Williams Trading has maintained a Buy rating on Shoe Carnival (NASDAQ: NASDAQ:SCVL) and raised the price target to $51.00 from $42.00, anticipating positive outcomes ahead of the company's second-quarter earnings report set for release on Thursday, September 5, before the market opens.
The firm's optimism is fueled by the expectation that Shoe Carnival (NYSE:CCL) will benefit from increased consumer foot traffic in stores and a strong demand for key brands.
The analyst highlighted that Shoe Carnival's strategic relationships with national brands such as Birkenstock (NYSE:BIRK), Skechers, and Crocs (NASDAQ:CROX), combined with a reduced reliance on private label products, position it well against competitors like Famous Footwear and DSW.
Shoe Carnival's ability to stock specific items requested by discerning consumers is expected to be a significant advantage. Additionally, the company's ongoing enhancements to its omni-channel operations are seen as a positive factor.
Williams Trading has raised its estimates for Shoe Carnival's second-quarter earnings per share (EPS) and same-store sales (SSS) from $0.80 and -2% to $0.87 and +2%, respectively. This revision comes in light of the company's guidance which suggested revenues of $330 million and EPS of $0.80 for the quarter, implying a midpoint for FY24 SSS guidance at -2%.
However, the firm believes that the trends have remained stable or improved since the positive SSS reported up to around May 20th.
The analyst also noted that the second-quarter revenue is expected to see a roughly $20 million boost due to a calendar shift from the 53rd week in the previous fiscal year. Despite losing a $5 million week at the start of the quarter, Shoe Carnival is anticipated to gain from a $25 million week, one of the busiest for back-to-school sales.
In other recent news, Shoe Carnival has been the subject of attention from Seaport Global Securities, which has revised its price target for the company's stock to $50 from the previous $42, while maintaining a Buy rating.
The adjustment comes in anticipation of Shoe Carnival's second quarter 2024 report. The company's sales growth in the second quarter surpassed that of the first, and early indicators suggest that the third quarter could be even stronger.
Despite a slower start to the back-to-school season, recent weeks have shown increased momentum, which, along with a strong start to the third quarter, is expected to bolster the company's forecast for a robust second half of 2024.
Seaport Global predicts that the second-quarter results will align with Shoe Carnival's conservative estimates and that improved back-to-school performance will likely lead to a reaffirmation of the full-year guidance. Among other recent developments, Shoe Carnival has declared a quarterly cash dividend of $0.135 per share, marking the 49th consecutive quarter of such dividends.
The company's CEO, Mark Worden, has attributed this continuous return to shareholders to the company's consistent cash flow and debt-free status, highlighting the company's strong capital and liquidity management.
Worden also expressed the company's ambition to become the nation's top family footwear retailer, suggesting that the company's financial health could support growth strategies and further increase shareholder value.
InvestingPro Insights
As Shoe Carnival (NASDAQ:SCVL) gears up for its second-quarter earnings report, real-time data from InvestingPro provides a comprehensive financial snapshot of the company. With a market cap of $1.17 billion and a P/E ratio that stands at 15.14, Shoe Carnival appears to be maintaining a solid position in the market. Notably, the company's revenue for the last twelve months as of Q1 2023 amounted to $1.195 billion, despite a slight decline of 2.51% in revenue growth during the same period. The gross profit margin remains robust at 35.97%, indicating a strong ability to control costs and generate profit from sales.
InvestingPro Tips suggest that Shoe Carnival's financial health is reinforced by its ability to cover interest payments with its cash flows and by maintaining dividend payments for 13 consecutive years, which is a testament to its financial stability and commitment to shareholder value. Additionally, the company has been profitable over the last twelve months, and analysts predict profitability will continue this year. For those looking to delve deeper into Shoe Carnival's financials, InvestingPro offers an array of additional tips, with 11 more listed on the platform.
Overall, these insights highlight Shoe Carnival's financial resilience and potential for growth, which may interest investors as they consider the company's upcoming earnings report. With a fair value estimation of $38.75 according to InvestingPro, the current analyst target of $51.00 suggests a bullish outlook on the stock's potential. Investors and analysts alike can explore further details and tips by visiting InvestingPro's dedicated page for Shoe Carnival at https://www.investing.com/pro/SCVL.
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