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Here's How Shoe Carnival Is Doing So Far This Year

Dec. 15, 2014 3:27 PM ETShoe Carnival, Inc. (SCVL)1 Comment
William Bias profile picture
William Bias


  • Shoe Carnival’s year-to-date top line growth came exclusively from new stores.
  • Shoe Carnival’s selling, general and administrative expenses increases resulted in a year-to-date net income decline of 14%.
  • Shoe Carnival’s free cash flow deficit expanded year-over-year due to expanded capital expenditures.

On Dec. 1, footwear retailer Shoe Carnival (NASDAQ: NASDAQ:SCVL) gave its Q3 2014 earnings announcement. The company performed well on the top line front. However, its profitability left much to be desired. Let's check out what's going on with the company.

Excellent top line expansion

Shoe Carnival grew its year-to-date revenue 4% versus the same time last year. However, most of that gain came from the company opening 30 new stores versus 29 the same time last year. However, its year-to-date same store sales declined 0.4%. While it's great that the company is expanding, I would like to see the company grow sales at its established locations.

Net income decreased

While Shoe Carnival saw decent top line expansion, it's a different matter with net income. The company saw its year-to-date net income decline by a whopping 14%. Selling, general, and administrative expenses expanded as a percentage of sales from 23.3% this time last year to 24.1% so far this year. The company really needs to bring more customers through the doors in order to grow revenue faster than expenses. It would also pay for the company to focus more on cost control.

Free cash flow deficit expanded

Shoe Carnival is free cash flow negative so far this year. Shoe Carnival went from negative $8.2 million last year to negative $8.4 million this year expanding its deficit 3%. Shoe Carnival's operating cash flow expanded 7% vs. the same time last year. However, capital expenditures expanded 9% year-over-year. Hopefully, the holidays will be kind to this company pushing free cash flow into positive territory.

Balance sheet

Shoe Carnival possesses an okay balance sheet. In the most recent quarter, the company possessed cash amounting $29 million or 9% of stockholders' equity. I like to see companies with cash amounting to 20% or more of stockholders' equity so that they can self-finance

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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Comments (1)

bigxbomber11 profile picture
And that's why year-to-date the stock has been struggling. However, there last quarter results showed that things are definitely looking up. I say the poor YTD results/stock price, coupled with a very strong most recent quarter signal a turnaround.
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