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Investing.com - Seaport Global Securities downgraded Shoe Carnival (NASDAQ:SCVL) stock rating from Buy to Neutral on Tuesday, citing concerns about the company’s back-to-school sales performance. The retailer, currently trading at a P/E ratio of 9.08 with annual revenue of $1.18 billion, has seen its stock decline over 31% year-to-date according to InvestingPro data.
The research firm eliminated its previous $24 price target for the footwear retailer, which is scheduled to report second-quarter 2025 results on Thursday, September 4th.
Seaport Global now models sales and earnings per share at the low end of Shoe Carnival’s guidance ranges for Q2 2025, while also lowering estimates for the third quarter.
According to Bloomberg Second Measure debit and credit card data cited by Seaport Global, Shoe Carnival’s observed sales growth in Q2 2025 was negative and slightly worse than the first quarter, with the first two weeks of Q3 showing high-single-digit percentage declines.
Despite the downgrade, Seaport Global maintains that Shoe Carnival’s rebannering strategy is appropriate and positions the company well for fiscal year 2027, though the firm doesn’t believe this long-term outlook will drive stock performance in the near term.
In other recent news, Shoe Carnival reported its first-quarter earnings for 2025, surpassing expectations with an earnings per share (EPS) of $0.34 compared to the forecasted $0.30. However, the company experienced a decline in revenue, reporting $277.7 million, which fell short of the anticipated $284.9 million. Following these earnings, Williams Trading raised its price target for Shoe Carnival to $21 from $17, while maintaining a Hold rating, acknowledging the company’s strategic initiatives and financial performance. Shoe Carnival also announced an 11% increase in its quarterly cash dividend, now set at $0.15 per share, marking its 53rd consecutive quarterly dividend payment.
In a strategic move to bolster its mergers and acquisitions efforts, Shoe Carnival reinstated Kerry Jackson as Senior Vice President of New Business Development. Jackson, who previously served as Chief Financial Officer, will lead the company’s M&A strategy to enhance its market position. This appointment is part of Shoe Carnival’s broader plan to expand its footprint and solidify its standing in the footwear retail sector. These developments underscore Shoe Carnival’s ongoing efforts to strengthen its market presence and financial stability.
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