Shoe Carnival’s Stock Is Sinking Double Digits on the Heels of a Mixed Quarter

Shoe Carnival Inc.’s stock is plummeting in Tuesday after-hours trading following the release of mixed second-quarter financial results.

For the three months ended Aug. 1, the footwear retailer posted profits of $10.1 million, or earnings of 71 per share, compared with the prior year’s income of $11.8 million, or earnings 80 cents per share. Analysts had expected earnings of 61 cents. Revenues were $300.8 million, versus the last year’s $268.2 million, while market watchers forecasted sales of $310.46 million.

As of 4:45 p.m. ET, SCVL shares were down nearly 16% to $30.30.

Despite the stock movement, Shoe Carnival was upbeat on sales, which it said exceeded the previous record set in the third quarter of fiscal 2017 by 4.6%. Of the $32.6 million increase in revenues, $29 million was attributed to adult athletic sales as the coronavirus pandemic forced consumers to find ways to stay active indoors amid government-mandated lockdowns.

Although brick-and-mortar closures and COVID-19-related delays to the back-to-school shopping season impacted the period, the chain revealed a 12.6% gain in comps, while e-commerce shot up 332%, representing more than 20% of total sales. (Today, all of the retailer’s 382 locations across 35 states and Puerto Rico have reopened to the public.)

What’s more, the Evansville, Ind.-based company reported that membership of its Shoe Perks customer loyalty program surpassed 25 million members during the quarter.

“The strength of our team was on full display during the second fiscal quarter,” vice chairman and CEO Cliff Sifford said in a statement. “Our customer-centric culture and exceptional operational execution enabled us to swiftly and safely welcome our loyal shoppers and new customers into our stores.”

According to the company, most of the volume it typically sees in August from back-to-school sales will likely shift to later in the quarter and extend through the end of October.

“Nearly all schools within the markets we operate in have, at a minimum, delayed their start dates,” Sifford added. “As we look forward, we remain focused on executing our long-term strategic plan. Combined with our strong vendor partnerships and dedicated team, this vision will further propel Shoe Carnival to be America’s favorite family footwear retailer.”

At the end of the quarter, Shoe Carnival’s cash and equivalents amounted to $76.9 million, and the company had no cash borrowings outstanding on its $100 million line of credit.

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