Shares of Shoe Carnival Inc. (NASDAQ:SCVL) were moving higher on Wednesday after the retailer posted a better-than-expected earnings report in its second quarter. Comparable-store sales surged, and the strip-mall staple beat expectations across the board.
As a result, the stock was up 10.9% as of 10:50 a.m. EDT.
Comps at the footwear retailer jumped 6.7% as the company appears to be riding the same bullish wave as retailers like Target and Walmart, which also had blowout earnings reports.
Overall revenue rose 14.2% to $268.4 million, topping estimates of $266.5 million. Gross margin jumped 220 basis points to 31.2% as the company gained operating leverage from improving comps. And earnings per share more than tripled, jumping 217% to $0.76, well ahead of expectations at $0.56.
CEO Cliff Sifford said that the strong performance was driven by a double-digit increase in women's nonathletic footwear, and he expects the momentum to continue. "We believe we remain well positioned for future growth. And based on these strong operational and financial results, as well as our outlook for the remainder of the year, we are raising our annual earnings guidance," Sifford said.
Shoe Carnival continues to execute going into the back-to-school season as comps are up 7.7% in the first three weeks, and the company raised its full-year guidance. The retailer is now calling for revenue of $1.016 billion to $1.02 billion with comps up in the low single digits, and EPS of $2.07 to $2.15, up from adjusted EPS of $1.49 last year.
Shoe Carnival still plans to close as many as 17 stores this year, a reminder of the chain's broader struggles, and as a result, revenue is expected to be flat for the year. However, if the current momentum keeps up, as appears to be happening with the strong growth through August, management's guidance could end up being overly conservative.