Shoe Carnival (SCVL) stock soared 10.54% in pre-market trading on Thursday following the release of its second-quarter fiscal 2025 results. The footwear retailer reported earnings that significantly surpassed analyst expectations, despite a decline in sales.

The company posted quarterly earnings of $0.91 per share, handily beating the analyst consensus estimate of $0.58 by 57.71%. This represents a 9.64% increase from earnings of $0.83 per share in the same period last year. However, quarterly sales came in at $306.388 million, missing the analyst consensus estimate of $313.121 million by 2.15% and marking a 7.91% decrease from $332.696 million in the year-ago quarter.

Despite the overall sales decline, Shoe Carnival's premium footwear brand, Shoe Station, saw 1.6% sales growth. The company's namesake Shoe Carnival brand, however, experienced a 10% drop in sales, which the company attributed to continued pressure on consumers with incomes below $40,000. In response to these challenges, Shoe Carnival has lowered its full-year sales guidance to $1.12 billion to $1.15 billion, down from its previous forecast of $1.15 billion to $1.23 billion. On a positive note, the company increased the lower end of its earnings guidance by 10 cents to $1.70 per share, while maintaining the upper end at $2.10 per share. Investors appear to be encouraged by the company's ability to maintain profitability despite the sales headwinds, as well as the reported strong back-to-school sales performance in August, which has pushed the company into positive comparable sales territory ahead of schedule.