Why Is Shoe Carnival (SCVL) Stock Rocketing Higher Today

What Happened:

Shares of footwear retailer Shoe Carnival (NASDAQ:SCVL) jumped 13.3% in the morning session after the company reported second-quarter earnings results. Notably, the Back-to-School shopping season (the company's most important sales period) was highly successful, driving strong sales momentum. As a result, the company achieved its highest second-quarter sales on record. However, same-store sales came in below expectations, leading to a revenue miss. Its full-year revenue guidance was underwhelming as well. Regardless, the company provided encouraging long-term projections, indicating strong demand for its offerings, as it expects to operate more than 500 stores by 2028 (vs the current count of 430). Overall, this was a decent quarter, with the market cheering the improved momentum following the successful Back-to-School campaign.

Is now the time to buy Shoe Carnival? Access our full analysis report here, it’s free.

What is the market telling us:

Shoe Carnival’s shares are not very volatile than the market average and over the last year have had only 16 moves greater than 5%. Moves this big are very rare for Shoe Carnival and that is indicating to us that this news had a significant impact on the market’s perception of the business. 

The biggest move we wrote about over the last year was 10 months ago, when the stock dropped 6.9% on the news that the company reported third quarter results that missed analysts' revenue and EPS estimates, with management attributing the shortfall to softening trends, largely influenced by unseasonably warm weather. 

Additionally, the company lowered its full-year guidance for revenue, operating income, and EPS, indicating a less optimistic outlook. The company expressed concerns about uncertainty in customer holiday shopping and ongoing volatility in broader macro-economic conditions. Overall, this was a mediocre quarter for Shoe Carnival.

Shoe Carnival is up 43.2% since the beginning of the year, and at $42.10 per share it is trading close to its 52-week high of $43.87 from August 2024. Investors who bought $1,000 worth of Shoe Carnival’s shares 5 years ago would now be looking at an investment worth $2,883.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.