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

                                    FORM 10-Q

(Mark One)


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
    ACT OF 1934

For the quarterly period ended  May 2, 1998

[ ] 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
 incorporation or organization)                      Number)


 8233 Baumgart Road, Evansville, Indiana                      47711
(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. 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.

  Common Stock, no par value, 13,146,005 shares outstanding as of June 1, 1998.


<PAGE>


                               SHOE CARNIVAL, INC.
                          INDEX TO FINANCIAL STATEMENTS


                                                                          Page

Part I   Financial Information
         Item 1 - Financial Statements (Unaudited)
           Condensed Balance Sheets ................................        3
           Condensed Statements of Income...........................        4
           Condensed Statement of Shareholders' Equity..............        5
           Condensed Statements of Cash Flows.......................        6
           Notes to Condensed Financial Statements..................        7

         Item 2 - Management's Discussion and Analysis..............     8-10

Part II  Other Information

         Item 6.  Exhibits and Reports on Form 8-K..................       11

         Signature..................................................       12



                                       2
<PAGE>

<TABLE>
<CAPTION>

                               SHOE CARNIVAL, INC.
                            CONDENSED BALANCE SHEETS
                                    Unaudited

                                                                                        
                                           May 2,    January 31,     May 3,
                                            1998        1998          1997
                                         ---------   -----------   ----------
                                                  (In thousands)

                                     ASSETS
<S>                                      <C>          <C>          <C>  
Current Assets:
   Cash and cash equivalents...........  $   2,080    $   1,571    $    1,762
   Accounts receivable.................        678          781           780
   Notes receivable from shareholders..          0           22            22
   Merchandise inventories.............     66,730       59,444        64,173
   Deferred income tax benefit.........        850          933           441
   Other...............................        929          834           777
                                         ---------    ---------     ---------
Total Current Assets...................     71,267       63,585        67,955
Property and equipment-net.............     32,263       31,969        30,831
                                         ---------    ---------     ---------
Total Assets...........................  $ 103,530    $  95,554     $  98,786
                                         =========    =========     =========


                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Accounts payable....................  $  10,481    $   9,521     $   8,637
   Accrued and other liabilities.......      7,346        4,487         6,191
   Current portion of long-term debt...        647          688           702
                                         ---------    ---------     ---------
Total Current Liabilities..............     18,474       14,696        15,530
Long-term debt.........................      6,892        6,133        14,939
Deferred lease incentives..............      1,239        1,308         1,416
Deferred income taxes..................      1,817        1,808         1,130
                                         ---------    ---------     ---------
Total Liabilities......................     28,422       23,945        33,015
                                         ---------    ---------     ---------

Shareholders' Equity:
   Common stock,  no par value, 50,000
    shares authorized, 13,132, 13,088,
    13,037 shares issued and 
    outstanding at May 2, 1998, 
    January 31, 1998 and May 3, 1997...          0            0             0
   Additional paid-in capital..........     62,228       61,844        61,579
   Retained earnings...................     12,880        9,765         4,192
                                         ---------    ---------     ---------
Total Shareholders' Equity.............     75,108       71,609        65,771
                                         ---------    ---------     ---------
Total Liabilities and 
  Shareholders' Equity.................  $ 103,530    $  95,554     $  98,786
                                         =========    =========     =========

</TABLE>



                   See Notes to Condensed Financial Statements

                                       3
<PAGE>

<TABLE>
<CAPTION>


                               SHOE CARNIVAL, INC.
                         CONDENSED STATEMENTS OF INCOME
                                    Unaudited

                                               Thirteen            Thirteen
                                              Weeks Ended         Weeks Ended
                                              May 2, 1998         May 3, 1997
                                             ------------         -----------
                                           (In thousands, except per share data)
<S>                                          <C>                   <C>    
Net sales................................    $   65,694           $   59,328
Cost of sales (including buying, 
  distribution and occupancy costs)......        45,020               40,998
                                             ----------           ----------

Gross profit.............................        20,674               18,330
Selling, general and administrative 
  expenses...............................        15,309               15,044
                                             ----------           ----------

Operating income.........................         5,365                3,286
Interest expense, net....................           174                  231
                                             ----------           ----------

Income before income taxes...............         5,191                3,055
Income taxes.............................         2,076                1,237
                                             ----------           ----------

Net income...............................    $    3,115           $    1,818
                                             ==========           ==========

Net income per share:
   Basic.................................    $      .24           $      .14
                                             ==========           ==========
   Diluted...............................    $      .23           $      .14
                                             ==========           ==========

Average shares outstanding:
   Basic.................................        13,108               13,034
                                             ==========           ==========
   Diluted...............................        13,404               13,054
                                             ==========           ==========


</TABLE>



                   See Notes to Condensed Financial Statements
  


                                       4
<PAGE>



<TABLE>
<CAPTION>


                             SHOE CARNIVAL, INC.
                   CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                                    Unaudited



                                   Common Stock  Additional
                                  -------------   Paid-In    Retained
                                  Shares  Amount  Capital    Earnings     Total
                                  ------  ------ ----------  --------   --------
                                                    (In thousands)
<S>                               <C>     <C>    <C>        <C>        <C> 
Balance at January 31, 1998....   13,088  $  0    $ 61,844   $  9,765   $ 71,609
   Employee stock purchase
        plan purchases.........        4                32                    32
   Exercise of stock options...       40               352                   352
   Net income..................                                 3,115      3,115
                                  ------  ----    --------   --------   --------
Balance at May 2, 1998.........   13,132  $  0    $ 62,228   $ 12,880   $ 75,108
                                  ======  ====    ========   ========   ========


</TABLE>




                   See Notes to Condensed Financial Statements



                                       5
<PAGE>


<TABLE>
<CAPTION>



                               SHOE CARNIVAL, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                    Unaudited

                                                         Thirteen     Thirteen
                                                        Weeks Ended  Weeks Ended
                                                        May 2, 1998  May 3, 1997
                                                        -----------  -----------       
                                                              (In thousands)
<S>                                                      <C>          <C> 
Cash flows from operating activities:
   Net income.........................................   $  3,115     $  1,818
   Adjustments to reconcile net income to net
      cash provided by operating activities:
     Depreciation and amortization....................      1,484        1,364
     Loss on retirement of assets.....................         13           97
     Deferred income taxes............................         92           33
     Compensation for forgiveness of debt.............          0          158
     Other  ..........................................        (69)         (41)
     Changes in operating assets and liabilities:
       Merchandise inventories........................     (7,286)      (4,934)
       Accounts receivable............................        103          137
       Accounts payable and accrued liabilities.......      3,819       (2,333)
       Other..........................................        (95)         129
                                                         --------     --------

Net cash provided by (used in) operating activities...      1,176       (3,572)
                                                         --------     --------

Cash flows from investing activities:
   Purchases of property and equipment................     (1,791)      (1,662)
   Other..............................................         22           16
                                                         --------     --------

Net cash used in investing activities.................     (1,769)      (1,646)
                                                         --------     --------

Cash flows from financing activities:
   Borrowings under line of credit....................     36,175       35,125
   Payments on line of credit.........................    (35,275)     (29,625)
   Payments on capital lease obligations..............       (182)        (168)
   Proceeds from issuance of stock....................        384           23
                                                         --------     --------

Net cash provided by financing activities.............      1,102        5,355
                                                         --------     --------

Net increase in cash and cash equivalents.............        509          137
Cash and cash equivalents at beginning of period......      1,571        1,625
                                                         --------     --------

Cash and cash equivalents at end of period............   $  2,080     $  1,762
                                                         ========     ========

Supplemental disclosures of cash flow information:
   Cash paid during period for interest...............   $    169     $    219
   Cash paid during period for income taxes...........   $     64     $    244
Supplemental disclosure of noncash investing activities: 
   Capital lease obligations incurred.................   $      0     $      0


</TABLE>




                   See Notes to Condensed Financial Statements




                                       6
<PAGE>



                               SHOE CARNIVAL, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                    Unaudited

Note 1 - Basis of Presentation

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements  contain all  adjustments  necessary to present  fairly the financial
position of the Company and the results of its operations and its cash flows for
the periods presented.  Certain information and disclosures normally included in
notes to financial  statements  have been condensed or omitted  according to the
rules and  regulations of the Securities and Exchange  Commission,  although the
Company  believes  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.

It is suggested that these financial  statements be read in conjunction with the
financial  statements and financial notes thereto included in the Company's 1997
Annual Report.



                                       7
<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations
<TABLE>
<CAPTION>
                                                                      
                       Number of Stores          Store Square Footage Comparable
                       ----------------          --------------------   Store
               Beginning                  End of   Net        End       Sales
Quarter Ended  Of Period  Opened  Closed  Period  Change   of Period   Increase
-------------  ---------  ------  ------  ------  ------   ---------  ----------
<S>               <C>        <C>     <C>    <C>  <C>        <C>          <C>
May 2, 1998       92         3       0      95    46,000    1,067,000    7.0%

May 3, 1997       93         0       2      91   (19,000)   1,007,000    4.4%

</TABLE>


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


<TABLE>
<CAPTION>

                                                   Thirteen          Thirteen
                                                  Weeks Ended       Weeks Ended
                                                  May 2, 1998       May 3, 1997
                                                  -----------       -----------
<S>                                                <C>               <C>   
Net sales.................................            100.0%            100.0%
Cost of sales (including buying, 
  distribution and occupancy costs).......             68.5              69.1
                                                   --------          --------

Gross profit..............................             31.5              30.9
Selling, general and administrative 
  expenses................................             23.3              25.4
                                                   --------          --------

Operating income..........................              8.2               5.5
Interest expense..........................               .3                .4
                                                   --------          --------

Income before income taxes................              7.9               5.1
Income taxes..............................              3.2               2.0
                                                   --------          --------

Net income................................              4.7%              3.1%
                                                   ========          ========
</TABLE>


Net Sales

Net sales  increased $6.4 million to $65.7 million in the first quarter of 1998,
a 10.7%  increase over net sales of $59.3 million in the  comparable  prior year
period.  The increase was attributable to a 7.0% comparable store sales increase
and the  sales  generated  by the  seven  new  stores  opened  in 1997 and 1998,
partially  offset by the  reduction in sales for the four stores closed in 1997.
The  comparable  store sales  increase was supported with increases in all major
product  categories.  Average  footwear  unit prices and footwear  unit sales in
comparable stores increased 6.0% and 1.1%, respectively.  Sales of private label
and non-name  brand  footwear  constituted  14.7% of total footwear sales in the
first quarter of 1998 as compared with 16.3% in the prior year quarter.

Gross Profit

Gross profit  increased  $2.3 million to $20.7  million in the first  quarter of
1998,  a 12.8%  increase  over gross profit of $18.3  million in the  comparable
prior year period.  The Company's  gross profit  margin  increased to 31.5% from
30.9% as a result of a 0.6%  decrease  in  buying,  distribution  and  occupancy
costs.

                                       8
<PAGE>
 



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)


Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $265,000 to $15.3 million
in the first  quarter of 1998 from $15.0  million in the  comparable  prior year
period. As a percentage of sales,  these expenses  decreased 2.1% primarily as a
result of the comparable  store sales increase and a non-recurring charge in the
first quarter of 1997 of $650,000  related to the retirement of the former chief
executive  officer.  Total  pre-opening costs for the three stores opened in the
first quarter of 1998 were  $245,000 or 0.4% of sales.  No stores were opened in
the first quarter of 1997.

Interest Expense

The  reduction in net interest  expense to $174,000 in the first quarter of 1998
from $231,000 in the first quarter of 1997 resulted from reduced borrowings.

Income Taxes

The effective  income tax rate of 40.0% and 40.5% in the first  quarters of 1998
and 1997, respectively,  differed from the statutory federal rates due primarily
to state and local income taxes, net of the federal tax benefit.


Liquidity and Capital Resources

The  Company's  primary  sources  of funds are cash flows  from  operations  and
borrowings under its revolving  credit facility.  Net cash provided by operating
activities was $1.2 million during the first quarter of 1998.  Excluding changes
in operating assets and liabilities,  cash provided by operating  activities was
$4.6 million in the first  quarter of 1998.  The net cash  provided by operating
activities  resulted  from the cash  generated by operations  before  changes in
operating assets and liabilities  along with an increase in accounts payable and
accrued liabilities of $3.8 million which was partially offset by a $7.3 million
increase in merchandise inventories. The increase in merchandise inventories was
primarily due to seasonal  fluctuations  and the addition of three stores in the
first quarter of 1998.

Working capital  increased to $52.8 million at May 2, 1998 from $48.9 million at
January 31, 1998 and the current ratio was 3.9 to 1 as compared with 4.3 to 1 at
January 31, 1998.  Long-term  debt as a percentage  of total capital was 8.4% at
May 2, 1998, compared to 7.9% at January 31, 1998.

Capital  expenditures  were $1.8 million in the first  quarter of 1998. Of these
expenditures,  approximately  $1.1  million was  incurred  for new  stores.  The
remaining  capital  expenditures in the first quarter of 1998 were primarily for
merchandise display and signage  enhancements and technological  improvements in
the stores.

The Company intends to open approximately 15 to 20 stores in 1998, including the
three stores opened in the first quarter. Seven stores are expected to be opened
in the second quarter with the remainder of the new stores opening in the second
half of 1998, primarily in the third quarter. No stores were opened in the first
half of 1997 and two stores were closed in the first quarter of 1997.

The actual amount of the Company's cash  requirements  for capital  expenditures
depends  in part on the  number  of new  stores  opened,  the  amount  of  lease
incentives,  if any, received from landlords and the number of stores remodeled.
The opening of new stores  will be  dependent  upon,  among  other  things,  the
availability of desirable  locations,  the negotiation of acceptable lease terms
and general  economic and business  conditions  affecting  consumer  spending in
areas the Company targets for expansion.

                                       9
<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)


The Company's current store prototype  utilizes between 12,000 and 18,000 square
feet  depending  upon,  among other  factors,  the location of the store and the
population base the store is expected to service. Capital expenditures for a new
store is expected to average  approximately  $400,000,  including  point-of-sale
equipment which is generally  acquired through equipment  leasing  transactions.
The  average  inventory  investment  in a new store is  expected  to range  from
$550,000 to $850,000,  depending on the size and sales  expectation of the store
and  the  timing  of the  new  store  opening.  Pre-opening  expenses,  such  as
advertising,   salaries,   supplies  and  utilities,  are  expected  to  average
approximately $60,000 per store.

The Company's $35 million  credit  facility  provides for a combination  of cash
advances on a revolving basis and the issuance of commercial  letters of credit.
Borrowings  under the  revolving  credit line are based on  eligible  inventory.
Borrowings and letters of credit  outstanding under this facility at May 2, 1998
were $6.6 million and $4.0 million, respectively.

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


Seasonality

The Company's 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 of a new store are  charged to expense in the month the store is opened.
Therefore,  the Company's results of operations may be adversely affected in any
quarter in which the Company opens new stores.

The Company has three  distinct  selling  periods:  Easter,  back-to-school  and
Christmas.


                                       10
<PAGE>


                               SHOE CARNIVAL, INC.
                           PART II - OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

    (a)   Exhibits

          (27) Financial Data Schedule

    (b)   Reports on Form 8-K

          No reports on Form 8-K were filed during the quarter ended May 2, 1998



                                       11
<PAGE>


                               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:  June 11,  1998                                    SHOE CARNIVAL, INC.
                                                            (Registrant)



                                                     By: /s/ W. Kerry Jackson
                                                         W. Kerry Jackson
                                                         Vice President and
                                                         Chief Financial Officer



                                       12
<PAGE>