Sterne Agee Raises Estimates on Shoe Carnival

Sterne Agee is raising its estimates on Shoe Carnival SCVL. In a note to client, Sterne Agee writes, "We are increasing our 4Q10, FY10 and FY11 EPS estimates from $0.26, $1.98, and $2.19 to $0.31, $2.06, and $2.28. We are modeling a 5% increase in 4Q10 SSS. We are now modeling a 30bps increase in gross margin in 4Q that will be driven by a strong boot business (expected to be ~25% of sales compared to 22%-23% LY), and a much stronger performance running assortment which will incorporate the introduction of some Nike (NKE-$82.47-Buy) Free product. The strength of boots and running should offset any negative margin impact derived from the toning product." Deutsche Bank maintains its Buy rating on SCVL and SCVL closed yesterday at $25.38.