Zacks Investment Research downgraded
Shoe Carnival Inc.
) to a Zacks Rank #5 (Strong Sell) on Jan 15 after this footwear
and accessories retailer trimmed its guidance for the fourth
quarter of fiscal 2013 (ending Feb 1, 2014) on Jan 9.
Why the Downgrade?
The company has recently cut its revenue and earnings guidance
for fourth quarter fiscal 2013. The slash in revenue guidance
came in the wake of double-digit decline in traffic in the first
three weeks of December due to a weak holiday season.
During the third quarter conference call on Dec 2, the company
posted positive comparable store sales growth of 0.7%. In fact,
the company delivered comparable sales growth of 5.4% and 7.8% in
the month of October and November, respectively, owing to
favorable weather along and strong Thanksgiving promotional
offers. The company was confident of solid sales in the remainder
of the holiday season. However, lower traffic during the holiday
season along with a volatile retail sales environment hurt
initial fourth quarter sales and resulted in lower-than-expected
comps, which led to a cut in earnings guidance.
For fourth quarter fiscal 2013, the company now anticipates
revenues between $203.0-$205.0 million and comparable store sales
decline of up to 1.0%, lower than its prior expectation of
$215.0-$219.0 million with comps gain of 4.0-6.0%.
Earnings per share for the fourth quarter of fiscal 2013 are
expected to be in the range of 3-6 cents, significantly lower
than its pervious expectation of 18-22 cents. The Zacks Consensus
Estimate, for fourth quarter 2013 revenues and earnings per share
is pegged at $204.0 million and 4 cents, respectively. For fiscal
2013, revenues are expected to be $888.0 million while earnings
per share are expected to be $1.46.
This retailer has witnessed sharp downward estimate revisions
after lowering its guidance for the fourth quarter. The Zacks
Consensus Estimate for the fourth quarter decreased 80.9% and
that for fiscal 2013 went down 11.2% over the last 7 days.
Other Stock to Consider
Not all stocks are performing as poorly as Shoe Carnival.
Finish Line Inc
The Men's Wearhouse Inc.
) are better-ranked retailers for apparels and shoes with a Zacks
Rank #2 (Buy). Another stock in the retail sector
), sporting a Zacks Rank #1 (Strong Buy), is also worth
CONNS INC (CONN): Free Stock Analysis Report
FINISH LINE-CLA (FINL): Free Stock Analysis
MENS WEARHOUSE (MW): Free Stock Analysis
SHOE CARNIVAL (SCVL): Free Stock Analysis
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