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Shoe Carnival shares rise on strong 1Q results

NEW YORK (AP) -- Shares of Shoe Carnival Inc. rose to an all-time high Friday after the footwear retailer managed to beat Wall Street predictions for fiscal first-quarter earnings, despite a 14 percent drop year over year.

THE SPARK: For the quarter ended May 4, Shoe Carnival earned $9.5 million, or 47 cents per share, compared with $11 million, or 54 cents per share, in the same quarter the year before.

Revenue rose 4 percent to $232.3 million from $222.6 million.

Analysts, on average, expected a profit of 40 cents per share on $228.1 million in revenue, according to FactSet.

THE BIG PICTURE: Evansville, Ind.-based Shoe Carnival said unusually cold and wet weather reduced sales at the beginning of the quarter, but sales picked up as weather conditions improved.

The company also got a boost from the addition of 27 new stores. It said it expects to open 33 new stores and close five stores this fiscal year. As of Thursday, Shoe Carnival operated 363 stores in 32 states and Puerto Rico.

Revenue at stores open at least a year, which excludes revenue from recently opened and closed stores, edged down 0.8 percent.

For the current quarter, the company projected earnings per share of 26 cents to 30 cents on $217 million to $220 million in revenue. Analysts expect earnings of 28 cents per share on $218.9 million in revenue.

THE ANALYSIS: Sterne Agee analyst Sam Poser backed his "Buy" rating for Shoe Carnival, saying that the worst of 2013 is likely behind the company.

Poser, who also boosted his price target for the stock by $1 to $26, said the company's initial second-quarter trends are strong and its guidance appears "quite conservative." He added that while sandal sales previously lagged because of cold weather, there is still plenty of spring and summer left to sell them.

Susquehanna Financial Group's Christopher Svezia, who backed his "Positive" rating for the stock, said the first-quarter rebound and strong second-quarter outlook could send the company's shares higher in the coming months.

Svezia also noted that the company looks well-positioned moving out of spring and into the back-to-school season. The analyst lifted his price target by $2, to $26.

THE SHARES: Up $1.93, or 8.7 percent, to $24.14 after peaking at an all-time high of $25.37 earlier in the session.