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<SEC-DOCUMENT>0001206774-08-001974.txt : 20081211
<SEC-HEADER>0001206774-08-001974.hdr.sgml : 20081211
<ACCEPTANCE-DATETIME>20081211115946
ACCESSION NUMBER:		0001206774-08-001974
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20081101
FILED AS OF DATE:		20081211
DATE AS OF CHANGE:		20081211

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:		081242747

	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%"><B><FONT face=serif size=2>[X]</FONT></B></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD noWrap align=left width="97%"><B><FONT face=serif size=2>Quarterly
      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
      quarterly period ended </FONT><FONT face=serif size=2><STRONG>November 1,
      2008</STRONG><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="90%" 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><BR></DIV>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="90%" 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>
<P align=justify><BR></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="90%" 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>
<P align=justify><BR></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="100%"><B><FONT size=2>(812) <FONT face=serif>867-6471</FONT></FONT></B>&nbsp; </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>
  <TR>
    <TD noWrap align=center width="100%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="100%"><STRONG><FONT size=2>NOT APPLICABLE</FONT></STRONG>&nbsp;
  </TD></TR>
  <TR>
    <TD noWrap align=center width="100%"><EM><FONT size=2>(Former name, former
      address and former fiscal year, if changed since last
    report)</FONT></EM>&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><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>
<P align=justify><FONT face=serif size=2>Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company. See definitions of "large accelerated
filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one): </FONT></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="75%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="24%"><FONT face=serif size=2>[&nbsp;
      ]&nbsp; Large accelerated filer</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD noWrap align=center width="25%"><FONT face=serif size=2>[X]&nbsp;
      Accelerated filer</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="25%"><FONT size=2>[&nbsp; ]&nbsp;
      Non-accelerated filer</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="25%"><FONT face=serif size=2>[&nbsp;
      ]&nbsp; Smaller reporting
      company</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</TD></TR></TABLE></DIV>
<P align=justify><BR></P>
<P align=justify><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>
<P align=justify><BR></P>
<P align=center><FONT face=serif size=2>APPLICABLE ONLY TO CORPORATE ISSUERS:
</FONT></P>
<P align=justify><FONT face=serif size=2>Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date. </FONT></P>
<P align=justify><FONT face=serif size=2>Number of Shares of Common Stock, $.01
par value, outstanding at December 8, 2008 were 12,721,810. </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>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="93%" colSpan=2></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%"><FONT size=2><STRONG>Page</STRONG></FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0><FONT face=serif size=2>Part I</FONT> </TD>
    <TD noWrap align=left width="93%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>Financial
      Information</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="5%"><FONT face=serif size=2>Item 1.</FONT> </TD>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Financial Statements
      (Unaudited)</FONT> </TD>
    <TD noWrap align=left width="2%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="93%" bgColor=#c0c0c0 colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Condensed Consolidated Balance Sheets</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>3</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="93%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Condensed Consolidated Statements of Income</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>4</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="93%" bgColor=#c0c0c0 colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Condensed Consolidated Statement of Shareholders'
      Equity</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>5</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="93%" colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Condensed Consolidated Statements of Cash Flows</FONT>
    </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>6</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="93%" bgColor=#c0c0c0 colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Notes to Condensed Consolidated Financial
      Statements</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>7 - 11</FONT>
  </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Item 2.</FONT>
</TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT size=2><FONT face=serif>Management's Discussion and Analysis of Financial Condition and
      Results of Operations</FONT></FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT size=2>12 - 19</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Item 3.</FONT>
</TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Quantitative and
      Qualitative Disclosures About Market Risk<FONT size=3>&nbsp;</FONT></FONT>
    </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>20</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Item 4.</FONT>
</TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Controls and
      Procedures</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>20</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0><FONT face=serif size=2>Part
      II&nbsp;&nbsp;&nbsp;&nbsp; </FONT>&nbsp;</TD>
    <TD noWrap align=left width="93%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>Other
      Information</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD noWrap align=left width="5%"><FONT face=serif size=2>Item 1.</FONT> </TD>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Legal Proceedings</FONT> </TD>
    <TD noWrap align=right width="2%"><FONT face=serif size=2>21</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Item
      1A.&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Risk
      Factors</FONT>&nbsp; </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>21</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Item 6.</FONT>
</TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Exhibits</FONT>
    </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>22 - 23</FONT>
  </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0><FONT face=serif size=2>Signature</FONT>
    </TD>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0><FONT face=serif size=2>24</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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>February 2,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>November 3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><B><FONT face=serif size=2>(In
      thousands, except per share data)</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" 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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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="81%"><FONT face=serif size=2>Current
      Assets:</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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="81%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Cash and cash equivalents</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>9,143</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>9,177</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right 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="4%" bgColor=#c0c0c0><FONT face=serif size=2>6,671</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Accounts receivable</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,281</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>411</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,579</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Merchandise inventories</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>194,827</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>200,781</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>200,242</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Deferred income tax benefit</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>2,401</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>2,340</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,558</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Other</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>8,579</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>7,221</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>8,368</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Total Current
      Assets</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>216,231</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>219,930</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>219,418</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Property and equipment-net</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>73,541</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>71,686</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>74,194</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Total
      Assets</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=serif size=2>289,772</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%"><FONT face=serif size=2>291,616</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2>293,612</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" 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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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="81%"><FONT face=serif size=2>Current
      Liabilities:</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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="81%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts payable</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>51,074</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>67,786</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right 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="4%" bgColor=#c0c0c0><FONT face=serif size=2>51,581</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accrued and other liabilities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>14,777</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>10,689</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>13,355</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Total Current Liabilities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>65,851</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>78,475</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>64,936</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Long-term
      debt</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>14,165</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Deferred lease incentives</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>5,012</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>5,396</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>5,528</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Accrued
      rent</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>5,576</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>5,925</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>6,124</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Deferred income taxes</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="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,672</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></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="3%" bgColor=#c0c0c0><FONT face=serif size=2>399</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>844</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Deferred
      compensation</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>2,795</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>3,559</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=right width="4%"><FONT face=serif size=2>3,690</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Other</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,458</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></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></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,250</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>809</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Total
      Liabilities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>82,364</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>95,004</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>96,096</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" 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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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="81%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Common stock, $.01 par value, 50,000 shares</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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="81%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>authorized, 13,664, 13,670 and 13,671 shares
      issued</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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="81%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>at November 1, 2008, February 2, 2008 and</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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="81%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>November 3, 2007, respectively</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>137</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>137</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>137</FONT> </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&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=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>71,926</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>75,523</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>75,357</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Retained earnings</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>156,915</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>148,547</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>147,420</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Treasury stock, at cost, 942, 1,205 and 1,002 shares at</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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="81%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>November 1, 2008, February 2, 2008 and</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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="81%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>November 3, 2007, respectively</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(21,570</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(27,595</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(25,398</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Total
      Shareholders' Equity</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>207,408</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>196,612</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>197,516</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Total Liabilities and Shareholders' Equity</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>289,772</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>291,616</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>293,612</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" 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>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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp; &nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp; &nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3>&nbsp; &nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Weeks</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>November 3,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>November 3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><B><FONT face=serif size=2>(In
      thousands, except per share data)</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Net sales</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>170,063</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>173,881</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>490,662</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>494,339</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Cost of sales
      (including buying,</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></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="1%"></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="1%"></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="64%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>distribution and occupancy costs)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>123,746</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>123,320</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>355,119</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>353,740</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit</FONT> </TD>
    <TD noWrap align=left width="1%" 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>46,317</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>50,561</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>135,543</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=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>140,599</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Selling, general
      and administrative</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>expenses</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>42,389</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>43,627</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>122,373</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>123,070</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Operating income</FONT> </TD>
    <TD noWrap align=left width="1%" 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>3,928</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>6,934</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>13,170</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>17,529</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Interest
      income</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(62</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(101</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(138</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%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(611</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Interest expense</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>42</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>115</FONT> </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></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>111</FONT> </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></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>179</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Income before
      income taxes</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>3,948</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>6,920</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>13,197</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>17,961</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Income tax expense</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>1,341</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>2,734</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>4,829</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>6,281</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Net
      income</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>2,607</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>4,186</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>8,368</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>11,680</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD width="100%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" 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="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="1%" 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>
    <TD noWrap align=left width="1%" 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>
    <TD noWrap align=left width="1%" 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="64%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Basic</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.21</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.33</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.68</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>.89</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Diluted</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.21</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.33</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.67</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>.87</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" 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="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="1%" 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>
    <TD noWrap align=left width="1%" 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>
    <TD noWrap align=left width="1%" 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="64%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Basic</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>12,431</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>12,604</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>12,383</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2>13,065</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Diluted</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,539</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,777</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,483</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13,362</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" 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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="17%" colSpan=8></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Additional</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="17%" colSpan=8><B><FONT face=serif size=2>Common Stock</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Paid-In</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Retained</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Treasury</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><B><FONT face=serif size=2>(In
      thousands)</FONT></B> </TD>
    <TD noWrap align=right width="1%">&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>Issued</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="5%" colSpan=2><B><FONT face=serif size=2>Treasury</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="5%" colSpan=2><B><FONT face=serif size=2>Amount</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="6%" colSpan=3><B><FONT face=serif size=2>Capital</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="5%" colSpan=2><B><FONT face=serif size=2>Earnings</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="6%" colSpan=3><B><FONT face=serif size=2>Stock</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="5%" colSpan=2><B><FONT face=serif size=2>Total</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><FONT face=serif size=2>Balance at February 2, 2008</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>13,670</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(1,205</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>137</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>75,523</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>148,547</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(27,595</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><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>196,612</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><FONT face=serif size=2>Stock option
      exercises</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>124</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(1,461</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%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,837</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,376</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation</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="1%" 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>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>income tax benefit</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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right 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=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>219</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></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="4%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" 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>
    <TD noWrap align=left width="1%" 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>219</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><FONT face=serif size=2>Employee stock
      purchase plan</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>purchases</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>12</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(143</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%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>282</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="4%"><FONT face=serif size=2>139</FONT>
</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><FONT face=serif size=2>Restricted stock awards</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(6</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>127</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>(2,906</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>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>2,906</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><FONT face=serif size=2>Stock-based
      compensation</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></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="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>expense</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>694</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>694</FONT>
</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><FONT face=serif size=2>Net income</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>8,368</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>8,368</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><FONT face=serif size=2>Balance at
      November 1, 2008</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>13,664</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>(942</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>137</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>71,926</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>156,915</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>(21,570</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>207,408</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>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 style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>November 3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><B><FONT face=serif size=2>(In
      thousands)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><B><FONT face=serif size=2>Cash Flows From Operating Activities</FONT></B>&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="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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Net income</FONT>&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;
</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>8,368</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;
</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>11,680</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Adjustments to reconcile net income to
      net</FONT>&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="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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>cash provided by (used in) operating
      activities:</FONT>&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="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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Depreciation and amortization</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>12,585</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="4%"><FONT face=serif size=2>11,781</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Stock-based compensation</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>694</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>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1,071</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Loss on retirement and impairment of assets</FONT>&nbsp;
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>271</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="4%"><FONT face=serif size=2>508</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Deferred income taxes</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>1,212</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>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(160</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Lease incentives</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>817</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="4%"><FONT face=serif size=2>418</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(2,104</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(545</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Changes in operating assets and
      liabilities:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="4%"></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="4%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts receivable</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(870</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(631</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Merchandise inventories</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>5,954</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="4%"><FONT face=serif size=2>(3,580</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Accounts payable and accrued liabilities</FONT>&nbsp;
</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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(14,771</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(16,307</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</FONT>&nbsp; </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="4%"><FONT face=serif size=2>(1,363</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp; </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="4%"><FONT face=serif size=2>(6,543</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash provided by (used in) operating activities</FONT>&nbsp;
</TD>
    <TD noWrap align=left width="1%" 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>10,793</FONT> </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></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>(2,308</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><B><FONT face=serif size=2>Cash Flows From Investing Activities</FONT></B>&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="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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Purchases of property and equipment</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(12,575</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(15,263</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Proceeds from sale of property and
      equipment</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>3</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>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>379</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Other</FONT>&nbsp; </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="4%"><FONT face=serif size=2>0</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </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="4%"><FONT face=serif size=2>6</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash used in investing activities</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" 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>(12,572</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" 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>(14,878</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><B><FONT face=serif size=2>Cash Flows From Financing Activities</FONT></B>&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="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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Borrowings under line of credit</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>6,625</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="4%"><FONT face=serif size=2>49,970</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Payments on line of credit</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(6,625</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>(35,805</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Proceeds from issuance of stock</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1,515</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="4%"><FONT face=serif size=2>551</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Excess tax benefits from stock-based
      compensation</FONT>&nbsp; </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="4%" bgColor=#c0c0c0><FONT face=serif size=2>230</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=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>275</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Common stock repurchased</FONT>&nbsp; </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="4%"><FONT face=serif size=2>0</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</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="4%"><FONT face=serif size=2>(25,973</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash provided by (used in) financing activities</FONT>&nbsp;
</TD>
    <TD noWrap align=left width="1%" 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>1,745</FONT> </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></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>(10,982</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2>Net decrease in
      cash and cash equivalents</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(34</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(28,168</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Cash and cash equivalents at beginning of period</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" 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>9,177</FONT> </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></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>34,839</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><B><FONT face=serif size=2>Cash and Cash
      Equivalents at End of Period</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2>9,143</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2>6,671</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Supplemental disclosures of cash flow information:</FONT>&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="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="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Cash paid during period for interest</FONT>&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;
</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>108</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;
</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>130</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>Cash paid during period for income
      taxes</FONT>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>2,917</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>7,833</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>Capital expenditures incurred but not yet paid</FONT>&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>4,205</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2,405</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 2, 2008.</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="71%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Weeks</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Weeks</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Weeks</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Weeks
      Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>November
      1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>November
      3,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>November
      1,</FONT></B> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>November
      3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"><B><FONT face=serif size=2>(In
      thousands)</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Basic shares</FONT>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,431</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,604</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,383</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13,065</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"><FONT face=serif size=2>Dilutive effect
      of stock-based awards</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>108</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>173</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>100</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>297</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Diluted shares</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,539</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,777</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12,483</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13,362</FONT>
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Options to purchase 196,100 shares of
common stock for the third quarter of fiscal 2008 and options to purchase
219,600 shares of common stock for the first nine months of fiscal 2008 were not
included in the computation of diluted shares because the options' exercise
prices were greater than the average market price for the period. For the
quarter and nine months ended November 3, 2007, there were no anti-dilutive
options. </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 September 2006, the Financial
Accounting Standards Board (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. The provisions of SFAS
No. 157 are effective for fiscal years beginning after November 15, 2007. In
February 2008, the FASB deferred the implementation of SFAS No. 157 for certain
non-financial assets and liabilities for fiscal years beginning after November
15, 2008. We adopted the provisions of SFAS No. 157 for financial assets and
liabilities on February 3, 2008 and elected to defer adoption for non-financial
assets and liabilities. The adoption of SFAS No. 157 for financial assets did
not have a material impact on our consolidated financial statements. We do not
believe the adoption of SFAS No. 157 for certain non-financial assets and
liabilities will have a material impact 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><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. We adopted the provisions of SFAS No. 159 on February 3, 2008. As we
did not elect the fair value measurement option for any of our financial assets
and liabilities, the adoption did not have a material impact on our consolidated
financial statements. </FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 141R, "Business Combinations" ("SFAS No. 141R"). SFAS No. 141R requires an
acquirer to recognize the assets acquired, the liabilities assumed, and any
non-controlling interest in the acquired business at the acquisition date,
measured at their full fair values as of that date. SFAS No. 141R is effective
for business combinations occurring after December 31, 2008, with early
application prohibited. We do not believe the adoption of SFAS No. 141R will
have a material impact on our consolidated financial statements. </FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 160, "Noncontrolling Interests in Consolidated Financial Statements &#151; an
amendment of ARB No. 51" ("SFAS No. 160"). SFAS No. 160 establishes accounting
and reporting standards that require (i) noncontrolling interests to be reported
as a component of equity, (ii) changes in a parent&#146;s ownership interest while
the parent retains its controlling interest to be accounted for as equity
transactions, and (iii) any retained noncontrolling equity investment upon the
deconsolidation of a subsidiary to be initially measured at fair value. SFAS No.
160 is effective for fiscal years and interim periods within those fiscal years,
beginning on or after December 15, 2008, with early adoption prohibited. We do
not believe the adoption of SFAS No. 160 will have a material impact on our
consolidated financial statements. </FONT></P>
<P align=justify><FONT face=serif size=2>In March 2008, the FASB issued SFAS No.
161, "Disclosures about Derivative Instruments and Hedging Activities&#151;an
amendment of FASB Statement No. 133" ("SFAS No. 161"). SFAS No. 161 changes the
disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about how and why an
entity uses derivative instruments, how the instruments are accounted for under
FASB Statement No. 133 ("SFAS No. 133") and its related interpretations, and how
the instruments and related hedged items affect an entity&#146;s financial position,
financial performance, and cash flows. We early adopted the disclosure
requirements of SFAS No. 161 on February 3, 2008. The adoption did not have a
material impact on our consolidated financial statements.</FONT></P>
<P align=justify><FONT face=serif size=2>In April 2008, the FASB issued Staff
Position No. FAS 142-3, "Determination of the Useful Life of Intangible
Assets"</FONT><I><FONT face=serif size=2> </FONT></I><FONT face=serif size=2>("FSP FAS 142-3"), which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under FASB Statement No. 142, "Goodwill and Other
Intangible Assets". FSP FAS 142-3 allows an entity to use its own historical
experience in renewing or extending similar arrangements, adjusted for specified
entity-specific factors, in developing assumptions about renewal or extension
used to determine the useful life of a recognized intangible asset. Additional
disclosures are required to enable financial statement users to assess the
extent to which the expected future cash flows associated with the asset are
affected by the entity&#146;s intent and/or ability to renew or extend the
arrangement. The guidance for determining the useful life of a recognized
intangible asset is to be applied prospectively to intangible assets acquired
after the effective date. The disclosure requirements are to be applied
prospectively to all intangible assets recognized as of, and subsequent to, the
effective date. FSP FAS 142-3 is effective for fiscal years and interim periods
within those fiscal years, beginning on or after December 15, 2008, with early
adoption prohibited. We do not believe the adoption of FSP FAS 142-3 will have a
material impact on our consolidated financial statements. </FONT></P>
<P align=justify><FONT face=serif size=2>In May 2008, the FASB issued SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS No.
162"). SFAS No. 162 is intended to improve financial reporting by identifying a
consistent framework, or hierarchy, for selecting accounting principles to be
used in preparing financial statements that are presented in conformity with
U.S. GAAP for nongovernmental entities. SFAS No. 162 was effective beginning
November 15, 2008. We do not believe the adoption of SFAS No. 162 will have a
material impact on our consolidated financial statements. </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><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
nine months ended November 1, 2008: </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Weighted-</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Average</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Weighted-</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Remaining</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>Aggregate</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>Number of</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>Contractual</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>Intrinsic Value</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>Shares</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="7%" colSpan=2><B><FONT face=serif size=2>Exercise Price</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="6%"><B><FONT face=serif size=2>Term (Years)</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="6%" colSpan=2><B><FONT face=serif size=2>(in thousands)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face=serif size=2>Outstanding at February 2, 2008</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>637,709</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 face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12.40</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="6%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Grants</FONT> </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>15,000</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>14.79</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="1%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Forfeited or expired</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(5,167</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></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>13.66</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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Exercised</FONT> </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>(123,874</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" 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%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%"><FONT face=serif size=2>11.11</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%">&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=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Outstanding November 1, 2008</FONT>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>523,668</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12.77</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>4.05</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,187</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>Options
      outstanding at November 1,</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="6%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>2008, net of estimated forfeitures</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#ffffff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>517,903</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#ffffff><FONT face=serif size=2>12.77</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#ffffff><FONT face=serif size=2>3.99</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#ffffff><FONT face=serif size=2>1,177</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face=serif size=2>Exercisable at November 1, 2008</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>478,668</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>12.78</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>3.56</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,111</FONT>
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The weighted-average fair value of
options granted was $6.46 during the first nine months of fiscal 2008. No stock
options were granted during the first nine months of fiscal 2007. The fair value
of options granted during the first nine months of fiscal 2008 was estimated at
grant date using a Black-Scholes option-pricing model with the following
weighted-average assumptions: </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Risk free interest rate</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.1</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="94%"><FONT face=serif size=2>Expected
      dividend yield</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>0.0</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Expected volatility</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>45.39</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="94%"><FONT face=serif size=2>Expected
      term</FONT>&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>5 Years</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The risk free interest rate was based
on the U.S. Treasury yield curve in effect at the time of the grant. We had not
paid and do not anticipate paying cash dividends; therefore, the expected
dividend yield was assumed to be zero. Expected volatility was based on the
historical volatility of our stock. The expected term of the options was based
on our historical option exercise data taking into consideration the exercise
and forfeiture patterns of the class of option holders during the option&#146;s life.
</FONT></P>
<P align=justify><FONT face=serif size=2>The following table summarizes
information regarding options exercised during the thirteen and thirty-nine week
periods ended November 1, 2008 and November 3, 2007: </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Weeks</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Weeks</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" 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="7%" colSpan=2><B><FONT face=serif size=2>Ended</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Ended</FONT></B>&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 3,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>November 3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><FONT face=serif size=2><STRONG>2007</STRONG></FONT>&nbsp;
</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face=serif size=2>Total intrinsic value </FONT><SUP><FONT face=serif size=2>(1)</FONT></SUP> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>613,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>640,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>548,000</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=serif size=2>Total cash
      received</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>1,084,000</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>0</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%">&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>1,376,000</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>409,000</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face=serif size=2>Associated excess income tax benefits</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="6%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" 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>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" 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="5%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=2>recorded</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>224,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>230,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>180,000</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></P>
<P align=center><FONT face=serif size=2>9 </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 outstanding and exercisable options at November 1, 2008:
</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="44%" colSpan=6><STRONG><FONT size=2>Options Outstand<FONT face=serif>ing</FONT></FONT></STRONG> </TD>
    <TD noWrap align=center width="14%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="22%" colSpan=4><STRONG><FONT size=2>Options Exercisable</FONT></STRONG>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="5%"><FONT size=+0><B><FONT face=serif size=2>Number</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="5%"><FONT size=+0><B><FONT face=serif size=2>Weighted</FONT></B> </FONT></TD>
    <TD noWrap align=center width="15%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weighted</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="4%"><FONT size=+0><B><FONT face=serif size=2>Number</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Weighted</FONT></B> </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Range
      of</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="5%"><FONT size=+0><B><FONT face=serif size=2>of
      Options</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="5%"><FONT size=+0><B><FONT face=serif size=2>Average</FONT></B> </FONT></TD>
    <TD noWrap align=center width="15%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Average</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="4%"><FONT size=+0><B><FONT face=serif size=2>of
      Options</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>Average</FONT></B> </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise
      Price&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><FONT size=+0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outstanding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
      </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><FONT size=+0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Remaining
      Life&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B> </FONT></TD>
    <TD noWrap align=center width="15%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise
      Price&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B> </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><FONT size=+0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercisable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
      </FONT></TD>
    <TD noWrap align=center width="14%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise
      Price&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B> </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>4.38 &#150;
      &nbsp;&nbsp;5.75</FONT> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>61,162</FONT> </TD>
    <TD noWrap align=center width="14%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=center width="5%" bgColor=#c0c0c0><FONT face=serif size=2>2.09</FONT> </TD>
    <TD noWrap align=left width="15%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>4.46</FONT> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>61,162</FONT>
</TD>
    <TD noWrap align=left width="14%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>4.46</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>8.56 &#150; 12.63</FONT> </TD>
    <TD noWrap align=right width="14%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>109,585</FONT> </TD>
    <TD noWrap align=center width="14%">&nbsp;</TD>
    <TD noWrap align=center width="5%"><FONT face=serif size=2>4.53</FONT> </TD>
    <TD noWrap align=left width="15%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>10.44</FONT> </TD>
    <TD noWrap align=right width="14%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>79,585</FONT> </TD>
    <TD noWrap align=left width="14%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>10.04</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>12.67 &#150;
      16.30</FONT> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>195,301</FONT>
</TD>
    <TD noWrap align=center width="14%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="5%" bgColor=#c0c0c0><FONT face=serif size=2>4.91</FONT> </TD>
    <TD noWrap align=left width="15%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>13.16</FONT> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>180,301</FONT>
    </TD>
    <TD noWrap align=left width="14%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>13.03</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>17.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT>&nbsp;</TD>
    <TD noWrap align=right width="14%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>157,620</FONT> </TD>
    <TD noWrap align=center width="14%"></TD>
    <TD noWrap align=center width="5%"><FONT face=serif size=2>3.42</FONT> </TD>
    <TD noWrap align=left width="15%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>17.12</FONT> </TD>
    <TD noWrap align=right width="14%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>157,620</FONT> </TD>
    <TD noWrap align=left width="14%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>17.12</FONT>
</TD></TR></TABLE><BR>
<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 thirty-nine week periods ended November 1,
2008 and November 3, 2007:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp; </TD>
    <TD noWrap align=center width="2%" colSpan=2>&nbsp; &nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&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;&nbsp;</TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&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%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Weeks</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</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&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>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>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="89%">&nbsp; </TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>November 3,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>November 3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="2%" colSpan=2><B><FONT face=serif size=2>2008</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>2007</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>2008</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>2007</FONT></B><STRONG><SUP><FONT size=2>(1)</FONT></SUP></STRONG> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation expense before</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>&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>&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="89%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>the recognized
      income tax benefit</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>11,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>22,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>48,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face=serif size=2>61,000</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="89%"><FONT face=serif size=2>Income tax
      benefit</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>4,000</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>9,000</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>18,000</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="1%"><FONT face=serif size=2>24,000</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 width="100%"><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></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>As of November 1, 2008, there was
approximately $164,000 of unrecognized compensation expense, net of estimated
forfeitures, remaining related to non-vested stock options. This expense is
expected to be recognized over a period of 2.4 years. </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 thirty-nine week period ended November 1,
2008: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Weighted-</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Number of</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Average Grant</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Shares</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&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>Date Fair Value</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Non-vested at February 2, 2008</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>130,154</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><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>27.61</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Granted</FONT>
    </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>126,850</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>12.54</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Forfeited</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>(10,986</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>19.97</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Non-vested at
      November 1, 2008</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="6%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>246,018</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="4%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>20.19</FONT>
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>No previously non-vested stock awards
vested during the first nine months of fiscal 2008. The total fair value at
grant date of previously non-vested stock awards that vested during the first
nine months of fiscal 2007 was $831,000. The weighted-average grant date fair
values of stock awards granted during the thirty-nine week periods ended
November 1, 2008 and November 3, 2007 were $12.54 and $29.42, respectively.
</FONT></P>
<P align=center><FONT face=serif size=2>10 </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 restricted stock
awards recognized during the thirteen and thirty-nine week periods ended
November 1, 2008 and November 3, 2007: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; &nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; &nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Weeks</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Weeks</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Thirty-nine</FONT></B> &nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>Weeks Ended</FONT></B> &nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>November 3,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2>&nbsp; <B><FONT face=serif size=2>November 3,</FONT></B> &nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%">&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>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&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>2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&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>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&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>2007</FONT></B><B><SUP><FONT face=serif size=2>(1)</FONT></SUP></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation expense before</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="6%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>
    <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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="6%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>the
      recognized income tax benefit</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>118,000</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>212,000</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>621,000</FONT>
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>985,000</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><FONT face=serif size=2>Income tax
      benefit</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>40,000</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>84,000</FONT>
</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>227,000</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>384,000</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;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="100%"><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></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>As of November 1, 2008, there was
approximately $1.7 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 3.8 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=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 thirty-nine week periods
ended November 1, 2008 and November 3, 2007: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Weeks</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Weeks</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" 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="7%" colSpan=2><B><FONT face=serif size=2>Ended</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Ended</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Weeks Ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 3,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 1,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>November 3,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B><B><SUP><FONT face=serif size=2>(1)</FONT></SUP></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0><FONT face=serif size=2>Stock-based compensation expense before</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="6%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" 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>
    <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="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="6%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>the
      recognized income tax benefit </FONT><SUP><FONT face=serif size=2>(2)</FONT></SUP> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>6,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>7,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>25,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>25,000</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><FONT face=serif size=2>Income tax
      benefit</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>2,000</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>3,000</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>9,000</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>10,000</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;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top width="100%"><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></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>Amounts are
      representative of the 15% discount employees are provided for purchases
      under the employee stock purchase plan.</FONT></TD></TR></TABLE>
<P align=justify><B><FONT face=serif size=2>Note 5 - Litigation Matters
</FONT></B></P>
<P align=justify><FONT face=serif size=2>On or about April 22, 2008, an
arbitration claim was filed by SDI Industries, Inc. ("SDI") against us with the
American Arbitration Association Western Case Management Center in Los Angeles,
California, </FONT><I><FONT face=serif size=2>captioned SDI Industries, Inc.
(Claimant and Counter-Respondent) v. Shoe Carnival, Inc. (Respondent and
Counterclaimant)</FONT></I><FONT face=serif size=2>, in which SDI seeks payment
of $1.04 million of unpaid retainage, as defined in our contract with SDI
("Contract"), plus additional interest and fees. The retainage was withheld from
progress billings for work performed on our new distribution center and is
recorded in accrued and other liabilities and fixed assets in our consolidated
financial statements. On or about May 21, 2008, we filed a Counterclaim and
Response in this matter, denying SDI's claim, and seeking monetary damages of
more than $3.0 million. We contend that SDI breached the Contract due to their
failure to deliver our distribution center's material handling system pursuant
to the specifications of the Contract. The hearing before the arbitration panel
is currently scheduled for April 2009.</FONT></P>
<P align=justify><FONT face=serif size=2>Although the investment we made in the
new distribution center will satisfy our distribution needs throughout fiscal
2009, we have not achieved the productivity that we expect will be required
based on our plan for long-term store growth. We have contracted with a company
to provide recommendations as to system upgrades to improve throughput.
Modifications are tentatively expected to be complete prior to the end of fiscal
2009. </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>ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </FONT></B></P>
<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; the effects and duration of the current economic downturn
and the ailing credit markets; changes in the overall retail environment and
more specifically in the apparel and footwear retail sectors; our ability to
generate increased sales at our stores; 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 effectiveness of our
inventory management; 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; our ability to
successfully execute our growth strategy, including the availability of
desirable store locations at acceptable lease terms, our ability to open new
stores in a timely and profitable manner and the availability of sufficient
funds to implement our growth plans; 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, Brazil, Spain and East Asia, the
primary manufacturers of footwear; and the continued favorable trade relations
between the United States and China and the 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 2, 2008. </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 2, 2008 as filed with the SEC. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Overview of Our
Business</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&#146;s largest family footwear retailers. As of November 1, 2008, we operated
310 stores in 29 states primarily 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.</FONT></P>
<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>Our marketing effort targets moderate
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. Low labor costs are achieved by housing merchandise
directly on the selling floor in an open-stock format, enabling customers to
serve themselves, if they choose. 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=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 Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes"
("SFAS No. 109") and account for uncertain tax positions in accordance with
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes &#150; an
interpretation of Financial Accounting Standards Board ("FASB") Statement No.
109" ("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. </FONT></P>
<P align=justify><I><FONT face=serif size=2>Insurance Reserves -
</FONT></I><FONT face=serif size=2>We use a combination of self-insurance and
third-party insurance for workers' compensation, employee medical and general
liability insurance. These plans have stop-loss provisions that protect us from
individual and aggregate losses over specified dollar values. When estimating
our self-insured liabilities, we consider a number of factors, including
historical claims experience, severity factors, statistical trends and, in
certain instances, valuation assistance provided by independent third-parties.
We will continue to evaluate our self-insured liabilities and the underlying
assumptions on a quarterly basis and make adjustments as needed. The ultimate
cost of these claims may be greater than or less than the established accruals.
While we believe that the recorded amounts are adequate, there can be no
assurance that changes to management's estimates will not occur due to
limitations inherent in the estimating process. In the event we determine an
accrual should be increased or reduced, we will record such adjustments in the
period in which such determination is made. </FONT></P>
<P align=center><FONT face=serif size=2>13 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Results of Operations Summary
Information</FONT></B><FONT face=serif size=2></FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" colSpan=2></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Number of
    Stores</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Store Square Footage</FONT></B></TD>
    <TD noWrap align=right 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="68%" colSpan=2></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%"><B><FONT face=serif size=2>Beginning</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="3%"><B><FONT face=serif size=2>End of</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><B><FONT face=serif size=2>Net</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"><B><FONT face=serif size=2>End</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Comparable</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="5%"><B><FONT face=serif size=2>Quarter
Ended</FONT></B></TD>
    <TD noWrap align=left width="63%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Of Period</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="3%"><B><FONT face=serif size=2>Opened</FONT></B></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><STRONG><FONT size=2>Closed</FONT></STRONG></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="3%"><B><FONT face=serif size=2>Period</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="3%"><B><FONT face=serif size=2>Change</FONT></B></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>of Period</FONT></B></TD>
    <TD noWrap align=right width="1%">&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>Store
  Sales</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>May
      3, 2008</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="4%" bgColor=#c0c0c0><FONT face=serif size=2>291</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>293</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>16,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3,254,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(4.9</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="68%" colSpan=2><FONT face=serif size=2>August 2, 2008</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"><FONT face=serif size=2>293</FONT></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>12</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>303</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>87,000</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,341,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(1.0</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>November 1, 2008</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="4%" bgColor=#c0c0c0><FONT face=serif size=2>303</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>8</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>310</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>62,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3,403,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(5.0</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="68%" colSpan=2><FONT face=serif size=2>Year-to-date 2008</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"><FONT face=serif size=2>291</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>22</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>3</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>310</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>165,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,403,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(3.7</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)%</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>May
      5, 2007</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="4%" bgColor=#c0c0c0><FONT face=serif size=2>271</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>7</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>278</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>66,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3,128,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(3.7</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="68%" colSpan=2><FONT face=serif size=2>August 4, 2007</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"><FONT face=serif size=2>278</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>6</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>0</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>284</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>59,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,187,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(7.1</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0 colSpan=2><FONT face=serif size=2>November 3, 2007</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="4%" bgColor=#c0c0c0><FONT face=serif size=2>284</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>11</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="3%" bgColor=#c0c0c0><FONT face=serif size=2>293</FONT></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>78,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3,265,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(5.0</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="68%" colSpan=2><FONT face=serif size=2>Year-to-date 2007</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="4%"><FONT face=serif size=2>271</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>24</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>2</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="3%"><FONT face=serif size=2>293</FONT></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>203,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3,265,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(5.0</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)%</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>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>The following table sets forth our
results of operations expressed as a percentage of net sales for the periods
indicated: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Thirteen</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Thirty-nine</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Weeks
      Ended</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Weeks
      Ended</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Weeks
      Ended</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Weeks
      Ended</FONT></B></TD></TR>
  <TR>
    <TD noWrap align=left width="64%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><STRONG><FONT size=2>November
      1, 2008</FONT></STRONG></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><STRONG><FONT size=2>November
      3, 2007</FONT></STRONG></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><STRONG><FONT size=2>November
      1, 2008 </FONT></STRONG></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><STRONG><FONT size=2>November
      3, 2007</FONT></STRONG></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Net
      sales</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>100.0</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=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>100.0</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=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>100.0</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=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>100.0</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="64%"><FONT face=serif size=2>Cost of sales (including
      buying,</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; distribution and
      occupancy costs)</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>72.8</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>70.9</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>72.4</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>71.5</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Gross
      profit</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>27.2</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=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>29.1</FONT></TD>
    <TD noWrap align=left width="1%" 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>27.6</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=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>28.5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Selling, general
    and</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; administrative
      expenses</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>24.9</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>25.1</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>24.9</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>24.9</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" 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="7%" bgColor=#c0c0c0><FONT face=serif size=2>2.3</FONT></TD>
    <TD noWrap align=left width="1%" 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>4.0</FONT></TD>
    <TD noWrap align=left width="1%" 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>2.7</FONT></TD>
    <TD noWrap align=left width="1%" 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>3.6</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Interest income</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.0</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>(0.1</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=right width="7%"><FONT face=serif size=2>0.0</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>(0.1</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Interest expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0.0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0.1</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0.0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0.0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Income before income
      taxes</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>2.3</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>4.0</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>2.7</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>3.7</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Income tax expense</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>0.8</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>1.6</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>1.0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>1.3</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="64%"><FONT face=serif size=2>Net income</FONT> </TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="7%"><FONT face=serif size=2>1.5</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="7%"><FONT face=serif size=2>2.4</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="7%"><FONT face=serif size=2>1.7</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1.5pt solid" noWrap align=right width="7%"><FONT face=serif size=2>2.4</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff 1.5pt solid" noWrap align=left width="1%"><FONT face=serif size=2>%</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>Operational Summary </FONT></B></P>
<P align=justify><FONT face=serif size=2>Labor Day marked the end of our all
important back-to-school season. While we generated slightly positive comparable
store sales in August, sales for the balance of the third quarter declined as
the consumer once again retreated to a conservative shopping pattern. This trend
led to lower customer traffic and a comparable store sales decrease of 5.0%
during the third quarter of fiscal 2008.</FONT></P>
<P align=justify><FONT face=serif size=2>Despite the challenging economic
climate, we achieved an increase in the average net price of our footwear and
achieved higher average purchases per ticket, both in terms of dollars spent and
units purchased. Our merchants remained focused on inventory control and were
able to decrease our per store inventory levels by 8% compared to the prior
year. The anticipated increase in the cost of footwear materialized in the third
quarter and we were successful in passing most of these costs through to the
consumer. However, due to the promotional nature of the footwear industry during
the third quarter, these increased costs outweighed the higher average net price
we were able to achieve on our footwear sales. This
contributed to lower merchandise margins during the third quarter as compared to
the prior year.</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>During the fourth quarter, we will
react to the pricing and promotional cadence of our competitors in the footwear
marketplace. Consequently, our stated initiative of increasing the average
retail price on footwear sales may be difficult as we expect the holiday retail
environment to become increasingly promotional and price-sensitive. We fully
expect to continue to lower inventory levels, especially on seasonal product.
While we will invest heavily in advertising during peak sales periods, we do not
believe the consumer is reacting to advertising in non-peak periods. Just as we
reduced our advertising in the second and third quarters, we plan to continue
this strategy in the fourth quarter, concentrating our advertising efforts on
weeks in which we expect the consumer to make the majority of their holiday
purchases.</FONT></P>
<P align=justify><FONT face=serif size=2>Despite the protracted economic
downturn, we believe we have the management discipline, correct operating
strategies and financial strength to maintain profitable operations on an annual
basis. We also believe these strengths will enable us to continue expanding our
market share to enhance shareholder value. Raising the net realized price of our
footwear, putting downward pressure on inventory levels to improve turnover,
controlling expenses and continuing to maintain a strong balance sheet with a
healthy cash position will remain our priorities through fiscal 2009.
</FONT></P>
<P align=justify><B><FONT face=serif size=2>Results of Operations for the Third
Quarter Ended November 1, 2008 </FONT></B></P>
<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>Net sales decreased $3.8 million to
$170.1 million during the third quarter ended November 1, 2008, a 2.2% decrease
from net sales of $173.9 million in the third quarter ended November 3, 2007.
The decrease in net sales was primarily due to a 5.0% decrease in comparable
store sales, which was partially offset by a $4.6 million increase in sales
generated by the 38 new stores opened since July of fiscal 2007, net of sales
lost from the eight stores which were closed during this same period.</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 $4.3 million to
$46.3 million in the third quarter of fiscal 2008 from gross profit of $50.6
million in the comparable prior year period. Our gross profit margin in the
third quarter of fiscal 2008 decreased to 27.2% from 29.1% in the comparable
prior year period. During the quarter, heavy promotions were necessary in the
women's non-athletic category to keep inventory turning at an acceptable level.
This was the primary cause of the 1.1% decrease in our merchandise margin
compared to the prior year. Additionally, we experienced a 0.8% increase in
occupancy costs, as a percentage of sales, primarily as a result of the lower
comparable store sales and an increase in costs due to the additional stores we
operated in the third quarter of 2008. </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>In the third quarter of fiscal 2008,
selling, general and administrative expenses decreased $1.2 million to $42.4
million, or 24.9% of sales, from $43.6 million, or 25.1% of sales, in the
comparable prior year period. The $1.2 million in savings was primarily the
result of a $1.5 million reduction in advertising costs from our decision to
decrease advertising during non-peak periods along with a $1.0 million decrease
in the expense for employee incentives and benefits. These decreases were
partially offset by $1.6 million of additional costs incurred from the operation
and support of the net new stores opened since July of fiscal 2007. </FONT></P>
<P align=justify><FONT face=serif size=2>Pre-opening costs were $386,000, or
0.2% of sales, for the third quarter of fiscal 2008 as compared to $407,000, or
0.2% of sales, for the third quarter of fiscal 2007. We opened eight stores in
the third quarter of fiscal 2008 as compared to 11 stores in the third quarter
of fiscal 2007. 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 by store depending on the specific market and the promotional activities
involved. </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>Store closing costs included in
selling, general and administrative expenses were $417,000, or 0.2% of sales,
for the third quarter of fiscal 2008 as compared to $96,000, or 0.1% of sales,
for the third quarter of fiscal 2007. One store was closed during the third
quarter of fiscal 2008 and two stores were closed during the third quarter of
fiscal 2007. The timing and actual amount of expense recorded in closing a store
can vary significantly depending in part on the period in which management
commits to a closing plan, the remaining basis in the fixed assets to be
disposed of at closing and the amount of any lease buyout. </FONT></P>
<P align=justify><I><FONT face=serif size=2>Interest (Income) Expense, Net
</FONT></I></P>
<P align=justify><FONT face=serif size=2>We recorded net interest income of
$20,000 in the third quarter of fiscal 2008 as compared to net interest expense
of $14,000 in the third quarter of the prior year. This increase in interest
income was primarily the result of an increase in the cash available for
short-term investment. </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
third quarter of fiscal 2008 decreased to 34.0% from 39.5% for the same time
period in fiscal 2007. The reduction in rate was primarily due to the decrease
in our federal taxable rate from the maximum of 35% to approximately 33.6% based
on our projected reduction in taxable income. This adjustment to lower the
year-to-date federal rate was reflected in our third quarter income tax expense.
</FONT></P>
<P align=justify><I><FONT face=serif size=2>Net Income </FONT></I></P>
<P align=justify><FONT face=serif size=2>Net income for the third quarter of
fiscal 2008 decreased to $2.6 million, or $0.21 per diluted share, from $4.2
million, or $0.33 per diluted share, in the third quarter of fiscal
2007.</FONT></P>
<P align=justify><FONT face=serif size=2>Our average diluted shares outstanding
at the end of the third quarter of fiscal 2008 were 12.5 million or
approximately 1.9% lower than the 12.8 million average diluted shares
outstanding at the end of the third quarter last year. This decrease was
primarily due to the 1.2 million shares repurchased in fiscal 2007 as part of
our $50.0 million share repurchase program.</FONT></P>
<P align=justify><FONT face=serif size=2></FONT><B><FONT face=serif size=2>Results Of Operations for the Nine Months Ended November 1, 2008
</FONT></B></P>
<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>Net sales decreased $3.6 million to
$490.7 million during the nine months ended November 1, 2008, from net sales of
$494.3 million in the comparable prior year period. The decrease in net sales
was primarily due to a 3.7% decrease in comparable store sales, which was
partially offset by a $13.5 million increase in sales generated by the 47 new
stores opened since February 3, 2007, net of sales lost from the eight stores
which were closed during this same period.</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 $5.1 million to
$135.5 million in the first nine months of fiscal 2008 from gross profit of
$140.6 million in the comparable prior year period. Our gross profit margin in
the first nine months of fiscal 2008 decreased to 27.6% from 28.5% in the
comparable prior year period. The merchandise margin decreased 0.4%, while
buying, distribution and occupancy costs increased 0.5% as a percentage of
sales. We experienced a 0.6% increase in occupancy costs, as a percentage of
sales, primarily as a result of the lower comparable store sales and an increase
in costs due to the additional stores we operated throughout the year. This
increase, as a percentage of sales, was partially offset by a 0.2% decline in
distribution costs. Our distribution costs, both as a percentage of sales and in
dollars, declined primarily as a result of costs associated with the conversion
to our new distribution center during the first quarter of the prior
year.</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><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 decreased $697,000 to $122.4 million in the first nine months of fiscal
2008 from $123.1 million in the comparable prior year period. For both periods,
selling, general and administrative expenses represented 24.9% of sales. The
$697,000 in savings was primarily the result of a $4.2 million reduction in
advertising costs along with a $1.3 million decrease in expense for employee
incentives and benefits. Our decision to lower advertising costs was based on
current market trends, store performance and an overall decrease in advertising
during non-peak periods. These decreases were partially offset by $4.1 million
of additional costs incurred from the operation and support of the net new
stores opened since February of fiscal 2007. </FONT></P>
<P align=justify><FONT face=serif size=2>Pre-opening costs were $826,000, or
0.2% of sales, for the first nine months of fiscal 2008 as compared to $963,000,
or 0.2% of sales, for the first nine months of fiscal 2007. We opened 22 stores
in the first nine months of fiscal 2008 as compared to 24 stores in the first
nine months of fiscal 2007. 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 by store depending on the specific market and the promotional
activities involved. </FONT></P>
<P align=justify><FONT face=serif size=2>Store closing costs included in
selling, general and administrative expenses were $1.1 million, or 0.2% of
sales, for the first nine months of fiscal 2008 as compared to $525,000, or 0.1%
of sales, for the first nine months of fiscal 2007. Three stores were closed
during the first nine months of fiscal 2008 and two stores were closed during
the first nine months of fiscal 2007. We expect to close nine stores during the
remainder of fiscal 2008 as compared to three stores in the last quarter of
fiscal 2007. We will continue to evaluate underperforming stores for possible
closing on a routine basis, which may result in the identification of additional
store closings for the current or future fiscal years. The timing and actual
amount of expense recorded in closing a store can vary significantly depending
in part on the period in which management commits to a closing plan, the
remaining basis in the fixed assets to be disposed of at closing and the amount
of any lease buyout.</FONT></P>
<P align=justify><I><FONT face=serif size=2>Interest (Income) Expense, Net
</FONT></I></P>
<P align=justify><FONT face=serif size=2>We recorded net interest income of
$27,000 in the first nine months of fiscal 2008 as compared to net interest
income of $432,000 in the first nine months of the prior year. This decrease in
interest income was primarily the result of a decline in the cash available for
short-term investment. </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
first nine months of fiscal 2008 increased to 36.6% from 35.0% compared to the
same time period in 2007. Our federal income tax rate was lower than last year
due to lower taxable income while our state tax rate was higher than last year
because during fiscal 2007 we experienced a one-time reduction in state income
taxes from state incentives related to the investment in our new distribution
center.</FONT></P>
<P align=justify><I><FONT face=serif size=2>Net Income </FONT></I></P>
<P align=justify><FONT face=serif size=2>For the first nine months of fiscal
2008, net income decreased to $8.4 million, or $0.67 per diluted share, from
$11.7 million, or $0.87 per diluted share, in the first nine months of fiscal
2007.</FONT></P>
<P align=justify><FONT face=serif size=2>Our average diluted shares outstanding
at the end of the first nine months of fiscal 2008 were 12.5 million or
approximately 6.6% lower than the 13.4 million average diluted shares
outstanding at the end of the first nine months last year. This decrease was
primarily due to the 1.2 million shares repurchased in fiscal 2007 as part of
our $50.0 million share repurchase program.</FONT><B><FONT face=serif size=2>
</FONT></B></P>
<P align=center><FONT face=serif size=2>17 </FONT></P>
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<PAGE>
<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>Our primary sources of funds are cash
flows from operations and borrowings under our revolving credit facility. Our
net cash provided by operations was $10.8 million in the first nine months of
fiscal 2008 as compared to net cash used in operations of $2.3 million in the
first nine months of 2007, for an increase of net cash provided by operations of
$13.1 million. This difference, when comparing the two periods of each year, was
primarily due to a reduction in inventory on a per store basis and the timing of
payments for accounts payable and accrued liabilities partially offset by a
decrease in net income. </FONT></P>
<P align=justify><FONT face=serif size=2>Working capital decreased to $150.4
million at November 1, 2008 from $154.5 million at November 3, 2007 primarily as
a result of our reduction in inventory. The current ratio at November 1, 2008
was 3.3 compared to 3.4 at November 3, 2007. We had no long-term debt at
November 1, 2008 compared to $14.2 million at November 3, 2007.</FONT></P>
<P align=justify><FONT face=serif size=2>We expended $12.6 million in cash
during the first nine months of fiscal 2008 for the purchase of property and
equipment. Of this amount, $10.2 million was used for new stores, store
remodeling and store relocation projects. The remaining capital expenditures
were used primarily for information technology and miscellaneous equipment
purchases. Additional capital expenditures of approximately $5.0 million will be
made over the course of fiscal 2008 for the opening of new stores, store
remodels and various other store improvements. During the nine months ended
November 1, 2008, we received $817,000 in lease incentives from our landlords
and we anticipate receiving a total of $2.0 million in lease incentives from our
landlords for fiscal 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>During the first nine months of fiscal
2008, we opened 22 new stores. This compares to 24 store openings in the first
nine months of fiscal 2007. We anticipate opening two additional stores and
closing nine stores during the remainder of fiscal 2008. Throughout the year,
our 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.
For fiscal 2008, our new stores will average approximately 8,900 square feet.
Capital expenditures for a new store in fiscal 2008 are expected to average
approximately $290,000 and tenant improvement allowances are expected to average
$30,000. The average inventory investment in a new store is expected to range
from $300,000 to $550,000 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
$40,000 per store in fiscal 2008, with individual stores experiencing variances
in expenditure levels based on the specific market. </FONT></P>
<P align=justify><FONT face=serif size=2>As of November 1, 2008, our unsecured
credit facility provided for up to $95.0 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 November 1, 2008. Should a default condition be reported, the
lenders may preclude additional borrowings and call all loans and accrued
interest at their discretion. At November 1, 2008, there were no borrowings
outstanding under the credit facility and $2.9 million in letters of credit were
outstanding. As of November 1, 2008, $92.1 million was available to us for
additional borrowings under the credit facility.</FONT></P>
<P align=justify><FONT face=serif size=2>During fiscal 2006, our Board of
Directors authorized a $50.0 million share repurchase program, which would
terminate upon the earlier of the repurchase of the maximum amount or December
31, 2008. On October 8, 2008, the Board of Directors extended the date of
termination one year to December 31, 2009. Share repurchases under this
authorization may be made in the open market or in privately negotiated
transactions. The timing and actual number of shares repurchased will depend on
a variety of factors including price, corporate and regulatory requirements and other market conditions. As of November 1, 2008,
approximately 1.2 million shares had been repurchased at an aggregate cost of
$28.1 million. The amount that remained available under the existing repurchase
authorization at November 1, 2008 was $21.9 million. No shares have been
repurchased during fiscal 2008.</FONT></P>
<P align=center><FONT face=serif size=2>18 </FONT></P>
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<PAGE>
<P align=justify><FONT face=serif size=2>On or about April 22, 2008, an
arbitration claim was filed by SDI Industries, Inc. ("SDI") against us with the
American Arbitration Association Western Case Management Center in Los Angeles,
California, </FONT><I><FONT face=serif size=2>captioned SDI Industries, Inc.
(Claimant and Counter-Respondent) v. Shoe Carnival, Inc. (Respondent and
Counterclaimant)</FONT></I><FONT face=serif size=2>, in which SDI seeks payment
of $1.04 million of unpaid retainage, as defined in our contract with SDI
("Contract"), plus additional interest and fees. The retainage was withheld from
progress billings for work performed on our new distribution center and is
recorded in accrued and other liabilities and fixed assets in our consolidated
financial statements. On or about May 21, 2008, we filed a Counterclaim and
Response in this matter, denying SDI's claim, and seeking monetary damages of
more than $3.0 million. We contend that SDI breached the Contract due to their
failure to deliver our distribution center's material handling system pursuant
to the specifications of the Contract. The hearing before the arbitration panel
is currently scheduled for April 2009.</FONT></P>
<P align=justify><FONT face=serif size=2>Although the investment we made in the
new distribution center will satisfy our distribution needs throughout fiscal
2009, we have not achieved the productivity that we expect will be required in
three to five years, based on our long-term store growth plan. We have
contracted with a company to provide recommendations as to system upgrades to
improve throughput. Modifications are tentatively expected to be complete prior
to the end of fiscal 2009. </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 along with
other capital expenditures, any future repurchase of our common stock under our
current repurchase plan and working capital requirements for at least the next
12 months. </FONT></P>
<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
Quarterly Report on Form 10-Q. </FONT></P>
<P align=center><FONT face=serif size=2>19&nbsp;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<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. A 1% change in the weighted average interest rate charged under
the credit facility would have resulted in interest expense fluctuating by less
than $1,000 for the first nine months of fiscal 2008.</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 November 1,
2008, 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. As
part of our continued strategy to grow our store base and increase capacity, we
are in the process of redesigning certain elements of the material handling
system in our distribution center. The internal controls impacted by this
project are mainly automated and operational in nature. See our Notes to
Condensed Consolidated Financial Statements, Note 5 &#150; "Litigation Matters"
included in PART I, ITEM 1. FINANCIAL STATEMENTS of this Quarterly Report on
Form 10-Q for further details on this matter. There have been no other changes
in our internal control over financial reporting that occurred during the
quarter ended November 1, 2008 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>20 </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 1. LEGAL PROCEEDINGS
</FONT></B></P>
<P align=justify><FONT face=serif size=2>The information set forth in Note 5 &#150;
"Litigation Matters" contained in the Notes to Condensed Consolidated Financial
Statement included in PART I, ITEM 1. FINANCIAL STATEMENTS of this Quarterly
Report on Form 10-Q is incorporated herein by reference. </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 2, 2008 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 2, 2008. </FONT></P>
<P align=center><FONT face=serif size=2>21 </FONT></P>
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<PAGE>
<P align=justify><B><FONT face=serif size=2>ITEM 6. EXHIBITS</FONT></B></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2>(a)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>
      <P align=justify><FONT face=serif size=2></FONT></P></TD>
    <TD noWrap></TD>
    <TD width="96%"><FONT size=2>Exhibits </FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD noWrap></TD>
    <TD width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2>3-A</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><FONT 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></TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2>3-B</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><FONT 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></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>4</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><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></TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><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></TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif 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></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif 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></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif 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></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif 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></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif 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>
<P align=center><FONT face=serif size=2>&nbsp;</FONT><FONT face=serif size=2>22
</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></TD>
    <TD vAlign=top noWrap><FONT size=2>(a)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>
      <P align=justify><FONT face=serif size=2></FONT></P></TD>
    <TD noWrap></TD>
    <TD width="96%">
      <P align=justify><FONT face=serif size=2>Exhibits (continued)
      </FONT></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD noWrap>&nbsp;</TD>
    <TD width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%">
      <P align=justify><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></P></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2></FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><FONT 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 vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2></FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><FONT 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 vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2></FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><FONT face=serif size=2>(xi) Ninth Amendment to
      Amended and Restated Credit Agreement and Notes dated June 10, 2008,
      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 Quarterly
      Report on Form 10-Q for the quarter ended May 3, 2008)</FONT></TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2>10.1</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="96%"><FONT face=serif size=2>Shoe Carnival, Inc.
      Deferred Compensation Plan (incorporated herein by reference from the same
      exhibit number to the Registrants' Current Report on Form 8-K filed on
      October 14, 2008)</FONT></TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2>10.2</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%">
      <P align=justify><FONT face=serif size=2>2000 Stock Option and Incentive
      Plan of Registrant, as amended</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT size=2>31.1</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Certification of Chief
      Executive Officer Pursuant to 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 vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></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 vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></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 vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap></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%">
      <P align=justify><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></P></TD></TR></TABLE>
<P align=center><FONT face=serif size=2>23 </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="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=serif size=2>Date: December 11,
      2008</FONT>&nbsp; </TD>
    <TD noWrap align=center width="40%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>SHOE CARNIVAL, INC.</FONT>&nbsp; </TD>
    <TD noWrap align=center width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%">&nbsp; </TD>
    <TD noWrap align=center width="40%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)</FONT>&nbsp;
    </TD>
    <TD noWrap align=center width="10%"></TD></TR>
  <TR>
    <TD width="90%" colSpan=2>&nbsp; </TD>
    <TD width="10%"></TD></TR>
  <TR>
    <TD width="90%" colSpan=2>&nbsp; </TD>
    <TD width="10%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%">&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> </TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%">&nbsp; </TD>
    <TD noWrap align=right width="40%"><FONT face=serif size=2>W. Kerry Jackson</FONT> </TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%">&nbsp; </TD>
    <TD noWrap align=right width="40%"><FONT face=serif size=2>Executive Vice President and</FONT>
    </TD>
    <TD noWrap align=right width="10%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%">&nbsp; </TD>
    <TD noWrap align=right width="40%"><FONT face=serif size=2>Chief Financial Officer</FONT> </TD>
    <TD noWrap align=right width="10%"></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>24 </FONT></P>
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<TYPE>EX-10.2
<SEQUENCE>2
<FILENAME>exhibit10-2.htm
<DESCRIPTION>2000 STOCK OPTION AND INCENTIVE PLAN OF REGISTRANT, AS AMENDED
<TEXT>

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<P align=right><B><FONT face=serif size=2>EXHIBIT 10.2 </FONT></B></P>
<P align=center><B><FONT face=serif size=2>SHOE CARNIVAL,
INC.<BR></FONT></B><B><FONT face=serif size=2>2000 STOCK OPTION AND INCENTIVE
PLAN <BR>(AS AMENDED) </FONT></B></P>
<P align=justify><FONT face=serif size=2></FONT><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>1. </STRONG></FONT><U><FONT face=serif size=2><STRONG>Plan Purpose</STRONG></FONT></U><FONT face=serif size=2>. The purpose of the Plan is to promote the long-term interests of the
Company and its shareholders by providing a means for attracting and retaining
Directors and officers and key employees of the Company and its Affiliates.
</FONT></P>
<P align=justify><FONT face=serif size=2></FONT><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>2. </STRONG></FONT><U><FONT face=serif size=2><STRONG>Definitions</STRONG></FONT></U><FONT face=serif size=2>. The following definitions are applicable to the Plan: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Affiliate" -- means any "parent corporation" or "subsidiary corporation"
of the Company as such terms are defined in Section 424(e) and (f),
respectively, of the Code. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Annual
Return To Shareholders" -- means the Company's return to shareholders as
represented by share price appreciation plus dividends paid on one share of
stock during any Year during a Restricted Period. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Award" -- means the grant by the
Committee of an Incentive Stock Option, a Non-</FONT><FONT face=serif size=2>Qualified Stock Option, or Restricted Stock, or any combination thereof,
as provided in the Plan. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Board" -- means the Board of
Directors of the Company. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Business
Criteria" -- means any one or any combination of Annual Return to Shareholders,
Total Net Sales, Net Earnings, Net Earnings before Nonrecurring Items, Return on
Equity, Return on Assets, EPS, EBITDA or EBITDA before Nonrecurring Items, in
each case during any Year during a Restricted Period. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Change
in Control" -- means each of the events specified in the following clauses (i)
through (iii): (i) any third person, including a "group" as defined in Section
13(d)(3) of the Exchange Act shall, after the date of the adoption of the Plan
by the Board, first become the beneficial owner of shares of the Company with
respect to which 25% or more of the total number of votes for the election of
the Board of Directors of the Company may be cast, (ii) as a result of, or in
connection with, any cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or combination of the
foregoing, the persons who were directors of the Company shall cease to
constitute a majority of the Board of Directors of the Company or (iii) the
stockholders of the Company shall approve an agreement providing either for a
transaction in which the Company will cease to be an independent publicly owned
entity or for a sale or other disposition of all or substantially all the assets
of the Company.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Code" -- means the Internal Revenue
Code of 1986, as amended. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Committee" -- means the Committee
referred to in Section 3 hereof. </FONT></P>
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<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Company" -- means Shoe Carnival,
Inc., an Indiana corporation. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Continuous Service" -- means the absence of any interruption or
termination of service as a Director or an employee of the Company or an
Affiliate. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Company or
in the case of any transfer between the Company and an Affiliate or any
successor to the Company. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Director" means any person who
serves as a member of the Board. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"EBITDA"
for any Year means -- the consolidated earnings before interest, taxes,
depreciation and amortization of the Company as reflected in the Company's
audited consolidated financial statements for the Year. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"EBITDA
before Nonrecurring Items" means -- for any Year EBITDA of the Company before
any extraordinary or unusual one-time nonrecurring expenses or other charges as
reflected in the Company's audited consolidated financial statements for the
Year. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Employee" -- means any person, including an officer or Director, who is
employed by the Company or any Affiliate. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"EPS" for
any Year means -- diluted earnings per share of the Company, as reported in the
Company's audited consolidated financial statements for the Year. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Exchange Act" -- means the
Securities Exchange Act of 1934, as amended. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Exercise
Price" -- means the price per Share at which the Shares subject to an Option may
be purchased upon exercise of such Option. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Incentive Stock Option" -- means an option to purchase Shares granted by
the Committee pursuant to the terms of the Plan which is intended to qualify
under Section 422 of the Code.</FONT></P>

<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Market
Value" -- means the last reported sale price on the date in question (or, if
there is no reported sale on such date, on the last preceding date on which any
reported sale occurred) of one Share on the principal exchange on which the
Shares are listed for trading, or if the Shares are not listed for trading on
any exchange, on the NASDAQ National Market System or any similar system then in
use, or, if the Shares are not listed on the NASDAQ National Market System, the
mean between the closing high bid and low asked quotations of one Share on the
date in question as reported by NASDAQ or any similar system then in use, or, if
no such quotations are available, the fair market value on such date of one
Share as the Committee shall determine.</FONT></P>

<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Net
Earnings" for any Year means -- the consolidated net earnings of the Company, as
reported in the Company's audited consolidated financial statements for the
Year. </FONT></P>
<P align=center><FONT face=serif size=2>-2- </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Net
Earnings before Nonrecurring Items" means -- for any Year the Net Earnings of
the Company before any extraordinary or unusual one-time nonrecurring expenses
or other charges as reflected in the Company's audited consolidated financial
statements for the Year. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee pursuant to the terms of the Plan, which option is not
intended to qualify under Section 422 of the Code. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Option" -- means an Incentive Stock
Option or a Non-Qualified Stock Option. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Participant" -- means any Director or any officer or key employee of the
Company or any Affiliate who is selected by the Committee to receive an Award.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Performance Target(s)" -- means the specific objective goal or goals
(which may be cumulative and/or alternative) that are timely set forth in
writing by the Committee for each Employee for the Restricted Period in respect
of any one or more of the Business Criteria. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Plan" -- means this 2000 Stock
Option and Incentive Plan of the Company. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Reorganization" -- means the liquidation or dissolution of the Company
or any merger, consolidation or combination of the Company (other than a merger,
consolidation or combination in which the Company is the continuing entity and
which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property or any combination
thereof). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Restricted Period" -- means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 9
hereof with respect to Restricted Stock awarded under the Plan. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Restricted Stock" -- means Shares which have been contingently awarded
to a Participant by the Committee subject to the restrictions referred to in
Section 9 hereof, so long as such restrictions are in effect. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Return
on Assets" for any Year means -- Net Earnings (as reported in the Company's
audited consolidated financial statements for the Year) divided by the average
of the total assets of the Company at the end of the fiscal quarters of the
Year. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Return
on Equity" for any Year means -- the Net Earnings (as reported in the Company's
audited consolidated financial statements for the Year) divided by the
shareholders equity of the Company at the beginning of each Year. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Securities Act" -- means the
Securities Act of 1933, as amended. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>"Shares" -- means the Common Stock,
$.01 par value, of the Company. </FONT></P>
<P align=center><FONT face=serif size=2>-3- </FONT></P>
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<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Total
Net Sales" for any Year -- means the Company's total net sales as reported in
the Company's consolidated audited financial statements for the Year.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>"Year" --
means any one or more fiscal years of the Company commencing on or after January
30, 2000 that represent(s) the applicable Restricted Period. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>3.
</FONT></B><B><U><FONT face=serif size=2>Administration</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>The Plan shall be
administered by the Committee, which shall consist of two or more members of the
Board, each of whom shall be a "non-employee director" as provided under Rule
16b-3 of the Exchange Act, and an "outside director" as provided under Code
Section 162(m). The members of the Committee shall be appointed by the Board.
Except as limited by the express provisions of the Plan, the Committee shall
have sole and complete authority and discretion to (a) select Participants and
grant Awards; (b) determine the number of Shares to be subject to types of
Awards generally, as well as to individual Awards granted under the Plan; (c)
determine the terms and conditions upon which Awards shall be granted under the
Plan; (d) prescribe the form and terms of instruments evidencing such grants;
(e) establish procedures and regulations for the administration of the Plan; (f)
interpret the Plan; and (g) make all determinations deemed necessary or
advisable for the administration of the Plan. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee without a meeting, shall be
acts of the Committee. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive and binding on
all persons, and shall be given the maximum deference permitted by law.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>4.
</FONT></B><B><U><FONT face=serif size=2>Participants</FONT></U></B><FONT face=serif size=2>. The Committee may select from time to time Participants in
the Plan from those Directors and officers and key employees of the Company or
its Affiliates who, in the opinion of the Committee, have the capacity for
contributing in a substantial measure to the successful performance of the
Company or its Affiliates. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>5.
</FONT></B><B><U><FONT face=serif size=2>Shares Subject to
Plan</FONT></U></B><FONT face=serif size=2>. Subject to adjustment by the
operation of Section 10 hereof, the maximum number of Shares with respect to
which Awards may be made under the Plan is 2,000,000 Shares. The number of
Shares which may be granted under the Plan to any Participant during any
calendar year of the Plan under all forms of Awards shall not exceed 300,000
Shares. The Shares with respect to which Awards may be made under the Plan may
either be authorized and unissued shares or issued shares heretofore or
hereafter reacquired and held as treasury shares. With respect to any Option
which terminates or is surrendered for cancellation or with respect to
Restricted Stock which is forfeited, new Awards may be granted under the Plan
with respect to the number of Shares as to which such termination or forfeiture
has occurred. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>6.
</FONT></B><B><U><FONT face=serif size=2>General Terms and Conditions of
Options</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>The Committee shall have full and complete authority and discretion,
except as expressly limited by the Plan, to grant Options and to provide the
terms and conditions (which need not be identical among Participants) thereof.
In particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price (which shall not be less than the Market Value per Share
on the date the Option is granted), (ii) the number of Shares subject to, and
the expiration date of, any Option, (iii) the manner, time and rate (cumulative
or otherwise) of exercise of such Option, and (iv) the restrictions, if any, to
be placed upon such Option or upon Shares which may be issued upon exercise of
such Option.</FONT></P>
<P align=center><FONT face=serif size=2>-4- </FONT></P>
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<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>7. </STRONG></FONT><U><FONT face=serif size=2><STRONG>Exercise of Options</STRONG></FONT></U><FONT face=serif size=2>. </FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) Except as provided in Section 13, an Option granted under
the Plan shall be exercisable during the lifetime of the Participant to whom
such Option was granted only by such Participant, and except as provided in
paragraphs (c), (d) and (e) of this Section 7, no such Option may be exercised
unless at the time such Participant exercises such Option, such Participant has
maintained Continuous Service since the date of the grant of such
Option.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b) To exercise an Option under the Plan, the Participant must
give written notice to the Company specifying the number of Shares with respect
to which such Participant elects to exercise such Option together with full
payment of the Exercise Price. The date of exercise shall be the date on which
such notice is received by the Company. Payment may be made either (i) in cash
(including check, bank draft or money order), (ii) by tendering Shares already
owned by the Participant and having a Market Value on the date of exercise equal
to the Exercise Price, or (iii) by any other means determined by the Committee
in its sole discretion, including permitting a Participant to elect to pay the
Exercise Price upon the exercise of an Option by authorizing a third party to
sell the Shares (or a sufficient portion of the Shares) acquired upon exercise
of the Option and remit to the Company a sufficient portion of the sale proceeds
to pay the Exercise Price and any tax withholding resulting from such
exercise.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c) If the Continuous Service of a Participant is terminated
for cause, or voluntarily by the Participant for any reason other than death,
disability or retirement, all rights under any Options granted to such
Participant shall terminate immediately upon such Participant's cessation of
Continuous Service, and the Participant shall (unless the Committee in its sole
discretion waives this requirement) repay to the Company within 10 days the
amount of any gain realized by the Participant upon any exercise within the
90-day period prior to the cessation of Continuous Service of any Options
granted to such Participant under the Plan. If the Continuous Service of a
Participant is terminated by reason of death, disability or retirement, such
Participant may exercise such Option, but only to the extent such Participant
was entitled to exercise such Option at the date of such cessation, at any time
during the remaining term of such Option, or, in the case of Incentive Stock
Options, during such shorter period as the Committee may determine and so
provide in the applicable instrument or instruments evidencing the grant of such
Option. If a Participant shall cease to maintain Continuous Service for any
reason other than those set forth above in this paragraph (c) of this Section 7,
such Participant may exercise such Option to the extent that such Participant
was entitled to exercise such Option at the date of such cessation but only
within 90 days immediately succeeding such cessation of Continuous Service, and
in no event after the expiration date of the subject Option; provided, however,
that such right of exercise after cessation of Continuous Service shall not be
available to a Participant if the Company otherwise determines and so provides
in the applicable instrument or instruments evidencing the grant of such
Option.</FONT></P>
<P align=center><FONT face=serif size=2>-5- </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d) In the event of the death of a Participant while in the
Continuous Service of the Company or an Affiliate, the person to whom any Option
held by the Participant at the time of his death is transferred by will or by
the laws of descent and distribution may exercise such Option on the same terms
and conditions that such Participant was entitled to exercise such Option. At
the time of the death of the Participant, all Options theretofore granted to the
Participant and not fully exercisable shall terminate. </FONT><FONT face=serif size=2>Following the death of any Participant to whom an Option was granted
under the Plan, the Committee, as an alternative means of settlement of such
Option, may elect to pay to the person to whom such Option is transferred the
amount by which the Market Value per Share on the date of exercise of such
Option shall exceed the Exercise Price of such Option, multiplied by the number
of Shares with respect to which such Option is properly exercised. Any such
settlement of an Option shall be considered an exercise of such Option for all
purposes of the Plan.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e) Notwithstanding the provisions of the foregoing paragraphs
of this Section 7, the Committee may, in its sole discretion, establish
different terms and conditions pertaining to the effect of the cessation of
Continuous Service, to the extent permitted by applicable federal and state law.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>8.
</FONT></B><B><U><FONT face=serif size=2>Incentive Stock
Options</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>Incentive Stock Options may be granted only to Participants who are
Employees. Any provisions of the Plan to the contrary notwithstanding, (i) no
Incentive Stock Option shall be exercisable more than ten years from the date
such Incentive Stock Option is granted, (ii) the Exercise Price of any Incentive
Stock Option shall not be less than the Market Value per Share on the date such
Incentive Stock Option is granted, (iii) any Incentive Stock Option shall not be
transferable by the Participant to whom such Incentive Stock Option is granted
other than by will or the laws of descent and distribution and shall be
exercisable during such Participant's lifetime only by such Participant, and
(iv) no Incentive Stock Option shall be granted which would permit a Participant
to acquire, through the exercise of Incentive Stock Options in any calendar
year, Shares or shares of any capital stock of the Company or any Affiliate
thereof having an aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) in excess of $100,000. The foregoing
limitation shall be determined by assuming that the Participant will exercise
each Incentive Stock Option on the date that such Option first becomes
exercisable. Notwithstanding the foregoing, in the case of any Participant who,
at the date of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of capital stock of the Company or any Affiliate,
the Exercise Price of any Incentive Stock Option shall not be less than 110% of
the Market Value per Share on the date such Incentive Stock Option is granted
and such Incentive Stock Option shall not be exercisable more than five years
from the date such Incentive Stock Option is granted. Notwithstanding any other
provisions of this Plan, if for any reason any Option granted under this Plan
that is intended to be an Incentive Stock Option shall fail to qualify as an
Incentive Stock Option, such Option shall be deemed to be a Non-Qualified Stock
Option, and such Option shall be deemed to be fully authorized and validly
issued under this Plan. </FONT></P>
<P align=center><FONT face=serif size=2>-6- </FONT></P>
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<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>9.
</FONT></B><B><U><FONT face=serif size=2>Terms and Conditions of Restricted
Stock</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>The Committee shall have full and complete authority, subject to the
limitations of the Plan, to grant awards of Restricted Stock and, in addition to
the terms and conditions contained in paragraphs (a) through (g) of this Section
9, to provide such other terms and conditions (which need not be identical among
Participants) in respect of such Awards, and the vesting thereof, as the
Committee shall determine and provide in the agreement referred to in paragraph
(d) of this Section 9. Notwithstanding any other provisions of this Plan, the
Committee shall have full and complete discretion, at the time of the grant of
an award of Restricted Stock, to determine whether or not the grant of
Restricted Stock is intended to qualify as "performance-based compensation"
under Section 162(m) of the Code. </FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) At the time of an award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period during which or at the
expiration of which, the Shares of Restricted Stock shall vest. The Committee
may also restrict or prohibit the sale, assignment, transfer, pledge or other
encumbrance of the Shares of Restricted Stock by the Participant during the
Restricted Period. Except for such restrictions, and subject to paragraphs (c),
(d) and (e) of this Section 9 and Section 10 hereof, the Participant as owner of
such Shares shall have all the rights of a stockholder, including but not
limited to, the right to receive all dividends paid on such Shares and the right
to vote such Shares. Except in the case of grants of Restricted Stock which are
intended to qualify as "performance-based compensation" under Section 162(m) of
the Code, the Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall lapse with
respect to any Shares of Restricted Stock prior to the expiration of the
Restricted Period with respect thereto, or to remove any or all of such
restrictions, whenever it may determine that such action is appropriate by
reason of changes in applicable tax or other laws or other changes in
circumstances occurring after the commencement of such Restricted
Period.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b) Except as provided in Section 12 hereof, if a Participant
ceases to maintain Continuous Service for any reason (other than death, total or
partial disability or retirement) unless the Committee shall otherwise
determine, all Shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 9 shall
upon such termination of Continuous Service be forfeited and returned to the
Company. If a </FONT><FONT face=serif size=2>Participant ceases to maintain
Continuous Service by reason of death or total or partial disability, then the
restrictions with respect to the Ratable Portion of the Shares of Restricted
Stock shall lapse and such Shares shall be free of restrictions and shall not be
forfeited. The Ratable Portion shall be determined with respect to each separate
Award of Restricted Stock issued and shall be equal to (i) the number of Shares
of Restricted Stock awarded to the Participant multiplied by the portion of the
Restricted Period that expired at the date of the Participant's death or total
or partial disability reduced by (ii) the number of Shares of Restricted Stock
awarded with respect to which the restrictions had lapsed as of the date of the
death or total or partial disability of the Participant.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c) Each certificate issued in respect of Shares of Restricted
Stock awarded under the Plan shall be registered in the name of the Participant
and deposited by the Participant, together with a stock
power endorsed in blank, with the Company and shall bear the following (or a
similar) legend: </FONT></P>
<P style="PADDING-LEFT: 30pt" align=justify><FONT face=serif size=2>"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 2000 Stock Option and Incentive Plan of Shoe
Carnival, Inc., and an Agreement entered into between the registered owner and
Shoe Carnival, Inc. Copies of such Plan and Agreement are on file in the office
of the Secretary of Shoe Carnival, Inc.</FONT></P>
<P align=center><FONT face=serif size=2>-7- </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d) At the time of an award of Shares of Restricted Stock, the
Participant shall enter into an Agreement with the Company in a form specified
by the Committee, agreeing to the terms and conditions of the award and to such
other matters as the Committee shall in its sole discretion
determine.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e) At the time of an award of Shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the Participant
of dividends declared or paid on such Shares by the Company or a specified
portion thereof, shall be deferred until the earlier to occur of (i) the lapsing
of the restrictions imposed under paragraph (a) of this Section 9 or (ii) the
forfeiture of such Shares under paragraph (b) of this Section 9, and shall be
held by the Company for the account of the Participant until such time. In the
event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the first sentence of this paragraph (e).&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(f) At the expiration of the restrictions imposed by paragraph
(a) of this Section 9, the Company shall redeliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 9 applies in the case of
a deceased Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 9 and the Shares represented by such certificate(s) shall be free
of the restrictions referred to in paragraph (a) of this Section 9.
Notwithstanding any other provision of this Section 9 and Section 11 to the
contrary, in the case of grants of Restricted Stock that are intended to qualify
as "performance-based compensation" under Section 162(m) of the Code, no Shares
of Restricted Stock shall become vested unless the Performance Targets with
respect to such Restricted Stock shall have been satisfied and unless the
Committee has certified, by resolution or other appropriate action in writing,
that the Performance Targets previously established by the Committee have been
satisfied. If the vesting of Shares of Restricted Stock is accelerated after the
applicable Performance Targets have been met, the amount of Restricted Stock
distributed shall be discounted by the Committee to reasonably reflect the time
value of money in connection with such early vesting.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(g) Notwithstanding any other provision of this Section 9 to
the contrary, for purposes of qualifying grants of Restricted Stock as
"performance-based compensation" under Section 162(m) of the Code, the Committee
shall establish restrictions based upon the achievement of Performance Targets.
The specific goal or goals under the Performance Targets that must be satisfied
for the Restricted Period to lapse or terminate shall be set by the Committee on
or before the latest date permissible to enable the Restricted Stock to qualify
as "performance-based compensation" under Section 162(m) of the Code. The
Business Criteria for Performance Targets under this Section 9 shall be any one
or any combination of Annual Return to Shareholders, Total Net Sales, Net
Earnings, Net Earnings before Nonrecurring Items, Return on Equity, Return on
Assets, EPS, EBITDA or EBITDA before Nonrecurring Items. In granting Restricted
Stock that is intended to qualify under Section 162(m), the Committee shall
follow any procedures determined by it in its sole discretion from time to time
to be necessary, advisable or appropriate to ensure qualification of the
Restricted Stock under Section 162(m) of the Code.</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><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>10. </STRONG></FONT><U><FONT face=serif size=2><STRONG>Adjustments Upon Changes in
Capitalization</STRONG></FONT></U><FONT face=serif size=2>. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Company, the maximum aggregate number and
class of shares as to which Awards may be granted under the Plan and the number
and class of shares with respect to which Awards theretofore have been granted
under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Company in the manner
provided in Section 9 hereof. </FONT></P>
<P align=justify><FONT face=serif size=2></FONT><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>11. </STRONG></FONT><U><FONT face=serif size=2><STRONG>Effect of Reorganization</STRONG></FONT></U><FONT face=serif size=2>. Awards will be affected by a Reorganization as follows:
</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) If the Reorganization is a dissolution or liquidation of
the Company then (i) the restrictions of Section 9(a) on Shares of Restricted
Stock shall lapse and (ii) each outstanding Option shall terminate, but each
Participant to whom the Option was granted shall have the right, immediately
prior to such dissolution or liquidation to exercise his Option in full,
notwithstanding the provisions of Section 8, and the Company shall notify each
Participant of such right within a reasonable period of time prior to any such
dissolution or liquidation.&nbsp;</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b) If the Reorganization is a merger or consolidation, upon
the effective date of such Reorganization (i) each Optionee shall be entitled,
upon exercise of his Option in accordance with all of the terms and conditions
of the Plan, to receive in lieu of Shares, shares of such stock or other
securities or consideration as the holders of Shares shall be entitled to
receive pursuant to the terms of the Reorganization; and (ii) each holder of
Restricted Stock shall receive shares of such stock or other securities as the
holders of Shares received and the certificate(s) or other instruments
representing or evidencing such shares or securities shall be legended and
deposited with the Company in the manner provided in Section 9 hereof.
</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><FONT face=serif size=2>The adjustments contained in this
Section and the manner of application of such provisions shall be determined
solely by the Committee.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>12.
</STRONG></FONT><STRONG><U><FONT face=serif size=2>Effect of Change of
Control</FONT></U><FONT face=serif size=2>. </FONT></STRONG><FONT face=serif size=2>Upon a Change in Control, unless the Committee shall have otherwise
provided in the agreement referred to in paragraph (d) of Section 9 hereof, any
Restricted Period with respect to Restricted Stock theretofore awarded to such
Participant shall lapse and all Shares awarded as Restricted Stock, including
Restricted Stock intended to qualify as "performance-based compensation" under
Section 162(m) of the Code, shall become fully vested in the Participant to whom
such Shares were awarded. If a tender offer or exchange offer for Shares (other
than such an offer by the Company) is commenced, or if an event specified in
clause (ii) or clause (iii) of the definition of a Change in Control contained
in Section 2 shall occur, unless the Committee shall have otherwise provided in
the instrument evidencing the grant of an Option, all Options theretofore
granted and not fully exercisable shall become exercisable in full upon the
happening of such event and shall remain so exercisable in accordance with their
terms; provided, however, that no Option which has previously been exercised or
otherwise terminated shall become exercisable. </FONT></P>
<P align=justify><FONT face=serif size=2></FONT><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>13. </STRONG></FONT><U><FONT face=serif size=2><STRONG>Assignments and Transfers</STRONG></FONT></U><FONT face=serif size=2>. Except as otherwise determined by the Committee, no Award
nor any right or interest of a Participant under the Plan in any instrument
evidencing any Award under the Plan may be assigned, encumbered or transferred
except, in the event of the death of a Participant, by will or the laws of
descent and distribution. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>14.
</FONT></B><B><U><FONT face=serif size=2>Employee Rights Under the
Plan</FONT></U></B><FONT face=serif size=2>. No Director, officer, employee or
other person shall have a right to be selected as a Participant nor, having been
so selected, to be selected again as a Participant and no Director, officer,
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the Company or
any Affiliate. Neither the Plan nor any action taken thereunder shall be
construed as giving any employee any right to be retained in the employ of the
Company or any Affiliate. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>15.
</FONT></B><B><U><FONT face=serif size=2>Delivery and Registration of
Stock</FONT></U></B><FONT face=serif size=2>. The Company's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Company shall determine to be necessary or advisable to comply with the
provisions of the Securities Act or any other applicable federal or state
securities legislation. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under the Securities Act or
other securities legislation. The Company shall not be required to deliver any
Shares under the Plan prior to (i) the admission of such shares to listing on
any stock exchange or system on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such Shares under any
state or federal law, rule or regulation, as the Company shall determine to be
necessary or advisable. </FONT></P>
<P align=center><FONT face=serif size=2>-10- </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>16.
</FONT></B><B><U><FONT face=serif size=2>Withholding Tax</FONT></U></B><FONT face=serif size=2>. Upon the termination of the Restricted Period with respect
to any Shares of Restricted Stock (or at any such earlier time, if any, that an
election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such Shares in taxable
income), the Company may, in lieu of requiring the Participant or other person
receiving such Shares to pay the Company the amount of any taxes which the
Company is required to withhold with respect to such Shares, retain a sufficient
number of Shares held by it to cover the amount required to be withheld. The
Company shall have the right to deduct from all dividends paid with respect to
Shares of Restricted Stock the amount of any taxes which the Company is required
to withhold with respect to such dividend payments. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Where a
Participant or other person is entitled to receive Shares pursuant to the
exercise of an Option pursuant to the Plan, the Company may, in lieu of
requiring the Participant or such other person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
retain a number of such Shares sufficient to cover the amount required to be
withheld. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>17.
</FONT></B><B><U><FONT face=serif size=2>Termination, Amendment and Modification
of Plan</FONT></U></B><FONT face=serif size=2>. The Board may at any time
terminate, and may at any time and from time to time and in any respect amend or
modify, the Plan; provided however, that to the extent necessary and desirable
to comply with Section 422 of the Code (or any other applicable law or
regulation, including requirements of any stock exchange or Nasdaq system on
which the Shares are listed or quoted) shareholder approval of any Plan
amendment shall be obtained in such a manner and to such a degree as is required
by the applicable law or regulation; and provided further, that no termination,
amendment or modification of the Plan shall in any manner affect any Award
theretofore granted pursuant to the Plan without the consent of the Participant
to whom the Award was granted or transferee of the Award.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>18.
</FONT></B><B><U><FONT face=serif size=2>Section 162(m) Conditions; Bifurcation
of Plan</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>It is the intent of the Company that the Plan and certain of the Awards
granted hereunder satisfy and be interpreted in a manner that, in the case of
Participants who are or may be persons whose compensation is subject to Section
162(m), satisfies any applicable requirements as performance-based compensation.
Any provision, application or interpretation of the Plan inconsistent with this
intent to satisfy the standards in Section 162(m) of the Code shall be
disregarded. </FONT><FONT face=serif size=2>Notwithstanding anything to the
contrary in the Plan, the provisions of the Plan may at any time be bifurcated
by the Board of Directors of the Company or the Committee in any manner so that
certain provision of the Plan or any Award intended (or required in order) to
satisfy the applicable requirements of Section 162(m) are only applicable to
persons whose compensation is subject to Section 162(m). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>19.
</FONT></B><B><U><FONT face=serif size=2>Effective Date and Term of
Plan</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>The Plan shall become effective upon its adoption by the Board of
Directors and shareholders of the Company. Unless sooner terminated under
Section 17 hereof, no further Awards may be made under the Plan after the later
of ten years from the date of (a) adoption of the Plan by the shareholders of
the Company, or (b) the approval of any amendment of the Plan by the
shareholders of the Company. </FONT></P>
<P align=center><FONT face=serif size=2>-11- </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>Adopted by the Board of Directors</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>of Shoe Carnival, Inc. as of</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>May 1, 2000 and by the</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>shareholders of Shoe Carnival, Inc.</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>as of June 8, 2000</FONT></B>&nbsp; </TD></TR>
  <TR>
    <TD width="100%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>Amended by the Board of Directors</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>of Shoe Carnival, Inc. as of</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>March 10, 2004 and by the</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>shareholders of Shoe Carnival, Inc.</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>as of June 11, 2004</FONT></B>&nbsp; </TD></TR>
  <TR>
    <TD width="100%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>Amended by the Board of Directors</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>of Shoe Carnival, Inc. as of</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>March 25, 2005 and by the</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>shareholders of Shoe Carnival, Inc.</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>as of June 14, 2005</FONT></B>&nbsp; </TD></TR>
  <TR>
    <TD width="100%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>Amended by the Board of Directors</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>of Shoe Carnival, Inc. as of</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>March 18, 2008 and by the</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>shareholders of Shoe Carnival, Inc.</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>as of June 12, 2008</FONT></B>&nbsp; </TD></TR>
  <TR>
    <TD width="100%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>Amended by the Board of Directors</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>of Shoe Carnival, Inc. as of</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="100%"><B><FONT face=serif size=2>October 8, 2008</FONT></B>&nbsp;
</TD></TR></TABLE></DIV><BR>
<P align=center><FONT face=serif size=2>-12- </FONT></P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>exhibit31-1.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A)/15D-14(A)
<TEXT>

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<P align=right><B><FONT face=serif size=2>Exhibit 31.1</FONT></B></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></P>
<P align=justify><FONT face=serif size=2>I, Mark L. Lemond, certify 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%" 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 vAlign=top width="100%" colSpan=5>&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%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>3.</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>4.</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(a)</FONT></TD>
    <TD vAlign=top noWrap >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(b)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(c)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(d)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>5.</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(a)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(b)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="47%"><FONT face=serif size=2>Date:<FONT size=3>
      </FONT>December 11, 2008</FONT>&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ Mark L.
      Lemond</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Mark L. Lemond</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>President and</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Chief Executive Officer</FONT>&nbsp;
    </TD></TR></TABLE><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>exhibit31-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A)/15D-14(A)
<TEXT>

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<P align=right><B><FONT face=serif size=2>Exhibit 31.2</FONT></B></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></P>
<P align=justify><FONT face=serif size=2>I, W. Kerry Jackson, certify 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%" 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 vAlign=top width="100%" colSpan=5>&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%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>3.</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>4.</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(a)</FONT></TD>
    <TD vAlign=top noWrap >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(b)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(c)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(d)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>5.</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%" colSpan=3><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(a)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top noWrap><FONT face=serif size=2>(b)</FONT></TD>
    <TD vAlign=top noWrap ></TD>
    <TD vAlign=top width="100%"><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></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=5>&nbsp;</TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="47%"><FONT face=serif size=2>Date:<FONT size=3>
      </FONT>December 11, 2008</FONT>&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/&nbsp;W. Kerry
      Jackson</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>W. Kerry Jackson</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Executive Vice President
      and</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Chief&nbsp;Financial
      Officer</FONT>&nbsp; </TD></TR></TABLE><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>exhibit32-1.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>

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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
November 1, 2008 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-Oxley Act 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>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="47%"><FONT face=serif size=2>Date:<FONT size=3>
      </FONT>December 11, 2008</FONT>&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/ Mark L.
      Lemond</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Mark L. Lemond</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>President and</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Chief Executive Officer</FONT>&nbsp;
    </TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>exhibit32-2.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>

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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
November 1, 2008 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-Oxley Act 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>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR></TABLE>
<TABLE cellSpacing=0 cellPadding=0 width="85%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="47%"><FONT face=serif size=2>Date:<FONT size=3>
      </FONT>December 11, 2008</FONT>&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>By: </FONT><U><FONT face=serif size=2>/s/&nbsp;W. Kerry
      Jackson</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>W. Kerry Jackson</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Executive Vice President
      and</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="47%">&nbsp; </TD>
    <TD noWrap align=right width="53%"><FONT face=serif size=2>Chief&nbsp;Financial
      Officer</FONT>&nbsp; </TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>


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