Shoe Carnival’s 1Q Outlook Outpaces Estimates After 4Q Earnings Beat

Shoe Carnival forecasted better-than-expected figures for the first quarter after fiscal 4Q earnings topped consensus estimates, driven by top-line growth and margin expansion. Shares of the shoe store company rose 2.1% in Wednesday’s extended trading session after closing almost 1% lower on the day.

Shoe Carnival’s (SCVL) 4Q earnings more than doubled on a year-over-year basis to $0.52 per share and beat the Street estimates by $0.01 per share. Net sales increased 5.8% to $253.9 million and were in-line with analysts’ expectations.

The company’s comparable-store sales jumped 6.4% in the quarter, while gross profit margin increased to 30.8%, up 170 basis points year-over-year. (See Shoe Carnival stock analysis on TipRanks)

Shoe Carnival CEO Cliff Sifford said, “We remain focused on maintaining our financial flexibility and expanding market share, while placing an added emphasis on our merchandising strategy and in-store experience. In addition, we will continue to enhance our e-commerce capabilities, delivering growth well ahead of our previous expectations.”

For the first quarter of the fiscal year 2021, the company expects EPS of $1.40, versus the consensus estimates of $0.99. Revenue is anticipated to be $273 million, higher than analysts’ expectations of $253.5 million. Shoe Carnival also plans to resume the share repurchase program in fiscal 2021.

Recently, Shoe Carnival announced that Mark Worden will succeed Cliff Sifford as CEO, effective from Sep. 30, 2021. Additionally, the company raised its quarterly cash dividend by 56% to $0.14 per share, to be paid on April 19 to shareholders of record as of April 5. The company’s annual dividend of $0.56 per share now reflects a dividend yield of 1.04%.

On March 22, Pivotal Research analyst Mitch Kummetz increased the stock’s price target to $64 (18.6% upside potential) from $60 and reiterated a Buy rating.

Kummetz said, “1Q21 trends picking up on easier comparison and stimulus.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 2 Buys. The average analyst price target of $61.50 implies 14% upside potential to current levels. Shares have increased 56.8% over the past six months.

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