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Bull of the Day: Shoe Carnival (SCVL)

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Based in Evansville, IN, Shoe Carnival (SCVL - Free Report) is one of the biggest footwear retailers in the country. In its stores, Shoe Carnival offers a wide variety of dress, casual, and athletic shoes for men, women, and children, and the company emphasizes national and regional name brands throughout its selection.

Better-Than-Expected Q3 Earnings

Shoe Carnival’s third quarter results showed nice growth overall for this retailer.

Earnings of 76 cents per share easily beat the Zacks Consensus Estimate of 61 cents, and marks the company’s sixth consecutive earnings beat.

Revenues totaled $269 million also beat our consensus estimate, and same-store sales growth of 4.5% came ahead of the analyst estimate of 4.1%.

Cliff Sifford, President and CEO, commented in the earnings release, “We are pleased with our strong third quarter sales results, which reflect growth in all geographic regions and virtually all of our product categories.”

As a result, Shoe Carnival raised its fiscal 2018 sales and EPS guidance.

The retailer now expects sales in the range of $1.020 billion and $1.022 billion, up from $1.016 billion to $1.020 billion. EPS is now projected to fall between $2.36 and $2.38, up from previous guidance of $2.07 to $2.15. Same-store sales growth is expected at 3.5%.

SCVL is On the Rise

Year-to-date, shares of Shoe Carnival are up almost 32%.

Estimates have been rising lately too, pushing the stocks towards a Zacks Rank #1 (Strong Buy).

For the current fiscal year, Shoe Carnival’s earnings are expected to grow almost 60% year-over-year. One analyst has revised their estimate upwards in the past 60 days, and the Zacks Consensus Estimate has moved 22 cents higher from $2.16 to $2.38 during the same time frame.

2019 looks pretty strong too, and earnings are expected to grow around 10.5%; next year’s consensus estimate sits at $2.63 per share, with one upward revision in the last 60 days.

Bottom Line

Shoe Carnival has been making some smart strategic decisions lately, like closing underperforming stores—there are 14 store closings expected for the year—which analysts are praising. Moves like this will help Shoe Carnival going forward.

If you’re an investor looking for a retail stock to add to your portfolio as the holiday season heats up, make sure to keep SCVL on your shortlist.

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