Shoe Carnival Q2 Profit Soars

Shoe Carnival Q2 Profit Soars
A Shoe Carnival store location.

Shoe Carnival Inc.’s net income for the second quarter increased four-fold and handily beat analysts’ estimates.

Net earnings for the period ended July 31 increased 319 percent to $4.1 million, or 32 cents a share, from $982,000, or 8 cents, in the same period a year ago, the company said Wednesday. Analysts polled by Yahoo Finance were looking for an average of 27 cents on revenue of $167.1 million.

The Evansville, Ind.-based retailer of value-priced footwear and accessories said net sales for the quarter increased 8 percent to $165.4 million, from $152.8 million, while comparable-store sales were up 8.3 percent.

At the same time, selling, general and administrative expenses decreased to 25 percent of sales, compared with 26 percent in the second quarter of 2009. This resulted in an operating income of $6 million, up from $1.9 million in the same period a year ago.

Toning footwear, sandals and other types of casual shoes for the family were all significant drivers of the sales increase, said Mark Lemond, Shoe Carnival’s president and CEO.

“Our continued strong financial performance and today’s positive footwear industry trends give us the confidence to remain optimistic about our outlook for the back-to-school sales season,” added Lemond. “Comparable-store sales for the first three weeks of August have increased approximately 6 percent, on top of an increase of 11 percent in the same period last year.”

The firm’s CFO, Cliff Sifford, said August sales were up in every category, with men’s and women’s boots, men’s and women’s performance running, and boat shoes showing particular strength.

“We believe boots will continue to be the No. 1 fashion trend of the season for women, men and children. We also believe the toning category will continue to grow with the introduction of new technology and new silhouettes,” Sifford said.

Shoe Carnival now expects third-quarter net sales to be between $196 million and $202 million, and earnings per share to be between 63 cents and 66 cents. For fiscal 2010, the company expects to earn between $1.89 and $1.95 a share, up from $1.20 in fiscal 2009.

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