Financial Data and Key Metrics Changes - The company reported consolidated sales of $762 million, a decline of 4.6% year-over-year, slightly below expectations [31][63] - Adjusted earnings per share were $1.37, exceeding the high end of the guidance range and representing a nearly 20% increase over the same quarter last year [51] - Consolidated gross margin increased by 210 basis points to 44.7%, driven by record gross margin in the brand portfolio [52][63] - Operating earnings were $67 million, with an operating margin of 8.8% [43] Business Line Data and Key Metrics Changes - The brand portfolio achieved record third-quarter adjusted operating earnings of $39 million and a record operating margin of 12.2% [55] - Famous Footwear sales were $450 million, down 6.7%, with comparable sales down 6.9% due to softness in seasonal categories, particularly boots [63][40] - Brand portfolio sales were $321 million, down 0.8%, reflecting sequential improvement [63] Market Data and Key Metrics Changes - The company saw strong performance in its kids' business, which increased by 4% year-over-year, capturing 27% of the kids' market share in shoe chains [61][83] - The direct-to-consumer business, particularly e-commerce, was a bright spot, up nearly 5% year-over-year [36] Company Strategy and Development Direction - The company is focused on leveraging competitive advantages and core competencies to drive growth, particularly through its lead brands [30][62] - A commitment to sustainability was highlighted with the introduction of the One Planet Standard, emphasizing eco-friendly styles [33] - The company plans to continue enhancing its marketing ecosystem and expanding its global presence [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing softness in consumer demand and inflationary pressures impacting families, particularly in the Famous Footwear segment [40][41] - The company expects a return to growth in 2024, driven by strong brand performance and strategic initiatives [62][84] - Management remains confident in closing 2023 on a strong note, poised to execute long-term strategies [81] Other Important Information - The company reduced borrowings under its asset-based revolving credit facility by $22 million, representing a $143 million year-over-year decline [54] - Inventory management was highlighted as a key strength, with inventory down more than 14% year-over-year [32][4] Q&A Session Summary Question: How does the company plan to merchandise and promote Famous Footwear moving into 2024? - Management emphasized a careful balance of sales and profit management, avoiding a return to pre-pandemic promotional levels [47] Question: Can you provide insights on trends at Famous and the Brand Portfolio since the last Analyst Day? - Management noted that comp sales at Famous declined each month in Q3, but improvements were seen in early November [92] Question: What gives confidence in the growth of the Brand Portfolio in 2024? - Management highlighted sequential improvement in sales trends and the ability to capture market share as key drivers for growth [73][94] Question: How is Nike performing within Famous Footwear? - Management indicated that Nike's performance was similar to the overall performance of Famous, with strength in retro and court-inspired shoes [22]

F a m o u s F o o t w e a r | S a m E d e l m a n | A l l e n E d m o n d s | N a t u r a l i z e r | V i o n i c | D r S c h o l l s | F r a n c o S a r t o | L i f e S t r i d e | V e r o n i c a B e a r d | V i n c e | B l o w f i s h | R y k ä The company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption Risk Factors in Item 1A of the company's Annual Report on Form 10-K for the year ...

Financial Performance - Net sales for the thirteen weeks ended July 29, 2023, were $695.5 million, a decrease of 5.8% compared to $738.3 million for the same period in 2022[8] - Gross profit for the thirteen weeks ended July 29, 2023, was $314.2 million, down from $336.8 million in the prior year, reflecting a gross margin of 45.1%[8] - Operating earnings decreased to $49.7 million for the thirteen weeks ended July 29, 2023, compared to $68.4 million in the same period last year, representing a decline of 27.4%[8] - Net earnings attributable to Caleres, Inc. for the thirteen weeks ended July 29, 2023, were $33.9 million, down from $51.2 million in the prior year, a decrease of 33.8%[8] - Basic earnings per share attributable to Caleres, Inc. shareholders were $0.95 for the thirteen weeks ended July 29, 2023, compared to $1.40 for the same period in 2022, a decline of 32.1%[8] - Comprehensive income for the thirteen weeks ended July 29, 2023, was $34.7 million, down from $52.2 million in the prior year[10] Cash Flow and Liquidity - Net cash provided by operating activities for the twenty-six weeks ended July 29, 2023, was $125.2 million, significantly higher than $27.3 million in the same period last year[14] - Cash and cash equivalents at the end of the period were $47.1 million, compared to $46.0 million at the end of the same period in 2022[14] Expenses and Charges - The company incurred restructuring and other special charges of $1.6 million during the thirteen weeks ended July 29, 2023[8] - Selling and administrative expenses for the thirteen weeks ended July 29, 2023, were $262.8 million, slightly down from $268.4 million in the prior year[8] - The Company incurred costs of approximately $1.7 million related to expense reduction initiatives during the second quarter of 2023, with additional costs expected to be around $2.3 million in the second half of 2023[64] Sales and Market Trends - The company noted that its business is seasonal, with higher sales typically occurring during back-to-school and holiday seasons, although recent years have shown more balanced quarterly distributions[19] - Comparable sales declined by 6.3% in the six months ended July 29, 2023, primarily due to reduced customer traffic in retail stores[89] - Total direct-to-consumer sales for the twenty-six weeks ended July 29, 2023, were $963,088 thousand, an increase from $1,014,009 thousand for the same period in 2022, indicating a decrease of 5.0%[34] Shareholder Returns - The company declared dividends of $0.07 per share, totaling $2,515 thousand for the quarter[16] - The company repurchased 763,000 shares under its share repurchase program during the thirteen weeks ended July 29, 2023[1] Assets and Liabilities - The total equity as of July 29, 2023, was $471,581 thousand, an increase from $384,877 thousand as of July 30, 2022, representing a growth of approximately 22.6%[16] - The company had $32.9 million in accounts payable subject to supply chain financing arrangements as of July 29, 2023, down from $39.9 million as of July 30, 2022[27] - The unfilled order position at the end of the period was $246.8 million, down from $360.4 million in the previous year[1] Accounting and Compliance - The company adopted new accounting standards related to supplier finance programs in fiscal year 2023, enhancing transparency in financial reporting[29] - The company was in compliance with all covenants and restrictions under the Credit Agreement as of July 29, 2023[155] Other Financial Metrics - Interest expense, net increased by $2.6 million, or 98.5%, to $5.1 million for Q2 2023, reflecting higher interest rates[78] - The effective tax rate for the six months ended July 29, 2023, was 24.5%, compared to 25.5% for the same period in 2022[86] - The company assessed long-lived assets with a carrying amount of $552.4 million for impairment indicators as of July 29, 2023[190]

Caleres Capabilities 11 GAAP to Non-GAAP Reconciliation CALERES, INC. RECONCILIATION OF NET EARNINGS (LOSS) AND DILUTED EARNINGS PER SHARE (GAAP BASIS) TO ADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS) GAAP to Non-GAAP Reconciliation CALERES, INC. SUMMARY FINANCIAL RESULTS BY SEGMENT RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) (Unaudited) ($ thousands) July 29, 2023 July 30, 2022 Debt/EBITDA leverage ratio: Borrowings under revolving credit agreement $ 244,000 $ 348,500 EBI ...

Financial Data and Key Metrics Changes - Consolidated sales decreased by 5.8% year-over-year, totaling $696 million, with Famous Footwear sales down 5.1% and comparable sales down 4.3% [95][108] - Consolidated gross margin decreased by 45 basis points to 45.2%, with Brand Portfolio gross margin increasing by 295 basis points to a record 41.3% [19][120] - Diluted earnings per share were $0.98, exceeding the high end of guidance, with EBITDA at $65 million or 9.4% of sales [20][82] - SG&A expenses were $263 million, representing 37.8% of sales, which was $5.6 million lower than the previous year [46] Business Line Data and Key Metrics Changes - Brand Portfolio sales were $301 million, down 7.2% due to seasonal weakness in sandals and cautious buying behavior in the wholesale channel [143] - Famous Footwear generated nearly $41 million in adjusted operating earnings on net sales down 5%, maintaining a gross margin rate of 46% [91][120] - Direct channels saw brick-and-mortar sales up 5% and e-commerce sales up 13%, driven by increased traffic and conversion [11] Market Data and Key Metrics Changes - The kids' footwear segment increased by 5% year-over-year, significantly outperforming the overall business [115] - The company noted a shift in consumer preferences towards casual flats and sneakers, impacting seasonal categories like sandals [84][143] Company Strategy and Development Direction - The company is focused on profitability over promotions, prioritizing inventory management and strategic investments in lead brands [4][108] - The goal is to enhance the consumer experience through new prototype stores and to leverage competitive advantages in the market [17][120] - The company aims to achieve a higher percentage of revenue from lead brands in 2023, with various growth opportunities identified [111] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving annual sales and earnings guidance, citing strong brand performance and clear strategies [44] - The company anticipates easier year-over-year comparisons in the second half of 2023, which should support improved sales trends [40] - Management highlighted the importance of maintaining a healthy inventory-to-sales relationship to adapt to market dynamics [74] Other Important Information - The company reduced borrowings by $48 million during the quarter, achieving a leverage ratio target of 1 times debt to EBITDA [21][107] - Capital expenditures are expected to be between $50 million and $60 million, reflecting adjustments in project timing [49] Q&A Session Summary Question: Can you comment on the performance of the Brand Portfolio? - Management noted that lead brands are taking market share, with a focus on newness driving consumer interest [31][51] Question: How is the company managing inventory levels? - The company is managing inventory to a new normal, focusing on driving newness while maintaining controlled levels [165] Question: What are the expectations for the back-to-school season? - Management indicated that while they do not anticipate matching last year's record performance, they believe Famous is well-positioned to maintain leadership in shoe chains [117][138]

Financial Performance - Net earnings for the thirteen weeks ended April 29, 2023, were $34,792,000, a decrease of 30.4% compared to $49,985,000 for the same period in 2022[59] - The company reported net earnings of $34,727 thousand for the thirteen weeks ended April 29, 2023, compared to $50,509 thousand for the same period in the previous year, indicating a decrease of approximately 31.3%[77] - Basic and diluted earnings per share attributable to the company were both $0.97 for the current period, down from $1.34 and $1.32 respectively in the prior year[77] - Operating earnings for the same period were $49.587 million, down 25% from $66.195 million in the prior year[103] - For the thirteen weeks ended April 29, 2023, net sales totaled $662.7 million, a decrease of 9.8% compared to $735.1 million for the same period in 2022[102] Assets and Liabilities - Total current assets decreased to $820,880,000 as of April 29, 2023, down from $933,641,000 a year earlier, reflecting a decline of 12.0%[54] - Total liabilities decreased to $1,366,202,000 as of April 29, 2023, compared to $1,428,885,000 in the prior year, representing a reduction of 4.4%[54] - Total assets decreased to $1,818,083,000 as of April 29, 2023, down from $1,928,298,000, a decline of 5.7%[54] - Total equity increased to $451,881,000 as of April 29, 2023, from $358,028,000 a year earlier, reflecting an increase of approximately 26.1%[54] Cash Flow and Operating Activities - The company reported a net cash provided by operating activities of $37,497,000 for the current period, compared to $19,686,000 for the same period last year, indicating an increase of 90.5%[59] - Cash and cash equivalents increased to $36,151,000 at the end of the period, up from $33,717,000, marking a growth of 4.3%[59] Inventory and Sales - The company's total inventories as of April 29, 2023, were valued at $559,467 thousand, a decrease from $643,527 thousand in the previous year[81] - Direct-to-consumer sales amounted to $479.6 million, accounting for 65.2% of total net sales, compared to $486.5 million in the prior year[72] - The company’s wholesale landed sales contributed $161,199 thousand to net sales, showcasing the strength of its wholesale distribution strategy[72] Shareholder Actions - The company did not repurchase any shares during the current period, maintaining its share repurchase program for future opportunities[77] - The Company had net issuances of 558,847 shares of common stock during the thirteen weeks ended April 29, 2023, compared to 512,508 shares in the prior year[113] Expenses and Charges - Interest expense, net, increased to $5.623 million for the thirteen weeks ended April 29, 2023, compared to $2.299 million in the same period last year[103] - The total lease expense for the thirteen weeks ended April 29, 2023, was $50.294 million, an increase from $48.216 million in the same period of 2022[133] - The Company recognized share-based compensation expense of $2.9 million during the thirteen weeks ended April 29, 2023, compared to $3.8 million for the same period in 2022[138] Impairment and Goodwill - The company’s goodwill and intangible assets were tested for impairment, with no impairment charges recorded during the thirteen weeks ended April 29, 2023[85] - The fair value of indefinite-lived intangible assets was tested for impairment, with no impairment charges recorded during the thirteen weeks ended April 29, 2023[129] Future Expectations - The company expects the sale of its corporate headquarters campus to be completed within the next year, which has been classified as property and equipment held for sale[67] - The company anticipates amortization expense related to intangible assets to be approximately $11.9 million in 2023[105]

Financial Data and Key Metrics Changes - Consolidated sales for Q1 2023 were $663 million, a 9.8% decrease compared to the previous year, with Famous sales down 9.2% and comparable sales down 8.5% [48][76] - Consolidated gross margin increased by 120 basis points to 45.7%, driven by a significant increase in Brand Portfolio gross margin [48][49] - Diluted earnings per share were $0.97, at the high end of previous guidance, with EBITDA for the quarter at $64 million, representing 9.6% of sales [48][49] Business Line Data and Key Metrics Changes - Brand Portfolio sales were $326 million, down 11% year-over-year, but this was the second highest first quarter amount in its history [48][22] - Famous Footwear's operating margin was 4.9%, down from 11.5% the previous year, reflecting softer consumer demand [11][49] - Brand Portfolio achieved a gross margin of 44.2%, a more than 600 basis point increase from last year, due to higher initial margins and lower freight costs [49][70] Market Data and Key Metrics Changes - The company maintained a total market share of over 6% in the U.S. footwear market, with Famous Footwear increasing its market share in shoe chains [58] - The kids' footwear segment was a bright spot for Famous, outpacing the rest of the business as families prioritized purchases for children [77] Company Strategy and Development Direction - The company is focused on disciplined expense management while investing in capabilities that drive growth, particularly in consumer experience, analytics, and marketing [59][63] - Strategic initiatives include cost-cutting measures expected to deliver approximately $20 million in SG&A savings and an additional $10 million from better-than-expected freight costs [18][59] - The company aims to leverage its leadership position in the family footwear market and enhance its marketing strategy to target millennial families [43][64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment but expressed confidence in achieving full-year earnings per share of $4.10 to $4.30, offsetting top-line softness with cost savings [16][19] - The outlook for Famous Footwear includes expectations for improved sales in the second quarter, driven by seasonal factors and back-to-school shopping [74][33] - Management emphasized the importance of inventory management and the ability to react quickly to market trends to maintain momentum [39][40] Other Important Information - The company ended Q1 with $292 million in borrowings on its revolver and no long-term debt, with inventory down 13.1% year-over-year [50][51] - The company plans to continue share repurchases based on market conditions, with 6.4 million shares remaining under the current Board repurchase authorization [51][19] Q&A Session Summary Question: Can you provide guidance for the second quarter and fiscal year regarding Famous Footwear and the Brand Portfolio? - Management indicated that Famous sales are expected to improve versus Q1, but negative sales growth is still anticipated for the year, while the Brand Portfolio is expected to show improvement in the back half of the year [36][37] Question: What are the expectations for AUR and wholesale orders? - Management noted that AUR was up slightly, indicating a strong hold, and the wholesale order book is in line with guidance, reflecting a more dynamic approach [26][28] Question: How is the company managing inventory compared to peers? - Management stated that consolidated inventories are expected to remain down versus last year, and they are closely monitoring the competitive landscape to manage promotional strategies effectively [39][40]

Financial Performance - Net sales for 2022 reached $2,968,138 thousand, an increase of 6.9% from $2,777,604 thousand in 2021[103] - Gross profit for 2022 was $1,284,873 thousand, up from $1,227,317 thousand in 2021, reflecting a gross margin improvement[103] - Operating earnings for 2022 were $214,327 thousand, compared to $205,807 thousand in 2021, indicating a slight increase[103] - Net earnings attributable to Caleres, Inc. for 2022 were $181,742 thousand, a significant recovery from a loss of $(439,114) thousand in 2020[103] - Basic earnings per share for 2022 were $4.98, up from $3.59 in 2021, showing a 38.7% increase[103] - The company reported net earnings of $181.7 million for the fiscal year ending January 28, 2023, compared to a net loss of $439.1 million in the previous period[109] - Comprehensive income for the fiscal year 2022 was $138.8 million, reflecting a significant recovery from the previous year's comprehensive loss of $416.4 million[109] - The Company reported domestic earnings before income taxes of $168.0 million in 2022, up from $152.5 million in 2021, while international earnings before income taxes increased to $45.0 million from $36.7 million in the same period[201] - The total income tax provision for 2022 was $33.339 million, a decrease from $51.081 million in 2021, with federal income tax provision at $18.481 million[202] Assets and Liabilities - As of January 28, 2023, the company reported total assets of $1,836.5 million, a decrease from $1,843.9 million as of January 29, 2022[101] - Current liabilities decreased to $911.2 million from $1,025.6 million in the previous year, primarily due to a reduction in trade accounts payable[101] - The company reported a decrease in total equity to $426.1 million from $323.4 million, reflecting changes in accumulated other comprehensive loss[101] - The total equity of Caleres, Inc. as of January 28, 2023, was $426.1 million, a decrease from $649.1 million in February 2020[109] - The fair value of plan assets at the end of 2022 was $356.745 million, down from $444.091 million at the beginning of the year[150] - The accumulated benefit obligation for the United States pension plans was $280.5 million as of January 28, 2023, down from $348.8 million in the previous year, representing a decrease of approximately 19.5%[172] Cash Flow and Investments - Net cash provided by operating activities in 2022 was $125,879 thousand, down from $168,441 thousand in 2021[107] - Cash and cash equivalents at the end of 2022 were $33,700 thousand, an increase from $30,115 thousand at the end of 2021[107] - The company incurred restructuring and other special charges of $2,910 thousand in 2022, significantly lower than $13,482 thousand in 2021[103] - The company plans to continue investing in new product development and market expansion strategies to drive future growth[107] - The company repurchased 2,622,845 shares at a cost of $63.2 million in the year ended January 28, 2023, under its share repurchase programs[263] Inventory and Sales - The company's inventories amounted to $580.2 million, including finished goods of $558.5 million, net of markdown reserves of $43.9 million[97] - The company recognized provisions for customer allowances of $27.6 million in 2022, up from $26.1 million in 2021, showing an increase in reserves for customer-related expenses[123] - The Company recorded a markdown reserve of $4.7 million in 2022 due to product cost inflation in the Famous Footwear segment[135] - The Company’s warehousing and distribution costs totaled $121.0 million in 2022, up from $99.5 million in 2021 and $84.0 million in 2020[137] - The Company generated $2,123.7 million in direct-to-consumer sales in 2022, up from $2,086.6 million in 2021, marking an increase of about 1.8%[228] Marketing and Customer Engagement - The company spent approximately $62.6 million on advertising and marketing for Famous Footwear in 2022[165] - Total advertising and marketing expense was $138.0 million in 2022, an increase of 16.8% from $118.1 million in 2021[188] - The Company has a customer loyalty program, Famously You Rewards, which offers members free shipping, bonus points, and product previews, enhancing customer engagement[205] - Approximately 77% of net sales in the Famous Footwear segment were made to loyalty program members in 2022, a slight decrease from 78% in 2021[184] Operational Insights - Caleres, Inc. operates 965 retail shoe stores across the U.S., Canada, China, and Guam, indicating a strong retail presence[112] - The Company operates in two segments: Famous Footwear with 873 retail stores and Brand Portfolio, which includes wholesale operations and e-commerce[247] - Famous Footwear employs an omni-channel approach, fulfilling approximately two-thirds of e-commerce orders from retail store inventory, enhancing delivery times[251] - The Company incurred COVID-19-related costs totaling $114.3 million in 2020, which equates to $3.10 per diluted share[269] Pension and Employee Benefits - The Company’s self-insurance reserves were $9.7 million as of January 28, 2023, down from $11.4 million as of January 29, 2022[144] - The projected benefit obligation for pension plans was $12.223 million at the end of 2022, up from $10.334 million in 2021[151] - The Company’s defined contribution 401(k) plan expenses were $4.6 million in 2022, down from $5.5 million in 2021[158] - The Company’s funding policy for pension plans is to make the minimum annual contributions required by applicable regulations, ensuring compliance with regulatory standards[171] Strategic Initiatives - The company is exposed to foreign currency exchange risks and may enter into hedging transactions to mitigate these risks[70] - The Company has options in approximately 35% of its leases to extend the lease term, reflecting strategic flexibility in its real estate commitments[192] - The Company continues to enhance its digital technology and e-commerce platform to improve customer experience[251] - The Company acquired Allen Edmonds in 2016 to strengthen its position in the men's footwear market, with products priced between $245 and $495[213]

Caleres, Inc. (NYSE:CAL) Q4 2022 Earnings Conference Call March 14, 2023 10:00 AM ET Company Participants Logan Bonacorsi - VP, IR Jay Schmidt - President and CEO Jack Calandra - SVP and CFO Conference Call Participants Abbie Zvejnieks - Piper Sandler Mitch Kummetz - Seaport Research Laura Champine - Loop Capital Dana Telsey - Telsey Advisory Group Operator Good morning, and welcome to the Caleres Fourth Quarter Earnings Conference Call. My name is Robert and I'll be your conference coordinator. At this tim ...

25th Annual ICR Conference January 9, 2023 2 This presentation contains certain forward-looking statements and expectations regarding the company's future performance and the performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) supply chain disruptions and inflationary pressures; (ii) the coronavirus pandemic and its adverse impact on our business operations and financial condition (iii) changi ...