UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $.01 par value, 12,755,246 shares outstanding as of December 10, 2003

See notes to condensed consolidated financial statements.

See notes to condensed consolidated financial statements.

See notes to condensed consolidated financial statements.

See notes to condensed consolidated financial statements.

SHOE CARNIVAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited

Note 1 - Basis of Presentation

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 notes to consolidated financial statements have been condensed or omitted according to the rules and regulations of the Securities and Exchange Commission, 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 fiscal year ended February 1, 2003.

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":

For the quarters ended November 1, 2003 and November 2, 2002, 294,557 and 306,615 options, respectively, 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 nine months ended November 1, 2003 and November 2, 2002, 299,468 and 4,143 options, respectively, were not included in the computation of diluted shares because the options' exercise prices were greater than the average market price for the period.

SFAS No. 123, "Accounting for Stock-Based Compensation", requires that companies either recognize compensation expense for grants of stock options and other equity instruments based on fair value, or provide pro forma disclosure of net income and net income per share in the notes to the financial statements. At November 1, 2003, we had three stock-based compensation plans: the 1993 Stock Option and Incentive Plan, the Outside Directors Stock Option Plan and the 2000 Stock Option and Incentive Plan. We account for these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations. Accordingly, no compensation cost has been recognized under SFAS No. 123 for our stock option plans. Had compensation cost for the awards under those plans been determined based on the grant date fair values, consistent with the method required under SFAS

No. 123, our net income and net income per share would have been reduced to the pro forma amounts indicated below:

The weighted-average fair value of options granted was $6.91 for the nine months ended November 1, 2003 and $9.62 for the nine months ended November 2, 2002. The fair value of these options was estimated at grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Certain amounts in the condensed consolidated financial statements have been reclassified to conform to the current presentation.

Merchandise Inventories - 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.

Valuation of Long-lived Assets - 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 undiscounted cash flows estimated to be generated by those assets are less than the carrying value of those assets, impairment losses are recorded. When events such as these occur, the impaired assets are adjusted to estimated fair value and 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 judgement and if actual results or market conditions differ from those anticipated, additional losses may be recorded.

Deferred Income Taxes - We calculate income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes", which requires the use of the asset and liability method. Under this method, 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 tax rates in effect in the years when those temporary differences are expected to reverse. Inherent in the measurement of these deferred balances are certain judgments and interpretations of existing tax law and other published guidance as applied to our operations. No valuation allowance has been provided for the deferred tax assets. We anticipate that future taxable income will be able to recover the full amount of deferred tax assets. Our effective tax rate considers management's judgment of expected tax liabilities in the various tax ing jurisdictions within which we are subject to tax. We have also been involved in domestic tax audits. At any given time, multiple tax years are subject to audit by various taxing authorities.

The following table sets forth our results of operations expressed as a percentage of net sales for the periods indicated:

Net sales increased $32.0 million to $423.7 million in the first nine months of 2003, an 8.2% increase over net sales of $391.7 million in the comparable prior year period. The increase was attributable to the sales generated by the 60 stores opened in 2002 and 2003 (net of four store closings) partially offset by a 2.6% decrease in comparable store sales.

Gross profit increased $4.9 million to $45.4 million in the third quarter of 2003, a 12.1% increase over gross profit of $40.5 million in the comparable prior year period. Our gross profit margin was 29.8% compared with 29.4% last year. As a percentage of sales, the merchandise gross profit margin increased 0.6% while buying, distribution and occupancy costs increased 0.2% as compared to the same period last year. The merchandise gross profit margin improvement was primarily due to lower promotional activity during the quarter. The increase in buying, distribution and occupancy costs as a percentage of sales was primarily a result of the inability to leverage these expenditures against a small comparable store sales increase.

Gross profit increased $7.9 million to $123.2 million in the first nine months of 2003, a 6.8% increase over gross profit of $115.3 million in the comparable prior year period. Our gross profit margin decreased to 29.1% from 29.4% last year. As a percentage of sales, the merchandise gross profit margin increased 0.2% from last year while buying, distribution and occupancy costs increased 0.5%. The increase in buying, distribution and occupancy costs as a percentage of sales was primarily due to the deleveraging effect of negative comparable store sales.

Selling, general and administrative expenses increased $4.0 million to $36.4 million in the third quarter of 2003 from $32.4 million in the comparable prior year period. As a percentage of sales, these expenses increased to 23.9% from 23.5% last year. During the third quarter of 2003, we opened 11 stores as compared with ten stores in the third quarter of 2002. Total new store pre-opening costs in the third quarter of 2003 were $646,000, or 0.4% of sales, as compared to $870,000, or 0.6% of sales, for the third quarter of 2002. The increase in selling, general and administrative expenditures as a percentage of sales was primarily due to higher health care costs and store closing and relocation costs. Approximately $330,000 was incurred in the third quarter of 2003 to close two stores and relocate one store.

Selling, general and administrative expenses increased $11.3 million to $103.3 million in the first nine months of 2003 from $92.0 million in the comparable prior year period. As a percentage of sales, these expenses increased to 24.4% from 23.5% last year. Total new store pre-opening costs for the first nine months of 2003 were $2.2 million, or 0.5% of sales, as compared to $2.0 million, or 0.5% of sales, for the first nine months of 2002. Thirty-five stores were opened in the first nine months of 2003 and 25 stores were opened in the first nine months of 2002. The increase in selling, general and administrative expenses as a percentage of sales was primarily due to the general deleveraging effect of the negative comparable store sales.

Net interest expense remained relatively flat with the prior year comparative quarter. For the first nine months of 2003, net interest expense decreased to $502,000 from $625,000 for the first nine months of 2002. The decrease in net interest expense for the first nine months of 2003, as compared with the first nine months of 2002, was primarily a result of a decrease in average borrowings partially offset by a higher effective interest rate.

The effective income tax rate was 37.5% for the third quarter and the first nine months of 2003 and for the same periods in 2002. The effective income tax rate differed from the statutory federal rates due primarily to state and local income taxes, net of the federal tax benefit.

Working capital increased to $126.8 million at November 1, 2003 from $103.3 million at November 2, 2002 and the current ratio was 3.5 to 1 at November 1, 2003 as compared with 2.9 to 1 at November 2, 2002. Long-term debt as a percentage of total capital (long-term debt plus shareholders' equity) increased to 20.1% at November 1, 2003, compared to 16.5% at November 2, 2002.

The increase in working capital was primarily due to the increase in merchandise inventory and the decrease in accounts payable. Merchandise inventories increased $17.5 million to $165.4 million at November 1, 2003 from $147.9 million at November 2, 2002. During 2003, our key merchandise strategy has centered on lowering merchandise inventory levels of seasonal fashion product in order to increase the merchandise gross profit margin. While the number of stores in operation at the end of the third quarter of 2003 increased 15.0% compared with the end of the third quarter of 2002, merchandise inventories only increased 11.8%. This resulted in a decrease in merchandise inventories on a per-store basis of 2.8%. This per-store decline in inventory is in addition to a 4.8% decrease in merchandise inventories on a per-store basis at the end of the third quarter of 2002.

Capital expenditures, net of lease incentives of $3.3 million, were $14.3 million in the first nine months of 2003. Of these expenditures, approximately $10.4 million was incurred for new stores, $1.6 million for store remodeling, $570,000 to relocate a store, with all other expenditures totaling $1.7 million.

During the first nine months of 2003, we have opened 35 new stores, with 11 of these opening in the third quarter. A total of four stores have been closed during the year, bringing the total stores in operation to 238. With the anticipation of opening two stores in the fourth quarter of the year and closing an additional three, we expect to finish our 2003 fiscal year with 237 stores. Of the 25 stores opened during the first nine months of 2002, ten stores were opened in the third quarter.

We currently anticipate opening 35 to 40 new stores in 2004 and closing four existing stores, with the new store expansion targeting a number of larger markets we have entered in the past few years. We intend to penetrate existing markets with additional store locations and enhance our marketing efforts in these markets. Additionally, we expect that due to the larger store base we will be able to leverage other operating expenses.

Our current store prototype utilizes between 8,000 and 15,000 square feet depending upon, among other factors, the location of the store and the population base the store is expected to service. Net capital expenditures for new stores in 2003 are expected to average approximately $320,000 per store. An updated store design, which has been utilized in all new stores in 2003 and is anticipated to be utilized in future new stores, will lower the cost to build a store by approximately 10% from historical levels. The average inventory investment in a new store is expected to range from $450,000 to $750,000, depending on the size and sales expectation of the store and the timing of the new store opening. Pre-opening expenses, such as advertising, salaries and supplies, are expected to average approximately $67,000 per store.

Our unsecured credit facility provides for up to $70 million in cash advances on a revolving basis and commercial letters of credit. Borrowings under the revolving credit line are based on eligible inventory. Borrowings and letters of credit outstanding under the credit facility at November 1, 2003 were $36.1 million and $3.0 million, respectively. As of November 1, 2003, $30.9 million was available to us for additional borrowings under the credit facility.

We anticipate existing cash and cash flow from operations, supplemented by borrowings under the credit facility, will be sufficient to fund planned expansion and other operating cash requirements for at least the next 12 months.

We have three distinct selling periods: Easter, back-to-school and Christmas.

This report on Form 10-Q contains certain forward-looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: general economic conditions in the areas of the United States in which our stores are located; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; the potential impact of national and international security concerns on the retail environment; the impact of competition and pricing; changes in weather patterns, consumer buying trends and the our ability to identify and respond to emerging fashion trends; risks associated with the seasonality of the retail industry; the availability of desirable store locations at acceptable lease terms and our ability to open new stores in a timely and profitable manner; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to delive r products in a timely manner; and changes in the political and economic environments in the People's Republic of China, a major manufacturer of footwear, and the continued favorable trade relations between China and the United States.

We are exposed to market risk in that the interest payable on 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 approximately $167,000 for the first nine months of 2003 and $142,000 for the first nine months of 2002.

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of November 1, 2003, 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.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended November 1, 2003 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

SHOE CARNIVAL, INC.
SIGNATURE

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.