Shoe Carnival Inc.
) recently posted third quarter 2012 earnings of 60 cents per
share, up 15.4% year over year. Earnings per share were also
ahead of the Zacks Consensus Estimate of 58 cents.
Net sales grew 13.4% year over year to $244.4 million during
the quarter, aided by comparable store sales (comps) growth of
6.2%. The increase in traffic (up low-single digit) and
transaction (up mid-single digit) resulted in the strong comps
growth. Net sales beat the Zacks Consensus Estimate of $242.0
During the quarter, gross margin increased 110 basis points
(bps) to 31.3%. Higher merchandise margin as well as a fall in
buying, distribution and occupancy costs led to the hike in gross
margin. Selling, general and administrative (SG&A) expenses,
as a percentage of sales, increased 50 bps year over year to
22.9%. Increased number of stores operated as well as higher
incentive compensation led to higher SG&A expenses.
At the end of the quarter, the company had cash and cash
equivalents of $67.1 million and shareholders' equity of $312.6
For fourth quarter 2012, the company anticipates revenue
growth between $215.0-$220.0 million and earnings per share in
the range of 19-23 cents. Comparable store sales are expected to
increase in the range of 2.0-4.0%.
For fiscal 2012, Shoe Carnival expects net sales in the range
of $864-$869 million. Comparable store sales are expected to
increase in the range of 4.8-5.3%. Earnings per diluted share are
expected in the range of $1.47 to $1.51.
For fiscal 2012, Shoe Carnival remains on track to open
approximately 31 new stores and close 7. Among the scheduled
openings, the company has already opened 13 stores in the first
quarter, 11 in the second and 6 in the third quarter. As a
result, the fourth quarter will now witness only one opening.
Year to date, the company closed 3 stores in the first quarter
and 2 stores in the second quarter. The third quarter did not
witness any unit shutdown but the company intends to close the
remaining two in the final quarter. Shoe Carnival plans to finish
the year with 352 stores. Management also plans to open as many
as 30-35 new stores in 2013.
Shoe Carnival, a leading retailer of value-priced footwear and
accessories, posted better-than-expected performance in the
reported quarter. Furthermore, the company has outperformed the
Zacks Consensus Estimates in the trailing four quarters with an
average surprise of 12.72%.
Solid sales momentum combined with margins improvement reflect
its strong performance. The company's e-commerce drive and new
loyalty programs are also contributing considerably. Management
also remains optimistic about the company's expansion plan, which
will likely broaden its market reach.
Shoe Carnival currently carries a Zacks #1 Rank, which
translates into a short-term Strong Buy rating. We are
maintaining our long-term Outperform recommendation on the stock.
One of its close peers,
) recently reported loss of 39 cents per share beating the Zacks
consensus estimate of 40 cents of loss. Its net sales declined
5.9% to $45.8 million.
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SHOE CARNIVAL (SCVL): Free Stock Analysis
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