenue expectations. The stock reacted to the upside, gaining 2.84% through the day so far.

The footwear retailer announced an adjusted earnings per share (EPS) of 71 cents, surpassing Wall Street's forecast of 67 cents. This marks a notable achievement for the company in terms of profitability.

However, the company faced challenges on the sales front, with quarterly sales of $306.89 million falling short of analyst consensus estimates of $316.95 million. One of the reasons cited for the lower-than-expected sales figure was a shift in the retail calendar. This shift resulted in $20 million in net sales moving out of the third quarter of 2024 relative to the previous year. Adjusting for this calendar shift, Shoe Carnival's net sales actually saw an increase of 2.2% compared to the same period last year, indicating underlying business strength despite the altered reporting period.

The retailer also faced headwinds in comparable store net sales, which dropped 4.1% for the quarter due to several disruptive factors. Notably, operations were impacted by hurricanes, and an unseasonably warm weather pattern adversely affected winter boot sales. Despite these challenges, Shoe Carnival managed to maintain a gross profit margin of 36.0%, marking the 15th consecutive quarter where this metric stood above 35%. Nevertheless, this margin was 80 basis points lower than that of the previous year.

In terms of strategic business developments, Shoe Carnival's acquisition of Rogan's is anticipated to contribute significantly to future sales, with expectations for it to deliver over $80 million in net sales for fiscal 2024. Specifically, for the third quarter of 2024, the acquisition is expected to contribute $22.3 million and a year-to-date figure of $63.9 million in 2024.

As of November 21, Shoe Carnival operated a total of 431 stores, comprising 361 Shoe Carnival stores, 42 Shoe Station stores, and 28 Rogan's locations. Expansion efforts continued with the opening of a new Shoe Station store in Tennessee during the third quarter, signaling the company's entry into a new market.

Looking ahead, the company adjusted its full-year net sales outlook for fiscal year 2024 to a range of $1.20 billion to $1.23 billion. However, Shoe Carnival has maintained its adjusted EPS guidance for fiscal year 2024, which remains set between $2.60 and $2.75.