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Shares of Shoe Carnival (NASDAQ: SCVL), a leading retailer of family footwear with brand names and private label merchandise, are soaring 28% as of 11:30 a.m. EST Friday after the company released better-than-expected earnings that boosted confidence with investors.
Shoe Carnival recorded a 4.7% increase in net sales to $287.5 million, driven by a strong 4.4% increase in comparable store sales. The bottom line was even better for investors: Shoe Carnival's earnings per share (EPS) jumped 22.2% to $0.66.
Cliff Sifford, Shoe Carnival's president and chief executive officer, said the following in a press release:
We are very pleased with our third quarter financial results, which reflect the strength of our selection of family footwear for the back-to-school season and our team's ability to increasingly connect with customers across Shoe Carnival's multi-channel presence. During the quarter, our traffic was down low single digits, particularly due to the three hurricanes affecting Texas, Florida and Puerto Rico. Despite the inclement weather in these regions, we experienced solid increases in both units per transaction and conversion which helped drive a 4.4 percent increase in comparable store sales for the quarter.
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Right now, Shoe Carnival is in the process of optimizing its stores and locations. While it expects to close 26 stores during fiscal 2017, it also plans to open 19 stores during the same time period. And despite slowing foot traffic due to hurricanes, the optimization of its inventory, which was down 4.3% on a per-store basis during the third quarter, and closing poor performing stores enabled the company to boost its bottom line. If the company can continue to execute, investors can expect more quarters similar to this -- however, investors have to expect large volatility each quarterly report, depending on positive or negative news.
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