Shares of Shoe Carnival, Inc. (SCVL - Free Report) increased 10.7% in after-hours trading on Jun 22, following a business update related to store reopenings. It has reopened all but one of its 390 outlets across the United States and Puerto Rico, as of Jun 22, 2020. The footwear retailer had shuttered all its outlets effective Mar 19 and started reopening them in late-April. Impressively, the company posted robust sales, surpassing management’s expectations so far in second-quarter fiscal 2020.
So far in fiscal second quarter, the company has seen comparable store sales growth of 28.1% year over year along with e-commerce comparable sales registering a surge of roughly 470%. Its brick-and-mortar comparable sales grew 4% during the said period. However, the company has warned of gross margin woes in the quarter, stemming from rising shipping charges in relation to higher e-commerce sales. Although uncertainties remain, management is optimistic due to favorable sales trends and efforts to cater to consumer needs.
To tackle coronavirus-induced challenges, management has taken measures like curbing non-essential corporate spending, reducing pay cuts temporarily, deferring non-essential capital plans, negotiating modified lease terms, putting share repurchases on hold, assessing possible benefits of the CARES Act and adopting sanitation procedures. Also, it has exercised the accordion feature in its credit agreement, resulting in an increase in capacity of the line of credit to $100 million from $50 million.
Undoubtedly, the coronavirus pandemic had a profound impact on its first-quarter performance, forcing it to shut all its brick-and-mortar stores midway through the quarter. The company posted a dismal first-quarter fiscal 2020, wherein it reported wider-than-expected loss per share. Also, both top and bottom lines declined year over year. Again, margins were dismal in the reported quarter. Management did not provide outlook for fiscal 2020 owing to continued volatile impacts of the pandemic.
We note that the company does not intend to release preliminary financial results unless otherwise required. However, it will provide additional details on its second-quarter fiscal 2020 in August on its earnings call. A look at this Zacks Rank #3 (Hold) stock’s price performance shows that it has increased 34.9% in the past three months. Meanwhile, the industry has gained 24.6%.
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