UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-Q

|[X]         |  | Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934 
|----------- |  | ----------------------------------------------------------------------------------------------------
|            |  | For the
      quarterly period ended**October 31, 2009**                                            
|or         
|[  
      ] |  | Transition
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934
|            |  | For the
      transition period from __________________ to__________________                        

Commission File
      Number:
    
    0-21360


Shoe Carnival, Inc.(Exact
      name of registrant as specified in its charter)




Indiana
    
    35-1736614(State or
      other jurisdiction of
    
    (IRS
      Employer Identification Number)incorporation or organization)7500 East
      Columbia StreetEvansville, IN
    
    47715(Address of
      principal executive offices)
    
    (Zip
      code)




(812) 867-6471(Registrant's telephone number, including area
      code)**NOT APPLICABLE***(Former name, former
      address and former fiscal year, if changed since last
    report)*


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.

| | [X]Yes |  | [   ]No
| | ------ |  | -------

Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate website, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).

| | [   ]Yes |  | [   ]No
| | -------- |  | -------

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):

[   ] Large accelerated
filer      [X] Accelerated
filer      [   ] Non-accelerated
filer      [   ] Smaller reporting company

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

| | [   ]Yes |  | [X]No
| | -------- |  | -----

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.

Number of Shares of Common Stock, $.01
par value, outstanding at December 7, 2009 were 13,006,252.

---

SHOE CARNIVAL, INC.INDEX TO FORM
10-Q

|              |  |                                                                |  |                                                                   |    | Page   
|------------- |  | -------------------------------------------------------------- |  | ----------------------------------------------------------------- | -- | -------
|Part
      I  |  | Financial Information                                          |  |                                                                  
|              |  | Item 1.                                                        |  | Financial Statements
      (Unaudited)                            |    |        
|              |  | Condensed
      Consolidated Balance Sheets                    |  | 3                                                                
|              |  | Condensed
      Consolidated Statements of Income              |  | 4                                                                
|              |  | Condensed
      Consolidated Statement of Shareholders' Equity |  | 5                                                                
|              |  | Condensed
      Consolidated Statements of Cash Flows          |  | 6                                                                
|              |  | Notes to Condensed
      Consolidated Financial Statements     |  | 7 - 14                                                           
|             
|              |  | Item
      2.                                                  |  | Management's Discussion and Analysis of Financial
      Condition |    |        
|              |  |                                                                |  | and Results of
      Operations                                   |    | 15 - 22
|             
|              |  | Item
      3.                                                  |  | Quantitative and Qualitative Disclosures About Market
      Risk  |    | 22     
|             
|              |  | Item
      4.                                                  |  | Controls and Procedures                                           |    | 23     
|             
|Part
      II |  | Other
      Information                                        |  |                                                                  
|              |  | Item 1.                                                        |  | Legal
Proceedings                                                 |    | 24     
|             
|              |  | Item
      1A.                                                 |  | Risk
      Factors                                                |    | 24     
|             
|              |  | Item
      6.                                                  |  | Exhibits                                                          |    | 24 - 26
|             
|              |  | Signature                                                      |  |                                                                   | 27

2

---

SHOE CARNIVAL, INC.PART I -
FINANCIAL INFORMATION

ITEM 1. FINANCIAL
STATEMENTS

SHOE CARNIVAL,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETSUnaudited

|                                                             |  | October 31, |         | January 31, |  | November 1,
|------------------------------------------------------------ |  | ----------- | ------- | ----------- |  | -----------
|(In thousands,
      except per share data)                  |  | 2009        |         | 2009        |  | 2008       
|Assets                                                       |  |             |         |             |  |            
|Current
      Assets:                                        |  |             |         |             |  |            
|Cash and cash
      equivalents                              |  | $           | 27,256  |             |  | $          
|Accounts
      receivable                                    |  |             | 1,378   |             |  |            
|Merchandise
      inventories                                |  |             | 204,000 |             |  |            
|Deferred
      income tax benefit                            |  |             | 2,708   |             |  |            
|Other                                                        |  |             | 2,897   |             |  |            
|Total Current
      Assets                                   |  |             | 238,239 |             |  |            
|Property and equipment-net                                   |  |             | 65,119  |             |  |            
|Other                                                        |  |             | 1,590   |             |  |            
|Total Assets                                                 |  | $           | 304,948 |             |  | $          
|                                                            
|Liabilities and Shareholders' Equity                         |  |             |         |             |  |            
|Current
      Liabilities:                                   |  |             |         |             |  |            
|Accounts
      payable                                       |  | $           | 50,301  |             |  | $          
|Accrued and
      other liabilities                          |  |             | 18,832  |             |  |            
|Total Current Liabilities                                    |  |             | 69,133  |             |  |            
|Deferred
      lease incentives                              |  |             | 6,364   |             |  |            
|Accrued rent                                                 |  |             | 5,176   |             |  |            
|Deferred income
      taxes                                  |  |             | 915     |             |  |            
|Deferred compensation                                        |  |             | 3,381   |             |  |            
|Other                                                        |  |             | 1,958   |             |  |            
|Total Liabilities                                            |  |             | 86,927  |             |  |            
|                                                            
|Shareholders' Equity:                                        |  |             |         |             |  |            
|Common stock,
      $.01 par value, 50,000 shares            |  |             |         |             |  |            
|authorized, 13,655, 13,664 and 13,664 shares issued
      at |  |             |         |             |  |            
|October 31, 2009, January 31, 2009 and                       |  |             |         |             |  |            
|November 1, 2008, respectively                               |  |             | 137     |             |  |            
|Additional
      paid-in capital                             |  |             | 67,666  |             |  |            
|Retained
      earnings                                      |  |             | 166,478 |             |  |            
|Treasury
      stock, at cost, 710, 745 and 942 shares at    |  |             |         |             |  |            
|October 31, 2009, January 31, 2009 and                       |  |             |         |             |  |            
|November 1, 2008, respectively                               |  |             | (16,260 | )           |  |            
|Total
      Shareholders' Equity                             |  |             | 218,021 |             |  |            
|Total Liabilities and Shareholders' Equity                   |  | $           | 304,948 |             |  | $          

See notes to condensed consolidated
financial statements.

3

---

SHOE CARNIVAL,
INC.CONDENSED CONSOLIDATED STATEMENTS
OF INCOMEUnaudited

|                                            |  | Thirteen    |         | Thirteen    |  | Thirty-nine |         | Thirty-nine
|------------------------------------------- |  | ----------- | ------- | ----------- |  | ----------- | ------- | -----------
|                                            |  | Weeks Ended |         | Weeks Ended |  | Weeks Ended |         | Weeks Ended
|                                            |  | October 31, |         | November 1, |  | October 31, |         | November 1,
|(In thousands, except per share
      data) |  | 2009        |         | 2008        |  | 2009        |         | 2008       
|Net
      sales                             |  | $           | 191,523 |             |  | $           | 170,063 |            
|Cost of sales (including
      buying,      |  |             |         |             |  |             |         |            
|distribution and
      occupancy costs)     |  |             | 134,424 |             |  |             | 123,746 |            
|Gross
      profit                          |  |             | 57,099  |             |  |             | 46,317  |            
|Selling, general and
      administrative   |  |             |         |             |  |             |         |            
|expenses                                    |  |             | 44,880  |             |  |             | 42,389  |            
|Operating income                            |  |             | 12,219  |             |  |             | 3,928   |            
|Interest income                             |  |             | (13     | )           |  |             | (62     | )          
|Interest expense                            |  |             | 42      |             |  |             | 42      |            
|Income before income
      taxes            |  |             | 12,190  |             |  |             | 3,948   |            
|Income tax expense                          |  |             | 4,692   |             |  |             | 1,341   |            
|Net income                                  |  | $           | 7,498   |             |  | $           | 2,607   |            
|                                           
|Net
      income per share:                 |  |             |         |             |  |             |         |            
|Basic                                       |  | $           | .60     |             |  | $           | .21     |            
|Diluted                                     |  | $           | .59     |             |  | $           | .21     |            
|                                           
|Average shares outstanding:                 |  |             |         |             |  |             |         |            
|Basic                                       |  |             | 12,503  |             |  |             | 12,431  |            
|Diluted                                     |  |             | 12,662  |             |  |             | 12,539  |            

See notes to condensed consolidated
financial statements.

4

---

SHOE CARNIVAL,
INC.CONDENSED CONSOLIDATED STATEMENT
OF SHAREHOLDERS' EQUITYUnaudited

|                                   |  |              |   |          |      |          |  |          |     |          | Additional |        |   |       |   |         |  |   |         |   | 
|---------------------------------- |  | ------------ | - | -------- | ---- | -------- |  | -------- | --- | -------- | ---------- | ------ | - | ----- | - | ------- |  | - | ------- | - | 
|                                   |  | Common Stock |   | Paid-In  |      | Retained |  | Treasury |     |          |           
|(In thousands)                     |  | Issued       |   | Treasury |      | Amount   |  | Capital  |     | Earnings |            | Stock  |   | Total
|Balance at January 31, 2009        |  | 13,664       |   |          | (745 | )        |  | $        | 137 |          | $          | 67,686 |   |       | $ | 153,866 |  | $ | (17,053 | ) | 
|Stock option
      exercises       |  |              |   |          | 19   |          |  |          |     |          |            | (296   | ) |       |   |         |  |   | 429     |   | 
|Stock-based compensation           |  |              |   |          |      |          |  |          |     |          |            |        |   |       |   |         |  |   |         |   | 
|income tax
    benefit             |  |              |   |          |      |          |  |          |     |          |            | 185    |   |       |   |         |  |   |         |   | 
|Employee stock purchase
      plan |  |              |   |          |      |          |  |          |     |          |            |        |   |       |   |         |  |   |         |   | 
|purchases                          |  |              |   |          | 12   |          |  |          |     |          |            | (148   | ) |       |   |         |  |   | 266     |   | 
|Restricted stock awards            |  | (9           | ) |          | 4    |          |  |          |     |          |            | (98    | ) |       |   |         |  |   | 98      |   | 
|Stock-based
      compensation     |  |              |   |          |      |          |  |          |     |          |            |        |   |       |   |         |  |   |         |   | 
|expense                            |  |              |   |          |      |          |  |          |     |          |            | 337    |   |       |   |         |  |   |         |   | 
|Net
      income                   |  |              |   |          |      |          |  |          |     |          |            |        |   |       |   | 12,612  |  |   |         |   | 
|Balance at October 31,
      2009  |  | 13,655       |   |          | (710 | )        |  | $        | 137 |          | $          | 67,666 |   |       | $ | 166,478 |  | $ | (16,260 | ) | 

See notes to condensed consolidated
financial statements.

5

---

SHOE CARNIVAL,
INC.CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWSUnaudited

|                                                                               |  | Thirty-nine |         | Thirty-nine
|------------------------------------------------------------------------------ |  | ----------- | ------- | -----------
|                                                                               |  | Weeks Ended |         | Weeks Ended
|                                                                               |  | October 31, |         | November 1,
|(In thousands)                                                                 |  | 2009        |         | 2008       
|Cash
      Flows From Operating Activities                                     |  |             |         |            
|Net income                                                                     |  | $           | 12,612  |            
|Adjustments to reconcile net
      income to net                               |  |             |         |            
|cash provided by operating
      activities:                                   |  |             |         |            
|Depreciation and
      amortization                                            |  |             | 11,310  |            
|Stock-based
      compensation                                                 |  |             | 757     |            
|Loss on retirement and
      impairment of assets                              |  |             | 73      |            
|Deferred income
      taxes                                                    |  |             | (632    | )          
|Lease
      incentives                                                         |  |             | 1,717   |            
|Other                                                                          |  |             | (630    | )          
|Changes in operating assets
      and liabilities:                             |  |             |         |            
|Accounts
      receivable                                                      |  |             | 329     |            
|Merchandise
      inventories                                                  |  |             | (14,506 | )          
|Accounts payable and
      accrued liabilities                                 |  |             | (4,928  | )          
|Other                                                                          |  |             | 4,436   |            
|Net
      cash provided by operating activities                                |  |             | 10,538  |            
|                                                                              
|Cash
      Flows From Investing Activities                                     |  |             |         |            
|Purchases of property and equipment                                            |  |             | (8,651  | )          
|Proceeds from sale of property
      and equipment                             |  |             | 8       |            
|Proceeds from note receivable                                                  |  |             | 100     |            
|Net
      cash used in investing activities                                    |  |             | (8,543  | )          
|                                                                              
|Cash
      Flows From Financing Activities                                     |  |             |         |            
|Borrowings under line of credit                                                |  |             | 0       |            
|Payments on line of
      credit                                               |  |             | 0       |            
|Proceeds from issuance of stock                                                |  |             | 251     |            
|Excess tax benefits from
      stock-based compensation                        |  |             | 193     |            
|Net cash provided by
      financing activities                                |  |             | 444     |            
|Net
      increase (decrease) in cash and cash equivalents                     |  |             | 2,439   |            
|Cash and cash equivalents
      at beginning of period                         |  |             | 24,817  |            
|Cash
      and Cash Equivalents at End of Period                               |  | $           | 27,256  |            
|                                                                              
|Supplemental disclosures of cash flow
    information:                         |  |             |         |            
|Cash paid during period for interest                                           |  | $           | 126     |            
|Cash paid during period for
      income taxes                                 |  | $           | 180     |            
|Capital expenditures incurred but not yet
      paid                           |  | $           | 536     |            
|                                                                              
|Supplemental disclosures of non-cash operating and
      investing activities: |  |             |         |            
|Forgiveness of accounts
      payable from litigation settlement (1)           |  | $           | 1,160   |            
|Recording of note
      receivable from litigation settlement (1)              |  | $           | 1,200   |            

|(1) |  | See Note 5  Litigation Matters
      for details of the settlement. Cumulative settlement served to reduce the
      value of originally acquired assets.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

See notes to condensed consolidated
financial statements.

6

---

SHOE CARNIVAL,
INC.NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTSUnaudited

Note 1 - Basis of
Presentation

In our opinion, the accompanying
unaudited condensed consolidated financial statements contain all normal
recurring 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 January 31,
2009.

We determined that certain deposits and
pre-paid expenses totaling $1.6 million as of October 31, 2009 would not be
utilized within the next 12 months and should be classified as long-term.
Therefore, we have presented these amounts as Other in the long-term section of
our condensed consolidated balance sheet. Similar assets in the amount of
$400,000 and $454,000 as of January 31, 2009 and November 1, 2008, respectively,
that had previously been classified as Other within Current Assets have been
presented as long-term in the accompanying comparative condensed consolidated
balance sheets.

Note 2 - Net Income Per
Share

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
Accounting Standards Codification 260 "Earnings Per Share":

|                                            |  | Thirteen    |  | Thirteen    |  | Thirty-nine |  | Thirty-nine
|------------------------------------------- |  | ----------- |  | ----------- |  | ----------- |  | -----------
|                                            |  | Weeks Ended |  | Weeks Ended |  | Weeks Ended |  | Weeks Ended
|                                            |  | October 31, |  | November 1, |  | October 31, |  | November 1,
|(In thousands)                              |  | 2009        |  | 2008        |  | 2009        |  | 2008       
|Basic
      shares                          |  | 12,503      |  | 12,431      |  | 12,490      |  | 12,383     
|Dilutive effect of
      stock-based awards |  | 159         |  | 108         |  | 83          |  | 100        
|Diluted shares                              |  | 12,662      |  | 12,539      |  | 12,573      |  | 12,483     

Options to purchase 195,000 shares of
common stock for the third quarter of fiscal 2009 and options to purchase
410,000 shares of common stock for the first nine months of fiscal 2009 were not
included in the computation of diluted shares because the options' exercise
prices were greater than the average market price of our common stock for the
period. 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 of our common stock for the period.

Note 3  Recently Issued Accounting
Pronouncements

In June 2009, the Financial Accounting
Standards Board ("FASB") issued FASB Accounting Standards Codification ("ASC")
effective for financial statements issued for interim and annual periods ending
after September 15, 2009. The ASC is an aggregation of previously issued
authoritative generally accepted accounting principles in one comprehensive set
of guidance organized by subject area. In accordance with the ASC, references to
previously issued accounting standards have been replaced by ASC references.
Subsequent revisions will be incorporated into the ASC through Accounting
Standards Updates. Our adoption of the ASC during the third quarter of fiscal
2009 did not have a material impact on our consolidated financial position,
results of operations or cash flows. For this initial period of adoption, we
have included both the pre-adoption as well as post-adoption authoritative
literature references.

7

---

In September 2006, the FASB issued
Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurements," now ASC 820, "Fair Value Measurements and Disclosures" which
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 ASC 820 are effective for fiscal years
beginning after November 15, 2007. In February 2008, the FASB deferred the
implementation of ASC 820 for certain non-financial assets and liabilities for
fiscal years beginning after November 15, 2008. We adopted the provisions of ASC
820 for financial assets and liabilities on February 3, 2008 and adopted the
provisions of ASC 820 for non-financial assets and liabilities on February 1,
2009. The adoption of ASC 820 did not have a material impact on our condensed
consolidated financial statements. See Note 6  "Fair Value Measurements" to our
notes to condensed consolidated financial statements.

In December 2007, the FASB issued SFAS
No. 141R, "Business Combinations," now ASC 805, "Business Combinations." ASC 805
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. We adopted the
provisions of ASC 805 on February 1, 2009. The adoption of ASC 805 did not have
a material impact on our condensed consolidated financial statements.

In April 2008, the FASB issued
Financial Statement of Position ("FSP") No. FAS 142-3, "Determination of the
Useful Life of Intangible Assets," now ASC 350-30, "General Intangibles Other
than Goodwill." ASC 350-30 amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset. ASC 350-30 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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. We adopted the provisions of ASC 350-30 on February 1, 2009. The
adoption of ASC 350-30 did not have a material impact on our condensed
consolidated financial statements.

In April 2009, the FASB issued FSP No.
FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly," now ASC 820. ASC 820 indicates that when determining the
fair value of an asset or liability that is not a Level 1 fair value
measurement, an entity should assess whether the volume and level of activity
for the asset or liability have significantly decreased when compared with
normal market conditions. If the entity concludes that there has been a
significant decrease in the volume and level of activity, a quoted price (e.g.,
observed transaction) may not be determinative of fair value and may require a
significant adjustment. The adoption of ASC 820 during the second quarter of
fiscal 2009 did not have a material impact on our condensed consolidated
financial statements.

In April 2009, the FASB issued FSP No.
FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary
Impairments," now ASC 320, "Investments-Debt and Equity Securities." ASC 320
modifies the requirements for recognizing other-than-temporarily impaired debt
securities and changes the existing impairment model for such securities. It
also modifies the presentation of other-than-temporary impairment losses and
increases the frequency of and expands already required disclosures about
other-than-temporary impairment for debt and equity securities. The adoption of
ASC 320 during the second quarter of fiscal 2009 did not have a material impact
on our condensed consolidated financial statements.

8

---

In April 2009, the FASB issued FSP No.
FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial
Instruments," now ASC 825, "Financial Instruments." ASC 825 requires publicly
traded companies to disclose the fair value of financial instruments within its
scope in interim financial statements, adding to the current requirement to make
those disclosures in annual financial statements. This also requires that
companies disclose the method or methods and significant assumptions used to
estimate the fair value of financial instruments and a discussion of changes, if
any, in the method or methods and significant assumptions during the period. The
adoption of ASC 825 during the second quarter of fiscal 2009 did not have a
material impact on our condensed consolidated financial statements.

In May 2009, the FASB issued SFAS No.
165, "Subsequent Events," now ASC 855, "Subsequent Events." ASC 855 sets forth:
1) the period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements; 2) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements; and 3) the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. ASC 855 is effective for interim and
annual periods ending after June 15, 2009. Subsequent events were evaluated
through December 10, 2009, the date on which the financial statements were
issued. This assessment of subsequent events did not reveal the occurrence of
any material events or transactions.

Note 4 - Stock-Based
Compensation

Stock Options

The following table summarizes the
stock option transactions pursuant to the stock-based compensation plans for the
thirty-nine week period ended October 31, 2009:

|                                         |  |           |   |                |           |              |           | Weighted-         |           |   |      
|---------------------------------------- |  | --------- | - | -------------- | --------- | ------------ | --------- | ----------------- | --------- | - | -----
|                                         |  |           |   |                |           |              |           | Average           |           |   |      
|                                         |  |           |   |                | Weighted- |              | Remaining |                   | Aggregate
|                                         |  | Number of |   | Average        |           | Contractual  |           | Intrinsic
  Value
|                                         |  | Shares    |   | Exercise Price |           | Term (Years) |           | (in thousands)   
|Outstanding at January 31, 2009          |  | 526,168   |   |                | $         | 12.77        |           |                   |           |   |      
|Grants                                   |  | 0         |   |                |           | 0.00         |           |                   |           |   |      
|Forfeited or
    expired                 |  | (8,000    | ) |                |           | 11.91        |           |                   |           |   |      
|Exercised                                |  | (18,712   | ) |                |           | 7.09         |           |                   |           |   |      
|Outstanding October 31,
      2009       |  | 499,456   |   |                | $         | 13.00        |           | 3.11              |           | $ | 1,351
|Options outstanding at
      October 31, |  |           |   |                |           |              |           |                   |           |   |      
|2009, net of estimated forfeitures       |  | 497,531   |   |                | $         | 13.00        |           | 3.09              |           | $ | 1,346
|Exercisable at October 31, 2009          |  | 465,289   |   |                | $         | 13.02        |           | 2.72              |           | $ | 1,269

The total fair value at grant date of
previously non-vested stock options that vested during the thirty-nine week
periods ended October 31, 2009 and November 1, 2008 were $32,000 and $12,000,
respectively.

No stock options were granted during
the first nine months of fiscal 2009. The weighted-average fair value of options
granted was $6.46 during the first nine months of fiscal 2008. 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:

2008Risk
      free interest rate
    3.1%Expected dividend
      yield
    0.0%Expected volatility
    45.39%Expected term
    5
Years


9

---

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 did 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s life.

The following table summarizes
information regarding options exercised:

|                                      |  | Thirteen    |         | Thirteen    |   | Thirty-nine |  | Thirty-nine
|------------------------------------- |  | ----------- | ------- | ----------- | - | ----------- |  | -----------
|                                      |  | Weeks Ended |         | Weeks Ended |   | Weeks Ended |  | Weeks Ended
|                                      |  | October 31, |         | November 1, |   | October 31, |  | November 1,
|                                      |  | 2009        |         | 2008        |   | 2009        |  | 2008       
|Total
      intrinsic value (1)       |  | $           | 100,000 |             | $ | 613,000     |  | $          
|Total cash
    received               |  | $           | 111,000 |             | $ | 1,084,000   |  | $          
|Associated excess income tax benefits |  |             |         |             |   |             |  |            
|recorded                              |  | $           | 125,000 |             | $ | 224,000     |  | $          

|(1) |  | Defined as the
      difference between the market value at exercise and the grant price of
      stock options exercised.
|--- |  | --------------------------------------------------------------------------------------------------------------------------

The following table summarizes
information regarding outstanding and exercisable options at October 31,
2009:

|               |                     |             | Options Outstanding |                | Options Exercisable
|-------------- | ------------------- | ----------- | ------------------- | -------------- | -------------------
|               |                     |             | Number              |                | Weighted           
|Range of       |                     | of Options  |                     | Average        |                    
|Exercise Price |                     | Outstanding |                     | Remaining Life |                    
|$              | 4.38 
    5.75     |             | 49,767              |                | 1.08               
|$              | 8.56  12.14        |             | 95,268              |                | 3.50               
|$              | 12.67 
      16.30 |             | 196,801             |                | 3.98               
|$              | 17.12               |             | 157,620             |                | 2.42               

The following table summarizes
information regarding stock-based compensation expense recognized for non-vested
options:

|                                        |  | Thirteen    |        | Thirteen    |   | Thirty-nine |  | Thirty-nine
|--------------------------------------- |  | ----------- | ------ | ----------- | - | ----------- |  | -----------
|                                        |  | Weeks Ended |        | Weeks Ended |   | Weeks Ended |  | Weeks Ended
|                                        |  | October 31, |        | November 1, |   | October 31, |  | November 1,
|                                        |  | 2009        |        | 2008        |   | 2009        |  | 2008       
|Stock-based compensation expense before |  |             |        |             |   |             |  |            
|the recognized
      income tax benefit |  | $           | 19,000 |             | $ | 11,000      |  | $          
|Income tax
    benefit                  |  | $           | 7,000  |             | $ | 4,000       |  | $          

As of October 31, 2009, there was
approximately $102,000 of unrecognized compensation expense, net of estimated
forfeitures, remaining related to non-vested stock options. This expense is
expected to be recognized over a weighted-average period of 1.5
years.

10

---

Restricted Stock
Awards

The following table summarizes the
restricted share transactions for the thirty-nine week period ended October 31,
2009:

|                               |           |   |                 | Weighted-
|------------------------------ | --------- | - | --------------- | ---------
|                               | Number of |   | Average Grant  
|                               | Shares    |   | Date Fair Value
|Non-vested at January 31, 2009 | 434,234   |   |                 | $        
|Granted                        | 4,284     |   |                 |          
|Released                       | (1,034    | ) |                 |          
|Forfeited                      | (1,500    | ) |                 |          
|Non-vested at October 31, 2009 | 435,984   |   |                 | $        

The total fair value at grant date of
previously non-vested stock awards that vested during the first nine months of
fiscal 2009 was $13,000. No previously non-vested stock awards vested during the
first nine months of fiscal 2008. The weighted-average grant date fair values of
stock awards granted during the thirty-nine week periods ended October 31, 2009
and November 1, 2008 were $12.26 and $12.54, respectively.

The following table summarizes
information regarding stock-based compensation expense for restricted stock
awards:

|                                        | Thirteen    |         | Thirteen    |   | Thirty-nine |  | Thirty-nine
|--------------------------------------- | ----------- | ------- | ----------- | - | ----------- |  | -----------
|                                        | Weeks Ended |         | Weeks Ended |   | Weeks Ended |  | Weeks Ended
|                                        | October 31, |         | November 1, |   | October 31, |  | November 1,
|                                        | 2009        |         | 2008        |   | 2009        |  | 2008       
|Stock-based compensation expense before |             |         |             |   |             |  |            
|the recognized
      income tax benefit | $           | 315,000 |             | $ | 118,000     |  | $          
|Income tax
    benefit                  | $           | 121,000 |             | $ | 40,000      |  | $          

The $258,000 of expense recorded during
the first nine months of fiscal 2009 was comprised of compensation expense of
$911,000 offset by income of $653,000. The income was attributable to the first
quarter reversal of the cumulative prior period expense for performance-based
awards which now have been deemed by management as not probable of vesting.

As of October 31, 2009, there was
approximately $3.1 million of unrecognized compensation expense remaining
related to both the performance-based and service-based non-vested stock awards.
The expense is expected to be recognized over a weighted average period of 2.6
years. This incorporates the current assumptions of the estimated requisite
service period required to achieve the designated performance conditions for
performance-based stock awards.

Cash-Settled Stock Appreciation
Rights (SARs)

Cash-settled stock appreciation rights
(SARs) were granted to non-executive employees in the fourth quarter of fiscal
2008 such that one-third of the shares underlying the SARs granted would vest
and become fully exercisable on each of the first three anniversaries of the
date of the grant and were assigned a five-year term from the date of grant.
Each SAR entitles the holder, upon exercise, to receive cash in the amount equal
to the closing price of our stock on the day prior to exercise less the exercise
price. The maximum amount paid, however, cannot exceed 100% of the exercise
price. In accordance with ASC 718, "Stock Compensation," cash-settled SARs are
classified as Other liabilities on the condensed consolidated balance sheet as
of October 31, 2009 and January 31, 2009.

11

---

No previously non-vested SARs vested
nor were any SARs granted during the first nine months of fiscal 2009. The total
number of non-vested SARs and the weighted-average exercise price at both
January 31, 2009 and October 31, 2009 was 157,000 and $9.72, respectively. The
weighted-average remaining contractual term for non-vested SARs at October 31,
2009 was 4.1 years.

ASC 718 requires the fair value of
these liability awards be remeasured at each reporting period until the date of
settlement. Increases or decreases in compensation expense are recognized over
the vesting period, or immediately for vested awards. The weighted-average fair
value of outstanding, non-vested SARs awards was $5.25 as of October 31, 2009.
The fair value was estimated using a trinomial lattice model with the following
assumptions:

October 31, 2009Risk free interest rate yield curve
    
    0.01% - 2.31%Expected
      dividend yield
    
    0.0%Expected volatility
    
    59.78%Maximum
      life
    
    4.13
    YearsExercise multiple
    
    1.74 - 1.8Maximum
      payout
    
    $9.72Employee exit rate
    
    2.2% - 9.0%


The risk free interest rate was based
on the U.S. Treasury yield curve in effect at the end of the reporting period.
We had not paid and did 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 exercise multiple and employee exit
rate are based on historical option data.

The following table summarizes
information regarding stock-based compensation expense recognized for SARs:

|                                                             | Thirteen    |         | Thirty-nine
|------------------------------------------------------------ | ----------- | ------- | -----------
|                                                             | Weeks Ended |         | Weeks Ended
|                                                             | October 31, |         | October 31,
|                                                             | 2009        |         | 2009       
|Stock-based compensation expense before the
      recognized |             |         |            
|income tax
      benefit                                     | $           | 198,000 |            
|Income tax
    benefit                                       | $           | 78,000  |            

As of October 31, 2009, there was
approximately $355,000 in unrecognized compensation expense related to
non-vested SARs. The expense is expected to be recognized over a
weighted-average period of 1.1 years.

Employee Stock Purchase
Plan

The following table summarizes
information regarding stock-based compensation expense recognized for the
employee stock purchase plan:

|                                            | Thirteen    |       | Thirteen    |   | Thirty-nine |  | Thirty-nine
|------------------------------------------- | ----------- | ----- | ----------- | - | ----------- |  | -----------
|                                            | Weeks Ended |       | Weeks Ended |   | Weeks Ended |  | Weeks Ended
|                                            | October 31, |       | November 1, |   | October 31, |  | November 1,
|                                            | 2009        |       | 2008        |   | 2009        |  | 2008       
|Stock-based compensation expense before     |             |       |             |   |             |  |            
|the recognized
      income tax benefit (1) | $           | 6,000 |             | $ | 6,000       |  | $          
|Income tax
    benefit                      | $           | 2,000 |             | $ | 2,000       |  | $          

|(1) |  | Amounts are
      representative of the 15% discount employees are provided for purchases
      under the employee stock purchase plan.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------

12

---

Note 5 - Litigation Matters

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, captionedSDI Industries, Inc.
(Claimant and Counter-Respondent) v. Shoe Carnival, Inc. (Respondent and
Counterclaimant),in which SDI sought payment
of $1.2 million of unpaid retainage, $700,000 for services not yet billed, plus
additional interest and legal fees. The retainage was withheld from progress
billings for work performed on our distribution center and was recorded in
accrued and other liabilities and fixed assets in our consolidated financial
statements. We filed a Counterclaim and Response in this matter, denying SDI's
claim, and seeking monetary damages of more than $3.0 million. We asserted that
SDI breached our contract with SDI ("Contract") due to its failure to deliver
our distribution center's material handling system pursuant to the
specifications of the Contract.

On May 30, 2009, the parties entered
into a settlement of the above matter. Under the terms of the settlement, SDI
agreed to forego collection of the $1.2 million in unpaid retainage and to pay
us $1.2 million towards the remediation of the distribution center's material
handling system. The $1.2 million will be paid in installments over seven years
and is evidenced by a promissory note secured by a standby letter of credit,
renewable annually, in an amount not less than $200,000 and by a security
interest in SDI's accounts receivable. In addition, both parties agreed to the
dismissal of all pending claims currently under arbitration. The installment due
on the promissory note within the next 12 months has been recorded in Accounts
receivable in our consolidated financial statements. The remaining balance of
the promissory note is recorded in Other as a non-current asset. SDI remitted
the first scheduled payment prior to the due date of July 1, 2009.

Although the investment we made in the
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 another
distribution logistics company to provide recommendations to improve throughput
and have begun implementation of certain of these recommendations and will
continue to make improvements in fiscal 2010.

We are involved in various other legal
proceedings incidental to the conduct of our business. While the outcome of any
legal proceeding is always uncertain, we do not currently expect that any such
proceedings will have a material adverse effect on our financial position or
results of operations.

Note 6 - Fair Value Measurements

As of February 1, 2009, ASC 820 applies
to both our financial and non-financial assets and liabilities. Although the
adoption of ASC 820 had no impact on our financial position or results of
operations, it does result in additional disclosures regarding fair value
measurements.

ASC 820 provides guidance for using
fair value to measure assets and liabilities and only applies when other
standards require or permit the fair value measurement of assets and
liabilities. It does not expand the use of fair value measurements. ASC 820
establishes a fair value hierarchy, which prioritizes the inputs used in
measuring fair value into three broad levels.

- Level 1  Quoted prices in active markets that are
  unadjusted and accessible at the measurement date for identical, unrestricted
  assets or liabilities;
- Level 2 
  Quoted prices for identical assets and liabilities in markets that are not
  active, quoted prices for similar assets and liabilities in active markets or
  financial instruments for which significant inputs are observable, either
  directly or indirectly; and
- Level 3 
  Prices or valuations that require inputs that are both significant to the fair
  value measurement and unobservable.

Our financial assets as of October 31,
2009, January 31, 2009, and November 1, 2008 included cash and cash equivalents.
We did not have any financial liabilities measured at fair value for these
periods. The carrying value of cash and cash equivalents
approximates fair value due to its short-term nature and is considered a Level 1
fair value measurement.

13

---

The following table summarizes our cash
and cash equivalents that are measured at fair value on a recurring basis as of
October 31, 2009, January 31, 2009, and November 1, 2008:

|                                          | Quoted Prices     |        | Significant |   |              |  |                  |   | 
|----------------------------------------- | ----------------- | ------ | ----------- | - | ------------ |  | ---------------- | - | 
|                                          | in Active
Markets |        | Other       |   | Significant  |  |                  |  
|                                          | for               |        | Observable  |   | Unobservable |  |                  |  
|                                          | Identical Assets  |        | Inputs      |   | Inputs       |  |                  |  
|(In thousands)                            | (Level 1)         |        | (Level 2)   |   | (Level 3)    |  | Total Fair Value
|As of
      October 31, 2009              |                   |        |             |   |              |  |                  |   | 
|Cash and short-term
      investments (1) | $                 | 23,364 |             | $ | 0            |  | $                | 0 | 
|Credit and debit card receivables
(2)     |                   | 3,892  |             |   | 0            |  |                  | 0 | 
|                                          | $                 | 27,256 |             | $ | 0            |  | $                | 0 | 
|                                         
|As of
      January 31, 2009              |                   |        |             |   |              |  |                  |   | 
|Cash and short-term
      investments (1) | $                 | 20,920 |             | $ | 0            |  | $                | 0 | 
|Credit and debit card receivables
(2)     |                   | 3,897  |             |   | 0            |  |                  | 0 | 
|                                          | $                 | 24,817 |             | $ | 0            |  | $                | 0 | 
|                                         
|As of
      November 1, 2008              |                   |        |             |   |              |  |                  |   | 
|Cash and short-term
      investments (1) | $                 | 5,626  |             | $ | 0            |  | $                | 0 | 
|Credit and debit card receivables
(2)     |                   | 3,517  |             |   | 0            |  |                  | 0 | 
|                                          | $                 | 9,143  |             | $ | 0            |  | $                | 0 | 

|(1) |  | Cash and short-term
      investments represents cash deposits and short-term investments held with
      financial institutions. The cash balances held in bank operating accounts
      are covered by the Federal Deposit Insurance Corporation Transaction
      Account Guarantee Program. Through the end of the period, non-interest
      bearing checking accounts and certain low interest transaction accounts
      are fully guaranteed for the entire amount in the account. To date, we
      have experienced no loss or lack of access to either invested cash or cash
      held in our operating accounts. Short-term investments consist of
      investments in commercial paper that accrue interest on a periodic
      basis.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Our credit and debit
      card receivables are highly liquid financial assets that typically settle
      in less than three days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

We did not have any fair value
measurements for our non-financial assets and liabilities during the third
quarter or first nine months of fiscal 2009.

14

---

|ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS
|---------------------------------------------------------------------------------------------------

Factors That May Effect Future
Results

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 impact on the 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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 January 31, 2009.

General

Management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 January 31, 2009 as filed with the SEC.

Overview of Our
Business

Shoe Carnival, Inc. is one of the
nations largest family footwear retailers. As of October 31, 2009, we operated
317 stores in 30 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.

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.

15

---

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.

Critical Accounting Policies

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:

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 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.

Income Taxes- We calculate income taxes and account for uncertain tax
positions in accordance with ASC 740, "Income Taxes" ("ASC 740"). Under ASC 740,
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. We are also 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.

Insurance Reserves- 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.

16

---

Results of Operations Summary
Information

|                     | Number of Stores |           | Store Square Footage |        |  
|-------------------- | ---------------- | --------- | -------------------- | ------ | -
|                     | Beginning        |           |                      |        |  
|Quarter Ended        |                  | Of Period |                      | Opened |  
|May 2, 2009          | 304              |           | 10                   |        | 1
|August
      1, 2009 | 313              |           | 2                    |        | 1
|October 31, 2009     | 314              |           | 4                    |        | 1
|                    
|Year-to-date 2009    | 304              |           | 16                   |        | 3
|                    
|May 3, 2008          | 291              |           | 2                    |        | 0
|August
      2, 2008 | 293              |           | 12                   |        | 2
|November 1, 2008     | 303              |           | 8                    |        | 1
|                    
|Year-to-date 2008    | 291              |           | 22                   |        | 3

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.

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

|                                        | Thirteen               |   | Thirteen               |       | Thirty-nine            |  | Thirty-nine           
|--------------------------------------- | ---------------------- | - | ---------------------- | ----- | ---------------------- |  | ----------------------
|                                        | Weeks Ended            |   | Weeks Ended            |       | Weeks Ended            |  | Weeks Ended           
|                                        | October 31,
      2009 |   | November 1,
      2008 |       | October 31,
      2009 |  | November 1,
      2008
|Net
      sales                         | 100.0                  | % |                        | 100.0 | %                      |  | 100.0                 
|Cost of sales (including
      buying,  |                        |   |                        |       |                        |  |                       
|distribution and
      occupancy costs) | 70.2                   |   |                        | 72.8  |                        |  | 71.7                  
|Gross
      profit                      | 29.8                   |   |                        | 27.2  |                        |  | 28.3                  
|Selling, general
    and                |                        |   |                        |       |                        |  |                       
|administrative expenses                 | 23.4                   |   |                        | 24.9  |                        |  | 24.3                  
|Operating income                        | 6.4                    |   |                        | 2.3   |                        |  | 4.0                   
|                                       
|Interest income                         | 0.0                    |   |                        | 0.0   |                        |  | 0.0                   
|Interest expense                        | 0.0                    |   |                        | 0.0   |                        |  | 0.0                   
|Income before income taxes              | 6.4                    |   |                        | 2.3   |                        |  | 4.0                   
|Income tax
    expense                  | 2.5                    |   |                        | 0.8   |                        |  | 1.5                   
|Net
      income                        | 3.9                    | % |                        | 1.5   | %                      |  | 2.5                   

Operational Summary

The third quarter of fiscal 2009
surpassed our expectations in regards to many key financial metrics including
comparable store sales gains, gross profit margin, aged inventory and cash
generation. The consumer responded well to our wide selection of value priced
family footwear enabling us to generate a net sales increase of 12.6% and a
comparable store sales increase of 10.2%, both compared to the third quarter of
fiscal 2008. This 10.2% comparable store sales gain was the second largest
quarterly comparable store sales increase in our history. Our positive sales
results were broad based with every product category delivering a comparable
store sales increase.

Our gross profit margin increased to
29.8% for the third quarter of fiscal 2009 from 27.2% in the third quarter of
fiscal 2008. The merchandise margin increased 1.1% primarily as a result of
improved inventory management resulting in less clearance product along with
strong sales of boots which carry a higher margin. We were able to leverage our
buying, distribution and occupancy costs as a percentage of sales by 1.5%
through a combination of higher sales and lower occupancy and distribution
expenses.

17

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Due to the strength of sales during the
third quarter, we have recorded a 1.4% comparable store sales gain on a
year-to-date basis. Our women's, children's and athletics categories recorded
positive comparable store sales for the year and our overall gross profit margin
is up 0.7%. Selling, general and administrative expenses increased only $1.6
million despite increasing our store base by a net of seven stores.

We expect our early-season strength in
boots, particularly women's fashion boots, to continue into the holidays. In
addition, we anticipate continued strength in the athletic category, in part,
due to the favorable consumer response to wellness footwear. This type of
footwear was not available in our stores last year. While our fourth quarter is
historically not a quarter in which we report significant earnings, we do
anticipate an improvement over the results in the fourth quarter last year. We
expect positive comparable store sales and an improving gross profit margin will
result in positive net earnings in the fourth quarter this year. We believe our
business model of providing a wide selection of footwear for the entire family
at a compelling value and in a fun shopping environment will continue to set us
apart from the competition during the holiday shopping season.

Results of Operations for the Third
Quarter Ended October 31, 2009

Net Sales

Net sales increased $21.4 million to
$191.5 million during the third quarter ended October 31, 2009, a 12.6% increase
from the prior year's third quarter net sales of $170.1 million. The increase in
sales resulted from a 10.2% comparable store sales gain plus an $8.6 million
increase in sales generated by new stores opened since the beginning of the
third quarter of fiscal 2008. These increases were partially offset by a $3.5
million loss in sales resulting from the closing of 12 stores over the past four
quarters.

The sales-tax-free holidays in nine of
our states shifted from the second quarter of fiscal 2009, where they were
reported in fiscal 2008, into the third quarter this year. We estimate this
shift negatively affected our comparable store sales in the second quarter of
fiscal 2009 by 2% and positively affected our comparable store sales in the
third quarter of fiscal 2009 by 2%.

Gross Profit

Gross profit increased $10.8 million to
$57.1 million in the third quarter of fiscal 2009 from gross profit of $46.3
million in the comparable prior year period. The gross margin in the third
quarter of fiscal 2009 increased 2.6% from the same period last year to 29.8%.
The merchandise margin increased 1.1% and buying, distribution, and occupancy
costs, as a percentage of sales, decreased 1.5%. The merchandise margin
benefited from less clearance activity and strong sales of mens, womens and
childrens boots which carry a higher margin. The leverage on our buying,
distribution and occupancy costs was the result of the sales increase combined
with a $482,000 decrease in occupancy and distribution expenses as compared to
the third quarter of fiscal 2008. While additional occupancy costs were incurred
for the operation of our new stores, these increases were more than offset by
rent reductions on certain comparable stores, the elimination of rent from the
12 stores closed during the past four quarters and lower store closing costs.
Distribution costs declined on a year-over-year basis as a result of various
cost saving initiatives.

18

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Selling, General and Administrative
Expenses

Selling, general and administrative
expenses increased $2.5 million in the third quarter of fiscal 2009 to $44.9
million; however, our third quarter sales gain enabled us to leverage these
costs as a percentage of sales by 1.5%. The $2.5 million increase between the
comparable periods was primarily the result of incurring an additional $1.7
million in expense for incentive compensation along with an increase of $1.3
million in employee benefits. Included in employee benefits is our non-qualified
deferred compensation plan. During the third quarter of fiscal 2008, we recorded
a $742,000 loss on investments for this plan due to a decline in the stock
markets. For the third quarter of fiscal 2009, we recorded earnings on
investments for this plan of $89,000 resulting in an increase in expense between
the two comparative periods of $831,000. Even though we operated an additional
seven stores at the end of the third quarter of fiscal 2009, we were able to
achieve significant expense savings in a number of categories, including
depreciation.

Pre-opening costs included in selling,
general and administrative expenses decreased $161,000 to $225,000, or 0.1% of
sales, for the third quarter of fiscal 2009 as compared to $386,000, or 0.2% of
sales, for the third quarter of fiscal 2008. We opened four stores in the third
quarter of fiscal 2009 as compared to eight stores in the third quarter of
fiscal 2008. 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.

Store closing costs included in
selling, general and administrative expenses decreased $279,000 in the third
quarter of fiscal 2009 to $138,000, or 0.1% as a percentage of sales, as
compared to $417,000, or 0.2% as a percentage of sales, in the third quarter of
fiscal 2008. We closed one store during the third quarter of both fiscal 2009
and fiscal 2008 and incurred costs related to other planned closures. 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.

Interest (Income) Expense, Net

We recorded net interest expense of
$29,000 in the third quarter of fiscal 2009 as compared to net interest income
of $20,000 in the third quarter of the prior year.

Income Taxes

The effective income tax rate for the
third quarter of fiscal 2009 increased to 38.5% from 34.0% for the third quarter
of fiscal 2008. The unusually low tax rate in the third quarter of fiscal 2008
was the result of recording a period adjustment to reduce our estimated annual
effective tax rate due to lowering projected annual earnings.

Results of Operations for the Nine
Months Ended October 31, 2009

Net Sales

Net sales increased $20.9 million to
$511.6 million during the nine months ended October 31, 2009, from net sales of
$490.7 million in the comparable prior year period. The increase in sales
resulted from a $25.9 million increase in sales generated by new stores opened
since the beginning of fiscal 2008 in addition to a 1.4% comparable store sales
gain. These increases were partially offset by an $11.3 million loss in sales
resulting from closing 14 stores since the beginning of fiscal 2008.

Gross Profit

Gross profit increased $9.2 million to
$144.7 million in the first nine months of fiscal 2009 from gross profit of
$135.5 million in the comparable prior year period. The gross margin in the
first nine months of fiscal 2009 increased 0.7% from the same period last year
to 28.3%. The merchandise margin increased 0.1%. Both as a percentage of sales
and in dollars, buying, distribution and occupancy costs declined on a
year-over-year basis.

19

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While occupancy costs increased on a
year-over-year basis as a result of operating additional stores, we were able to
offset these increases through cost saving initiatives within our buying and
distribution functions resulting in a net expense savings of $514,000. This
savings coupled with the increase in net sales resulted in us leveraging these
costs by 0.6% as a percentage of sales.

Selling, General and Administrative
Expenses

Selling, general and administrative
expenses increased $1.6 million in the first nine months of fiscal 2009 to
$124.0 million, or 24.3% of sales; however, the sales gain for the first nine
months of fiscal 2009 enabled us to leverage these costs, as a percentage of
sales, by 0.6%. The increase in expense between the two comparative periods was
primarily the result of a $2.1 million increase in employee benefits along with
incurring an additional $1.6 million in incentive compensation. Included in
employee benefits is our non-qualified deferred compensation plan. During the
first nine months of fiscal 2008, we recorded a loss on investments for this
plan of $890,000 due to the decline in the stock markets. For the first nine
months of fiscal 2009, we recorded earnings on investments for this plan of
$391,000 resulting in an increase in expense between the two comparative periods
of $1.3 million. Even though we operated additional stores during the first nine
months of fiscal 2009 compared to the prior year period, we were able to reduce
store-level expenses. Expense reductions resulted primarily from decreases in
depreciation and advertising and recording lower store closing costs.

Pre-opening costs included in selling,
general and administrative expenses were $859,000, or 0.2% of sales, for the
first nine months of fiscal 2009 as compared to $826,000, or 0.2% of sales, for
the first nine months of fiscal 2008. We opened 16 stores in the first nine
months of fiscal 2009 as compared to 22 stores in the first nine months of
fiscal 2008. 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.

The portion of store closing costs
included in selling, general and administrative expenses were $400,000, or 0.1%
of sales, for the first nine months of fiscal 2009 as compared to $1.1 million,
or 0.2% of sales, for the first nine months of fiscal 2008. We closed three
stores during the first nine months of both fiscal 2009 and fiscal 2008 and
incurred costs related to other planned closures. 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.

Interest (Income) Expense, Net

We recorded net interest expense of
$109,000 in the first nine months of fiscal 2009 as compared to net interest
income of $27,000 in the first nine months of the prior year. As returns
available on short-term investments fell to record lows, we held our excess
funds for the first seven months of fiscal 2009 in non-interest bearing deposit
accounts to offset bank service fees, which are included in selling, general and
administrative expenses.

Income Taxes

The effective income tax rate for the
first nine months of fiscal 2009 increased to 38.8% from 36.6% for the same time
period in 2008. The increase in rate between the two periods was primarily due
to the federal tax rate falling below 35% in fiscal 2008 as a result of lower
projected income before tax. The annual effective income tax rate for fiscal
2009 is expected to be approximately 39.0% compared to 36.5% for fiscal
2008.

20

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Liquidity and Capital
Resources

Our primary sources of funds are cash
flows from operations and borrowings under our revolving credit facility. Net
cash provided by operations was $10.5 million in the first nine months of fiscal
2009 as compared to net cash provided by operations of $10.8 million in the
first nine months of 2008. While the change in operating cash flow when
comparing the two periods of each year was minimal, we did experience a
significant change in inventory, accounts payable and income taxes between the
two periods. Due to slowing sales trends during the first nine months of fiscal 2008, we reduced our
average per-store inventories over prior year levels. We reacted to the
increasing sales experienced during the fiscal 2009 back-to-school and early
fall seasons by modestly increasing our inventories on a per-store basis. The
increase in per-store inventory levels, along with operating additional stores,
resulted in a significant shift in the use of cash when comparing the two
periods. The resulting use of cash was mostly offset by the timing of payments
for accounts payable, an increase in income taxes payable, and the increase in
net income.

Working capital increased $19.2 million
to $169.1 million at October 31, 2009 from $149.9 million at November 1, 2008
primarily as a result of our increase in cash and cash equivalents. Our strong
earnings performance coupled with tightly controlling our inventory and fixed
asset investments enabled us to increase our cash and cash equivalents by $18.1
million. The current ratio at October 31, 2009 was 3.5 as compared to 3.3 at
November 1, 2008. We had no interest bearing long-term debt as of the end of
either period.

During the first nine months of fiscal
2009, we expended $8.7 million in cash for the purchase of property and
equipment. Of this expenditure, $6.3 million was used for new stores, store
remodeling and store relocation projects. An additional $1.1 million was used to
begin the remediation of our distribution center's material handling system. The
remaining capital expenditures were used primarily for information technology
and miscellaneous equipment purchases. We anticipate capital expenditures of
approximately $1.3 million to $2.3 million will be made during the fourth
quarter of fiscal 2009. We currently anticipate recognizing an additional
$400,000 in landlord incentives through the end of fiscal 2009 to bring our
total to $2.1 million for fiscal 2009.

During the first nine months of fiscal
2009, we opened 16 new stores averaging 9,700 square feet and have completed our
new store openings for the fiscal year. On a per-store basis, the initial
inventory investment averaged $484,000, capital expenditures averaged $359,000
and lease incentives received from landlords averaged $100,000. Pre-opening
expenses such as advertising, salaries and supplies, have averaged approximately
$55,000 per store.

We closed three stores during the first
nine months of both fiscal years. We expect to close six stores during the
fourth quarter of fiscal 2009 as compared to closing eight stores in the fourth
quarter of fiscal 2008. We will continue to evaluate underperforming stores for
possible closure in 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.

Our unsecured credit agreement provides
for up to $95.0 million in cash advances and commercial and standby letters of
credit. Borrowings under the revolving credit line are based on eligible
inventory. The credit agreement contains the following covenants: (1) Total
Shareholders' Equity, adjusted for the effect of any share repurchases, will not
fall below that of the prior fiscal year-end; (2) the ratio of funded debt plus
rent to EBITDA plus rent will not exceed 2.5 to 1.0; (3) total distributions for
stock repurchases will not exceed $50.0 million; and (4) cash dividends will not
reduce our Total Shareholders' Equity, adjusted for the effect of any share
repurchases, below that of the prior fiscal year-end. We were in compliance with
these covenants as of October 31, 2009. Should a default condition be reported,
the lenders may preclude additional borrowings and call all loans and accrued
interest at their discretion. As of October 31, 2009, there were no cash
advances outstanding and letters of credit outstanding were $7.9 million. The
amount available to us for additional borrowings was $87.1 million as of October
31, 2009.

During December 2006, the Board of
Directors authorized a $50.0 million share repurchase program which will
terminate on 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 October 31, 2009, 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 October 31, 2009 was
$21.9 million. No shares have been repurchased since the fourth quarter of
fiscal 2007.

21

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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, captionedSDI Industries, Inc.
(Claimant and Counter-Respondent) v. Shoe Carnival, Inc. (Respondent and
Counterclaimant),in which SDI sought payment
of $1.2 million of unpaid retainage, $700,000 for services not yet billed, plus
additional interest and legal fees. The retainage was withheld from progress
billings for work performed on our distribution center and was recorded in
accrued and other liabilities and fixed assets in our consolidated financial
statements. We filed a Counterclaim and Response in this matter, denying SDI's
claim, and seeking monetary damages of more than $3.0 million. We asserted that
SDI breached our contract with SDI ("Contract") due to its failure to deliver
our distribution center's material handling system pursuant to the
specifications of the Contract.

On May 30, 2009, the parties entered
into a settlement of the above matter. Under the terms of the settlement, SDI
agreed to forego collection of the $1.2 million in unpaid retainage and to pay
us $1.2 million towards the remediation of the distribution center's material
handling system. The $1.2 million will be paid in installments over seven years
and is evidenced by a promissory note secured by a standby letter of credit,
renewable annually, in an amount not less than $200,000 and by a security
interest in SDI's accounts receivable. In addition, both parties agreed to the
dismissal of all pending claims currently under arbitration. The installment due
on the promissory note within the next 12 months has been recorded in Accounts
receivable in our consolidated financial statements. The remaining balance of
the promissory note is recorded in Other as a non-current asset. SDI remitted
the first scheduled payment prior to the due date of July 1, 2009.

Although the investment we made in the
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 another
distribution logistics company to provide recommendations to improve throughput
and have begun implementation of certain of these recommendations and will
continue to make improvements in fiscal 2010.

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.

Seasonality

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.

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

New Accounting Pronouncements

Recent accounting pronouncements
applicable to our operations are contained in Note 3  "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.

ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk in that
the interest payable under our credit facility is based on variable interest
rates and therefore is affected by changes in market rates. We do not use
interest rate derivative instruments to manage exposure to changes in market
interest rates. We had no borrowings during the first nine months of fiscal
2009.

22

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ITEM 4. CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief
Financial Officer have concluded, based on their evaluation as of October 31,
2009, 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.

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  "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 October 31, 2009 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

23

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SHOE CARNIVAL, INC.PART II -
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 5 
"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.

ITEM 1A. RISK FACTORS

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 January 31, 2009 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 January 31, 2009.

ITEM 6. EXHIBITS

|        |     |             |  | Incorporated by Reference To                                                                                                                                                                                                                                         |  |        
|------- | --- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------
|Exhibit |     |             |  |                                                                                                                                                                                                                                                                      |  |        
|No.     |     | Description |  | Form                                                                                                                                                                                                                                                                 |  | Exhibit
|        | 3-A |             |  | Restated Articles of Incorporation of
      Registrant                                                                                                                                                                                                               |  | 10-K   
|        |    
|        | 3-B |             |  | By-laws of Registrant, as amended to date                                                                                                                                                                                                                            |  | 8-K    
|        |    
|        | 4   |             |  | (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                                                  |  | 10-K   
|        |    
|        |     |             |  | (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                                    |  | 10-K   
|        |    
|        |     |             |  | (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          |  | 10-Q   
|        |    
|        |     |             |  | (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 |  | 10-K   

24

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EXHIBITS - Continued

|        |      |             |  | Incorporated by Reference To                                                                                                                                                                                                                                                                                            |  |        
|------- | ---- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------
|Exhibit |      |             |  |                                                                                                                                                                                                                                                                                                                         |  |        
|No.     |      | Description |  | Form                                                                                                                                                                                                                                                                                                                    |  | Exhibit
|        |      |             |  | (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                                     |  | 10-K   
|        |     
|        |      |             |  | (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                                            |  | 10-K   
|        |     
|        |      |             |  | (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 |  | 10-Q   
|        |     
|        |      |             |  | (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                                                   |  | 8-K    
|        |     
|        |      |             |  | (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                                                                                       |  | 8-K    
|        |     
|        |      |             |  | (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                                                                                      |  | 8-K    
|        |     
|        |      |             |  | (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                                                                                          |  | 10-Q   
|        |     
|        | 31.1 |             |  | 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                                                                                                                  |  |        

25

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EXHIBITS - Continued

|        |      |             |  |                                                                                                                                                                                                        |  | Incorporated by Reference To |  |       
|------- | ---- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- |  | ------
|Exhibit |      |             |  |                                                                                                                                                                                                        |  |                              |  | Filing
|No.     |      | Description |  | Form                                                                                                                                                                                                   |  | Exhibit                      |  | Date  
|        | 31.2 |             |  | 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 |  |                              |  |       
|        |     
|        | 32.1 |             |  | 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                                          |  |                              |  |       
|        |     
|        | 32.2 |             |  | 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                                          |  |                              |  |       

26

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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.



|Date: December 10, 2009 |                                    | SHOE CARNIVAL, INC.
|----------------------- | ---------------------------------- | -------------------
|                        |                                    | (Registrant)       
|                       
|                       
|                        | By: /s/ W. Kerry
      Jackson    
|                        | W. Kerry Jackson                  
|                        | Executive Vice President
      and
|                        | Chief Financial Officer           

27

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