Shoe Carnival (SCVL) is an American footwear retailer that offers casual and dress shoes, athletic shoes, boots, and sandals. It operates almost 300 stores primarily in the midwest, south, and southeast United States.

The company has been having a rough time of it lately. About three weeks ago, it said that first-quarter profits fell by a third due to poor product sales and a weak economy. The CEO said that dress shoes and sandals were particularly poor. Clearly, the pinched consumer has taken a toll on Shoe Carnival’s results.

Earnings per share came in at 38 cents, missing the estimate by a penny. This was the second time in four quarters that the company has missed the consensus estimate. Looking forward, the CEO uttered the dreaded “c” word in describing the future. That word would be “challenging.”

Current-year earnings estimates have been shaved by about 10% to 91 cents per share over the past 60 days. That would represent a drop of over 6% from last year’s results. The stock is not expensive at these levels, but the downside momentum in the stock price and the business will likely result in lower prices in the near future. We see downside to the $11-$12 area.