Shoe Carnival Third Quarter Income Jumps 46% on 8.3% Comp-Store Increase

Shoe Carnival, Inc. net income for the third quarter of fiscal 2005 increased 46.3% to $7.2 million compared with net income of $4.9 million in the third quarter of fiscal 2004. Diluted earnings per share increased 39.5% to 53 cents per share from 38 cents per share last year.

Net sales for the third quarter of 2005 increased 12.3 percent to a record $182.7 million from $162.7 million last year. Comparable store sales increased by 8.3 percent for the 13-week period.

Gross profit margin for the third quarter of 2005 increased to 29.5 percent from 29.1 percent last year. Selling, general and administrative expenses, as a percentage of sales, decreased to 23.1 percent from 24.1 percent in the third quarter of 2004.

Mark Lemond, president and chief executive officer stated, “Thanks to a record breaking 21.2 percent comparable store sales increase in October, we posted the highest earnings ever in the Company's history. This broke the record set in the first quarter of this year. With two record breaking quarters in 2005, we're obviously pleased with the results so far this year.”

“In the third quarter, each of our major product categories posted a comparable store sales increase. Importantly, we continue to make great progress in our initiative of strengthening our women's dress and casual business. In fact, the largest quarterly comparable store sales increases came from women's dress shoes and women's boots, both of which were up 40 percent.”

“I want to commend our associates for the tremendous job they have done in dealing with the devastation and consequent relief efforts resulting from the hurricanes in Florida and along the Gulf Coast. Part of the success we had as a company in the third quarter was attributable to the strength and perseverance of our associates in these difficult times.”

Net income for the first nine months of 2005 was $15.8 million, or $1.18 per diluted share, compared with net income of $11.3 million, or $0.87 per diluted share, last year. Net sales increased 10.3 percent to $492.1 million for the first nine months from sales of $446.3 million last year. Comparable store sales increased 5.5 percent for the nine-month period. Gross profit margin for the first nine months of 2005 increased to 29.1 percent from 28.7 percent last year. Selling, general and administrative expenses, as a percentage of sales, decreased to 23.8 percent in the first nine months of 2005 from 24.4 percent last year.

Shoe Carnival now anticipates an increase in comparable store sales for the fourth quarter of 3 to 5 percent. Diluted earnings per share are expected to be between $0.13 and $0.15 for the fourth quarter compared to $0.09 for the fourth quarter of 2004. Diluted earnings per share for the full year of 2005 are anticipated to be between $1.31 and $1.33.

Store Growth

During the first nine months of 2005, 14 new stores were opened and four were closed. Two stores were opened in the third quarter, and an additional store has opened in the fourth quarter. The Company closed three stores in the third quarter and expects to close four stores during the last quarter of this year, two of which will be closed in the last week of the fiscal year. In 2006, the Company plans to open 15 new stores and close four.

The two stores opened during the third quarter included locations in:

              City                         Market/Stores
              ----                         -------------
              Sioux City, IA               Sioux City/1
              Chesapeake, VA               Norfolk/4

                          SHOE CARNIVAL, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   (In thousands, except per share)
                              (Unaudited)

                                Thirteen                  Thirty-nine
                               Weeks Ended                Weeks Ended
                    Thirteen   October 30,  Thirty-nine   October 30,
                  Weeks Ended     2004      Weeks Ended      2004
                  October 29, (as restated) October 29,  (as restated)
                      2005         (1)          2005          (1)
                 ------------ ------------- ------------ -------------


Net sales        $   182,697  $    162,716  $   492,068  $    446,308
Cost of sales
 (including
 buying,
 distribution
 and occupancy
 costs)              128,815       115,421      349,089       318,394
                 ------------ ------------- ------------ -------------

Gross profit          53,882        47,295      142,979       127,914
Selling, general
 and
 administrative
 expenses             42,180        39,150      117,024       108,811
                 ------------ ------------- ------------ -------------

Operating income      11,702         8,145       25,955        19,103
Interest
 expense-net             100           135          361           508
                 ------------ ------------- ------------ -------------

Income before
 income taxes         11,602         8,010       25,594        18,595
Income tax
 expense               4,452         3,124        9,819         7,252
                 ------------ ------------- ------------ -------------

Net income       $     7,150  $      4,886  $    15,775  $     11,343
                 ============ ============= ============ =============


Net income per
 share:
   Basic         $       .54  $        .38  $      1.21  $        .89
                 ============ ============= ============ =============

   Diluted       $       .53  $        .38  $      1.18  $        .87
                 ============ ============= ============ =============