Fossil Group (NASDAQ:FOSL) and Shoe Carnival (NASDAQ:SCVL) Critical Review

Fossil Group (NASDAQ:FOSL) and Shoe Carnival (NASDAQ:SCVL) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Fossil Group and Shoe Carnival, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	1	2	0	2.25
Shoe Carnival	0	1	0	2	3.33

Fossil Group currently has a consensus price target of $7.00, suggesting a potential upside of 66.67%. Shoe Carnival has a consensus price target of $22.00, suggesting a potential upside of 27.61%. Given Fossil Group’s higher possible upside, research analysts clearly believe Fossil Group is more favorable than Shoe Carnival.

Earnings & Valuation

This table compares Fossil Group and Shoe Carnival”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fossil Group	$1.00 billion	0.25	-$78.30 million	($1.14)	-3.68
Shoe Carnival	$1.14 billion	0.42	$52.27 million	$1.35	12.77

Shoe Carnival has higher revenue and earnings than Fossil Group. Fossil Group is trading at a lower price-to-earnings ratio than Shoe Carnival, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

61.1% of Fossil Group shares are held by institutional investors. Comparatively, 66.1% of Shoe Carnival shares are held by institutional investors. 2.9% of Fossil Group shares are held by company insiders. Comparatively, 33.6% of Shoe Carnival shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Fossil Group and Shoe Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fossil Group	-6.19%	-48.51%	-7.06%
Shoe Carnival	3.31%	7.24%	4.19%

Volatility and Risk

Fossil Group has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Shoe Carnival has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Summary

Shoe Carnival beats Fossil Group on 12 of the 15 factors compared between the two stocks.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.

About Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.