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1. Company Snapshot

1.a. Company Description

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States.The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories.As of January 29, 2022, it operated 372 stores in 35 states and Puerto Rico under the Shoe Carnival banner; and 21 locations across the Southeast under the Shoe Station banner.


The company also sells its products through online shopping at shoecarnival.com, as well as through mobile application.Shoe Carnival, Inc.was founded in 1978 and is headquartered in Evansville, Indiana.

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1.b. Last Insights on SCVL

Recent drivers behind Shoe Carnival's performance include a 4.1% decline in comparable sales in Q3 2024, impacted by hurricanes and a mild fall season affecting boot sales. However, margins remained resilient, with gross margins down only 80bps YoY and SG&A expenses reduced by $3.5 million. The company is rebranding stores to Shoe Station, targeting a more affluent market, with initial results showing a 10% sales improvement. Additionally, Shoe Carnival announced a new $50 million share repurchase program, which should support its price action over time.

1.c. Company Highlights

2. Shoe Carnival's Strong Q3 Earnings and Strategic Rebranding

Shoe Carnival delivered a robust third quarter with EPS of $0.53, in line with consensus expectations, and net sales of $297.2 million, exceeding expectations. The company's gross profit margin expanded 160 basis points to 37.6%, driven by disciplined pricing and a shift toward higher-income customers. The athletic category represented 51% of total sales, growing low single-digit overall, while non-athletic categories declined mid-single digits.

Publication Date: Nov -30

📋 Highlights
  • Strong Q3 Performance:: EPS of $0.53 and net sales of $297.2M, exceeding consensus with 160 bps gross margin expansion to 37.6%.
  • Shoe Station Outperformance:: Shoe Station outperformed Shoe Carnival by >10% quarterly in all categories, driving 34% of total stores (up from 10% at fiscal 2025 start).
  • Cost Savings & Efficiency:: $20M annual cost savings by 2027 from brand consolidation and $100M+ inventory reduction cash freed over 2 years via lower stock.
  • Rebanner Strategy:: 101 stores rebannered in 2025; 51% of stores to adopt Shoe Station by 2026 (accelerated to 90% by 2028) with $25M–$30M rebanner costs in 2026.
  • Inventory Reductions:: $50M–$60M inventory drop in 2026 and $40M–$50M in 2027, targeting 20–25% lower inventory per store under Shoe Station model.

Rebranding Strategy and Future Outlook

The company announced plans to rebrand Shoe Carnival to Shoe Station Group, Inc., reflecting its conviction in the strategy to build a stronger, more focused, and profitable company. The performance gap between Shoe Station and Shoe Carnival has exceeded 10 percentage points every quarter this year, with Shoe Station outperforming in every major category. Mark Worden noted that "we're not at the beginning of this journey, but at the acceleration point," as Shoe Station's share of the company grew from 10% to 34% this fiscal year.

Financial Guidance and Projections

For Q4, the company forecasted net sales of $240 million to $270 million, ranging from down 7% to up 2% compared to Q4 last year. The company expects Q4 EPS in the range of $0.25 to $0.30. For fiscal 2026 and 2027, the company expects continued investment, with fiscal 2026 being a year of investment to reach the milestone of 51% of stores bannered at Shoe Station. Analysts estimate next year's revenue growth at -6.3%.

Valuation Metrics

With a P/E Ratio of 7.8, P/B Ratio of 0.66, and P/S Ratio of 0.4, the company's valuation appears reasonable. The ROE of 8.72% and ROIC of 4.86% indicate a decent return on equity and invested capital. The Dividend Yield of 3.54% and Free Cash Flow Yield of 5.23% are also attractive. The Net Debt / EBITDA ratio of 2.66 suggests a manageable debt position.

Inventory Reduction and Margin Impact

The company expects to reduce inventory by $50 million to $60 million next year and another $40 million to $50 million in 2027, which will be achieved through returning goods to vendors, taking lower margins, and bringing in less product. Mark Worden noted that the inventory reduction will "more than fully fund our rebanner capital needs over the course of the year, maintaining our debt-free position at year-end."

3. NewsRoom

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Shoe Carnival, Inc. (NASDAQ:SCVL) Given Consensus Rating of “Moderate Buy” by Analysts

Nov -25

Source: defenseworld.net

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Shoe Carnival, Inc. (SCVL) Q3 2026 Earnings Call Transcript

Nov -20

Source: seekingalpha.com

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SCVL Q3 Earnings & Sales Meet Estimates, Comparable Sales Dip Y/Y

Nov -20

Source: zacks.com

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Shoe Carnival (SCVL) Q3 Earnings Match Estimates

Nov -20

Source: zacks.com

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Shoe Carnival Reports Third Quarter Results; Reaffirms Fiscal 2025 Outlook

Nov -20

Source: businesswire.com

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Campbell & CO Investment Adviser LLC Lowers Holdings in Shoe Carnival, Inc. $SCVL

Nov -18

Source: defenseworld.net

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Shoe Carnival: Bright Prospects, But It Remains A Hold

Nov -16

Source: seekingalpha.com

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Shoe Carnival Announces Name Change to Shoe Station Group

Nov -13

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.24%)

6. Segments

Non-Athletics - Women's

Expected Growth: 2.1%

The 2.1% growth in Non-Athletics - Women's segment at Shoe Carnival, Inc. is driven by increasing demand for fashion footwear, expanding online presence, and effective marketing strategies targeting female consumers. Additionally, the company's focus on providing trendy and affordable products has contributed to the segment's growth.

Athletics - Men's

Expected Growth: 2.5%

The 2.5% growth in Athletics - Men's from Shoe Carnival, Inc. is driven by increasing popularity of athleisure wear, rising health awareness, and growing demand for comfortable and stylish footwear. Additionally, strategic partnerships with popular athletic brands and effective marketing campaigns have contributed to the segment's growth.

Non-Athletics - Men's

Expected Growth: 1.8%

Shoe Carnival's Non-Athletics - Men's segment growth of 1.8% is driven by increasing demand for casual footwear, particularly boots and loafers, as well as the company's effective inventory management and targeted marketing efforts. Additionally, the segment benefits from a strong brand portfolio, including Dr. Martens and Vans, which resonates with the target demographic.

Athletics - Women's

Expected Growth: 2.3%

Women's athletics segment at Shoe Carnival, Inc. grew 2.3% driven by increasing popularity of athleisure wear, rising female participation in sports, and strategic partnerships with popular athletic brands. Additionally, the company's focus on providing stylish and comfortable footwear at affordable prices resonated with female consumers, contributing to the segment's growth.

Athletics - Children's

Expected Growth: 2.8%

Strong brand recognition, increasing participation in youth sports, and growing demand for comfortable and stylish footwear drive the 2.8% growth in Athletics - Children's segment at Shoe Carnival, Inc. Additionally, strategic marketing efforts, expanded product offerings, and competitive pricing contribute to the segment's growth.

Non-Athletics - Children's

Expected Growth: 2.4%

Shoe Carnival's Non-Athletics - Children's segment growth of 2.4% is driven by increasing demand for casual, comfortable footwear, and trendy styles. Parents' willingness to spend on quality products, coupled with the company's effective marketing strategies and competitive pricing, contribute to this growth.

Accessories

Expected Growth: 1.9%

Shoe Carnival's accessories segment growth of 1.9% is driven by increasing demand for fashion-forward and affordable products, strategic partnerships with popular brands, effective inventory management, and targeted marketing efforts. Additionally, the company's focus on omnichannel retailing and investments in e-commerce capabilities have contributed to the segment's growth.

Other

Expected Growth: 1.5%

Shoe Carnival's 'Other' segment, with 1.5% growth, is driven by increasing online sales, strategic partnerships, and effective inventory management. Additionally, the company's focus on private label brands, loyalty programs, and targeted marketing efforts contribute to this growth.

7. Detailed Products

Athletic Shoes

Shoe Carnival offers a wide range of athletic shoes from top brands like Nike, Adidas, and Under Armour, catering to various sports and fitness activities.

Casual Shoes

The company offers a diverse selection of casual shoes, including sneakers, boots, and sandals, from popular brands like Vans, Converse, and Steve Madden.

Dress Shoes

Shoe Carnival carries a variety of dress shoes for men and women, including oxfords, loafers, and heels, from brands like Clarks and Dr. Scholl's.

Sandals and Flip Flops

The company offers a wide range of sandals and flip flops from brands like Teva, Sanuk, and Birkenstock, perfect for warm weather and outdoor activities.

Boots

Shoe Carnival sells a variety of boots, including ankle boots, knee-high boots, and work boots, from brands like UGG and Timberland.

Kids' Shoes

The company offers a wide selection of kids' shoes, including sneakers, sandals, and boots, from popular brands like Nike and Vans.

8. Shoe Carnival, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Shoe Carnival, Inc. faces moderate threat from substitutes as customers have various alternatives for footwear and accessories. However, the company's strong brand presence and loyalty programs help mitigate this threat.

Bargaining Power Of Customers

Shoe Carnival, Inc. has a large customer base, but individual customers do not have significant bargaining power. The company's pricing strategy and loyalty programs help maintain customer loyalty.

Bargaining Power Of Suppliers

Shoe Carnival, Inc. relies on a diverse supplier base, which reduces dependence on individual suppliers. However, suppliers of popular brands may have some bargaining power.

Threat Of New Entrants

The footwear and accessories market has moderate barriers to entry, and new entrants would need significant investment to compete with established players like Shoe Carnival, Inc.

Intensity Of Rivalry

The footwear and accessories market is highly competitive, with many established players competing for market share. Shoe Carnival, Inc. faces intense rivalry from competitors like DSW, Foot Locker, and online retailers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 37.79%
Debt Cost 3.95%
Equity Weight 62.21%
Equity Cost 11.73%
WACC 8.79%
Leverage 60.74%

11. Quality Control: Shoe Carnival, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Buckle

A-Score: 6.8/10

Value: 4.5

Growth: 3.9

Quality: 7.5

Yield: 10.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Shoe Carnival

A-Score: 4.3/10

Value: 7.2

Growth: 5.0

Quality: 4.9

Yield: 5.0

Momentum: 0.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
J.Jill

A-Score: 4.2/10

Value: 8.7

Growth: 4.0

Quality: 6.3

Yield: 2.0

Momentum: 0.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Designer Brands

A-Score: 4.2/10

Value: 9.8

Growth: 2.8

Quality: 3.8

Yield: 6.0

Momentum: 1.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Cato

A-Score: 3.9/10

Value: 9.8

Growth: 1.1

Quality: 4.5

Yield: 5.0

Momentum: 1.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Hibbett

A-Score: 2.8/10

Value: 1.9

Growth: 2.1

Quality: 5.1

Yield: 1.0

Momentum: 5.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.22$

Current Price

18.22$

Potential

-0.00%

Expected Cash-Flows