Shoe Carnival, Inc. SCVL posted second-quarter fiscal 2023 results, wherein the bottom line missed the Zacks Consensus Estimate and the top line beat the same.
It delivered earnings per share of 71 cents, missing the Zacks Consensus Estimate of earnings of 81 cents per share and decreasing from earnings of $1.04 a share earned in the year-ago quarter.
Net sales totaled $294.6 million, down 5.7% from the year-ago quarter’s figure, but came above the Zacks Consensus Estimate of $287 million. Comparable store sales decreased 6.5% year over year, driven by sluggish traffic results, partly offset by a 5.4% e-commerce net sales increase and growth from the new Shoe Station stores. Net sales of athletic merchandise remained flat year over year.
Shoe Carnival, Inc. Price, Consensus and EPS Surprise
Shoe Carnival, Inc. price-consensus-eps-surprise-chart | Shoe Carnival, Inc. Quote
Gross profit margin fell 40 basis points (bps) to 35.8% while merchandise margins slipped 20 bps.
SG&A expenses increased 8.7% to $80.8 million during the reported quarter. As a rate of net sales, SG&A expenses came in at 27.4%.
Shoe Carnival ended the quarter with cash and cash equivalents of $34.6 million and a long-term portion of operating lease liabilities of $307.3 million. Merchandise inventories were $409.3 million. Management informed that the company had no debt as of Jul 29, 2023.
In the reported quarter, the company did not repurchase shares. As of Jul 29, 2023, Shoe Carnival had $50 million available for future repurchases under its share buyback program.
In August 2023, Shoe Carnival introduced its 400th store while presently operating 373 Shoe Carnival stores and 27 Shoe Station outlets. It is focused on modernizing its Shoe Carnival fleet via a multi-year remodel program. As of Jul 29, 2023, over 50% of the modernization initiative was completed, and it is on track to complete 65% during the summer of 2024.
The company has a strategic roadmap to exceed 500 stores and become a multi-billion dollar retailer in 2028, with organic and acquired growth.
For fiscal 2023, management envisions net sales to be in the range of $1.19-$1.21 billion and earnings per share to be $3.10-$3.25. Comparable store sales are likely to decline 6-8%. The gross margin is anticipated to be 36-37%, while SG&A is projected to be $321-$327 million. Operating income is expected to be $109-$116 million for the fiscal year.
In the past six months, this Zacks Rank #4 (Sell) stock has lost 9% compared with the industry's decline of 4.6%.
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch ANF, Boot Barn BOOT and American Eagle Outfitters AEO.
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share (EPS) suggests growth of 3.4% and 736%, respectively, from the year-ago reported figures. ANF has delivered an earnings surprise of 480.6% in the last four quarters.
Boot Barn, a fashion retailer of apparel and accessories, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 13.5%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 5.1% from the year-ago reported figure.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO has delivered an average earnings surprise of 9.2% in the last four quarters.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year EPS suggests growth of 7.2% from the year-ago reported figure.
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