Shoe Carnival will continue buying back shares this year
On Dec. 20, Shoe Carnival, Inc. (NASDAQ:SCVL) announced that its board of directors authorized a new share repurchase program for up to $50 million of its outstanding common stock, effective Jan. 1. This program will replace its existing $50 million buyback program, which expired in accordance with its terms at the end of 2021. The firm's board of directors also approved the payment of a quarterly cash dividend of $0.07 per share, which will be paid on Jan. 24 to shareholders on record by Jan. 10.
Shoe Carnival stock has increased about 77% in price year-over-year, and just hit a record high of $46.20 on Nov. 18, thanks to a bounce off the 180-day moving average. It looks like this trendline is once again serving as support for a pullback, and today SCVL is up 1.3% at $37.41. Moreover, Shoe Carnival offers a forward dividend of $0.28 with a dividend yield of 0.74%.
Despite this positive price action, SCVL is heavily shorted, and an unwinding of some of this pessimism could put wind at the stock's back. Currently, the 2.85 million shares sold short make up 16.3% of the stock's available float, and would take almost two weeks to cover at its average daily pace of trading.
From a fundamental perspective, Shoe Carnival stock maintains a very attractive valuation despite the significant appreciation in share price last year. Shoe Carnival stock currently trades a price-earnings ratio of 7.91 and a price-sales ratio of 0.88. SCVL’s revenues and net income are also up 25% and 659%, respectively, since fiscal 2017, despite experiencing a 6% decline in revenues and a 63% drop in net income in fiscal 2020.