Shoe Carnival Q4 Comps Up 2.9 Percent, Reiterates Sales Guidance

Evansville, Ind.-based footwear retailer Shoe Carnival Inc.’s revenue growth is intact amid industrywide sales declines resulting from a stalled start of winter.

On Monday, the company reiterated its earnings outlook for fiscal year 2015 and said its comps for the first two months of the fourth quarter advanced a solid 2.9 percent.

A cold January can be a further boon to same-store sales,” wrote Sterne Agee CRT analyst Sam Poser. “Shoe Carnival continues to manage its business well, especially in a warm winter and very promotional environment. Recall that inventory was only up 0.3 percent at the end of 3Q15.”

Elevated inventories have been a major issue across the footwear-and-apparel landscape as many companies had stocked up on seasonal product after the prior year’s lengthy winter led them to expect similar weather patterns in the current year. Unfortunately, temperatures hovered at record highs across much of the country into December and early January.

The excess stock has prompted unprecedented promotional activity and discounting across the space, evidenced by a slew of lackluster earnings reports in Q3.

Meanwhile, when Shoe Carnival reported Q3 in November, its comps had climbed 6 percent, and its revenues, at $269.7 million, surpassed Wall Street’s bets by more than $5 million. Profits, however, dropped more than 13 percent, to $9.4 million.

At the time, Shoe Carnival President and CEO Cliff Sifford had predicted more declines in Q4 due to record high temperatures.

“As we enter the fourth quarter, unseasonably warm weather has impacted our boot sales and overall comparable-store sales. However, we are confident that as more seasonal weather arrives, we will once again see positive reaction to our strong assortment of boots for the entire family,” Clifford had said.

Shoe Carnival forecasts FY15 earnings per share of $1.38 to $1.43, an increase of 9 percent to 13 percent over fiscal 2014 earnings per diluted share of $1.27. Revenues are projected to land between $980 million to $987 million, with same-store sales growth of 3 percent.

At press time, the firm’s share price had climbed 15 cents, to $21.93.

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