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<SEC-DOCUMENT>0001206774-07-002161.txt : 20070913
<SEC-HEADER>0001206774-07-002161.hdr.sgml : 20070913
<ACCEPTANCE-DATETIME>20070913125448
ACCESSION NUMBER:		0001206774-07-002161
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20070804
FILED AS OF DATE:		20070913
DATE AS OF CHANGE:		20070913

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SHOE CARNIVAL INC
		CENTRAL INDEX KEY:			0000895447
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-SHOE STORES [5661]
		IRS NUMBER:				351736614
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			0202

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21360
		FILM NUMBER:		071115054

	BUSINESS ADDRESS:	
		STREET 1:		7500 EAST COLUMBIA STREET
		CITY:			EVANSVILLE
		STATE:			IN
		ZIP:			47715
		BUSINESS PHONE:		8128676471

	MAIL ADDRESS:	
		STREET 1:		7500 EAST COLUMBIA STREET
		CITY:			EVANSVILLE
		STATE:			IN
		ZIP:			47715
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>shoecarnival_10q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>

<BODY bgColor=#ffffff><P align=center><B><FONT face=serif size=2>UNITED STATES<BR></FONT></B><B><FONT face=serif size=2>SECURITIES AND EXCHANGE COMMISSION<BR></FONT></B><FONT face=serif size=2>Washington, D.C. 20549</FONT></P>

<P align=center><B><FONT face=serif size=2>Form 10-Q</FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><FONT face=serif size=2><B>[X]</B><FONT size=3>&nbsp;</FONT></FONT></TD>
<TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD noWrap align=left width="97%"><FONT face=serif size=2><B>Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="97%"><FONT face=serif size=2>For the quarterly period ended<FONT size=3></FONT> <B>August 4, 2007</B><FONT size=3>&nbsp;</FONT></FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="99%" colSpan=3><FONT face=serif size=2>or</FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><B><FONT face=serif size=2>[&nbsp; ]</FONT></B></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="97%"><B><FONT face=serif size=2>Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="97%"><FONT face=serif size=2>For the transition period from __________________</FONT>&nbsp;<FONT face=serif size=2><B>to</B> __________________<B>&nbsp;</B></FONT></TD></TR>
</TABLE>

<BR>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="15%"><FONT face=serif size=2>Commission File Number:</FONT>&nbsp;</TD>
<TD noWrap align=left width="20%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="64%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0-21360</FONT>&nbsp;</TD></TR>
</TABLE>

</DIV><BR>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="100%"><B><FONT face=serif size=2>Shoe Carnival, Inc.</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="100%"><I><FONT face=serif size=2>(Exact name of registrant as specified in its charter)</FONT></I>&nbsp;</TD></TR>
</TABLE>

</DIV><BR>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="47%"><B><FONT face=serif size=2>Indiana</FONT></B>&nbsp;</TD>
<TD noWrap align=center width="5%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="48%"><B><FONT face=serif size=2>35-1736614</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="47%"><I><FONT face=serif size=2>(State or other jurisdiction of</FONT></I>&nbsp;</TD>
<TD noWrap align=center width="5%"></TD>
<TD noWrap align=center width="48%"><I><FONT face=serif size=2>(IRS Employer Identification Number)</FONT></I>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="47%"><I><FONT face=serif size=2>incorporation or organization)</FONT></I>&nbsp;</TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="48%">&nbsp;</TD></TR>
<TR>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="47%"><B><FONT face=serif size=2>7500 East Columbia Street</FONT></B>&nbsp;</TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="48%">&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="47%"><B><FONT face=serif size=2>Evansville, IN</FONT></B>&nbsp;</TD>
<TD noWrap align=center width="5%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="48%"><B><FONT face=serif size=2>47715</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="47%"><I><FONT face=serif size=2>(Address of principal executive offices)</FONT></I>&nbsp;</TD>
<TD noWrap align=center width="5%"></TD>
<TD noWrap align=center width="48%"><I><FONT face=serif size=2>(Zip code)</FONT></I>&nbsp;</TD></TR>
</TABLE>

</DIV><BR>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="100%"><FONT size=2><FONT size=3>&nbsp;</FONT><B>(812) <FONT face=serif>867-6471</FONT></B></FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="100%"><I><FONT face=serif size=2>(Registrant&#146;s telephone number, including area code)</FONT></I>&nbsp;</TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="100%"><FONT size=2><FONT size=3>&nbsp;</FONT><B>NOT APPLICABLE</B></FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="100%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><I>(Former name, former address and former fiscal year, if changed since last report)</I></FONT></TD></TR>
</TABLE>

</DIV><BR>
<P style="PADDING-RIGHT: 24pt; PADDING-LEFT: 24pt" align=left><FONT face=serif size=2>Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</FONT></P>

<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="75%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="25%"><FONT face=serif size=2>[X]Yes</FONT>&nbsp;</TD>
<TD noWrap align=left width="74%"><FONT face=serif size=2>[&nbsp; ]No</FONT>&nbsp;</TD></TR>
</TABLE>

</DIV><BR>
<P style="PADDING-RIGHT: 24pt; PADDING-LEFT: 24pt" align=left><FONT face=serif size=2>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of the Exchange Act.</FONT></P>

<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="75%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="31%"><FONT face=serif size=2>[&nbsp; ]Large accelerated filer</FONT>&nbsp;</TD>
<TD noWrap align=left width="34%"><FONT face=serif size=2>[X]Accelerated filer</FONT>&nbsp;</TD>
<TD noWrap align=left width="34%"><FONT face=serif size=2>[&nbsp; ]Non-accelerated filer</FONT>&nbsp;</TD></TR>
</TABLE>

</DIV><BR>
<P style="PADDING-RIGHT: 24pt; PADDING-LEFT: 24pt" align=left><FONT face=serif size=2>Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</FONT></P>

<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="75%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="25%"><FONT face=serif size=2>[&nbsp; ]Yes</FONT>&nbsp;</TD>
<TD noWrap align=left width="74%"><FONT face=serif size=2>[X]No</FONT>&nbsp;</TD></TR>
</TABLE>

</DIV><BR>
<P align=center><FONT face=serif size=2>APPLICABLE ONLY TO CORPORATE ISSUERS:</FONT></P>

<P style="PADDING-RIGHT: 24pt; PADDING-LEFT: 24pt" align=left><FONT face=serif size=2>Indicate the number of shares outstanding of each of the issuer&#146;s classes of common stock, as of the latest practicable date.</FONT></P>

<P style="PADDING-RIGHT: 24pt; PADDING-LEFT: 24pt" align=left><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;</FONT> <FONT face=serif size=2>Number of Shares of Common Stock, $.01 par value, outstanding at September 10, 2007 were 12,668,294.</FONT></FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR>INDEX TO FORM 10-Q </FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="5%">&nbsp; </TD>
<TD noWrap align=left width="6%">&nbsp; </TD>
<TD noWrap align=left width="85%">&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Page</B></FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Part I</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="91%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>Financial Information</FONT>&nbsp; </TD>
<TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%">&nbsp; </TD>
<TD noWrap align=left width="6%"><FONT face=serif size=2>Item 1.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%"><FONT face=serif size=2>Financial Statements (Unaudited)</FONT>&nbsp; </TD>
<TD noWrap align=left width="3%">&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="91%" bgColor=#c0c0c0 colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Condensed Consolidated Balance Sheets</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>3</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%">&nbsp; </TD>
<TD noWrap align=left width="91%" colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Condensed Consolidated Statements of Income</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%"><FONT face=serif size=2>4</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="91%" bgColor=#c0c0c0 colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Condensed Consolidated Statement of Shareholders' Equity</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>5</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%">&nbsp; </TD>
<TD noWrap align=left width="91%" colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Condensed Consolidated Statements of Cash Flows</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%"><FONT face=serif size=2>6</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="91%" bgColor=#c0c0c0 colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Notes to Condensed Consolidated Financial Statements</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>7 - 10</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Item 2.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Management's Discussion and Analysis of Financial Condition and</FONT>&nbsp; </TD>
<TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Results of Operations</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>11 - 17</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Item 3.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Quantitative and Qualitative Disclosures About Market Risk</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>17</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Item 4.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Controls and Procedures</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>17</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Part II</FONT>&nbsp; </TD>
<TD noWrap align=left width="91%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>Other Information</FONT>&nbsp; </TD>
<TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%">&nbsp; </TD>
<TD noWrap align=left width="6%"><FONT face=serif size=2>Item 1A.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%"><FONT face=serif size=2>Risk Factors</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%"><FONT face=serif size=2>18</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Item 2.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Unregistered Sales of Equity Securities and Use of Proceeds</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>18</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Item 4.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Submission of Matters to a Vote of Security Holders</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>18</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Item 6.</FONT>&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Exhibits</FONT>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>19 - 20</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=4>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0><FONT face=serif size=2>Signature</FONT>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>21</FONT> </TD></TR>
</TABLE>

<BR>
<P align=center><FONT face=serif size=2>2</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR>PART I - FINANCIAL INFORMATION </FONT></B></P>

<P align=justify><B><FONT face=serif size=2>ITEM 1. FINANCIAL STATEMENTS </FONT></B></P>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC.<BR></FONT></B><B><FONT face=serif size=2>CONDENSED CONSOLIDATED BALANCE SHEETS <BR>Unaudited</FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"></TD>
<TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>August 4,</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>February 3,</B></FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>July 29,</B></FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><B><FONT face=serif size=2>(In thousands, except per share data)</FONT></B> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>2007</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>2007</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>2006</B></FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><B><FONT face=serif size=2>Assets</FONT></B> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Current Assets:</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Cash and cash equivalents</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>15,466</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>34,839</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>25,407</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp;<FONT face=serif size=2>Accounts receivable</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>1,216</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>948</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>1,759</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Merchandise inventories</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>210,043</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>196,662</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>203,688</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp;<FONT face=serif size=2>Deferred income tax benefit</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>2,304</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>2,088</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>1,154</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Other</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>10,542</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>2,605</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>5,486</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Total Current Assets</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>239,571</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>237,142</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>237,494</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Property and equipment-net</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>74,736</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>74,020</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>61,822</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Total Assets</FONT>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>314,307</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>311,162</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>299,316</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=9>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><B><FONT face=serif size=2>Liabilities and Shareholders' Equity</FONT></B> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Current Liabilities:</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Accounts payable</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>84,859</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>70,352</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>75,835</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp;<FONT face=serif size=2>Accrued and other liabilities</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>13,493</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>14,576</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>12,629</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Total Current Liabilities</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>98,352</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>84,928</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>88,464</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Deferred lease incentives</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>5,442</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>6,095</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>5,819</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Accrued rent</FONT>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>6,163</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>6,260</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>6,356</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Deferred income taxes</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>534</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>781</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>1,539</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Deferred compensation</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>3,543</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>3,149</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>2,538</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Other</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>795</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>0</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Total Liabilities</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>114,829</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>101,213</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>104,716</FONT> </TD></TR>
<TR>
<TD width="99%" colSpan=9>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Shareholders' Equity:</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp;<FONT face=serif size=2>Common stock, $.01 par value, 50,000</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>shares authorized, 13,673, 13,561 and 13,449 shares</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>issued at August 4, 2007, February 3, 2007</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="7%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>and July 29, 2006</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>137</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>136</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>134</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Additional paid-in capital</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>75,169</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>73,959</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>72,114</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%">&nbsp; &nbsp;<FONT face=serif size=2>Retained earnings</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>143,234</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>135,854</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="7%"><FONT face=serif size=2>122,352</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Treasury stock, at cost, 665 shares at August 4, 2007 and 0 shares</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="7%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>at February 3, 2007 and July 29, 2006</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(19,062</FONT> </TD>
<TD style="BORDER-BOTTOM: #c0c0c0 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%"><FONT face=serif size=2>Total Shareholders' Equity</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>199,478</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>209,949</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>194,600</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Total Liabilities and Shareholders' Equity</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>314,307</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>311,162</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>299,316</FONT> </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>See notes to condensed consolidated financial statements. </FONT></P>

<P align=center><FONT face=serif size=2>3</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC.<BR></FONT></B><B><FONT face=serif size=2>CONDENSED CONSOLIDATED STATEMENTS OF INCOME <BR>Unaudited</FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Thirteen</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Thirteen</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Twenty-six</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Twenty-six</B></FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Weeks Ended</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Weeks Ended</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Weeks Ended</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Weeks Ended</B></FONT>&nbsp;</TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"><B><FONT face=serif size=2>(In Thousands, except per share data)</FONT></B> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><B>August 4, 200</B></FONT><FONT face=serif size=2><B>7</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp; &nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><B>July 29, 2006</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp; &nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><B>August 4, 2007</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>July 29, 200</B></FONT><FONT face=serif size=2><B>6</B></FONT>&nbsp;</TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Net sales</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>154,805</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>146,886</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>320,458</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>315,355</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"><FONT face=serif size=2>Cost of sales (including buying,</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%">&nbsp; &nbsp;<FONT face=serif size=2>distribution and occupancy costs)</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>114,558</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>106,045</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>230,420</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>223,064</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit</FONT>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>40,247</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>40,841</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>90,038</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>92,291</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"><FONT face=serif size=2>Selling, general and administrative</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%">&nbsp; &nbsp;<FONT face=serif size=2>expenses</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>40,118</FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>36,421</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>79,443</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>76,055</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Operating income</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>129</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>4,420</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>10,595</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>16,236</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"><FONT face=serif size=2>Interest income</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(176</FONT> </TD>
<TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(302</FONT> </TD>
<TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(510</FONT> </TD>
<TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>(510</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Interest expense</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>32</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>42</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>64</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>74</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"><FONT face=serif size=2>Income before income taxes</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>273</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>4,680</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>11,041</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>16,672</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Income tax expense</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>106</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>1,818</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>3,547</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>6,410</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%"><FONT face=serif size=2>Net income</FONT>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>167</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>2,862</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>7,494</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2>10,262</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR>
<TD width="99%" colSpan=13>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Net income per share:</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%">&nbsp; &nbsp;<FONT face=serif size=2>Basic</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.01</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.21</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.56</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2>.77</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Diluted</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.01</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.21</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.55</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>.75</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR>
<TD width="99%" colSpan=13>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Average shares outstanding:</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%">&nbsp; &nbsp;<FONT face=serif size=2>Basic</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>13,091</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>13,353</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>13,295</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2>13,300</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="66%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Diluted</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13,400</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13,715</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13,634</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>13,684</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>See notes to condensed consolidated financial statements. </FONT></P>

<P align=center><FONT face=serif size=2>4</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR></FONT></B><B><FONT face=serif size=2>CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY <BR>Unaudited </FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Additional</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="18%" colSpan=6><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Common Stock</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Paid-In</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Retained</FONT></B> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Treasury</B></FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"><B><FONT face=serif size=2>(In thousands)</FONT></B> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Issued</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Treasury</B></FONT>&nbsp;</TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Amount</B></FONT>&nbsp;</TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Capital</B></FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Earnings</B></FONT>&nbsp;</TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2>&nbsp;<B><FONT face=serif size=2>Stock</FONT></B> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Total</FONT></B> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0><FONT face=serif size=2>Balance at</FONT>&nbsp; </TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0>&nbsp;&nbsp; <FONT face=serif size=2>February 3, 2007</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>13,561</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>136</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>73,959</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>135,854</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>209,949</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"><FONT face=serif size=2>Stock option exercises</FONT> </TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>24</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD noWrap align=right width="5%"><FONT face=serif size=2>(5</FONT> </TD>
<TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>241</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>168</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>409</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation</FONT> </TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0>&nbsp;&nbsp; <FONT face=serif size=2>income tax benefit</FONT> </TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>372</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>372</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"><FONT face=serif size=2>Employee stock purchase</FONT> </TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%">&nbsp;&nbsp; <FONT face=serif size=2>plan purchases</FONT> </TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>1</FONT> </TD>
<TD noWrap align=right width="2%">&nbsp;</TD>
<TD noWrap align=right width="5%"><FONT face=serif size=2>(2</FONT> </TD>
<TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>54</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>50</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>104</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0><FONT face=serif size=2>Restricted stock awards</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>87</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(10</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(287</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>286</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"><FONT face=serif size=2>Common stock</FONT>&nbsp; </TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%">&nbsp;&nbsp; <FONT face=serif size=2>repurchased</FONT> </TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=right width="5%"><FONT face=serif size=2>682</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>(19,566</FONT> </TD>
<TD noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>(19,566</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation</FONT> </TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0>&nbsp;&nbsp; <FONT face=serif size=2>expense</FONT> </TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>830</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>830</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"><FONT face=serif size=2>Cumulative effect of</FONT> </TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%">&nbsp;&nbsp; <FONT face=serif size=2>adoption of FIN 48</FONT> </TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>(114</FONT> </TD>
<TD noWrap align=left width="2%"><FONT size=2>)</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>(114</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%" bgColor=#c0c0c0><FONT face=serif size=2>Net income</FONT>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>7,494</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>7,494</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%"><FONT face=serif size=2>Balance at</FONT>&nbsp; </TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="5%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="4%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="53%">&nbsp;&nbsp; <FONT face=serif size=2>August 4, 2007</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;</FONT>13,673</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="5%"><FONT face=serif size=2>665</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT size=2>$</FONT></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;</FONT>137</FONT> </TD>
<TD noWrap align=right width="2%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT size=2>$</FONT></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;</FONT>75,169</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT size=2>$</FONT>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>143,234</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT size=2>$</FONT></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; (19,062</FONT> </TD>
<TD style="BORDER-BOTTOM: #ffffff 2pt solid" noWrap align=left width="2%"><FONT face=serif size=2>)</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT size=2>$</FONT></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2>199,478</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp; </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>See notes to condensed consolidated financial statements. </FONT></P>

<P align=center><FONT face=serif size=2>5</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR></FONT></B><B><FONT face=serif size=2>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS <BR>Unaudited </FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="82%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Twenty-six</B></FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Twenty-six</B></FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%"></TD>
<TD noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Weeks Ended</B></FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=center width="7%" colSpan=2>&nbsp;<B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%"><B><FONT face=serif size=2>(In thousands)</FONT></B> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>August 4, 2007</B></FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2>&nbsp;<B><FONT face=serif size=2>July 29, 2006</FONT></B> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>Cash Flows From Operating Activities</FONT></B> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Net income</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>7,494</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>10,262</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Adjustments to reconcile net income to net</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>cash provided by operating activities:</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Depreciation and amortization</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>7,834</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>7,132</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Stock-based compensation</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>830</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>966</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Loss on retirement and impairments of assets</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>389</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>127</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Deferred income taxes</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(216</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(691</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Lease incentives</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>127</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Other</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(334</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(735</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Changes in operating assets and liabilities:</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="6%"></TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Accounts receivable</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(268</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(1,473</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Merchandise inventories</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(13,381</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(19,695</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Accounts payable and accrued liabilities</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>16,739</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>8,617</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Other</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>(8,710</FONT> </TD>
<TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>(2,876</FONT> </TD>
<TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash provided by operating activities</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>10,377</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>1,761</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR>
<TD width="100%" colSpan=8>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>Cash Flows From Investing Activities</FONT></B> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Purchases of property and equipment</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(11,372</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;</TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(5,787</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Proceeds from sale of property and equipment</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>379</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>7,200</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Other</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>6</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>2</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash (used in) provided by investing activities</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(10,987</FONT> </TD>
<TD style="BORDER-BOTTOM: #c0c0c0 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>1,415</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR>
<TD width="100%" colSpan=8>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>Cash Flows From Financing Activities</FONT></B> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Proceeds from issuance of stock</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>513</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>1,813</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Excess tax benefits from stock-based compensation</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>290</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>355</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Common stock repurchased</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>(19,566</FONT> </TD>
<TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>(241</FONT> </TD>
<TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash (used in) provided by financing activities</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(18,763</FONT> </TD>
<TD style="BORDER-BOTTOM: #c0c0c0 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>1,927</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%"><FONT face=serif size=2>Net (decrease) increase in cash and cash equivalents</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>(19,373</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>5,103</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Cash and cash equivalents at beginning of period</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>34,839</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>20,304</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%"><B><FONT face=serif size=2>Cash and Cash Equivalents at End of Period</FONT></B> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>15,466</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="6%"><FONT face=serif size=2>25,407</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR>
<TD width="100%" colSpan=8>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Supplemental disclosures of cash flow information:</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Cash paid during period for interest</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>64</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>78</FONT> </TD>
<TD noWrap align=left width="1%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Cash paid during period for income taxes</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>7,796</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>7,096</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="82%">&nbsp; &nbsp;<FONT face=serif size=2>Capital expenditures incurred but not yet paid</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>2,773</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="2%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="6%"><FONT face=serif size=2>4,247</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp; </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>See notes to condensed consolidated financial statements. </FONT></P>

<P align=center><FONT face=serif size=2>6</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC.</FONT></B><FONT face=serif size=2> <BR></FONT><B><FONT face=serif size=2>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</FONT></B><FONT face=serif size=2> <BR></FONT><B><FONT face=serif size=2>Unaudited</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><B><FONT face=serif size=2>Note 1 - Basis of Presentation</FONT></B></P>

<P align=justify><FONT face=serif size=2>In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly our financial position and the results of our operations and our cash flows for the periods presented. Certain information and disclosures normally included in the notes to consolidated financial statements have been condensed or omitted according to the rules and regulations of the Securities and Exchange Commission (the "SEC"), although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended February 3, 2007.</FONT></P>

<P align=justify><B><FONT face=serif size=2>Note 2 - Net Income Per Share</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Net income per share of common stock is based on the weighted average number of shares and common share equivalents outstanding during the period. The following table presents a reconciliation of our basic and diluted weighted average common shares outstanding as required by Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share": </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="61%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>Thirteen</FONT> </TD>
<TD noWrap align=center width="2%">&nbsp;</TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>Thirteen</FONT> </TD>
<TD noWrap align=center width="2%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>Twenty-six</FONT> </TD>
<TD noWrap align=center width="2%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>Twenty-six</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="61%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>Weeks Ended</FONT> </TD>
<TD noWrap align=center width="2%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp; </FONT>Weeks Ended<FONT size=3>&nbsp;</FONT></FONT> </TD>
<TD noWrap align=center width="2%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>Weeks Ended</FONT> </TD>
<TD noWrap align=center width="2%"></TD>
<TD noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp; </FONT>Weeks Ended<FONT size=3>&nbsp;</FONT></FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="61%"><FONT face=serif size=2>(In thousands)</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2><FONT size=3>&nbsp; </FONT>Aug</FONT><FONT face=serif size=2>ust 4, 2007<FONT size=3>&nbsp;</FONT></FONT>&nbsp; </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>July 29, 2006</FONT> </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp; </FONT>August 4, 2007</FONT>&nbsp; </TD>
<TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>July 29, 2006</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="61%" bgColor=#c0c0c0><FONT face=serif size=2>Basic shares</FONT>&nbsp; </TD>
<TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,091</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,353</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,295</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,300</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="61%"><FONT face=serif size=2>Dilutive effect of stock-based awards</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>309</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>362</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>339</FONT> </TD>
<TD noWrap align=right width="2%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>384</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="61%" bgColor=#c0c0c0><FONT face=serif size=2>Diluted shares</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,400</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,715</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,634</FONT> </TD>
<TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>13,684</FONT> </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>For the above current and prior year periods, there were no anti-dilutive shares. </FONT></P>

<P align=justify><B><FONT face=serif size=2>Note 3 &#150; Recently Issued Accounting Pronouncements </FONT></B></P>

<P align=justify><FONT face=serif size=2>In July 2006, the Financial Accounting Standards Board (the "FASB") issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"), an interpretation of FASB No. 109 ("SFAS No. 109"). FIN 48 clarifies the accounting for the uncertainty in income taxes recognized by prescribing a recognition threshold that a tax position is required to meet before being recognized in the financial statements. Additionally, FIN 48 provides guidance on measurement, derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. We adopted the provisions of FIN 48 on February 4, 2007. See Note 5 &#150; "Income Taxes", in this Quarterly Report on Form 10-Q for additional information, including the effects of adoption of this interpretation on our consolidated financial statements. </FONT></P>

<P align=justify><FONT face=serif size=2>In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We do not believe the adoption of SFAS No. 157 will have a material impact on our consolidated financial statements.</FONT></P>

<P align=justify><FONT face=serif size=2>In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities&#151;Including an Amendment of FASB Statement No. 115" ("SFAS No. 159"). SFAS No. 159 allows companies the choice to measure many financial instruments and certain other items at fair value. This gives companies the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of SFAS No. 159 will be effective for fiscal years beginning after November 15, 2007. We are currently evaluating the impact the adoption of SFAS No. 159 will have on our consolidated financial statements. </FONT></P>

<P align=center><FONT face=serif size=2>7</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><B><FONT face=serif size=2>Note 4 - Stock-Based Compensation </FONT></B></P>

<P align=justify><U><FONT face=serif size=2>Stock Options</FONT></U><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>The following table summarizes the stock option transactions pursuant to the stock-based compensation plans for the six months ended August 4, 2007: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="86%">&nbsp; </TD>
<TD noWrap align=center width="4%"></TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Weighted-</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%">&nbsp; </TD>
<TD noWrap align=center width="4%"></TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Average</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%">&nbsp; </TD>
<TD noWrap align=center width="4%"></TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weighted-</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Remaining</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Aggregate</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%">&nbsp; </TD>
<TD noWrap align=center width="4%"><B><FONT face=serif size=2>&nbsp;Number of&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Contractual</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Intrinsic Value</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%">&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Shares</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Exe</FONT><FONT face=serif>rcise Price</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT size=2><FONT face=serif>&nbsp;Term (Years)</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>(</FONT></B><B><FONT face=serif size=2>in thousands)</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face=serif size=2>Outstanding at February 3, 2007</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>652,946</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>12.51</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%">&nbsp; &nbsp;<FONT face=serif size=2>Forfeited or expired</FONT> </TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>(2,001</FONT> </TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>15.24</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="1%">&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Exercised</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(28,836</FONT> </TD>
<TD style="PADDING-BOTTOM: 1pt" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>14.18</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%"><FONT face=serif size=2>Outstanding at August 4, 2007</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%"><FONT face=serif size=2>622,109</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%"><FONT face=serif size=2>12.43</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%"><FONT face=serif size=2>4.17</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%"><FONT face=serif size=2>5,041</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%" bgColor=#c0c0c0><FONT face=serif size=2>Options outstanding at August 4, 2007, net</FONT> </TD>
<TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2>&nbsp;</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>of estimated forfeitures</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>618,453</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>12.43</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>4.15</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>5,010</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="86%"><FONT face=serif size=2>Exercisable at August 4, 2007</FONT> </TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>602,106</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>12.44</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>4.07</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>4,873</FONT> </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>The following table summarizes information regarding outstanding and exercisable options at August 4, 2007: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=center width="2%" colSpan=2>&nbsp; &nbsp; &nbsp; </TD>
<TD noWrap align=center width="87%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=6><B><FONT face=serif size=2>Options Outstand</FONT></B><B><FONT face=serif size=2>ing</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=4><B><FONT face=serif size=2>Options Exercisable</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="2%" colSpan=2>&nbsp;</TD>
<TD noWrap align=center width="87%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Number</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Weighted</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weighted</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Number</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weighted</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Range of</FONT></B></TD>
<TD noWrap align=center width="87%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>of Options</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>Average</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><B><FONT face=serif size=2>of Options</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Exercise Price</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="87%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT size=2><FONT face=serif>&nbsp;Outstanding</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT size=2><FONT face=serif>&nbsp;Remaining Life</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Exercise Price</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><B><FONT size=2><FONT face=serif>&nbsp;Exercisable</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Exercise Price</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>4.38 &#150; 5.75</FONT> </TD>
<TD noWrap align=right width="87%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>62,662</FONT> </TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>3.32</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>4.48</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>62,662</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>4.48</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT size=2><FONT face=serif>8.56</FONT> &#150; </FONT><FONT face=serif size=2>11.95</FONT> </TD>
<TD noWrap align=right width="87%">&nbsp;</TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>185,125</FONT> </TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"><FONT face=serif size=2>2.04</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=center width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>10.52</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>178,458</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>10.47</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=2><FONT face=serif>12.14</FONT> &#150; </FONT><FONT face=serif size=2>15.27</FONT> </TD>
<TD noWrap align=right width="87%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>196,902</FONT> </TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>5.76</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>12.66</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>183,566</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>12.68</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=center width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT size=2><FONT face=serif>15.44</FONT> &#150; </FONT><FONT face=serif size=2>17.12</FONT> </TD>
<TD noWrap align=right width="87%"></TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>177,420</FONT> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><FONT face=serif size=2>4.93</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=center width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>16.97</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>177,420</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=center width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>16.97</FONT> </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>The following table summarizes information regarding options exercised during the thirteen and twenty-six week periods ended August 4, 2007 and July 29, 2006: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Thirteen</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Thirteen</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Twenty-six</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Twenty-six</FONT></B> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT size=2>&nbsp;<FONT face=serif>Weeks Ended</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>July 29, 2006</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;July 29, 2006</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Total intrinsic value </FONT><SUP><FONT face=serif size=2>(1)</FONT></SUP>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>44,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>674,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>548,000</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>1,600,000</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0><FONT face=serif size=2>Total cash received</FONT> </FONT></TD>
<TD noWrap align=center width="1%">
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>41,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>683,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=center width="1%">
<P align=left><FONT size=+0><FONT size=2><FONT face=serif>$</FONT></FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>409,000</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>1,800,000</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Associated excess income tax benefits</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0>&nbsp; &nbsp;<FONT face=serif size=2>recorded</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>10,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>233,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT size=2><FONT face=serif>$</FONT></FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>190,000</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>571,000</FONT> </FONT></TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>(1) Defined as the difference between the market value at exercise and the grant price of stock options exercised.</FONT><FONT face=serif size=2> </FONT></P>

<P align=center><FONT face=serif size=2>8</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><FONT face=serif size=2>The following table summarizes information regarding stock-based compensation expense for non-vested options recognized during the thirteen and twenty-six week periods ended August 4, 2007 and July 29, 2006:</FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="88%">&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Twenty-six</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Twenty-six</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%">&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%">&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;July 29, 2006</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007 <SUP><FONT face=serif>(1)</FONT></SUP></FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;July 29, 2006</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation expense before</FONT> </TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>the recognized income tax benefit</FONT> </TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT face=serif size=2>$</FONT> </P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>17,000</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>40,000</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT face=serif size=2>$</FONT> </P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>39,000</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>145,000</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT face=serif size=2>Income tax benefit</FONT> </TD>
<TD noWrap align=center width="1%">
<P align=left><FONT face=serif size=2>$</FONT> </P>
</TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>6,000</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>16,000</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=center width="1%">
<P align=left><FONT face=serif size=2>$</FONT> </P>
</TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>15,000</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>56,000</FONT> </TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top align=left width="100%">
<P align=justify><FONT face=serif size=2>Income tax benefit was calculated using an adjusted effective tax rate. The adjusted rate removes the tax effect of a reduction in state income taxes from state incentives related to the investment in our new distribution center.</FONT></P>
</TD></TR>
</TABLE>


<P align=justify><FONT face=serif size=2>As of August 4, 2007, there was approximately $25,000 of unrecognized compensation remaining related to non-vested stock options. This expense is expected to be recognized over a period of less than one year. </FONT></P>

<P align=justify><U><FONT face=serif size=2>Restricted Stock Awards</FONT></U><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>The following table summarizes the restricted share transactions for the twenty-six week period ended August 4, 2007: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="92%">&nbsp; </TD>
<TD noWrap align=center width="4%"></TD>
<TD noWrap align=center width="1%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weighted-</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%">&nbsp; </TD>
<TD noWrap align=center width="4%"><B><FONT face=serif size=2>&nbsp;Number of</FONT><FONT size=2>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Average Grant</FONT></B> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%">&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Shares</FONT></B> </TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Date Fair Value</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=serif size=2>Non-vested at February 3, 2007</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>79,517</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>21.58</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%">&nbsp; &nbsp;<FONT face=serif size=2>Granted</FONT> </TD>
<TD noWrap align=right width="4%"><FONT face=serif size=2>98,000</FONT> </TD>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=right width="1%"><FONT face=serif size=2>29.42</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%" bgColor=#c0c0c0>&nbsp; &nbsp;<FONT face=serif size=2>Forfeited</FONT> </TD>
<TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(1,434</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>27.92</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%">&nbsp; &nbsp;<FONT face=serif size=2>Vested</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>(41,228</FONT> </TD>
<TD style="PADDING-BOTTOM: 1pt" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
<TD noWrap align=left width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=serif size=2>19.84</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=serif size=2>Non-vested at August 4, 2007</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>134,855</FONT> </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>27.74</FONT> </TD></TR>
</TABLE>

<BR>
<P align=justify><FONT face=serif size=2>The following table summarizes information regarding stock-based compensation for restricted stock awards recognized during the thirteen and twenty-six week periods ended August 4, 2007 and July 29, 2006: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Thirteen</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Thirteen</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Twenty-six</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Twenty-six</FONT></B> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;July 29, 2006</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007 <SUP><FONT face=serif>(1)</FONT></SUP></FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Jul</FONT><FONT face=serif>y 29, 2006</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Stock-based compensation expense before</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0>&nbsp; &nbsp;<FONT face=serif size=2>the recognized income tax benefit</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>332,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>256,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>773,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>803,000</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0><FONT face=serif size=2>Income tax benefit</FONT> </FONT></TD>
<TD noWrap align=center width="1%">
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>129,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>99,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=center width="1%">
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>291,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>309,000</FONT> </FONT></TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD align=left width="100%">
<P align=justify><FONT face=serif size=2>Income tax benefit was calculated using an adjusted effective tax rate. The adjusted rate removes the tax effect of a reduction in state income taxes from state incentives related to the investment in our new distribution center.</FONT></P>
</TD></TR>
</TABLE>


<P align=justify><FONT face=serif size=2>The total fair value at grant date of previously non-vested stock awards that vested during the first six months of fiscal 2007 and 2006 was $831,000 and $826,000, respectively. No stock awards vested during the second quarter of fiscal 2007 or 2006. The weighted-average grant date fair value of stock awards granted during the first six months of fiscal 2007 and 2006 was $29.42 and $22.99, respectively. </FONT></P>

<P align=justify><FONT face=serif size=2>As of August 4, 2007, there was approximately $2.8 million of unrecognized compensation expense remaining related to non-vested stock awards. The expense is expected to be recognized over a weighted average period of 2.0 years, incorporating the current assumptions of the estimated requisite service period required to achieve the designated performance conditions for performance-based stock awards. </FONT></P>

<P align=center><FONT face=serif size=2>9</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><U><FONT face=serif size=2>Employee Stock Purchase Plan</FONT></U><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>The following table summarizes information regarding stock-based compensation expense recognized for the employee stock purchase plan during the thirteen and twenty-six week periods ended August 4, 2007 and July 29, 2006: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Thirteen</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Thirteen</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Twenty-six</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Twenty-six</FONT></B> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="2%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weeks Ended</FONT></B> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;July 29, 2006</FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;August 4, 2007 <SUP><FONT face=serif>(1)</FONT></SUP></FONT>&nbsp;</FONT></B></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT size=2><FONT face=serif>&nbsp;Jul</FONT><FONT face=serif>y 29, 2006</FONT>&nbsp;</FONT></B></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Stock based compensation expense before</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; the recognized income tax benefit </FONT><SUP><FONT face=serif size=2>(2)</FONT></SUP>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>7,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>7,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>18,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>17,000</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="88%"><FONT size=+0><FONT face=serif size=2>Income tax benefit</FONT> </FONT></TD>
<TD noWrap align=center width="1%">
<P align=left><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></P>
</TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>3,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>3,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT>
</FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>7,000</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>$</FONT> </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>7,000</FONT> </FONT></TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top align=left width="100%">
<P align=justify><FONT face=serif size=2>Income tax benefit was calculated using an adjusted effective tax rate. The adjusted rate removes the tax effect of a reduction in state income taxes from state incentives related to the investment in our new distribution center.</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top align=left width="100%">
<P align=justify><FONT face=serif size=2>Amounts are representative of the 15% discount employees are provided for purchases under the employee stock purchase plan.</FONT></P>
</TD></TR>
</TABLE>


<P align=justify><B><FONT face=serif size=2>Note 5 &#150; Income Taxes </FONT></B></P>

<P align=justify><FONT face=serif size=2>On February 4, 2007, we adopted the provisions of FIN 48. This interpretation of SFAS No. 109 clarifies the accounting for the uncertainty in income taxes recognized by prescribing a recognition threshold that a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition. The total effect of the adoption on our consolidated balance sheet as of February 4, 2007 was a $361,000 increase in tax liability including penalties and interest and a $247,000 increase in deferred income tax benefits. This resulted in a $114,000 net reduction to retained earnings. After recording these entries, we had a liability for unrecognized tax benefits, including interest and penalties, of $775,000 at February 4, 2007. </FONT></P>

<P align=justify><FONT face=serif size=2>Our liability for unrecognized tax benefits is related to tax years encompassing our fiscal years 1999 through 2005, the tax years which remain subject to examination by major tax jurisdictions as of August 4, 2007. </FONT></P>

<P align=justify><FONT face=serif size=2>Prior to the adoption of FIN 48, we recorded interest expense related to uncertain tax positions as a component of interest expense. Upon adoption of FIN 48 we changed this policy to record such items as a component of income tax expense in the consolidated statement of income. Penalties have historically been included as a component of income tax expense and will continue to be recorded in this manner with the adoption of FIN 48. For the second quarter of fiscal 2007, we recorded $11,000 of interest expense related to uncertain tax positions. For the first half of fiscal 2007, we recorded $20,000 of interest expense related to uncertain tax positions.</FONT></P>

<P align=justify><FONT face=serif size=2>Our liability for unrecognized tax benefits was $795,000 as of August 4, 2007. This total includes $566,000 related to unrecognized tax positions and $229,000 in accrued interest and penalties. This amount was classified as an Other liability on our consolidated balance sheet as of August 4, 2007. If our uncertain tax positions become recognizable, the amount would reduce our effective tax rate. We do not expect the amount of the liability for unrecognized tax benefits, excluding interest and penalties, will change significantly within the next 12 months.</FONT></P>

<P align=justify><B><FONT face=serif size=2>Note 6 &#150; Stock Repurchase Program</FONT></B></P>

<P align=justify><FONT face=serif size=2>In fiscal 2006, our Board of Directors authorized a $50.0 million stock buy-back program, which will terminate upon the earlier of the repurchase of the maximum amount or December 31, 2008. During the second quarter of fiscal 2007, we repurchased 662,000 shares of our outstanding common stock at a cost of $18.9 million under this program. As of August 4, 2007, the amount that remained available under the existing repurchase authorization was $30.8 million. Subsequent to August 4, 2007, through September 10, 2007, we purchased an additional 339,000 shares of our outstanding common stock at a cost of $6.4 million. All repurchases under this program have been made utilizing available cash on hand. </FONT></P>

<P align=center><FONT face=serif size=2>10</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>
<BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><B><FONT face=serif size=2>ITEM 2.</FONT></B></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp;</TD>
<TD vAlign=top noWrap align=left width="98%">
<P align=justify><B><FONT size=2>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></B></P>
</TD></TR>
</TABLE>

<BR>
<P align=justify><B><FONT face=serif size=2>Factors That May Effect Future Results</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: general economic conditions in the areas of the United States in which our stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; the potential impact of national and international security concerns on the retail environment; changes in our relationships with key suppliers; the impact of competition and pricing; changes in weather patterns, consumer buying trends and our ability to identify and respond to emerging
fashion trends; the impact of disruptions in our distribution or information technology operations; the impact of hurricanes or other natural disasters on our stores, as well as on consumer confidence and purchasing in general; risks associated with the seasonality of the retail industry; the availability of desirable store locations at acceptable lease terms and our ability to open new stores in a timely and profitable manner; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to deliver products in a timely manner; changes in the political and economic environments in the People&#146;s Republic of China, a major manufacturer of footwear; and the continued favorable trade relations between the United States and China and other countries which are the major manufacturers of footwear. For a more detailed discussion of certain risk factors, see the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended February
3, 2007. </FONT></P>

<P align=justify><B><FONT face=serif size=2>General </FONT></B></P>

<P align=justify><FONT face=serif size=2>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our condensed consolidated financial statements and the notes to those statements included in PART I, ITEM 1 FINANCIAL STATEMENTS of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended February 3, 2007 as filed with the SEC. </FONT></P>

<P align=justify><B><FONT face=serif size=2>Overview</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Shoe Carnival, Inc. is one of the nation's largest family footwear retailers. As of August 4, 2007, we operated 284 stores in 26 states in the Midwest, South and Southeast regions of the United States. We offer a distinctive shopping experience, a broad merchandise assortment and value to our customers while maintaining an efficient store level cost structure.</FONT></P>

<P align=justify><FONT face=serif size=2>Our stores combine competitive pricing with a highly promotional, in-store marketing effort that encourages customer participation and creates a fun and exciting shopping experience. We believe this highly promotional atmosphere results in various competitive advantages, including increased multiple unit sales; the building of a loyal, repeat customer base; the creation of word-of-mouth advertising; and enhanced sell through of in-season goods. Our objective is to be the destination store-of-choice for a wide range of consumers seeking moderately priced, current season name brand and private label footwear. Our product assortment includes dress and casual shoes, sandals, boots and a wide assortment of athletic shoes for the entire family. We believe that by offering a wide selection of both athletic and non-athletic footwear, we are able to reduce our exposure to shifts in fashion preferences between those categories. Our ability to identify and react to
fashion changes is a key factor in our sales and earnings performance. </FONT></P>

<P align=justify><FONT face=serif size=2>Our marketing effort targets middle income, value-conscious consumers seeking name brand footwear for all age groups. We believe that by offering a wide selection of popular styles of name brand merchandise at competitive prices, we generate broad customer appeal. Our cost-efficient store operations and real estate strategy enable us to price products competitively and earn attractive store level returns. Low labor costs are achieved by housing merchandise directly on the selling floor in an open-stock format, enabling customers who choose to serve themselves. This reduces the staffing required to assist customers and reduces store level labor costs as a percentage of sales. We locate stores predominantly in strip shopping centers in order to take advantage of lower occupancy costs and maximize our exposure to value-oriented shoppers.</FONT></P>

<P align=center><FONT face=serif size=2>11</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><B><FONT face=serif size=2>Critical Accounting Policies </FONT></B></P>

<P align=justify><FONT face=serif size=2>It is necessary for us to include certain judgments in our reported financial results. These judgments involve estimates that are inherently uncertain and actual results could differ materially from these estimates. The accounting policies that require the more significant judgments are: </FONT></P>

<P align=justify><I><FONT face=serif size=2>Merchandise Inventories</FONT></I><FONT face=serif size=2> - Merchandise inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) method. In determining market value, we estimate the future sales price of items of merchandise contained in the inventory as of the balance sheet date. Factors considered in this determination include, among others, current and recently recorded sales prices, the length of time product has been held in inventory and quantities of various product styles contained in inventory. The ultimate amount realized from the sale of certain product could differ materially from our estimates. We also estimate a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage trends. </FONT></P>

<P align=justify><I><FONT face=serif size=2>Valuation of Long-Lived Assets</FONT></I><FONT face=serif size=2> - We review long-lived assets whenever events or circumstances indicate the carrying value of an asset may not be recoverable and annually when no such event has occurred. We evaluate the ongoing value of assets associated with retail stores that have been open longer than one year. When events such as these occur, the assets subject to impairment are adjusted to estimated fair value and, if applicable, an impairment loss is recorded in selling, general and administrative expenses. Our assumptions and estimates used in the evaluation of impairment, including current and future economic trends for stores, are subject to a high degree of judgment and if actual results or market conditions differ from those anticipated, additional losses may be recorded. </FONT></P>

<P align=justify><I><FONT face=serif size=2>Income Taxes</FONT></I><FONT face=serif size=2> - We calculate income taxes in accordance with SFAS No. 109 and account for uncertain tax positions in accordance with FIN 48. Under SFAS No. 109, deferred tax assets and liabilities are recognized based on the difference between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the estimated tax rates in effect in the years when those temporary differences are expected to reverse. Under FIN 48, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations are often complex, ambiguous and change over time. As such, changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated financial statements. See our Notes to Condensed
Consolidated Financial Statements, Note 5 &#150; "Income Taxes" included in PART I, ITEM 1 FINANCIAL STATEMENTS of this Quarterly Report on Form 10-Q for additional details on our uncertain tax positions. </FONT></P>

<P align=justify><B><FONT face=serif size=2>Results of Operations</FONT></B><FONT face=serif size=2> </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" colSpan=2><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Comparable</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" colSpan=2><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%" colSpan=3><FONT size=+0><FONT face=serif size=2>Number of Stores</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" colSpan=3><FONT size=+0><FONT face=serif size=2>Store Square Footage</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Store Sales</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" colSpan=2><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Beginning</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>End of</FONT> </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Net</FONT> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>End</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Increase</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>Quarter Ended</FONT> </FONT></TD>
<TD noWrap align=left width="84%">&nbsp;</TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Of Period</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Opened</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Closed</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Period</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>Change</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>of Period</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>(Decrease)</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" bgColor=#c0c0c0 colSpan=2><FONT size=+0><FONT face=serif size=2>May 5, 2007</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>271</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>7</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>278</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>66,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>3,128,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>(3.7%</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" colSpan=2><FONT size=+0><FONT face=serif size=2>August 4, 2007</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>278</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>6</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>0</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="1%"><FONT size=+0><FONT face=serif size=2>284</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>59,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>3,187,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="1%"><FONT size=+0><FONT face=serif size=2>(7.1%</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" bgColor=#c0c0c0 colSpan=2><FONT size=+0><FONT face=serif size=2>Year-to-date 2007</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>271</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>13</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>284</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>125,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>3,187,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>(5.4%</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD></TR>
<TR>
<TD noWrap align=left width="85%" bgColor=#ffffff colSpan=2>&nbsp; </TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" bgColor=#c0c0c0 colSpan=2><FONT size=+0><FONT face=serif size=2>April 29, 2006</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>263</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>263</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>3,012,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>4.1%</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" bgColor=#ffffff colSpan=2><FONT size=+0><FONT face=serif size=2>July 29, 2006</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>263</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>4</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>2</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff></TD>
<TD noWrap align=center width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>265</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>12,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>3,024,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff></TD>
<TD noWrap align=right width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>(1.0%</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#ffffff><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="85%" bgColor=#c0c0c0 colSpan=2><FONT size=+0><FONT face=serif size=2>Year-to-date 2006</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>263</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>4</FONT>&nbsp; </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>2</FONT> </FONT></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=center width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>265</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>12,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>3,024,000</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>1.8%</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
</TABLE>

<BR>
<P align=center><FONT face=serif size=2>12</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><FONT face=serif size=2>The following table sets forth our results of operations expressed as a percentage of net sales for the periods indicated: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Thirteen</FONT></FONT><FONT size=+0> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Thirteen</FONT> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Twenty-six</FONT> </FONT></TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Twenty-six</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Weeks Ended</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Weeks Ended</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Weeks Ended</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>Weeks Ended</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>August 4, 2007</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>July 29, 2006</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>August 4, 2007</FONT> </FONT></TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT size=+0><FONT face=serif size=2>July 29, 2006</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Net sales</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>100.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>100.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>100.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>100.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0><FONT face=serif size=2>Cost of sales (including buying,</FONT>&nbsp; </FONT></TD>
<TD noWrap align=left width="3%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="3%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="3%">&nbsp;</TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="3%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0>&nbsp; &nbsp;<FONT face=serif size=2>distribution and occupancy costs)</FONT>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>74.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>72.2</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>71.9</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>70.7</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Gross profit</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>26.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>27.8</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>28.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>29.3</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0><FONT face=serif size=2>Selling, general and</FONT>&nbsp; </FONT></TD>
<TD noWrap align=left width="3%"></TD>
<TD noWrap align=left width="1%">&nbsp;</TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="3%">&nbsp;</TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="3%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=left width="1%"></TD>
<TD noWrap align=left width="3%"></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0>&nbsp; &nbsp;<FONT face=serif size=2>administrative expenses</FONT>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>25.9</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>24.8</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>24.8</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%">&nbsp;</TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>24.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Operating income</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>3.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>3.3</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>5.2</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0><FONT face=serif size=2>Interest income</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>(0.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>(0.2</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD>
<TD noWrap align=right width="1%">&nbsp;</TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>(.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>)</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>(0.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>)<FONT size=3> </FONT></FONT></FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Interest expense</FONT>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0><FONT face=serif size=2>Income before income taxes</FONT>&nbsp; </FONT></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>0.2</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>3.2</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>3.4</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>5.3</FONT> </FONT></TD>
<TD noWrap align=left width="1%"><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>Income tax expense</FONT>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>0.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>1.2</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>1.1</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>2.0</FONT> </FONT></TD>
<TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="80%"><FONT size=+0><FONT face=serif size=2>Net income</FONT>&nbsp; </FONT></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>0.1</FONT> </FONT></TD>
<TD style="PADDING-BOTTOM: 2pt" noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>2.0</FONT> </FONT></TD>
<TD style="PADDING-BOTTOM: 2pt" noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>2.3</FONT> </FONT></TD>
<TD style="PADDING-BOTTOM: 2pt" noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 2pt solid" noWrap align=right width="3%"><FONT size=+0><FONT face=serif size=2>3.3</FONT> </FONT></TD>
<TD style="PADDING-BOTTOM: 2pt" noWrap align=left width="1%"><FONT size=+0><FONT face=serif size=2>%</FONT> </FONT></TD></TR>
</TABLE>

<BR>
<P align=justify><I><FONT face=serif size=2>Net Sales</FONT></I><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>In the regular course of business, we offer our customers sales incentives including coupons, discounts, and free merchandise. Sales are recorded net of such incentives and returns and allowances. If an incentive involves free merchandise, that merchandise is recorded as a zero sale and the cost is included in cost of sales. Comparable store sales for the periods indicated include stores that have been open for 13 full months prior to the beginning of the period, including those stores that have been relocated or remodeled. Therefore, stores opened or closed during the periods indicated are not included in comparable store sales.</FONT></P>

<P align=justify><FONT face=serif size=2>It is important to note that the 53</FONT><SUP><FONT face=serif size=2>rd</FONT></SUP><FONT face=serif size=2> week in fiscal 2006 caused a one-week shift in our fiscal 2007 calendar. Therefore, each of our fiscal 2007 quarters&nbsp;is shifted one-week later. Due to this one-week shift, our year-over-year sales comparisons are impacted&nbsp;when there are seasonal sales influences that fall near the respective quarter-end dates. Our reported quarterly and year-to-date comparable store sales results for fiscal 2007, both in this Quarterly Report on Form 10-Q and in our other public disclosures, have been adjusted for the above shift. As such, changes in comparable store sales may not be consistent with changes in net sales reported for the fiscal period. Net sales for our 13-week and 26-week periods ended August 4, 2007 compares to the 13-week and 26-week periods ended July 29, 2007. To minimize the effect of the fiscal calendar shift on comparable store sales,
we compare the 13-week and 26-week periods ended August 4, 2007 to the 13-week and 26-week periods ended August 5, 2006. </FONT></P>

<P align=justify><FONT face=serif size=2>Net sales increased $7.9 million to $154.8 million during the second quarter ended August 4, 2007, a 5.4% increase from net sales of $146.9 million in the second quarter ended July 29, 2006. Of the increase in net sales, $6.0 million was attributable to operating the 27 new stores opened in fiscal 2006 and fiscal 2007 (net of the six store closings in fiscal 2006). An additional $13.1 million increase in net sales was attributed to the seasonal differences associated with the fiscal calendar shift noted above, but was partially offset by the 7.1% decrease in comparable store sales.</FONT></P>

<P align=justify><FONT face=serif size=2>Net sales increased $5.1 million to $320.5 million in the first half of fiscal 2007, a 1.6% increase over net sales of $315.4 million in the comparable prior year period. Of the increase in net sales, $11.4 million was attributable to operating the 27 new stores opened in fiscal 2006 and fiscal 2007 (net of the six store closings in fiscal 2006). An additional $10.9 million increase in net sales was attributable to the seasonal differences associated with the fiscal calendar shift noted above, but&nbsp;was more than&nbsp;offset by a 5.4% decrease in comparable store sales.</FONT></P>

<P align=center><FONT face=serif size=2>13</FONT></P>

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<PAGE>

<P align=justify><FONT face=serif size=2>The second quarter continued to be a difficult period for us and footwear retailers in general. Our core customer base has been faced with financial challenges brought about by higher gasoline prices, housing and mortgage issues and increased consumer debt loads. This resulted in lower traffic counts throughout the first and second quarters of fiscal 2007 as compared to the same periods last year. From a fashion perspective, our core customers did not respond to the style and color direction of dress and sandalized footwear this past spring. Additionally, on an industry-wide basis, retailers have continued to see a decline in the demand for traditional athletic footwear.</FONT></P>

<P align=justify><FONT face=serif size=2>We have aggressively managed our inventories during fiscal 2007 and will continue to do so for the remainder of the year. Per-store inventories at the end of the second quarter were approximately flat with inventories at the end of the comparable week in fiscal 2006. By keeping our inventories lean and fresh, we have the ability to react to developing trends and opportunistic buys.</FONT></P>

<P align=justify><I><FONT face=serif size=2>Gross Profit</FONT></I><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Gross profit decreased $594,000 to $40.2 million in the second quarter of fiscal 2007 from gross profit of $40.8 million in the comparable prior year period. Our gross profit margin in the second quarter of fiscal 2007 decreased to 26.0% from 27.8% in the comparable prior year period. As a percentage of sales, the merchandise margin decreased 1.5% and buying, distribution and occupancy costs increased 0.3%. The decrease in the merchandise margin was driven by a decrease in the average sale price resulting from the promotionally driven quarter. The increase in buying, distribution and occupancy costs, as a percentage of sales, was primarily attributable to higher fixed costs associated with our new distribution center. The increase in fixed costs was primarily due to under utilized capacity, which is necessary for future store growth.</FONT></P>

<P align=justify><FONT face=serif size=2>Gross profit decreased $2.3 million to $90.0 million in the first half of fiscal 2007 from $92.3 million in the comparable prior year period. Our gross profit margin decreased to 28.1% in the first six months of fiscal 2007 from 29.3% for the first six months of fiscal 2006. As a percentage of sales, the merchandise margin decreased 0.2% and buying, distribution and occupancy costs increased 1.0%. The increase in buying, distribution and occupancy costs, as a percentage of sales, was primarily due to the increase in distribution costs related to the operation of our new distribution center and the deleveraging effect of lower same store sales. </FONT></P>

<P align=justify><I><FONT face=serif size=2>Selling, General and Administrative Expenses</FONT></I><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Selling, general and administrative expenses increased $3.7 million to $40.1 million in the second quarter of fiscal 2007 from $36.4 million in the comparable prior year period. Of the increase, $2.0 million resulted from an increase in advertising costs due to the shift in the retail calendar and approximately $1.3 million was attributable to operating the 27 new stores opened in fiscal 2006 and fiscal 2007 (net of the six store closings in fiscal 2006). As a percentage of sales, selling, general and administrative expenses increased to 25.9% in the second quarter of fiscal 2007 from 24.8% for the comparable period last year. The increase as a percentage of sales resulted primarily from an increase in advertising costs coupled with the deleveraging effect of lower same store sales.</FONT></P>

<P align=justify><FONT face=serif size=2>Pre-opening costs were $268,000, or 0.2% of sales, for the second quarter of fiscal 2007 as compared to $164,000, or 0.1% of sales, for the second quarter of fiscal 2006. We opened six stores in the second quarter of fiscal 2007 as compared to four stores in the second quarter of fiscal 2006. Pre-opening costs, such as advertising, payroll and supplies, incurred prior to the opening of a new store are charged to expense in the period they are incurred. The total amount of pre-opening expense incurred will vary on a store-by-store basis depending on the specific market and the promotional activities involved. </FONT></P>

<P align=justify><FONT face=serif size=2>Store closing costs were $346,000, or 0.2% of sales, for the second quarter of fiscal 2007 as compared to $143,000, or 0.1% of sales, for the second quarter of fiscal 2006. The timing and actual amount of expense recorded in closing a store can vary significantly on a store-by-store basis depending in part on the period in which management commits to a closing plan, the age of the store and possible lease buyout involved. The costs incurred in the second quarter of fiscal 2007 related primarily to the impairment of three stores planned for closing later this year. No stores were closed during the second quarter of fiscal 2007 and two stores were closed during the second quarter of fiscal 2006.</FONT></P>

<P align=center><FONT face=serif size=2>14</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><FONT face=serif size=2>Selling, general and administrative expenses increased $3.3 million to $79.4 million in the first half of fiscal 2007 from $76.1 million in the comparable prior year period. Of the increase, approximately $2.0 million resulted from an increase in advertising costs due to the shift in the retail calendar and $2.2 was attributable to operating the 27 new stores opened in fiscal 2006 and fiscal 2007 (net of the six store closings in fiscal 2006). The increase was partially offset by $1.2 million of savings generated by comparable stores during the first half of fiscal 2007 compared to the same period last year. As a percentage of sales, these expenses increased to 24.8% from 24.1% in the first six months of last year. The increase as a percentage of sales resulted primarily from an increase in advertising costs coupled with the deleveraging effect of lower same store sales. </FONT></P>

<P align=justify><FONT face=serif size=2>Pre-opening costs were $556,000, or 0.2% of sales, for the first half of fiscal 2007 as compared to $164,000, or 0.1% of sales, for the first half of fiscal 2006. We opened 13 stores in the first half of fiscal 2007 as compared to four stores in the first half of fiscal 2006. Pre-opening costs, such as advertising, payroll and supplies, incurred prior to the opening of a new store are charged to expense in the period they are incurred. The total amount of pre-opening expense incurred will vary on a store-by-store basis depending on the specific market and the promotional activities involved. </FONT></P>

<P align=justify><FONT face=serif size=2>Store closing costs were $400,000 or 0.1% of sales, for the first half of fiscal 2007 as compared to $254,000, or 0.1% of sales, for the first half of fiscal 2006. The timing and actual amount of expense recorded in closing a store can vary significantly on a store-by-store basis depending in part on the period in which management commits to a closing plan, the age of the store and possible lease buyout involved. The costs incurred in the first six months of fiscal 2007 related primarily to the impairment of three stores planned for closing later this year. No stores were closed in the first half of fiscal 2007 and two stores were closed in the first half of fiscal 2006.</FONT></P>

<P align=justify><I><FONT face=serif size=2>Interest (Income) Expense </FONT></I></P>

<P align=justify><FONT face=serif size=2>We recorded net interest income of $144,000 and $260,000 in the second quarter of fiscal 2007 and 2006, respectively. For the first six months of fiscal 2007 and 2006, we recorded net interest income of $446,000 and $436,000, respectively. We had no direct borrowings under our credit facility during the first half of fiscal 2007 or fiscal 2006. </FONT></P>

<P align=justify><I><FONT face=serif size=2>Income Taxes</FONT></I><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>The effective income tax rate for the second quarter of fiscal 2007 decreased to 38.7% from 38.8% for the comparable period in 2006. The effective income tax rate for the first six months of fiscal 2007 decreased to 32.1% from 38.4% compared to the same time period in 2006. The reduction in the effective income tax rate for the six months of fiscal 2007 as compared to fiscal 2006 was primarily due to a reduction in state income taxes from state incentives related to the investment in our new distribution center. </FONT></P>

<P align=justify><B><FONT face=serif size=2>Liquidity and Capital Resources</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Net cash provided by operating activities was $10.4 million for the first six months of fiscal 2007, as compared to net cash provided by operating activities of $1.8 million for the first six months of fiscal 2006. These amounts reflect the income from operations adjusted for non-cash items and working capital changes. The $8.6 million increase in cash provided by operating activities between the two respective periods related primarily to the reduction in inventory levels coupled with the timing of the payments of accounts payable and accrued liabilities.</FONT></P>

<P align=justify><FONT face=serif size=2>Working capital decreased to $141.2 million at August 4, 2007 from $149.0 million at July 29, 2006. The decrease in working capital was primarily the result of a $9.9 million decrease in cash and cash equivalents attributable to outstanding common stock purchased under the stock-buyback program. The decrease in working capital was also due to a $2.7 million net increase in accounts payable (net of merchandise inventory) offset by a $5.1 million increase in other assets. The current ratio at August 4, 2007 was 2.4 as compared to 2.7 at July 29, 2006. We had no long-term debt at August 4, 2007 or July 29, 2006. </FONT></P>

<P align=center><FONT face=serif size=2>15</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><FONT face=serif size=2>Capital expenditures were $11.4 million in the first half of fiscal 2007. Of this amount, $4.2 million was incurred for our new distribution center, $3.4 million was incurred for new stores and $1.9 million was incurred for our new corporate headquarters. The remaining capital expenditures for the first half of fiscal 2007 were incurred for store remodeling and relocation, software and information technology, in-store graphics and miscellaneous equipment purchases. We did not receive any&nbsp;cash&nbsp;lease incentives from landlords during the first six months of fiscal 2007. </FONT></P>

<P align=justify><FONT face=serif size=2>During the first half of fiscal 2007, we opened 13 new stores and closed no stores. This compares to four store openings and two store closings in the first half of fiscal 2006. We anticipate opening an additional 12 stores and closing four stores in the second half of fiscal 2007. </FONT></P>

<P align=justify><FONT face=serif size=2>Remaining capital expenditures are expected to be $9 million to $10 million in fiscal 2007. Of this amount, approximately $4.7 million will be spent on new stores and $1.4 million represents equipment for our new distribution center. The balance of capital expenditures are expected to be incurred for store remodels, visual presentation enhancements and various other store improvements,&nbsp;furnishing our new corporate headquarters, continued investments in technology and normal asset replacement activities. The actual amount of cash required for capital expenditures for store operations depends in part on the number of new stores opened, the amount of lease incentives, if any, received from landlords and the number of stores remodeled. The opening of new stores will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending in
areas we target for expansion. </FONT></P>

<P align=justify><FONT face=serif size=2>Our current store prototype uses between 6,500 and 12,000 square feet depending upon, among other factors, the location of the store and the population base the store is expected to service. Capital expenditures for a new store in fiscal 2007 are expected to average approximately $298,000. The average inventory investment in a new store is expected to range from $350,000 to $750,000 depending on the size and sales expectation of the store and the timing of the new store opening. Pre-opening expenses, such as advertising, salaries and supplies, are expected to average approximately $45,000 per store in fiscal 2007 with individual stores experiencing variances in expenditure levels based on the specific market. </FONT></P>

<P align=justify><FONT face=serif size=2>Our unsecured credit facility provides for up to $70 million in cash advances on a revolving basis and commercial letters of credit. Borrowings under the revolving credit line are based on eligible inventory. The agreement governing the credit facility stipulates a minimum threshold for net worth, a maximum ratio of funded debt plus rent to EBITDA plus rent, and a maximum of total distributions for stock repurchases and cash dividends. We were in compliance with these requirements as of August 4, 2007. Should a default condition be reported, the lenders may preclude additional borrowings and call all loans and accrued interest at their discretion. The credit agreement and amendments thereto are filed as exhibits to (or incorporated by reference in) this Quarterly Report on Form 10-Q. There were no borrowings outstanding under the credit facility and letters of credit outstanding were $13.6 million at August 4, 2007. As of August 4, 2007, $56.4 million was
available to us for additional borrowings under the credit facility. On December 15, 2006, the credit agreement was amended to extend the maturity date to April 30, 2010 and to allow us to repurchase shares of our outstanding common stock in an amount not to exceed $50 million. This amendment followed the Board of Director&#146;s December 2006 authorization of a $50 million stock buy-back program, which will terminate on the earlier of the repurchase of the maximum amount or December 31, 2008. During the second quarter of fiscal 2007, 662,000 shares of common stock were repurchased under this program at a cost of $18.9 million. Subsequent to August 4, 2007, through September 10, 2007, we purchased an additional 339,000 shares of our outstanding common stock at a cost of $6.4 million. All repurchases under this program have been made utilizing available cash on hand.</FONT></P>

<P align=justify><FONT face=serif size=2>We anticipate that our existing cash and cash flow from operations, supplemented by borrowings under our revolving credit line, will be sufficient to fund our planned store expansion, the capital investment required for our new corporate headquarters and distribution center, the repurchase of our common stock under our current repurchase plan and other operating cash requirements for at least the next 12 months. </FONT></P>

<P align=center><FONT face=serif size=2>16</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><B><FONT face=serif size=2>Seasonality</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Our quarterly results of operations have fluctuated and are expected to continue to fluctuate in the future primarily as a result of seasonal variances and the timing of sales and costs associated with opening new stores. Non-capital expenditures, such as advertising and payroll, incurred prior to opening a new store are charged to expense as incurred. Therefore, our results of operations may be adversely affected in any quarter in which we incur pre-opening expenses related to the opening of new stores.</FONT></P>

<P align=justify><FONT face=serif size=2>We have three distinct peak selling periods: Easter, back-to-school and Christmas. </FONT></P>

<P align=justify><B><FONT face=serif size=2>New Accounting Pronouncements </FONT></B></P>

<P align=justify><FONT face=serif size=2>Recent accounting pronouncements applicable to our operations are contained in Note 3 &#150; "Recently Issued Accounting Pronouncements" contained in the Notes to Condensed Consolidated Financial Statements included in PART I, ITEM 1 FINANCIAL STATEMENTS of this Report. </FONT></P>

<P align=justify><B><FONT face=serif size=2>ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK </FONT></B></P>

<P align=justify><FONT face=serif size=2>We are exposed to market risk in that the interest payable under our credit facility is based on variable interest rates and therefore is affected by changes in market rates. We do not use interest rate derivative instruments to manage exposure to changes in market interest rates. We did not incur borrowings against our revolving credit line during the first six months of fiscal 2007. </FONT></P>

<P align=justify><B><FONT face=serif size=2>ITEM 4. CONTROLS AND PROCEDURES </FONT></B></P>

<P align=justify><FONT face=serif size=2>Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of August 4, 2007, that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. </FONT></P>

<P align=justify><FONT face=serif size=2>Management is continuously seeking to improve the efficiency and effectiveness of our operations and internal controls. This results in refinements to processes throughout the company. In the fourth quarter of fiscal 2006, we began conversion to our new distribution center. We believe the launch of our new distribution center has strengthened the overall system of internal controls due to enhanced automation and integration of related processes. Testing of the controls related to this system is ongoing and management will make its evaluation of the effectiveness of these controls upon completion of all components and enhanced functions of the new distribution center. There have been no other changes in our internal control over financial reporting that occurred during the second quarter ended August 4, 2007, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. </FONT></P>

<P align=center><FONT face=serif size=2>17</FONT></P>

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<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR>PART II - OTHER INFORMATION</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><B><FONT face=serif size=2>ITEM 1A. RISK FACTORS </FONT></B></P>

<P align=justify><FONT face=serif size=2>You should carefully consider the risks and uncertainties we describe both in this Quarterly Report on Form 10-Q and in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended February 3, 2007 before deciding to invest in, or retain, shares of our common stock. These are not the only risks and uncertainties that we face. Additional risks and uncertainties that we do not currently know about, we currently believe are immaterial or we have not predicted may also harm our business operations or adversely affect us. If any of these risks or uncertainties actually occur, our business, financial condition, results of operations or cash flows could be materially adversely affected. There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended February 3, 2007. </FONT></P>

<P align=justify><B><FONT face=serif size=2>ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS </FONT></B></P>

<P align=center><B><FONT face=serif size=2>Issuer Purchases of Equity Securities</FONT></B><B><FONT face=serif size=2> </FONT></B></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD noWrap align=center width="16%">&nbsp; </TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD noWrap align=center width="15%" colSpan=2>&nbsp;</TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Total Number</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Approximate</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD noWrap align=center width="16%">&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="15%" colSpan=2>&nbsp;</TD>
<TD noWrap align=center width="1%">&nbsp;</TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Of Shares</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Dollar Value</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD noWrap align=center width="16%">&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="15%" colSpan=2>&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Purchased</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>of Shares</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD noWrap align=center width="16%">&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="15%" colSpan=2>&nbsp; </TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>as Part</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>that May Yet</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD noWrap align=center width="16%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Total Number</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="15%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Average</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>of Publicly</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Be Purchased</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD noWrap align=center width="16%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>of Shares</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="15%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Price Paid</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Announced</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Under the</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=justify width="31%"><B><FONT face=serif size=2>Period</FONT></B>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Purchased <SUP>(1)</SUP></B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%" colSpan=2><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>per Share</B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Programs <SUP>(1)</SUP></B></FONT>&nbsp;</TD>
<TD noWrap align=center width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><B>Programs</B></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%" bgColor=#c0c0c0><FONT face=serif size=2>May 6, 2007 to June 2, 2007<FONT size=3>&nbsp; </FONT></FONT></TD>
<TD noWrap align=right width="16%" bgColor=#c0c0c0><FONT face=serif size=2>119,771</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="14%" bgColor=#c0c0c0>&nbsp;<FONT size=2>$</FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 28.63</FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="17%" bgColor=#c0c0c0><FONT face=serif size=2>119,771</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="17%" bgColor=#c0c0c0>&nbsp;&nbsp;<FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 46,276,000</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%"><FONT face=serif size=2>June 3, 2007 to July 7, 2007<FONT size=3>&nbsp; </FONT></FONT></TD>
<TD noWrap align=right width="16%"><FONT face=serif size=2>541,841</FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="14%">&nbsp;<FONT face=serif size=2>$ </FONT></TD>
<TD noWrap align=right width="1%"><FONT size=2>28.59</FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="17%"><FONT face=serif size=2>541,841</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="17%"><FONT size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>30,785,000</FONT></FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%" bgColor=#c0c0c0><FONT face=serif size=2>July 8, 2007 to August 4, 2007<FONT size=3>&nbsp; </FONT></FONT></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="16%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT size=2><FONT size=3>&nbsp;</FONT>0.00</FONT></TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="17%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
<TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
<TD noWrap align=right width="17%" bgColor=#c0c0c0><FONT size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>30,785,000</FONT></FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=justify width="31%">&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="16%"><FONT face=serif size=2>661,612</FONT></TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="15%" colSpan=2>&nbsp; </TD>
<TD noWrap align=right width="1%"></TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="17%"><FONT face=serif size=2>661,612</FONT> </TD>
<TD noWrap align=right width="1%"></TD>
<TD noWrap align=right width="17%">&nbsp;&nbsp; </TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
<TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>These shares are part of a publicly announced, $50.0 million stock buy-back program that our Board of Directors approved in December 2006. The program will terminate on the earlier of the repurchase of the maximum amount or December 31, 2008.</FONT></TD></TR>
</TABLE>


<P align=justify><B><FONT face=serif size=2>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS </FONT></B></P>

<P align=justify><FONT face=serif size=2>The annual meeting of our common shareholders was held June 12, 2007. </FONT></P>

<P align=justify><B><FONT face=serif size=2>Election of Directors <BR></FONT></B><FONT face=serif size=2>Mark Lemond was elected at the annual meeting to serve as our Director for a three-year term. Mr. Lemond received 11,274,837 votes in favor of his election and 1,933,228 votes were withheld.</FONT></P>

<P align=justify><FONT face=serif size=2>In addition, the following Directors continue in office until the annual meeting of shareholders in the year indicated: </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="20%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>J. Wayne Weaver</FONT>&nbsp; </TD>
<TD noWrap align=right width="25%" bgColor=#c0c0c0><FONT face=serif size=2>2008</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="74%"><FONT face=serif size=2>Gerald W. Schoor</FONT>&nbsp; </TD>
<TD noWrap align=right width="25%"><FONT face=serif size=2>2008</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>William E. Bindley</FONT>&nbsp; </TD>
<TD noWrap align=right width="25%" bgColor=#c0c0c0><FONT face=serif size=2>2009</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="74%"><FONT face=serif size=2>Kent A. Kleeberger</FONT>&nbsp; </TD>
<TD noWrap align=right width="25%"><FONT face=serif size=2>2009</FONT> </TD></TR>
</TABLE>

<BR>
<P align=justify><B><FONT face=serif size=2>Other Matters Voted Upon at the Meeting <BR></FONT></B><FONT face=serif size=2>The appointment of Deloitte &amp; Touche LLP as our independent registered public accounting firm for 2007 was ratified. Votes of 13,171,004 were cast in favor, 32,473 votes were cast against, 4,688 abstentions were recorded, and no broker non-votes were recorded with respect to such ratification. </FONT></P>

<P align=center><FONT face=serif size=2>18</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>

<P align=justify><B><FONT face=serif size=2>ITEM 6. EXHIBITS</FONT></B><FONT face=serif size=2> </FONT></P>

<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2><FONT face=serif size=2>(a)</FONT></FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="95%"><FONT size=2><FONT face=serif size=2>Exhibits</FONT>&nbsp; </FONT></TD></TR>
<TR>
<TD vAlign=top width="1%"></TD>
<TD vAlign=top width="99%" colSpan=5><FONT size=2>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp;&nbsp;&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2><FONT face=serif size=2>3-A</FONT></FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
<TD vAlign=top align=justify width="95%"><FONT size=2><FONT face=serif size=2>Restated Articles of Incorporation of Registrant (incorporated herein by reference from the same exhibit number to the Registrant's Annual Report on Form 10-K for the year ended February 2, 2002)</FONT></FONT></TD></TR>
<TR>
<TD vAlign=top width="1%"></TD>
<TD vAlign=top width="99%" colSpan=5><FONT size=2>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2><FONT face=serif size=2>3-B</FONT></FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top align=justify width="95%"><FONT size=2><FONT face=serif size=2>By-laws of Registrant, as amended to date (incorporated herein by reference from the same exhibit number to our Current Report on Form 8-K filed on March 19, 2007)</FONT></FONT></TD></TR>
<TR>
<TD vAlign=top width="1%"></TD>
<TD vAlign=top width="99%" colSpan=5><FONT size=2>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2><FONT face=serif size=2>4</FONT></FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top align=justify width="95%"><FONT size=2><FONT face=serif size=2>(i) Amended and Restated Credit Agreement and Promissory Notes dated April 16, 1999, between Registrant and Mercantile Bank National Association, First Union National Bank and Old National Bank (incorporated herein by reference from Exhibit 4(I) to the Registrant's Annual Report on Form 10-K for the year ended January 30, 1999)</FONT></FONT></TD></TR>
<TR>
<TD vAlign=top width="1%"></TD>
<TD vAlign=top width="99%" colSpan=5><FONT size=2>&nbsp; </FONT></TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top noWrap align=justify width="1%"><FONT size=2>&nbsp; </FONT></TD>
<TD vAlign=top noWrap align=justify width="1%"></TD>
<TD vAlign=top align=justify width="95%"><FONT size=2><FONT face=serif size=2>(ii) Amendment to Amended and Restated Credit Agreement and Promissory Notes dated March 24, 2000, between Registrant and Mercantile Bank National Association, First Union National Bank and Old National Bank (incorporated herein by reference from the same exhibit number to the Registrant's Annual Report on Form 10-K for the year ended January 29, 2000)</FONT></FONT></TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%">&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%"><FONT size=2>(iii) Second Amendment to Amended and Restated Credit Agreement and Promissory Notes dated November 8, 2000, between Registrant and Firstar Bank N.A., First Union National Bank, Old National Bank and LaSalle Bank National Association (incorporated herein by reference from the same exhibit number to the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 28, 2000)</FONT></TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%">&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%"><FONT size=2>(iv) Third Amendment to Amended and Restated Credit Agreement and Promissory Notes dated March 18, 2002, between Registrant and U.S. Bank National Association, First Union National Bank, Old National Bank and LaSalle Bank National Association (incorporated herein by reference from the same exhibit number to the Registrant's Annual Report on Form 10-K for the year ended February 2, 2002)</FONT></TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%">&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%"><FONT size=2>(v) Fourth Amendment to Amended and Restated Credit Agreement and Promissory Notes dated March 12, 2003, between Registrant and U.S. Bank National Association, Wachovia Bank National Association, Old National Bank and LaSalle Bank National Association (incorporated herein by reference from the same exhibit number to the Registrant's Annual Report on Form 10-K for the year ended February 1, 2003)</FONT></TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%">&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%"><FONT size=2>(vi) Fifth Amendment to Amended and Restated Credit Agreement and Promissory Notes dated April 5, 2004, between Registrant and U.S. Bank National Association, Wachovia Bank National Association, Old National Bank and LaSalle Bank National Association (incorporated herein by reference from the same exhibit number to the Registrant's Annual Report on Form 10-K for the year ended January 31, 2004)</FONT></TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%">&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top noWrap width="1%"></TD>
<TD vAlign=top width="95%"><FONT size=2>(vii) Assignment Agreement dated June 1, 2004 among LaSalle Bank National Association as Assignor, Fifth Third Bank (Southern Indiana) as Assignee, Registrant as Borrower and U.S. Bank National Association as Agent relating to the Amended and Restated Credit Agreement as further amended (incorporated herein by reference from the same exhibit number to the Registrant's Quarterly Report on Form 10-Q for the quarter ended May 1, 2004)</FONT></TD></TR>
</TABLE>

<BR><BR>
<P align=center><FONT face=serif size=2>19</FONT></P>

<HR align=center width="100%" noShade SIZE=2>


<PAGE>
<BR>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
<TD vAlign=top noWrap><FONT face=serif size=2>(a)</FONT></TD>
<TD vAlign=top noWrap>&nbsp;&nbsp; </TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>Exhibits (continued)</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>(viii) Sixth Amendment to Amended and Restated Credit Agreement and Notes dated April 5, 2005, between Registrant and U.S. Bank National Association, Wachovia Bank National Association, Fifth Third Bank (Southern Indiana) and Old National Bank (incorporated herein by reference from the same exhibit number to the Registrant's Current Report on Form 8-K filed on April 11, 2005)</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp; </TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>(ix) Seventh Amendment to Amended and Restated Credit Agreement and Notes dated March 31, 2006, between Registrant and U.S. Bank National Association, Wachovia Bank, National Association and Fifth Third Bank (incorporated herein by reference from the same exhibit number to the Registrant's Current Report on Form 8-K filed on April 4, 2006)</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>(x) Eighth Amendment to Amended and Restated Credit Agreement and Notes dated December 15, 2006, between Registrant and U.S. Bank National Association, Wachovia Bank, National Association and Fifth Third Bank (incorporated herein by reference from the same exhibit number to the Registrant's Current Report on Form 8-K filed on December 11, 2006)</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap><FONT size=2>31.1 </FONT></TD>
<TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap><FONT size=2>31.2 </FONT></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap><FONT size=2>32.1 </FONT></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</FONT></TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
<TR>
<TD noWrap></TD>
<TD vAlign=top noWrap>&nbsp;</TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top noWrap><FONT size=2>32.2 </FONT></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</FONT></TD></TR>
</TABLE>


<P align=center><FONT face=serif size=2>20</FONT></P>

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<PAGE>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC.</FONT></B><FONT face=serif size=2> <BR></FONT><B><FONT face=serif size=2>SIGNATURE</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify><FONT face=serif size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed, on its behalf by the undersigned thereunto duly authorized. </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><FONT face=serif size=2>Date:</FONT>&nbsp; </TD>
<TD noWrap align=left width="69%"><FONT face=serif size=2>September 13, 2007</FONT>&nbsp; </TD>
<TD noWrap align=center width="30%"><FONT face=serif size=2><FONT size=3></FONT>SHOE CARNIVAL, INC.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="69%">&nbsp; </TD>
<TD noWrap align=center width="30%"><FONT face=serif size=2>(Registrant)</FONT>&nbsp;</TD></TR>
<TR>
<TD width="100%" colSpan=3>&nbsp; </TD></TR>
<TR>
<TD width="100%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="69%">&nbsp;</TD>
<TD noWrap align=right width="30%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ W. Kerry Jackson</FONT></U> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="69%">&nbsp; </TD>
<TD noWrap align=right width="30%"><FONT face=serif size=2>W. Kerry Jackson</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="69%">&nbsp; </TD>
<TD noWrap align=right width="30%"><FONT face=serif size=2>Executive Vice President and</FONT> </TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="69%">&nbsp; </TD>
<TD noWrap align=right width="30%"><FONT face=serif size=2>Chief Financial Officer</FONT> </TD></TR>
</TABLE>

<BR><BR><BR><BR>
<P align=center><FONT face=serif size=2>21</FONT></P>

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<TYPE>EX-31.1
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<FILENAME>exhibit31-1.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
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<P align=right><B><FONT face=serif size=2>EXHIBIT 31.1</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR></FONT></B><B><FONT face=serif size=2>CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES <BR>EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE <BR></FONT></B><B><FONT face=serif size=2>SARBANES-OXLEY ACT OF 2002</FONT></B><FONT face=serif size=2> </FONT></P>

<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="100%" colSpan=5><FONT face=serif size=2>I, Mark L. Lemond, certify that:</FONT></TD></TR>
<TR>
<TD style="TEXT-ALIGN: justify" vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>1.</FONT></TD>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top noWrap align=left width="98%" colSpan=3><FONT face=serif size=2>I have reviewed this quarterly report on Form 10-Q of Shoe Carnival, Inc.;</FONT></TD></TR>
<TR>
<TD style="TEXT-ALIGN: justify" vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>2.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>3.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>4.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(a)</FONT></TD>
<TD vAlign=top align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(b)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(c)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(d)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>5.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(a)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(b)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</FONT></P>
</TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><FONT face=serif size=2>Date:</FONT>&nbsp; </TD>
<TD noWrap align=left width="48%"><FONT face=serif size=2>September 13, 2007</FONT>&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ Mark L. Lemond</FONT></U>&nbsp; </TD>
<TD noWrap align=right width="10%">&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>Mark L. Lemond</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>President and</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>Chief Executive Officer</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
</TABLE>

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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
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<P align=right><B><FONT face=serif size=2>EXHIBIT 31.2</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL, INC. <BR></FONT></B><B><FONT face=serif size=2>CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES <BR>EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE <BR></FONT></B><B><FONT face=serif size=2>SARBANES-OXLEY ACT OF 2002</FONT></B><FONT face=serif size=2> </FONT></P>

<P align=justify>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="100%" colSpan=5><FONT face=serif size=2>I, W. Kerry Jackson, certify that:</FONT></TD></TR>
<TR>
<TD style="TEXT-ALIGN: justify" vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>1.</FONT></TD>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top noWrap align=left width="98%" colSpan=3><FONT face=serif size=2>I have reviewed this quarterly report on Form 10-Q of Shoe Carnival, Inc.;</FONT></TD></TR>
<TR>
<TD style="TEXT-ALIGN: justify" vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD style="TEXT-ALIGN: justify" vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>2.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>3.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>4.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(a)</FONT></TD>
<TD vAlign=top align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(b)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(c)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(d)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>5.</FONT></TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2></FONT></TD>
<TD vAlign=top align=left width="98%" colSpan=3>
<P align=justify><FONT face=serif size=2>The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(a)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</FONT></P>
</TD></TR>
<TR>
<TD vAlign=top align=left width="100%" colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
<TD vAlign=top noWrap align=left width="1%"></TD>
<TD vAlign=top noWrap align=left width="1%">&nbsp; </TD>
<TD vAlign=top noWrap align=left width="1%"><FONT face=serif size=2>(b)</FONT></TD>
<TD vAlign=top align=left width="1%"></TD>
<TD vAlign=top align=left width="96%">
<P align=justify><FONT face=serif size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</FONT></P>
</TD></TR>
</TABLE>


<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><FONT face=serif size=2><BR>Date:</FONT>&nbsp; </TD>
<TD noWrap align=left width="48%"><FONT face=serif size=2>September 13, 2007</FONT>&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ W. Kerry Jackson</FONT></U>&nbsp; </TD>
<TD noWrap align=right width="10%">&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>W. Kerry Jackson</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>Executive Vice President and</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>Chief Financial Officer</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
</TABLE>

<B><FONT face=serif size=2></FONT></B>
<P align=justify>
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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32-1.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
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<P align=right><B><FONT face=serif size=2>EXHIBIT 32.1 </FONT></B></P>

<P align=center><B><FONT face=serif size=2>CERTIFICATION PURSUANT TO 18 U.S.C. <BR>SECTION 1350, <BR>AS ADOPTED PURSUANT TO SECTION<BR></FONT></B><B><FONT face=serif size=2>906 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></B></P>

<P align=justify><FONT face=serif size=2>In connection with the Quarterly Report of Shoe Carnival, Inc. (the "Company") on Form 10-Q for the period ending August 4, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark L. Lemond, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002, that: </FONT></P>

<TABLE style="text-align: justify" cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>1.</FONT></TD>
<TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD></TR>
<TR>
<TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>2.</FONT></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</FONT></TD></TR>
</TABLE>

<BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><FONT face=serif size=2>Date:</FONT>&nbsp; </TD>
<TD noWrap align=left width="48%"><FONT face=serif size=2>September 13, 2007</FONT>&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ Mark L. Lemond</FONT></U>&nbsp; </TD>
<TD noWrap align=right width="10%">&nbsp;</TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>Mark L. Lemond</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>President and</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
<TR vAlign=bottom>
<TD noWrap align=left width="1%">&nbsp; </TD>
<TD noWrap align=left width="48%">&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>Chief Executive Officer</FONT>&nbsp; </TD>
<TD noWrap align=right width="10%"></TD></TR>
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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exhibit32-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
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<P align=right><B><FONT face=serif size=2>EXHIBIT 32.2 </FONT></B></P>

<P align=center><B><FONT face=serif size=2>CERTIFICATION PURSUANT TO 18 U.S.C. <BR>SECTION 1350, <BR>AS ADOPTED PURSUANT TO SECTION<BR></FONT></B><B><FONT face=serif size=2>906 OF THE SARBANES-OXLEY ACT OF 2002 </FONT></B></P>

<P align=justify><FONT face=serif size=2>In connection with the Quarterly Report of Shoe Carnival, Inc. (the "Company") on Form 10-Q for the period ending August 4, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I W. Kerry Jackson, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002, that: </FONT></P>

<TABLE style="text-align: justify" cellSpacing=0 cellPadding=0 border=0>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>1.</FONT></TD>
<TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD></TR>
<TR>
<TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD vAlign=top noWrap><FONT face=serif size=2>2.</FONT></TD>
<TD vAlign=top noWrap></TD>
<TD vAlign=top width="100%"><FONT face=serif size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</FONT></TD></TR>
</TABLE>


<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR vAlign=bottom>
<TD noWrap align=left width="1%"><FONT face=serif size=2><BR>Date:</FONT>&nbsp; </TD>
<TD noWrap align=left width="48%"><FONT face=serif size=2>September 13, 2007</FONT>&nbsp; </TD>
<TD noWrap align=right width="40%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ W. Kerry Jackson</FONT></U>&nbsp; </TD>
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<TD noWrap align=right width="40%"><FONT face=serif size=2>W. Kerry Jackson</FONT>&nbsp; </TD>
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<TD noWrap align=right width="40%"><FONT face=serif size=2>Executive Vice President and</FONT>&nbsp; </TD>
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<TD noWrap align=right width="40%"><FONT face=serif size=2>Chief Financial Officer</FONT>&nbsp; </TD>
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