Jeffrey Stein, who declined to discuss his reasoning, moved the retailer to "Hold" from "Sell."
Shoe Carnival said net profit in its fiscal first quarter ended May 3 plummeted nearly 35 percent, to $4.8 million, from the same period last year. A "challenging economic environment" is hurting moderate-income customers, the company said.
Sales of $162.1 million were down $3.6 million. The company also continued to struggle with slumping same-store sales, which declined 4.9 percent.
Shoe Carnival shares closed 86 cents higher yesterday and were up another 61 cents this morning to trade at $14.54.