Shoe Carnival declines on analyst downgrade

Sterne Agee analyst Sam Poser cut his rating on the stock to "Hold" from "Buy" and cut his price target to $15 from $19, implying downside of 7.4 percent to Monday's close of $16.19.

The stock declined $1.54, or 9.5 percent, to $14.65.

Poser said store traffic is deteriorating and may fall below results in the second quarter when traffic declined 6 percent. Consumers have been scaling back on spending as tightening credit and a softening job market have weighed on the economy.

Meanwhile, Poser said competition in the space is increasing from companies like Brown Shoe's Famous Footwear segment.

On the positive side, Poser said the company has no debt on its balance sheet and has been able to manage costs, but Poser still expects softening consumer spending will pressure results.

A spokesman for the company could not be immediately reached for comment.

In August, the company said second-quarter profit more than quadrupled on favorable pricing and government stimulus checks, which gave the company a short-term boost in sales.