Caleres Inc Sees 5.6% Sales Rise in Q2

By Tamara Parker • Wednesday, September 09 10:55 • Permanent Link

Caleres said second-quarter net sales rose 5.6% year over year to $695.5 million, with the brand portfolio up 23.6% and 8.2% on an organic basis. Excluding Stuart Weitzman, total sales were $653.0 million, down 0.8%.

Famous Footwear posted a 6.3% sales decline, with comparable sales off 5.9%. The company said direct-to-consumer channels accounted for about 71% of total sales.

Gross margin widened sharply. GAAP gross margin increased 1,140 basis points to 54.8%, helped by $55.6 million in tariff refunds. Excluding those refunds, adjusted gross margin was 46.8%, up 340 basis points from a year earlier. Brand portfolio adjusted gross margin climbed 880 basis points to 49.1%, while Famous Footwear gross margin slipped 100 basis points to 42.7%.

Selling and administrative expenses rose to $303.4 million, or 43.6% of sales, up 270 basis points from last year. Excluding Stuart Weitzman, those expenses were $279.9 million, or 42.9% of sales.

Net earnings jumped to $58.6 million, or $1.71 a diluted share, from $6.7 million, or $0.20 a share, a year earlier. Adjusted net earnings increased to $16.1 million, or $0.47 a share, from $11.7 million, or $0.35 a share.

Inventory ended the quarter at $754.2 million, up $61.0 million from a year ago. Excluding $69.0 million tied to Stuart Weitzman, inventory was down 1.2%. Borrowings under the asset-based revolver were $288.0 million at quarter-end, with $357.3 million in availability.

For the third quarter, Caleres expects consolidated sales to rise low single digits, brand portfolio sales to increase in the mid* to high-single digits, and Famous Footwear sales and comparable sales to decline low single digits. It projects gross margin improvement of 150 to 200 basis points and GAAP EPS of $0.62 to $0.70.

For the full year, the company expects sales to rise low to mid-single digits, brand portfolio sales to increase low double digits, and Famous Footwear sales and comparable sales to fall low to mid-single digits. It forecast gross margin improvement of 180 to 220 basis points, interest expense of $16 million to $17 million, capital expenditures of $50 million to $55 million, GAAP EPS of $2.80 to $2.95, and adjusted EPS of $1.50 to $1.65, up from prior guidance of $1.40 to $1.65. Today the company's shares have moved 10.02% to a price of $13.235. If you want to know more, read the company's complete 8-K report here.

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