Shoe Carnival (NASDAQ:SCVL) shares rose sharply higher despite missing revenue estimates for the first quarter. Revenue for the footwear retailer fell short by $4 million compared to analyst estimates. The revenue of $257 million in the first quarter increased only 1.6% year over year. Investors, however, applauded the company’s bottom line performance – which led it to forecast record earnings for the full-year.
Its stock price rose 20% after an earnings beat and robust outlook for the full year. SCVL stock price rose 56% in the last twelve months.
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Shoe Carnival Earnings Performance
Shoe Carnival’s first quarter earnings per share grew 79% year over year to $0.89 per share. Inventory management and expense control drove the sharp earnings growth.
Its gross profit margin surged 150 basis points in the first quarter while merchandise margin jumped 0.7% over the past year period.
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The company, on the other hand, lowered its buying, distribution and occupancy expenses by a broader margin from a year ago period.
Shoe Carnival management looks optimistic about its future performance after a strong start to the year. The CEO stated, “Based on these results, we are raising both the low and high end of our diluted earnings per share guidance for the fiscal year 2018. We believe we are well-positioned as we move through the year with a compelling assortment of on-trend family footwear at the right price.”
Share Buybacks Supports Earnings and Share Performance
The company has been supporting its earnings per share through its focus on reducing the number of outstanding shares. It repurchased 810,613 shares of common stock during the latest quarter. It plans to extend its share buyback program in the following three quarters of this year. Share buybacks always have a positive impact on the stock performance, as the lower number of outstanding shares increases the demand.
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