Core Viewpoint - Shoe Carnival, Inc. has announced an increase in its quarterly cash dividend, reflecting the company's commitment to shareholder value and confidence in its growth trajectory [1][2]. Dividend Information - The company has approved a dividend payment of 15 cents per share, marking an 11.1% increase and bringing the annualized dividend rate to 60 cents per share [1][2]. - This is the 52nd consecutive quarterly dividend and the 11th straight year of dividend growth, with the new annualized rate representing a 238% increase compared to five years ago [2]. Financial Position - As of the end of the third quarter of fiscal 2024, Shoe Carnival reported a cash balance of $91 million, an increase of $20 million from the previous year, demonstrating liquidity generation despite challenges [2]. - The company generated $58.1 million in cash flow from operations over the past nine months of fiscal 2024, allowing it to fund growth initiatives internally [3]. - Shoe Carnival has maintained a debt-free status for 19 consecutive years, providing financial flexibility and reducing risks associated with interest payments [4]. Upcoming Earnings Expectations - The company is expected to report a year-over-year decrease in revenue for the fourth quarter of fiscal 2024, with consensus estimates pegged at $263.9 million, indicating a 5.8% decline from the prior year [5][6]. - The consensus estimate for earnings per share is stable at 42 cents, reflecting a decrease of 28.8% from the year-ago quarter [6]. Stock Performance - Shares of Shoe Carnival have declined by 34.2% over the past three months, compared to a 21.5% decline in the industry [8].

Summary of Kroger's Recent Developments Core Viewpoint - Kroger's financial position remains strong despite the failed acquisition of Albertsons, leading to a significant share buyback initiative [1][2]. Financial Position - Kroger has authorized a $7.5 billion share buyback plan, representing approximately 17% of its market capitalization [2]. - Of this, $5.5 billion is allocated for an accelerated buyback expected to be completed by mid-December, while the remaining funds are likely to be utilized in 2025 [2]. Market Performance - Kroger's stock price is currently at $61.95, with a 52-week range between $44.48 and $63.59, and a dividend yield of 2.07% [1]. - The company's P/E ratio stands at 16.39, with a price target set at $65.79 [1]. Analyst Ratings - Kroger holds a "Moderate Buy" rating among analysts, although it is not currently listed among the top recommended stocks by leading analysts [5].

Financial Performance - In Q3 2024, net sales were $306.9 million, a decrease of $13.0 million, or 4.1%, compared to Q3 2023[75] - The calendar shift resulted in a $20 million decrease in Q3 2024 net sales compared to Q3 2023, while underlying sales increased by $7.0 million, or 2.2%[75] - Comparable store net sales declined by 4.1% in Q3 2024, impacted by hurricanes and warm weather affecting fall merchandise demand[76] - Year-to-date 2024 comparable store net sales decreased by 3.2% compared to the same period in 2023[70] - Year-to-date 2024 Net Sales reached $939.9 million, an increase of 4.9% compared to year-to-date 2023, driven by the acquisition of Rogan's, which contributed $63.9 million[91] Gross Profit and Income - Gross profit margin decreased to 36.0% in Q3 2024 from 36.8% in Q3 2023[74] - Net income for Q3 2024 was 6.3% of net sales, down from 6.8% in Q3 2023[74] - Gross Profit for Q3 2024 was $110.4 million, down $7.3 million from Q3 2023, with a gross profit margin of 36.0%, compared to 36.8% in Q3 2023[86] - Operating Income in Q3 2024 totaled $24.5 million, a decrease of 12.2% from Q3 2023, mainly due to lower Net Sales and soft demand in September and October[81] Store Operations - The company operated 431 stores at the end of Q3 2024, with a net increase of 28 stores from the Rogan's acquisition[70] - Boot sales fell by 31%, accounting for approximately half of the decline in comparable store net sales in Q3 2024[76] - The company opened four new Shoe Station branded stores and acquired 28 Rogan's stores in year-to-date 2024, targeting over 500 stores by 2028[109] - The company plans to rebanner 25 additional Shoe Carnival stores to Shoe Station stores in the first half of Fiscal 2025[109] Expenses and Tax - Cost of sales as a percentage of net sales increased to 64.0% in Q3 2024 from 63.2% in Q3 2023[74] - Selling, General and Administrative Expenses (SG&A) decreased by $3.9 million in Q3 2024 to $85.9 million, representing 28.0% of Net Sales compared to 28.1% in Q3 2023[88] - The effective income tax rate for Q3 2024 was 24.7%, up from 23.8% in Q3 2023, with an expected full fiscal year tax rate between 25.6% and 26.0%[90] Cash and Capital Expenditures - Cash, Cash Equivalents, and Marketable Securities amounted to $91.1 million at the end of Q3 2024, with cash flows from operations totaling $58.1 million year-to-date 2024[84] - Capital expenditures for Fiscal 2024 are expected to be between $30 million and $35 million, with $20 million to $25 million allocated for new and rebannered stores[108] - The actual cash required for capital expenditures depends on the number of stores opened and lease incentives received from landlords[108] Shareholder Returns - A quarterly cash dividend of $0.135 per share was paid on October 21, 2024, an increase from $0.120 per share in the third quarter of 2023[110] - The Board of Directors authorized a share repurchase program for up to $50 million of common stock, effective January 1, 2024[111] - No share repurchases have been made in Fiscal 2024, while 230,696 shares were repurchased at a total cost of $5.4 million in year-to-date 2023[112] Acquisition and Synergies - Rogan's, acquired on February 13, 2024, contributed approximately $22.3 million to Q3 2024 net sales[75] - The company estimates that synergies from the Rogan's acquisition will exceed $1 million in Fiscal 2024, with a significant portion recognized in Q3 2024[80] E-commerce Performance - E-commerce sales represented approximately 11% of merchandise sales in Q3 2024, up from 10% in Q3 2023[85] Market Risks - The company had no borrowings outstanding during year-to-date 2024, exposing it to market risk from variable interest rates[117] - The Credit Agreement permits the payment of dividends and share repurchases, subject to certain covenants and restrictions[114] Seasonal Impact - The company has three distinct peak selling periods: Easter, back-to-school, and Christmas, which significantly impact operating results[115]

Company Performance - Shoe Carnival (NASDAQ: SCVL) reported earnings showing a mixed performance, with comparable sales down 4%, consistent with a challenging performance in the first half of 2024 [1] - The decline in sales is attributed to external factors, including hurricanes impacting Southeast markets and a mild fall season [1] Investment Perspective - The analysis emphasizes a long-only investment approach, focusing on operational aspects and the long-term earnings potential of companies rather than market-driven dynamics [1] - The strategy involves holding companies independently of future price movements, with most recommendations being holds, reflecting a cautious outlook in a bullish market [1]

Core Insights - Shoe Carnival, Inc. reported third-quarter fiscal 2024 results with net sales of $306.9 million, down 4.1% year over year, missing the consensus estimate of $311 million [4] - Adjusted earnings per share were 71 cents, surpassing the Zacks Consensus Estimate of 61 cents, but down from 80 cents in the same quarter last year [3] Financial Performance - The company experienced a decline in adjusted gross profit, which decreased by 6% year over year to $110.6 million, with an adjusted gross margin of 36.1%, contracting by 70 basis points [5] - Adjusted operating income fell 10.9% year over year to $24.9 million, representing 8.1% of net sales, a decline of 60 basis points [8] - Selling, general and administrative expenses decreased by 4.5% year over year to $85.7 million, with SG&A as a percentage of net sales declining by 10 basis points to 28% [6][7] Strategic Developments - The company made progress on its store rebanner strategy, converting seven Shoe Carnival stores to Shoe Station stores, with plans to rebanner 25 more in the first half of fiscal 2025 [10] - As of November 21, 2024, Shoe Carnival operated 431 stores, including 361 Shoe Carnival, 42 Shoe Station, and 28 Rogan's locations [9] Fiscal 2024 Outlook - The company revised its fiscal 2024 sales guidance to a range of $1.20 billion to $1.23 billion, down from the previous range of $1.23 billion to $1.25 billion, indicating growth of 2% to 4.5% compared to fiscal 2023 [13] - GAAP earnings per share is forecasted to be between $2.55 and $2.70, while adjusted EPS is expected to be between $2.60 and $2.75 [14] - The fiscal 2024 period consists of 52 weeks compared to 53 weeks in fiscal 2023, which is expected to impact fourth-quarter net sales by approximately $20 million [15]

Financial Data and Key Metrics Changes - The company reported third quarter adjusted EPS of $0.71, consistent with expectations, and year-to-date adjusted EPS totaled $2.19, an increase of 3.8% compared to the prior year [11][76] - Year-to-date net sales reached $939.9 million, reflecting a 4.9% increase, while adjusted operating income was $78.4 million, up 6.6% year-over-year [12][73] - Gross profit margin for the quarter was 36%, marking the 15th consecutive quarter above 35% [11][45] Business Line Data and Key Metrics Changes - The acquisition of Rogan's contributed approximately $22.3 million in net sales for the quarter, with year-to-date sales of $63.9 million, aligning with expectations [67][68] - Comparable store sales for the quarter decreased by 4.1%, primarily due to a decline in boot sales, which were down over 35% in October [48][64] - The company achieved solid comparable store net sales growth during the back-to-school season, particularly in Children's and Athletics categories [18][43] Market Data and Key Metrics Changes - Sales were significantly impacted by hurricanes Helene and Milton, affecting about half of the stores and leading to a disruption in customer shopping behavior [20][95] - The warm weather delayed the start of the winter boot season, contributing to lower sales in that category [21][89] - The company anticipates a continued decline in customer purchasing behavior during the current nonevent period until the holiday season [23][84] Company Strategy and Development Direction - The company is focusing on profitable M&A activity, with Rogan's integration ahead of schedule and capturing significant profit synergies [27][70] - The rebanner strategy is being expanded, with plans to rebanner an additional 25 stores in the first half of fiscal 2025, aiming for long-term growth [35][37] - The company is committed to a digital-first marketing approach, allowing for flexible spending based on customer engagement [16][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about pent-up demand for boots as the weather turns colder, although they do not expect recovery from lost business in Q3 [98][104] - The company revised its full-year sales guidance downward due to Q3 performance, but reiterated EPS guidance based on strong margins [81][91] - Management remains confident in the ability to deliver a profitable quarter despite challenges faced in Q3 [88][92] Other Important Information - The company ended the quarter with total cash and marketable securities of approximately $91 million, an increase of $20 million year-over-year [77] - The company has maintained a debt-free status for 19 consecutive years [76] - Carl Scibetta, Chief Merchandising Officer, announced plans to retire in spring 2025, with a succession plan underway [40][41] Q&A Session Summary Question: Impact of hurricanes on sales - Management estimated that about half of the sales loss was due to the hurricanes, with the other half attributed to warm weather affecting boot sales [95][96] Question: Expectations for fourth quarter boot sales - Management believes there is some pent-up demand for boots, but does not expect recovery from lost business in Q3 [98][104] Question: Changes in sales guidance - The company confirmed that the lower end of the sales guidance reflects the impact of persistent warm weather and the retail calendar shift [103][104] Question: Performance of rebannered stores - Early results from rebannered stores have shown strong performance, exceeding expectations, and the company plans to expand this strategy further [105][121]

Financial Performance - Shoe Carnival reported quarterly earnings of $0.71 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, but down from $0.80 per share a year ago, representing an earnings surprise of 16.39% [1] - The company posted revenues of $306.89 million for the quarter ended October 2024, missing the Zacks Consensus Estimate by 1.18%, and down from $319.91 million year-over-year [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $279.82 million, and for the current fiscal year, it is $2.54 on revenues of $1.22 billion [7] - The estimate revisions trend for Shoe Carnival is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Retail - Apparel and Shoes industry, to which Shoe Carnival belongs, is currently in the top 50% of over 250 Zacks industries, suggesting that companies in this segment are likely to outperform those in the bottom 50% [8] - Another company in the same industry, American Eagle Outfitters, is expected to report quarterly earnings of $0.46 per share, reflecting a year-over-year decline of 6.1% [9]

Financial Performance - Third quarter 2024 GAAP EPS was $0.70, with Adjusted EPS at $0.71, meeting expectations[1] - Year-to-date 2024 net sales grew by 4.9% compared to the prior year, totaling $939.9 million[5] - Third quarter 2024 net sales were $306.9 million, down from $319.9 million in the same quarter of 2023, primarily due to a retail calendar shift impacting approximately $20 million in sales[5] - Comparable store net sales for the thirteen-week period ended November 2, 2024, declined by 4.1% compared to the same period in 2023[6] - Third quarter 2024 net income was $19.2 million, or $0.70 per diluted share, compared to $21.9 million, or $0.80 per diluted share, in the prior year[11] - Adjusted net income for the thirteen weeks ended November 2, 2024, was $19,521,000, reflecting a decrease from $21,861,000 in the prior year[33] - Reported net income for the thirty-nine weeks ended November 2, 2024, was $59,101,000, representing 6.3% of net sales, compared to $57,828,000 or 6.5% for the same period in 2023[34] - Adjusted net income for the thirty-nine weeks ended November 2, 2024, was $60,073,000, or 6.4% of net sales, compared to $57,828,000 or 6.5% for the same period in 2023[34] Sales and Revenue - The Rogan's acquisition is expected to deliver over $80 million in net sales for Fiscal 2024, with $22.3 million in the third quarter alone[13] - Fiscal 2024 net sales guidance has been updated to a range of $1.20 billion to $1.23 billion, reflecting growth of 2% to 4.5% versus Fiscal 2023[19] - Net sales for the thirteen weeks ended November 2, 2024, were $306,885,000, compared to $319,914,000 for the same period last year, representing a decrease of approximately 4.0%[28] Profitability Metrics - Gross profit margin for the third quarter 2024 was 36.0%, marking the 15th consecutive quarter above 35%, but down 80 basis points from the prior year[8] - Gross profit for the thirteen weeks ended November 2, 2024, was $110,382,000, which is 36.0% of net sales, down from 36.8% in the prior year[33] - Operating income for the thirteen weeks ended November 2, 2024, was $24,529,000, a decrease of 12.0% from $27,935,000 in the same period last year[28] - Basic net income per share for the thirteen weeks ended November 2, 2024, was $0.71, down from $0.80 in the prior year[28] - Reported gross profit for the thirty-nine weeks ended November 2, 2024, was $337,125,000, or 35.9% of net sales, consistent with the previous year[34] - Reported operating income for the thirty-nine weeks ended November 2, 2024, was $77,115,000, or 8.2% of net sales, compared to $73,536,000 or 8.2% for the same period in 2023[34] - Adjusted operating income for the thirty-nine weeks ended November 2, 2024, was $78,399,000, or 8.3% of net sales, compared to $73,536,000 or 8.2% for the same period in 2023[34] Expenses and Liabilities - SG&A expenses as a percentage of net sales were 28.0%, slightly improved from 28.1% in the prior year[9] - Total liabilities increased to $488,771,000 as of November 2024, compared to $453,566,000 as of October 28, 2023, indicating a rise of approximately 7.8%[30] - Selling, general and administrative expenses for the thirty-nine weeks ended November 2, 2024, were $260,010,000, or 27.7% of net sales, compared to $248,147,000 or 27.7% for the same period in 2023[34] Cash and Assets - Total current assets increased to $527,040,000 as of November 2024, compared to $462,039,000 as of October 28, 2023, representing an increase of approximately 14.1%[31] - Cash and cash equivalents at the end of the period were $77,235,000, down from $99,000,000 at the beginning of the period, reflecting a decrease of approximately 21.8%[32] Future Outlook - The company plans to rebanner 25 additional Shoe Carnival stores to Shoe Station stores in the first half of Fiscal 2025[2][15] - The fiscal 2024 outlook for net income per diluted share (GAAP) ranges from $2.55 to $2.70[35] - Adjusted diluted net income per share for fiscal 2024 is projected to be between $2.60 and $2.75[35]

Core Insights - The article emphasizes the importance of value investing, highlighting the identification of undervalued companies through fundamental analysis and traditional valuation metrics [2][3] Company Analysis: Shoe Carnival (SCVL) - Shoe Carnival holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock is currently trading with a P/E ratio of 12.16, significantly lower than the industry average of 16.06 [4] - SCVL's Forward P/E has fluctuated between 6.47 and 15.85 over the past year, with a median of 12.64 [4] - The P/B ratio for SCVL is 1.56, which is attractive compared to the industry's average P/B of 4.45 [5] - Over the past 12 months, SCVL's P/B has ranged from 1.03 to 2.01, with a median of 1.59 [5] - SCVL's P/CF ratio is 9.12, lower than the industry's average of 12.88, indicating a solid cash outlook [6] - The P/CF for SCVL has varied from 5.38 to 11.74 over the past year, with a median of 9.24 [6] Company Analysis: Tapestry (TPR) - Tapestry also holds a Zacks Rank of 2 (Buy) and a Value score of A, making it another attractive option for value investors [7] - The Forward P/E ratio for TPR is 9.83, which is favorable compared to the industry average of 16.06 [7] - TPR's PEG ratio is 1.63, which is higher than the industry's average PEG ratio of 1.37 [7] - The price-to-earnings ratio for TPR has ranged from 6.25 to 10.91 over the past year, with a median of 9.18 [8] - TPR's P/B ratio is 3.57, lower than the industry's average P/B of 4.45, indicating relative value [8] - The P/B for TPR has fluctuated between 2.52 and 4.19 over the past year, with a median of 3.40 [8] Conclusion - Both Shoe Carnival and Tapestry exhibit strong value metrics, suggesting they are likely undervalued in the current market [9]

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies. Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find compani ...