What Happened?

Shares of footwear retailer Shoe Carnival (NASDAQ: SCVL) fell 3.2% in the morning session after Seaport Global analyst Mitch Kummetz downgraded the company's stock from 'Buy' to 'Neutral'. 

The decision reflects a more conservative stance on the footwear retailer's future performance. The downgrade comes amid what Seaport Global described as an "uncertain market environment for the retail sector." Supporting this view, broader economic data from Fitch Ratings indicates that U.S. consumer spending slowed significantly in the first half of 2025. This deceleration has been attributed to increased trade policy uncertainty and equity market volatility, which has weakened overall consumer sentiment and confidence. Seaport Global did not announce a specific price target adjustment along with the rating change.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Shoe Carnival? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Shoe Carnival’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 12 days ago when the stock dropped 3.6% on the news that a hotter-than-expected wholesale inflation report fueled concerns about slowing consumer spending. 

The market was rattled by a Labor Department report showing the Producer Price Index (PPI), a measure of wholesale inflation, jumped 0.9% in July, significantly exceeding economists' expectations of a 0.2% rise. This was the largest monthly increase since March 2022, reigniting worries that businesses will be forced to pass higher costs on to consumers, who are already showing signs of price sensitivity. This inflation data has fanned concerns that U.S. tariffs on imported goods could start to translate into higher prices for shoppers. The inflation report landed amid growing evidence of consumer caution, with recent reports highlighting that shoppers are cutting back on non-essential spending, seeking out sales, and trading down to cheaper brands.

Shoe Carnival is down 33.7% since the beginning of the year, and at $21.42 per share, it is trading 53.3% below its 52-week high of $45.82 from September 2024. Investors who bought $1,000 worth of Shoe Carnival’s shares 5 years ago would now be looking at an investment worth $1,566.

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