Shoe Carnival (SCVL) posted record-setting sales improvement on the way to its fifth consecutive earnings surprise.
Company Description
Shoe Carnival has 311 stores selling footwear throughout the Midwest, South and Southeast. The company targets cost conscious shoppers of all ages.
Sales up 13%
On Jun 2 Shoe Carnival reported first-quarter results for fiscal 2010 that showed a 13.3% jump in sales, to $190 million. Same-store sales were up a company-record 13.1%, showing improving conditions rather than just growth through expansion.
Net income more than doubled to $9.2 million, leading to earnings per share of 72 cents. Heading into the report, the Zacks Consensus Estimates was 71 cents, making it the fifth consecutive earnings surprise for Shoe Carnival.
Bullish Guidance
In the same release Shoe Carnival said it expects to earn between 23 and 27 cents in the second quarter. Three months ago the Zacks Consensus Estimate was 14 cents.
Analysts raised full-year guidance on the news. Estimates are averaging $1.85 for this year, up from $1.32 in the past 3 months. Projections for next year are at $2.10, up from $1.41.
Given these estimates, analysts are expecting annual growth of 54% this year and another 13% next year.
A Good Value
Like its stores, the company shares are also giving buyers a good value. Shares of SCVL are trading at less than 13 times forward earnings and with a PEG of 0.8 times.
A PEG ratio under 1.0 is a rule of thumb when looking for growth at a reasonable price (GARP).
The Chart
Shares of SCVL sold off on the earnings news but are bouncing back. The MACD is ready to signal a buy for momentum-based traders.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service Zacks Investment Research
