Shoe Carnival's Q3 Sales Dip, Net Income Falls 24%

TL;DR

**SCVL's Q3 results are a red flag, showing significant declines in sales and profit, making it a risky bet for now.**

AI Summary

Shoe Carnival Inc. (SCVL) reported a decline in net sales and net income for both the thirteen and thirty-nine weeks ended November 1, 2025. Net sales for the thirteen weeks decreased by 3.1% to $297.16 million from $306.89 million in the prior year, while net income fell by 23.8% to $14.65 million from $19.24 million. For the thirty-nine weeks, net sales dropped 6.2% to $881.26 million from $939.95 million, and net income decreased by 26.9% to $43.21 million from $59.10 million. Operating income also saw a significant decline, falling 24.1% to $18.62 million for the thirteen weeks and 27.6% to $55.82 million for the thirty-nine weeks. The company's acquisition of Rogan Shoes in February 2024 contributed $21.1 million in net sales for the thirteen weeks and $60.1 million for the thirty-nine weeks ended November 1, 2025. Cash and cash equivalents decreased to $94.37 million as of November 1, 2025, from $108.68 million at February 1, 2025, primarily due to increased merchandise inventories and capital expenditures. The One Big Beautiful Bill Act (OBBB), signed on July 4, 2025, led to an increase in deferred tax expense, though the company expects no material impact on its Fiscal 2025 effective tax rate.

Why It Matters

Shoe Carnival's declining sales and net income signal a challenging retail environment, impacting investor confidence and potentially future dividend growth. The competitive landscape, with rivals like Foot Locker and DSW, intensifies pressure on SCVL to innovate and maintain market share. For employees, sustained declines could lead to operational adjustments, while customers might see changes in product assortment or pricing strategies. The broader market will watch if this trend is indicative of a wider slowdown in discretionary consumer spending on footwear, especially as the company navigates the integration of Rogan's acquisition amidst these headwinds.

Risk Assessment

Risk Level: medium — The company experienced a 23.8% decrease in net income for the thirteen weeks ended November 1, 2025, falling to $14.65 million from $19.24 million in the prior year. Additionally, net sales declined by 3.1% to $297.16 million. These declines, coupled with a significant increase in merchandise inventories by $49.69 million for the thirty-nine weeks, indicate potential challenges in sales velocity and profitability, warranting a medium risk assessment.

Analyst Insight

Investors should exercise caution and monitor SCVL's next earnings report closely for signs of stabilization or further deterioration. Consider holding off on new investments until there's clear evidence of a turnaround in sales and profitability, especially given the inventory build-up.

Financial Highlights

revenue

$881.26M

operating Margin

6.3%

total Assets

$1,172.54M

net Income

$43.21M

gross Margin

37.0%

cash Position

$94.37M

revenue Growth

-6.2%

Revenue Breakdown

Key Numbers

• $297.16M — Net Sales (Decreased 3.1% for the thirteen weeks ended November 1, 2025, from $306.89M in prior year.)
• $14.65M — Net Income (Decreased 23.8% for the thirteen weeks ended November 1, 2025, from $19.24M in prior year.)
• $881.26M — Net Sales (Decreased 6.2% for the thirty-nine weeks ended November 1, 2025, from $939.95M in prior year.)
• $43.21M — Net Income (Decreased 26.9% for the thirty-nine weeks ended November 1, 2025, from $59.10M in prior year.)
• $18.62M — Operating Income (Decreased 24.1% for the thirteen weeks ended November 1, 2025, from $24.53M in prior year.)
• $55.82M — Operating Income (Decreased 27.6% for the thirty-nine weeks ended November 1, 2025, from $77.12M in prior year.)
• $49.69M — Merchandise Inventories Increase (Increase in inventories for the thirty-nine weeks ended November 1, 2025, indicating potential overstock or slowing sales.)
• $94.37M — Cash and Cash Equivalents (As of November 1, 2025, a decrease from $108.68M at February 1, 2025.)
• 27,374,968 — Shares Outstanding (As of November 28, 2025, indicating shareholder base.)
• $44.8M — Rogan Shoes Acquisition Price (Paid in February 2024, contributing to strategic expansion.)

Key Players & Entities

• SHOE CARNIVAL INC (company) — registrant
• Rogan Shoes, Incorporated (company) — acquired subsidiary
• President Trump (person) — signed the One Big Beautiful Bill Act
• Securities and Exchange Commission (regulator) — filing oversight
• $297.16 million (dollar_amount) — net sales for thirteen weeks ended November 1, 2025
• $14.65 million (dollar_amount) — net income for thirteen weeks ended November 1, 2025
• $881.26 million (dollar_amount) — net sales for thirty-nine weeks ended November 1, 2025
• $43.21 million (dollar_amount) — net income for thirty-nine weeks ended November 1, 2025
• $44.8 million (dollar_amount) — purchase price for Rogan Shoes acquisition
• $94.37 million (dollar_amount) — cash and cash equivalents as of November 1, 2025

FAQ

Risk Factors

• Inventory Management [medium — operational]: Merchandise inventories increased to $435.3 million as of November 1, 2025, from $385.6 million at February 1, 2025. This increase, particularly for the thirty-nine weeks ended November 1, 2025, suggests potential overstocking or a slowdown in sales velocity, which could lead to markdowns and reduced profitability.
• Consumer Spending Sensitivity [high — market]: The company's net sales have declined for both the thirteen-week and thirty-nine-week periods ended November 1, 2025. This indicates a sensitivity to consumer spending patterns, which can be impacted by economic conditions, inflation, and shifts in discretionary spending on apparel and footwear.
• Cash Position Decline [medium — financial]: Cash and cash equivalents decreased to $94.37 million as of November 1, 2025, from $108.68 million at February 1, 2025. This reduction, driven by increased merchandise inventories and capital expenditures, could limit financial flexibility for future investments or unexpected economic downturns.
• Tax Law Changes [low — regulatory]: The 'One Big Beautiful Bill Act' (OBBB) enacted on July 4, 2025, resulted in an increase in deferred tax expense. While the company anticipates no material impact on its Fiscal 2025 effective tax rate, future changes or interpretations of tax legislation could affect profitability.
• Acquisition Integration [medium — operational]: The acquisition of Rogan Shoes in February 2024 contributed $21.1 million in net sales for the thirteen weeks and $60.1 million for the thirty-nine weeks ended November 1, 2025. Successful integration and realization of synergies from this acquisition are critical for its long-term success and impact on overall financial performance.

Industry Context

The retail footwear industry is highly competitive and sensitive to consumer discretionary spending. Trends include a shift towards online sales, demand for athleisure and comfort wear, and increasing price sensitivity due to economic pressures. Companies like Shoe Carnival face challenges from both large national chains and direct-to-consumer brands.

Regulatory Implications

The recent enactment of the 'One Big Beautiful Bill Act' (OBBB) has introduced a new factor in deferred tax expenses. While the immediate impact on the effective tax rate appears minimal, companies must remain vigilant about evolving tax legislation and its potential long-term effects on profitability and financial planning.

What Investors Should Do

1. Monitor inventory levels closely.
2. Analyze the impact of Rogan Shoes acquisition.
3. Evaluate the sustainability of sales trends.
4. Assess cash flow generation and liquidity.

Key Dates

• 2025-11-01: End of thirteen and thirty-nine week reporting periods — Provides the latest financial performance data, showing declines in net sales and income, and an increase in inventory.
• 2025-07-04: Enactment of the One Big Beautiful Bill Act (OBBB) — Led to an increase in deferred tax expense, highlighting potential regulatory impacts on future tax liabilities.
• 2025-02-01: End of prior fiscal year reporting period — Used as a comparison point for current period cash and inventory levels, showing a decrease in cash and an increase in inventory.
• 2024-11-02: End of prior year thirteen and thirty-nine week reporting periods — Benchmark for current period sales and income declines.
• 2024-02-01: Acquisition of Rogan Shoes completed — The acquisition's sales contribution is now reflected in the current period's results, impacting revenue figures.

Glossary

Operating lease right-of-use assets

Represents the value of a company's right to use an asset over the lease term, typically for properties or equipment, under operating lease agreements. (Significant balance ($340.9M as of Nov 1, 2025) indicating substantial lease commitments, impacting financial leverage and cash flow.)

Treasury stock

Shares of a company's own stock that it has repurchased from the open market. (The company holds $212.7M in treasury stock as of Nov 1, 2025, reducing outstanding shares and potentially signaling a return of capital to shareholders.)

Deferred income taxes

Taxes that are payable in future periods, arising from temporary differences between accounting income and taxable income. (Increased to $25.2M as of Nov 1, 2025, partly due to the OBBB Act, indicating potential future tax liabilities or benefits.)

Gross profit

The profit a company makes after deducting the costs associated with making and selling its products (cost of goods sold). (Slight increase for the thirteen weeks ($111.8M vs $110.4M) but a decrease for the thirty-nine weeks ($326.4M vs $337.1M) shows pressure on core profitability.)

Operating income

Profitability from a company's core business operations before interest and taxes. (Significant declines for both periods (-24.1% and -27.6%) highlight challenges in managing operational expenses relative to sales.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Shoe Carnival Inc. has experienced a decline in both net sales and net income. Net sales for the thirty-nine weeks ended November 1, 2025, decreased by 6.2% to $881.26 million, and net income fell by 26.9% to $43.21 million. Operating income also saw a significant drop of 27.6%. Key balance sheet changes include a decrease in cash and cash equivalents to $94.37 million and a substantial increase in merchandise inventories to $435.3 million, indicating potential headwinds in sales performance and inventory management.

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share SCVL The Nasdaq Stock Mar

Filing Documents

• scvl-20251101.htm (10-Q) — 2291KB
• scvl-ex31_1.htm (EX-31.1) — 14KB
• scvl-ex31_2.htm (EX-31.2) — 14KB
• scvl-ex32_1.htm (EX-32.1) — 8KB
• scvl-ex32_2.htm (EX-32.2) — 8KB
• 0001193125-25-308714.txt ( ) — 8764KB
• scvl-20251101.xsd (EX-101.SCH) — 773KB
• scvl-20251101_htm.xml (XML) — 2041KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Shareholders' Equity 5 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 24 Item 4.

Controls and Procedures

Controls and Procedures 24 Part II Other Information Item 1A.

Risk Factors

Risk Factors 25 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 5. Other Information 25 Item 6. Exhibits 26 Signature 27 2 SHOE CARNIVAL, INC.

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS SHOE CARNIVAL, INC. CONDENSED CONSOLID ATED BALANCE SHEETS Unaudited (In thousands, except share data) November 1, 2025 February 1, 2025 November 2, 2024 Assets Current Assets: Cash and cash equivalents $ 94,369 $ 108,680 $ 77,235 Marketable securities 13,294 14,432 13,866 Accounts receivable 7,094 9,018 8,678 Merchandise inventories 435,296 385,605 406,599 Other 22,986 18,409 20,662 Total Current Assets 573,039 536,144 527,040 Property and equipment – net 187,779 172,806 174,171 Operating lease right-of-use assets 340,931 343,547 351,023 Intangible assets 40,934 40,968 40,979 Goodwill 18,018 18,018 18,018 Other noncurrent assets 11,840 12,650 13,198 Total Assets $ 1,172,541 $ 1,124,133 $ 1,124,429 Liabilities and Shareholders' Equity Current Liabilities: Accounts payable $ 65,853 $ 52,030 $ 57,283 Accrued and other liabilities 23,567 25,382 20,050 Current portion of operating lease liabilities 51,906 53,013 58,432 Total Current Liabilities 141,326 130,425 135,765 Long-term portion of operating lease liabilities 310,885 314,974 317,679 Deferred income taxes 25,203 18,879 17,639 Deferred compensation 10,988 10,011 13,449 Other 962 848 4,239 Total Liabilities 489,364 475,137 488,771 Shareholders' Equity: Common stock, $ 0.01 par value, 50,000,000 shares authorized and 41,049,190 shares issued in each period, respectively 410 410 410 Additional paid-in capital 91,484 90,371 87,861 Retained earnings 803,948 773,353 762,489 Treasury stock, at cost, 13,674,222 shares, 13,874,787 shares and 13,874,425 shares, respectively ( 212,665 ) ( 215,138 ) ( 215,102 ) Total Shareholders' Equity 683,177 648,996 635,658 Total Liabilities and Shareholders' Equity $ 1,172,541 $ 1,124,133 $ 1,1

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