Shoe Carnival Q4 Earnings Beat Estimates, Gross Margin Declines Y/Y

Shoe Carnival, Inc. SCVL reported fourth-quarter fiscal 2024 results, wherein the top line lagged the Zacks Consensus Estimate and the bottom line surpassed the same. Both metrics declined year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Shoe Carnival, Inc. Price, Consensus and EPS Surprise Shoe Carnival, Inc. price-consensus-eps-surprise-chart | Shoe Carnival, Inc. QuoteMore on SCVL’s Q4 ResultsShoe Carnival reported adjusted earnings per share (EPS) of 54 cents, which beat the Zacks Consensus Estimate of 42 cents. However, the bottom line declined from adjusted earnings of 59 cents per share reported in the year-ago quarter.Net sales amounted to $262.9 million, down 6.2% year over year. Also, the top line slightly missed the consensus estimate of $264 million. The additional week and retail calendar shift provided a roughly $20 million boost to fourth-quarter fiscal 2023 sales. Comparable store sales declined 6.3%, largely due to ongoing declines at Shoe Carnival during non-vent periods.From a category perspective in the quarter, adult athletic sales declined mid-single digits, while athletic performance at the Shoe Station banner saw a high-single-digit increase, driven by growth in running and court footwear. Children's sales declined in the low teens, primarily due to softness in boots, though children's athletic footwear grew at Shoe Station as the company continued to expand children's product penetration with Shoe Station customers.Fourth-quarter sales in women's nonathletic footwear declined in high-single digits, with boots being the primary driver. Casual footwear increased in high-single digits, while sandals continued to perform well with a low-single-digit increase. Men's athletic comparable sales declined low-single digits, dress footwear decreased in the mid-teens and boots were down in the mid-single digits. Similar to women's trends, men's casual footwear increased low-single digits.Shoe Carnival’s Margin & Cost DetailsAdjusted gross profit decreased 7.8% year over year to $91.9 million. The adjusted gross margin of 35% contracted 60 basis points (bps) year over year. Merchandise margins improved 35 basis points during the quarter, driven by higher product margins on boots.Adjusted selling, general and administrative expenses decreased 1.7% year over year to $77.6 million. The decline was primarily due to lower selling costs at Shoe Carnival and Shoe Station stores, as the prior year included an extra week of store operations. Additionally, expense reductions and optimized advertising spending in the current year more than offset the new costs associated with Rogan's during the quarter.As a percentage of net sales, selling, general and administrative expenses deleveraged 140 bps year over year to 29.6%, resulting from the extra sales week in the prior year, partially offset by lower overall expenses.Adjusted operating income decreased 31.1% year over year to $14.3 million. As a percentage of net sales, this metric declined 200 bps year over year to 5.4%.SCVL’s Store UpdateAs of March 20, 2025, the company reached a milestone of 431 stores, consisting of 346 Shoe Carnival, 57 Shoe Station stores and 28 Rogan’s locations.During fiscal 2024, the company expanded the rebanner store count to 50–75 locations, exceeding the initial plan of 25 stores. The company plans to rebanner 50-75 stores in fiscal 2025.Shoe Carnival’s Financial Health SnapshotThe 2024 fiscal year marked the 20th consecutive year the company ended with no debt, fully funding its operations, acquisitions and investments through operating cash flow. SCVL ended the quarter with cash, cash equivalents and marketable securities of $123.1 million. Operating cash flow for fiscal 2024 totaled $102.6 million.In March 2025, the company approved an 11.1% increase in the quarterly dividend, raising it to 15 cents per share. The dividend will be paid on April 21, 2025, to shareholders of record as of the close of business on April 7. This new annualized dividend rate represents a 238% increase compared with the rate paid five years ago and marks the 11th consecutive year of dividend growth. The company has now maintained a consistent dividend payment for 52 consecutive quarters.As of March 20, 2025, the company had $50 million available for future share repurchases. SCVL did not engage in any share repurchase activity during the quarter.SCVL Stock Past Three-Month PerformanceImage Source: Zacks Investment ResearchSCVL’s Fiscal 2025 OutlookNet sales for fiscal 2025 are expected to be between $1.15 billion and $1.23 billion, representing a change of down 4% to up 2% compared with the prior year. GAAP EPS is projected between $1.60 and $2.10, with a midpoint of $1.85, reflecting the impact of the 65 cents per share rebanner investment and the loss of Rogan’s tax benefits from fiscal 2024.Capital expenditures are anticipated to be between $45 million and $60 million, with $35-$45 million allocated to rebannering and store growth.Shares of this Zacks Rank #4 (Sell) company have lost 34.7% in the past three months compared with the industry’s decline of 21.4%.Stocks to ConsiderSome better-ranked stocks are The Gap, Inc. GAP, Urban Outfitters Inc. URBN and G-III Apparel Group, Ltd.  GIII.The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.6%, respectively, from the fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift items. It sports a Zacks Rank of 1 at present. The company delivered a 16.9% earnings surprise in the last reported quarter.The consensus estimate for URBN’s fiscal 2025 earnings and revenues indicates growth of 11.8% and 6%, respectively, from the fiscal 2024 reported levels. URBN delivered a trailing four-quarter average earnings surprise of 28.4%.G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It currently carries a Zacks Rank #2 (Buy).The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies a decline of 4.5% and 1.2%, respectively, from the year-ago actuals. GIII delivered a trailing four-quarter average earnings surprise of 117.8%.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. 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