Shoe Carnival (NASDAQ:SCVL) Misses Q3 Income Estimates
Footwear retailer Shoe Carnival (NASDAQ:) reported outcomes in step with analysts’ expectations in Q3 FY2023, with income down 6.4% 12 months on 12 months to $319.9 million. However, its full-year income steerage of $1.17 billion on the midpoint got here in 1.3% under analysts’ estimates. Turning to EPS, Shoe Carnival (NYSE:) made a GAAP revenue of $0.80 per share, down from its revenue of $1.18 per share in the identical quarter final 12 months.
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Shoe Carnival (SCVL) Q3 FY2023 Highlights:
- Income: $319.9 million vs analyst estimates of $321.3 million (small miss)
- EPS: $0.80 vs analyst expectations of $0.95 (15.3% miss)
- The corporate dropped its income steerage for the complete 12 months from $1.2 billion to $1.17 billion on the midpoint, a 2.5% lower
- Free Money Circulate of $34.03 million is up from -$3.42 million in the identical quarter final 12 months
- Gross Margin (GAAP): 36.8%, down from 38.3% in the identical quarter final 12 months
- Identical-Retailer Gross sales have been down 7.4% 12 months on 12 months (miss vs. expectations of down 6.4% 12 months on 12 months)
- Retailer Areas: 401 at quarter finish, growing by 3 over the past 12 months
“Our team delivered a successful Back-to-School season, with solid growth in the children’s business, double-digit Shoe Station banner growth and continued market share gains in the family footwear channel. After Labor Day, Shoe Carnival banner results softened and were below our expectations, as persistently hot and dry weather led to soft seasonal sales and a sluggish start to the boot season,” mentioned Mark Worden, President and Chief Government Officer.
Identified for its playful ambiance that options carnival components, Shoe Carnival (NASDAQ:SCVL) is a retailer that sells footwear from mainstream manufacturers for your entire household.
Footwear RetailerFootwear gross sales–like their attire counterparts–are pushed by seasons, developments, and innovation extra so than absolute want and equally face the bigger-picture secular pattern of e-commerce penetration. Footwear performs a component in societal belonging, private expression, and event, and retailers promoting footwear acknowledge this. Subsequently, they goal to stability choice, aggressive costs, and the most recent developments to draw customers. Not like their attire counterparts, footwear retailers most promote widespread third-party manufacturers (versus their very own unique manufacturers), which might imply much less exclusivity of product however extra nimbleness to pivot to what’s sizzling.
Gross sales GrowthShoe Carnival is a small retailer, which generally brings disadvantages in comparison with bigger opponents that profit from economies of scale.
As you’ll be able to see under, the corporate’s annualized income progress price of three.6% over the past 4 years (we examine to 2019 to normalize for COVID-19 impacts) was mediocre , however to its credit score, it opened new shops and grew gross sales at present, established shops.
This quarter, Shoe Carnival reported a fairly uninspiring 6.4% year-on-year income decline, lacking Wall Road’s expectations.
Variety of StoresA retailer’s retailer depend typically determines on how a lot income it may well generate.
When a retailer like Shoe Carnival retains its retailer footprint regular, it normally signifies that demand is steady and it is centered on enhancing operational effectivity to extend profitability. As of probably the most just lately reported quarter, Shoe Carnival operated 401 complete retail places, in step with its retailer depend a 12 months in the past.
Over the past two years, the corporate has solely opened just a few new shops, averaging 2.4% annual progress in new places. This sluggish tempo lags the broader sector. A flat retailer base signifies that income progress should come from elevated e-commerce gross sales or larger foot visitors and gross sales per buyer at present shops.
Identical-Retailer SalesSame-store gross sales progress is a key efficiency indicator used to measure natural progress and demand for retailers.
Shoe Carnival’s demand inside its present shops has typically risen over the past two years however lagged behind the broader shopper retail sector. On common, the corporate’s same-store gross sales have grown by 3.8% 12 months on 12 months. With optimistic same-store gross sales progress amid an growing bodily footprint of shops, Shoe Carnival is reaching extra prospects and rising gross sales.
Within the newest quarter, Shoe Carnival’s same-store gross sales fell 7.4% 12 months on 12 months. This decline was a reversal from the 18.3% year-on-year improve it posted 12 months in the past. We’ll be maintaining an in depth eye on the corporate to see if this turns right into a longer-term pattern.
Key Takeaways from Shoe Carnival’s Q3 Outcomes
Sporting a market capitalization of $661.3 million, Shoe Carnival is amongst smaller firms, however its greater than $71.12 million in money available and optimistic free money circulation over the past 12 months places it in a pretty place to put money into progress.
We struggled to seek out many robust positives in these outcomes. Its full-year earnings forecast underwhelmed and it missed on key objects like same-store gross sales, income, and EPS. Total, this was a mediocre quarter for Shoe Carnival. The inventory is flat after reporting and presently trades at $24.17 per share.
The creator has no place in any of the shares talked about on this report.
