What Happened?
Shares of footwear retailer Shoe Carnival (NASDAQ: SCVL) jumped 14.4% in the morning session after 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.
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What Is The Market Telling Us
Shoe Carnival’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Shoe Carnival and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 3.2% on the news that Seaport Global analyst Mitch Kummetz downgraded the company's stock from 'Buy' to 'Neutral'. The decision reflects a more conservative stance on the footwear retailer's future performance. The downgrade comes amid what Seaport Global described as an "uncertain market environment for the retail sector." Supporting this view, broader economic data from Fitch Ratings indicates that U.S. consumer spending slowed significantly in the first half of 2025. This deceleration has been attributed to increased trade policy uncertainty and equity market volatility, which has weakened overall consumer sentiment and confidence. Seaport Global did not announce a specific price target adjustment along with the rating change.
Shoe Carnival is down 22.8% since the beginning of the year, and at $24.95 per share, it is trading 45.6% below its 52-week high of $45.82 from September 2024. Investors who bought $1,000 worth of Shoe Carnival’s shares 5 years ago would now be looking at an investment worth $1,353.
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