What Happened?
Shares of footwear retailer Shoe Carnival (NASDAQ: SCVL) jumped 4.8% in the afternoon session after the company reported preliminary third-quarter results that beat market expectations and announced a plan to change its corporate name to Shoe Station Group, Inc.
The footwear retailer posted preliminary third-quarter net sales of $297.2 million and earnings per share of $0.53, both surpassing consensus estimates. The strong results were accompanied by the news that its Board of Directors unanimously voted for the name change, which is subject to shareholder approval in June 2026. This move was part of a broader plan to consolidate operations under the Shoe Station banner, which saw net sales grow 5.3% in the quarter, while the Shoe Carnival banner experienced a 5.2% sales decline. The company expected this banner consolidation to generate about $20 million in yearly cost savings and operating efficiencies by the end of fiscal 2027.
After the initial pop the shares cooled down to $17.55, up 3.7% from previous close.
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What Is The Market Telling Us
Shoe Carnival’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 14.4% on the news that the company reported second-quarter earnings that surpassed Wall Street's profit estimates, overshadowing a revenue miss and a reduction in its full-year sales forecast.
The footwear retailer posted earnings of $0.70 per share, beating consensus estimates by 15.4%, even as revenue of $306.4 million fell 7.9% year on year and missed expectations. Investors appeared to focus on the company's profitability, as its gross profit margin expanded by 2.7 percentage points to 38.8% compared to the same quarter last year. However, the company's same-store sales declined by 7.5% year on year. Looking ahead, Shoe Carnival lowered its full-year revenue guidance to a midpoint of $1.14 billion, down from $1.19 billion previously. Despite the weaker sales outlook, the company's full-year earnings guidance of $1.90 per share at the midpoint was ahead of analysts' forecasts, signaling better-than-expected profitability.
Shoe Carnival is down 45.7% since the beginning of the year, and at $17.55 per share, it is trading 53.6% below its 52-week high of $37.84 from November 2024. Investors who bought $1,000 worth of Shoe Carnival’s shares 5 years ago would now be looking at an investment worth $1,033.
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