Shoe Carnival reported second-quarter earnings that doubled year-ago results but followed several other retailers in issuing a cautious outlook for the current quarter.

Earnings jumped 104.2 percent in the second quarter, to $5.8 million, or 29 a share, hitting the high-end of its guidance calling for EPS in the range of 26 to 30 cents.

Sales climbed 18.8 percent in the quarter to $216.4 million, benefiting from the one-week shift in the calendar due to fiscal 2012 being a 53-week year. Comparable store sales increased 2.6 percent, just under expectations.

Looking ahead to the third quarter, Shoe Carnival projected earnings of 51 to 55 cents a share, which would represent a decline from 60 cents a share in the year-ago period due to the calendar shift. Analysts were expecting earnings of 58 cents per share. Q3 comps are expected to increase in the range of 1.0 to 2.5 percent, which compares to a gain of 6.2 percent in the 2012 third quarter.

“The overall consumer discretionary spending environment remains challenging and we believe it is prudent to have a conservative outlook on our business for the third quarter,” said Cliff Sifford, President and CEO.

In the second quarter, traffic was down low single digits while conversion, average transaction and average units per transaction were all up low single digits.

Sifford said on a conference call with analysts that once spring arrived in late April and early May, the sales of traditional spring and summer products escalated.

“We experienced double-digit comparable store growth for the second quarter in categories such as molded footwear, canvas casuals and sport sandals,” said Sifford. “These categories drove comparable store sales increases in both the women's non-athletic department as well as the children's department.”

Women's non-athletic department’s comps were up high single digits with double-digit sales growth in its sport casual and boot sub departments making up for continued declines in dress.

Sport casual categories were driven primarily with molded footwear, sandals and canvas casuals, including a shift to canvas boat shoes from the more traditional leather versions. In boots, Western and the sport booty classifications sold well.

Men's non-athletic saw a low single digit decrease on a comp basis. Sandals were flat with a strong performance in soccer slides making up for a slow overall start to the quarter. Canvas casual classification also increased but declines were seen in boat shoes and men's casual sandals.

Adult athletics comps were down low single digits for the quarter, due to declines in women's running and basketball, along with men's basketball and skate. The athletic business trended up in May and June, but Shoe Carnival began to see a general slowdown in July sales as the Olympic time period last year approached.

Merchandise margins were down 70 basis points, partly due to the first week of back-to-school shifting from August to July. Overall gross margins improved to 28.9 percent compared to 28.7 percent a year ago due to sales leverage on buying, distribution and occupancy costs.

SG&A expenses decreased to 24.5 percent of sales compared to 26.1 percent in the second quarter of fiscal 2012.

Inventory closed the quarter up approximately 2 percent on a per store basis, in line with expectations.

Comps sales during August are expected to inch up approximately 1.0 percent on top of a high single-digit comparable store sales increase the fiscal month of August last year. The small gain was due to declining traffic and a shift in demand in its women's business into canvas casuals from brands such as Skechers, Keds, Vans, Bob's, Sperry and Roxy. Said Sifford, “This classification is performing very well but at lower price points than the mid-more traditional women's nautical and athletic styles that would normally drive sales during the back-to-school season.”

Double-digit sales increases are also being seen this BTS season in junior boots as booties and lace up boots “are both performing well.”

Sifford noted that Shoe Carnival has added Merrell to 56 doors, which we will expand to 100 for holiday. In about 20 percent of its doors it is adding four better women’s brands – Anne Klein Sport, Calvin Klein jeans, Report footwear and Steve Madden � in a test in September. Six brands already seeing a strong performance – Bare Traps, Clark's, Earth Origins, Roxy, Madden Girl and Bandolino � are being expanded.

To make room, Sifford said Shoe Carnival has reduced its selection of “tertiary brands” carrying lower selling prices.

“This long-term strategy is a key element to growing our women's nonathletic sales to 30 percent of our overall sales from 26 percent at the end of 2012,” said Sifford. “We plan to accomplish this through a combination of unit growth and higher AURs.”