AP News

Shoe Carnival falls as analyst downgrades

NEW YORK (AP) — Shares of Shoe Carnival dropped nearly 6 percent on Friday after an analyst downgraded the footwear and accessories company's rating, saying its second-quarter results and third-quarter guidance did not top expectations.

THE SPARK: Sam Poser of Sterne, Agee & Leach lowered his rating on Shoe Carnival to "Neutral" from "Buy."

THE ANALYSIS: The analyst said in a client note that he considers the retailer "a very good company with a solid management team that is executing properly." While Poser views the company's second-quarter performance and third-quarter outlook as solid, he pointed out that it did not beat his estimates.

The analyst also believes that Shoe Carnival's stock is fairly valued.

"Given no new catalysts we see no reason to put new money to work," Poser wrote.

BACKGROUND: On Thursday Shoe Carnival reported second-quarter earnings of 14 cents per share on revenue of $182.2 million.

Analysts surveyed by FactSet expect second-quarter earnings of 11 cents per share on revenue of $182.1 million. Poser forecast earnings of 13 cents per share.

The company also said that it expects third-quarter earnings of 55 cents to 60 cents per share on revenue between $240 million and $245 million.

Wall Street predicts third-quarter earnings of 57 cents per share on revenue of $234.5 million. Poser forecasts earnings of 59 cents per share.

SHARE ACTION: Shoe Carnival Inc.'s stock fell $1.43, or 5.9 percent, to $22.95 in midday trading. The shares have traded in a range of $12.79 to $24.66 over the last year.

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