What happened

Shares of Shoe Carnival (SCVL -1.95%) were climbing higher today after the footwear retailer posted strong results in its second-quarter earnings report. Though revenue and profits fell from the quarter a year ago, that was more a result of difficult comparisons with a quarter that benefited from stimulus checks and the economic reopening than any current struggles.

The stock closed up 11% today on the news. 

So what

Shoe Carnival reported revenue of $312.3 million, which was up 16.4% from Q2 2019, the equivalent pre-pandemic period, but down 6% from the quarter a year ago, as the company is operating in a more difficult macroeconomic environment.

The retailer also held onto much of the profitability gains it made during the pandemic as gross margin was 36.2%, compared to 30.6% in Q2 2019, and operating margin came in at 12.4%, more than double the 5.8% it had in Q2 2019. Though both of those margins were down from a year ago, they were still strong enough to please investors.

On the bottom line, the company reported earnings per share of $1.04, which beat analyst estimates at $1.02, and compares with EPS of $1.54 in Q2 2021 and $0.40 in Q2 2019. 

The company also said Shoe Station, the retailer it acquired late last year, was delivering better results than expected with sales more than 10% above its prior expectation of $100 million annually.

CEO Mark Worden summed up the performance, saying,

The Shoe Carnival team delivered exceptional profitability in a challenging economic environment. The nearly $2.00 of EPS earned during the first half of 2022 is greater than any full year earnings in our 44 years of operation except for last year's stimulus boosted results.

Now what

Shoe Carnival said the back-to-school season was off to a strong start, and it reaffirmed its full-year guidance, calling for earnings per share of $3.95 to $4.15, much better than its pre-pandemic high of $1.46 and above the analyst consensus at $3.97, showing how much its efforts to streamline costs have paid off.

Based on that forecast, the stock looks like a bargain at a price-to-earnings ratio of just 6.