Group 1 - Shoe Carnival (NASDAQ: SCVL) reported a decline in sales for 2Q25, mirroring the performance seen in 1Q25 [1] - Gross margins showed significant improvement, but this was insufficient to offset the deleverage in selling, general and administrative expenses (SG&A) [1] - Profits were lower compared to the previous year, and this trend is expected to continue [1]

Company Performance - Shoe Carnival (NASDAQ: SCVL) reported a decline in sales for 2Q25, mirroring the performance seen in 1Q25 [1] - Despite a significant improvement in gross margins, the gains were insufficient to offset the deleverage in selling, general, and administrative (SG&A) expenses [1] - Profits for the company were lower compared to the previous year, with expectations of continued decline [1] Investment Perspective - The investment approach focuses on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The strategy emphasizes holding companies for the long term, with a preference for a small fraction of companies being classified as a buy at any given time [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended August 2, 2025 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission File Number: 0-21360 Shoe Carnival, Inc. (Exact name of registrant as specified in its charter) Indiana 35-1736614 (State or other jurisdictio ...

Group 1 - Shoe Carnival's shares increased by 20.3% on September 4th following the announcement of its second-quarter financial results [1] - The company is focused on generating cash flow, which is essential for value and growth prospects [1] Group 2 - Crude Value Insights provides an investing service centered on oil and natural gas, emphasizing cash flow analysis [2] - Subscribers have access to a stock model account and in-depth analyses of exploration and production firms [2]

Financial Data and Key Metrics Changes - The company reported Q2 net sales of $306.4 million, a decrease from $332.7 million in the prior year, reflecting a 7.9% change due to a strategic focus on higher margin business [26] - Gross profit margin reached 38.8%, representing a 270 basis point expansion compared to the previous year, driven by disciplined pricing and improved inventory availability [29][30] - Net income was $19.2 million, or $0.70 per diluted share, down from $22.6 million, or $0.82 per share in the prior year [31] Business Line Data and Key Metrics Changes - Shoe Station sales grew by 1.6%, with comparable store sales essentially flat, while Shoe Carnival sales declined by 10.1% due to pricing discipline amidst pressure on low-income consumers [27][28] - The children's category saw high single-digit growth in sales, while the adult athletics category grew in the low 20s, contributing to overall positive comparable sales growth [12][28] Market Data and Key Metrics Changes - The company is experiencing a shift in customer demographics, with a growing number of customers from households earning over $50,000, which is driving improved economics and reducing exposure to economic downturns [9][20] - The company reported that the sub-$30,000 income consumer is facing ongoing pressure, leading to a strategic shift away from this segment [19] Company Strategy and Development Direction - The company is focusing on a rebanner strategy, prioritizing margin dollars over lower quality sales, and investing in inventory depth to improve availability [7][10] - By the end of fiscal 2025, the company plans to operate 145 Shoe Station stores, which will represent approximately one-third of its entire fleet, indicating a significant shift in its business model [14][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position, highlighting a debt-free status and cash and securities exceeding $148 million, up over 10% year over year [20][31] - The company raised its annual EPS guidance range to reflect the Q2 profit beat and positive August comparable sales growth results [25][34] Other Important Information - The company is investing approximately $25 million in its rebanner strategy, expecting a two to three-year ROI payback [21] - Inventory levels were reported at $449 million, up 5% year over year, reflecting strategic investments to improve product availability [31][32] Q&A Session Summary Question: Sales performance in Q2 and unexpected changes - Management noted that opportunistic buys and additional inventory performed better than expected, contributing to higher margins [43] Question: Third quarter guidance on sales and margins - The company expects Q3 sales in the range of $290 million to $300 million, with gross margins targeted at 37% to 37.5% [46] Question: Managing Shoe Carnival as a cash generator - Management clarified that they are not chasing low-income customers with aggressive pricing, focusing instead on maintaining margin integrity [48][50] Question: Impact of rebannering on next year's earnings - Management indicated that reaching 51% of the fleet as Shoe Station will lead to sustained positive comparable sales growth [52] Question: Inventory levels and gross margin guidance - Management acknowledged having higher inventory levels but emphasized that it is strategically positioned for margin opportunities [60][64]

分组1 - Shoe Carnival reported quarterly earnings of $0.7 per share, exceeding the Zacks Consensus Estimate of $0.55 per share, but down from $0.83 per share a year ago, representing an earnings surprise of +27.27% [1] - The company posted revenues of $306.39 million for the quarter ended July 2025, missing the Zacks Consensus Estimate by 1.15% and down from $332.7 million year-over-year [2] - Shoe Carnival has surpassed consensus EPS estimates for the last four quarters but has not beaten consensus revenue estimates during the same period [2] 分组2 - The stock has underperformed, losing about 34.9% since the beginning of the year compared to the S&P 500's gain of 9.6% [3] - The current consensus EPS estimate for the coming quarter is $0.50 on revenues of $293.54 million, and for the current fiscal year, it is $1.75 on revenues of $1.15 billion [7] - The Zacks Industry Rank for Retail - Apparel and Shoes is in the bottom 39% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

[Second Quarter Fiscal 2025 and Back-to-School Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20and%20Back-to-School%20Highlights) Shoe Carnival exceeded profit consensus in Q2 FY2025, achieving its strongest gross margin in years and positive comparable sales during the Back-to-School period - Delivered **$0.70 EPS**, exceeding consensus by over **20 percent**[5](index=5&type=chunk) - Expanded gross profit margin by **270 basis points to 38.8 percent**, representing the strongest Q2 margin performance in years[3](index=3&type=chunk)[5](index=5&type=chunk)[7](index=7&type=chunk) - Achieved positive comparable sales and margin expansion across all banners during the August Back-to-School period, ahead of projected timelines[3](index=3&type=chunk)[5](index=5&type=chunk)[10](index=10&type=chunk) - Shoe Station's rebanner strategy achieved **8 percent comparable sales growth** through year-to-date August[5](index=5&type=chunk) - Grew cash by **double digits** through fiscal August with **zero debt**, positioning the company to fund growth[5](index=5&type=chunk) [Shoe Station Growth Strategy](index=1&type=section&id=Shoe%20Station%20Growth%20Strategy) The company is aggressively executing its Shoe Station rebanner strategy, aiming for it to be the majority concept by Back-to-School 2026, delivering strong financial returns and increased margins Store Count as of August 2, 2025 | Banner | Count | | :------------ | :---- | | Shoe Carnival | 313 | | Shoe Station | 87 | | Rogan's | 28 | | **Total** | **428** | - Completed **20 rebanner conversions** in Q2 2025, totaling **44 year-to-date conversions**[5](index=5&type=chunk) - Expected to reach **145 Shoe Station stores** by year-end fiscal 2025 (**34% of fleet**) and exceed **215 stores** by Back-to-School 2026 (**over 51% threshold**)[5](index=5&type=chunk)[6](index=6&type=chunk) - First-year rebanner investments of approximately **$25 million** are expected to impact fiscal 2025 operating income, with a **$0.36 EPS impact** incurred year-to-date, and a payback period of two to three years[6](index=6&type=chunk) [Second Quarter Operating Results](index=2&type=section&id=Second%20Quarter%20Operating%20Results) Q2 FY2025 saw a 7.9% net sales decrease and 7.5% comparable sales decline, yet gross profit margin expanded by 270 basis points to 38.8% due to strategic initiatives Second Quarter Fiscal 2025 Operating Results | Metric | Q2 FY2025 | Q2 FY2024 | Change (%) | | :-------------------- | :------------ | :------------ | :------------ | | Net Sales | $306.4 million | $332.7 million | -7.9% | | Comparable Sales | -7.5% | N/A | N/A | | Gross Profit Margin | 38.8% | 36.1% | +270 bps | | Net Income | $19.2 million | $22.6 million | -15.0% | | Diluted EPS | $0.70 | $0.82 | -14.6% | - Merchandise margin improved by **390 basis points**, driven by disciplined pricing, a favorable mix shift, and strategic inventory investments[7](index=7&type=chunk) - Q2 2025 EPS included a **$0.21 negative impact** from rebanner investments, contributing to an estimated **1% net sales decline** from temporary closures and a **2% increase in SG&A** as a percent of net sales[8](index=8&type=chunk)[9](index=9&type=chunk) [Back-to-School Performance Update](index=2&type=section&id=Back-to-School%20Performance%20Update) Fiscal August, including Back-to-School, showed significant acceleration with positive comparable sales year-over-year, driven by Shoe Station and strong children's category performance - The company achieved positive comparable sales year-over-year in fiscal August, a significant improvement from Q2 trends and ahead of projected timelines[10](index=10&type=chunk) - Comparable sales increased by **high-single digits** and rebanner margins expanded by **270 basis points** during fiscal August[11](index=11&type=chunk) Fiscal August Performance by Banner | Banner | Net Sales Growth | Comparable Sales Growth | Key Drivers | | :------------ | :--------------- | :---------------------- | :------------------------------------------------------------------------------------------------------ | | Shoe Station | +1.6% | High-single digits | High-single digit growth in children's, low-twenties growth in adult athletics, with margin expansion | | Shoe Carnival | -10.1% | Positive children's category sales with margin growth | Sub-$40,000 income consumer remained pressured | | Rogan's | Exceeded $20M | Comparable sales growth | In line with integration plans | [Balance Sheet Strength](index=3&type=section&id=Balance%20Sheet%20Strength) Shoe Carnival maintains a strong, debt-free balance sheet, funding growth from operating cash flow, with substantial cash reserves at Q2 2025 and fiscal August end - Ended Q2 2025 **debt-free** and fully funded operations and growth investments from operating cash flow[13](index=13&type=chunk) Cash and Cash Equivalents | Period | Amount (in millions) | | :---------------------- | :------------------- | | End of Q2 2025 | $91.9 | | August fiscal month end | ~$148 | | Change YoY (August) | >10% increase | - Inventory increased by **5%** year-over-year, a strategic investment that improved key item availability during Back-to-School, contributing to margin expansion and sales capture, with normalization expected in 2026[14](index=14&type=chunk) - Capital expenditures totaled **$24.4 million** year-to-date, primarily for **44 completed rebanner conversions**[15](index=15&type=chunk) - The company has **$50 million** remaining under its share repurchase authorization[15](index=15&type=chunk) [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%202025%20Outlook) Shoe Carnival updated its Fiscal 2025 outlook, anticipating slower sales decline, increased gross profit margin, and higher capital expenditures due to strong Q2 and rebanner momentum Updated Fiscal 2025 Outlook | Metric | New Range | Previous Range | Notes | | :-------------------- | :---------------------------- | :---------------------------- | :------------------------------------------- | | Net Sales | $1.12 billion to $1.15 billion | $1.15 billion to $1.23 billion | Lowered | | GAAP EPS | $1.70 to $2.10 | Lower end increased by $0.10 | Increased lower end | | Gross Profit Margin | 36.5% to 37.5% | N/A | 150-basis point increase | | SG&A | $355 million to $360 million | N/A | Inclusive of increased rebanner investment | | Capital Expenditures | $45 to $55 million | N/A | Inclusive of $30 to $35 million for rebanners| - The outlook anticipates sales declines will slow in the second half, with the midpoint implying a **3% decline** versus the **7.7% year-to-date decline**, reflecting rebanner momentum and strong event performance[17](index=17&type=chunk) - As Shoe Station grows, its gains are expected to increasingly offset Shoe Carnival's challenges[17](index=17&type=chunk) [Company Information & Conference Call](index=3&type=section&id=Company%20Information%20%26%20Conference%20Call) Shoe Carnival, Inc. is a major family footwear retailer with 428 stores across 35 states and Puerto Rico, and hosted a Q2 results conference call on September 4, 2025 - Shoe Carnival, Inc. is one of the nation's largest family footwear retailers, offering a broad assortment of dress, casual, and athletic footwear from national name brands[21](index=21&type=chunk) - As of September 4, 2025, the company operated **428 stores** in **35 states and Puerto Rico** under its Shoe Carnival, Shoe Station, and Rogan's banners, with online shopping available[21](index=21&type=chunk) - A conference call was hosted on **September 4, 2025, at 9:00 a.m. Eastern Time** to discuss Q2 results, with a live webcast and archived replay available[18](index=18&type=chunk)[20](index=20&type=chunk) [Cautionary Statement Regarding Forward-Looking Information](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Information) This cautionary statement highlights that forward-looking information in the press release is subject to risks and uncertainties, including rebanner strategy success, competition, and economic conditions, with no obligation to update - The press release contains forward-looking statements involving risks and uncertainties, where actual results, performance, or achievements could materially differ[23](index=23&type=chunk)[24](index=24&type=chunk) - Key factors influencing actual results include the success of rebannering and Shoe Station growth, competitive pressures, economic downturns, supply chain constraints, and shifts in consumer buying trends[24](index=24&type=chunk)[25](index=25&type=chunk) - The company cautions investors against undue reliance on these forward-looking statements and disclaims any obligation to update them[25](index=25&type=chunk) [Financial Tables](index=6&type=section&id=Financial%20Tables) This section presents unaudited condensed consolidated financial statements for Shoe Carnival, Inc., including Statements of Income, Balance Sheets, and Cash Flows, providing detailed financial performance and position data Condensed Consolidated Statements of Income (Thirteen Weeks Ended) | Metric (in thousands) | August 2, 2025 | August 3, 2024 | | :---------------------------------------- | :------------- | :------------- | | Net sales | $306,388 | $332,696 | | Cost of sales | $187,580 | $212,753 | | Gross profit | $118,808 | $119,943 | | Selling, general and administrative expenses | $93,580 | $89,864 | | Operating income | $25,228 | $30,079 | | Net income | $19,225 | $22,573 | | Diluted EPS | $0.70 | $0.82 | | Cash dividends declared per share | $0.150 | $0.135 | Condensed Consolidated Balance Sheets (as of) | Metric (in thousands) | August 2, 2025 | August 3, 2024 | | :------------------------------ | :------------- | :------------- | | Cash and cash equivalents | $78,719 | $71,633 | | Merchandise inventories | $449,005 | $425,462 | | Total Current Assets | $574,068 | $537,096 | | Total Assets | $1,165,253 | $1,115,027 | | Total Current Liabilities | $156,463 | $159,990 | | Total Liabilities | $494,563 | $496,532 | | Total Shareholders' Equity | $670,690 | $618,495 | Condensed Consolidated Statements of Cash Flows (Twenty-six Weeks Ended) | Metric (in thousands) | August 2, 2025 | August 3, 2024 | | :---------------------------------------- | :------------- | :------------- | | Net cash provided by operating activities | $3,622 | $40,742 | | Net cash used in investing activities | $(22,936) | $(60,141) | | Net cash used in financing activities | $(10,647) | $(7,968) | | Net decrease in cash and cash equivalents | $(29,961) | $(27,367) | | Cash and cash equivalents at end of period | $78,719 | $71,633 |

Stock Recommendations - Zacks 排名第一的股票为强力买入推荐 [1] - Zacks 排名第五的股票为强力卖出推荐 [1] Investment Opportunities - Zacks 提供未来 30 天内有望跑赢市场的七支股票 [1] Resources - 更多信息请访问 zachs.com/bull [1]

Core Viewpoint - Shoe Carnival (SCVL) is anticipated to report a year-over-year decline in earnings due to lower revenues for the quarter ended July 2025, with the consensus outlook indicating a significant impact on the stock price based on actual results compared to estimates [1][3]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.55 per share, reflecting a year-over-year decrease of 33.7%, while revenues are projected to be $309.96 million, down 6.8% from the previous year [3]. - The consensus EPS estimate has been revised down by 15.25% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, suggesting no recent differing analyst views [12]. - The stock currently holds a Zacks Rank of 5, which complicates predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Shoe Carnival exceeded the expected earnings of $0.27 per share by delivering $0.34, resulting in a surprise of +25.93% [13]. - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14]. Conclusion - Shoe Carnival does not appear to be a strong candidate for an earnings beat based on current estimates and rankings, but investors should consider other factors when making decisions regarding the stock ahead of the earnings release [17].

Financial Performance - Net Income for Q1 2025 was $9.3 million, or $0.34 per diluted share, down from $17.3 million, or $0.63 per diluted share in Q1 2024[69] - Net Sales declined 7.5% in Q1 2025 compared to Q1 2024, with a 10.0% decline at the Shoe Carnival banner, while Shoe Station saw a 4.9% increase[70] - Comparable stores Net Sales decreased by 8.1%, primarily due to declines at the Shoe Carnival banner, partially offset by increases at Shoe Station[70] - Gross profit margin for Q1 2025 was 34.5%, down from 35.6% in Q1 2024, while Cost of Sales increased to 65.5% of Net Sales[68] - Operating Income for Q1 2025 was 4.3%, a decrease from 7.5% in Q1 2024, reflecting the impact of the rebanner strategy and industry headwinds[68] - Net Sales for Q1 2025 were $277.7 million, a decrease of $22.7 million or 7.5% compared to Q1 2024, primarily due to a 10.0% decline in the Shoe Carnival banner[78] - Gross Profit for Q1 2025 was $95.8 million, down $11.0 million from Q1 2024, with a gross profit margin of 34.5% compared to 35.6% in Q1 2024[79] - SG&A expenses decreased slightly to $83.8 million in Q1 2025, but as a percentage of Net Sales, they increased to 30.2% from 28.1% in Q1 2024[80] - Net cash used in operating activities was $9.6 million in Q1 2025, compared to net cash provided of $17.1 million in Q1 2024, driven by inventory purchase timing and lower earnings[84] Store Strategy and Capital Expenditures - The company plans to rebanner approximately 120 stores, or 28% of its current fleet, to Shoe Station by the end of Fiscal 2025, up from a previous goal of 51%[72] - The rebanner strategy is expected to reduce annual Operating Income by $20 to $25 million due to various associated costs[73] - Capital expenditures for the rebanner initiative are projected to be between $30 to $40 million in Fiscal 2025, with $10.3 million incurred in Q1 2025[75] - Capital expenditures for Fiscal 2025 are expected to be between $45 million and $60 million, with significant allocations for store rebanners and upgrades to the distribution center[96] - The company plans to rebanner over 50 additional Shoe Carnival stores into Shoe Station stores by March 2027, aiming for over 80% of the store fleet to operate as Shoe Station stores[97] Financial Position and Shareholder Returns - The company ended Q1 2025 with approximately $93.0 million in Cash, Cash Equivalents, and Marketable Securities, and $99.0 million available under its credit facility[76] - Working capital increased to $399.0 million at May 3, 2025, up from $355.8 million at May 4, 2024, primarily due to a higher cash balance and increased merchandise inventories[85] - The Board of Directors approved an 11.1% increase in the quarterly cash dividend to $0.15 per share, with $4.4 million returned to shareholders in Q1 2025[98] - The company has a $100 million Credit Agreement, with compliance on covenants as of May 3, 2025, allowing for dividends and share repurchases under certain conditions[91] - No share repurchases have been made in Fiscal 2025 to date, with the share repurchase program authorized for up to $50 million effective January 1, 2025[99] Inventory Management - Merchandise Inventories increased approximately 4% at the end of Q1 2025 compared to Q1 2024, with inventory purchased in advance of tariff increases[77]