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Shoe Carnival Surprises

EVANSVILLE, IN-Despite a slow start to back-to-school sales, an increase in non-athletic shoes sales during Q2 pumps profits up 39%.

By Dana Dubriwny | Updated on August 24, 2005

EVANSVILLE, IN-Despite sluggish sales in the first weeks of the back-to-school season, Shoe Carnival Inc.’s president and chief executive officer, Mark Lemond, assured investors during Tuesday’s Q2 earnings call that the company has seen positive results in third week of August. In Carnival’s southern regions, where schools tend to start earlier, sales have been exceeding the company’s expectations. “It appears that consumers are shopping closer to the back-to-school date, or even after school starts, more than they have in recent years,” Lemond told investors.

Reiterating the late start in back-to-school sales, Clifton E. Sifford, executive vice president and general merchandise manager, attributed the trend to the challenging effect of changing styles. “I think part of the reason is the consumer is somewhat confused,” Sifford said. “They know a new fashion trend is happening within the athletic arena but they don’t know what to wear it with or how to pair it up with the apparel they want to wear. I think they got to school and saw what was happening and now they are in our store making their selection.”

Yet, even with disappointing numbers in the last two weeks of its second quarter as a result of the back-to-school season, the company closed its Q2 with a 39% increase in profit, posting $2.7 million compared with net income of $1.9 million in the second quarter last year. The company attributed the gain to the increase in women’s non-athletic products to make up 26.2% of total sales, up from 23.5% in the second quarter of 2004.

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