Shoe Carnival Inc.
) -- a leading retailer of value-priced footwear and accessories
-- recently posted second-quarter 2013 earnings of 29 cents per
share, which more than doubled from 14 cents in the year-ago
quarter. The year-over-year increase was primarily due to
top-line growth and margin expansion. Earnings per share were in
line with the Zacks Consensus Estimate and came within the
company provided range of 26-30 cents.
Net sales grew 18.8% year over year to $216.4 million during
the quarter, driven by comparable store sales (comps) increase of
2.6%. The shift of one of the peak selling seasons -
back-to-school season - to the second quarter from the third
quarter in the year-ago period also boosted the sales in the
Women's non-athletic and children's footwear segments posted a
good show in the quarter. Traffic was down low single digit, but
was better than the high single digit decline in comps recorded
in the last quarter.
However, sales missed the Zacks Consensus Estimate of $219.0
million. Sales also fell short of the company guided range of
$217.0-$220.0 million. Lower-than-expected comps growth
(projected in the range of 3.0%-5.0%) was responsible for the
During the quarter, gross margin improved 20 basis points
(bps) to 28.9% mainly due to lower buying, distribution and
occupancy costs. Selling, general and administrative (SG&A)
expenses as a percentage of sales decreased 160 bps year over
year to 24.5%.
Third Quarter Outlook
For third quarter 2013, the company anticipates revenues
between $236.0-$240.0 million and earnings per share in the range
of 51-55 cents. Comparable store sales are expected to increase
in the range of 1.0%-2.5%. The third quarter outlook for
revenues, earnings and comps is lower than the year-ago numbers.
Comps are guided to suffer the most.
Outlook for 2013 & 2014
For full year 2013, Shoe Carnival plans to open approximately
32 new stores and close 5. Among the scheduled openings, the
company has already opened 13 stores in the first quarter and 8
in the second. The third quarter is likely to witness 8 openings
while 3 are scheduled for the fourth quarter.
While the second quarter witnessed 2 closures, the third
quarter will witness no shutdown. There will be 3 store closures
in the fourth quarter of 2013. Moving on to 2014, the company
seeks to speed up its expansionary activity and enter several new
Shoe Carnival's second-quarter results were marked by soft
sales generation due to sluggish traffic and pressure on comps.
Also, the outlook for the upcoming quarter is not quite
encouraging. While the company performed well on the margin
front, we do not expect the trend to continue in the upcoming
Shoe Carnival currently has a Zacks Rank #4 (Sell). However,
not all stocks in the retail industry are performing as poorly as
Shoe Carnival. Some of the stocks that are doing well in the
retail industry include
Haverty Furniture Companies Inc.
reen Mountain Coffee Roasters Inc.
). While Haverty and hhgregg carry a Zacks Rank #1 (Strong Buy),
Green Mountain has a Zacks Rank #2 (Buy).
GREEN MTN COFFE (GMCR): Free Stock Analysis
HHGREGG INC (HGG): Free Stock Analysis Report
HAVERTY FURNIT (HVT): Free Stock Analysis
SHOE CARNIVAL (SCVL): Free Stock Analysis
To read this article on Zacks.com click here.