Financial Performance - Net sales for the thirteen weeks ended November 2, 2024, were $740,941 thousand, a decrease of 2.7% compared to $761,904 thousand for the same period in the previous year[9]. - Gross profit for the same period was $326,960 thousand, down from $340,374 thousand, reflecting a decline of 3.8%[9]. - Operating earnings decreased to $56,698 thousand, compared to $64,418 thousand in the prior year, a decline of 12.6%[9]. - Net earnings attributable to Caleres, Inc. were $41,427 thousand, down from $46,914 thousand, a decrease of 11.8%[11]. - Basic earnings per share attributable to Caleres, Inc. shareholders were $1.20, compared to $1.32 in the previous year, a decline of 9.1%[9]. - The company reported a comprehensive income of $42,121 thousand for the thirteen weeks ended November 2, 2024, compared to $46,848 thousand in the prior year, a decrease of 10.0%[11]. - The Company reported net earnings of $41.4 million for the thirteen weeks ended November 2, 2024, compared to $46.9 million for the same period in 2023, reflecting a decrease of approximately 3.2%[49]. - For the thirty-nine weeks ended November 2, 2024, net earnings attributable to Caleres, Inc. were $102.3 million, down from $115.6 million in the prior year, indicating a decline of about 11.5%[49]. Sales and Revenue - Total net sales for the thirty-nine weeks ended November 2, 2024, were $2,083,456 thousand, a decrease of 1.7% from $2,120,171 thousand in the same period of 2023[6]. - The Famous Footwear segment reported net sales of $428,264 thousand, a decrease of 4.8% from $449,773 thousand in the previous year[6]. - The Brand Portfolio segment achieved net sales of $322,936 thousand, an increase of 0.5% compared to $320,775 thousand in the prior year[6]. - Total direct-to-consumer sales for the thirteen weeks ended November 2, 2024, were $535.6 million, down from $554.8 million in the prior year, representing a decrease of 3.5%[34]. - Consolidated net sales decreased by $21.0 million, or 2.8%, to $740.9 million for Q3 2024 compared to $761.9 million for Q3 2023[131]. - Famous Footwear segment net sales declined by $21.5 million, or 4.8%, primarily due to a retail calendar shift and softer seasonal demand[131]. - Brand Portfolio segment net sales increased by $2.2 million, or 0.7%, during Q3 2024, with premium brands outperforming others[133]. Assets and Liabilities - Total assets increased to $1,955,939 thousand as of November 2, 2024, up from $1,826,893 thousand on October 28, 2023, representing a growth of 7.1%[7]. - Total current assets increased to $870,307 thousand, up from $822,873 thousand, an increase of 5.4%[7]. - Total current liabilities decreased to $806,430 thousand, down from $827,921 thousand, a reduction of 2.0%[7]. - The balance of total equity as of November 2, 2024, was $606,306,000, reflecting changes in retained earnings and other comprehensive income[16]. - The company's net inventory balance as of November 2, 2024, was $585,877 thousand, an increase from $556,034 thousand as of October 28, 2023[6]. - The company had $33.4 million in cash and cash equivalents and $252.1 million in excess availability on its revolving credit agreement, with borrowings increasing by $53.8 million to $238.5 million during the nine months ended November 2, 2024[124]. Cash Flow and Financing - Net cash provided by operating activities was $75,855,000, down from $157,183,000 in the prior period[15]. - Net cash used for investing activities was $40,328,000, compared to $37,380,000 in the prior period[15]. - Cash used for financing activities decreased by $96.3 million to $23.2 million for the thirty-nine weeks ended November 2, 2024, compared to $119.5 million in the same period in 2023[192]. - The company repurchased $65.0 million of common stock during the nine months ended November 2, 2024, compared to $17.4 million in the same period in 2023[192]. - The company expects capital expenditures for property and equipment and capitalized software to be between $50 million and $55 million in 2024, up from $49.6 million in 2023[191]. Operational Highlights - The company is actively marketing its nine-acre corporate headquarters campus in Clayton, Missouri, and expects to complete the sale within the next year[28]. - The company is in the process of a multi-year cloud-based ERP implementation, with capitalized costs of $20.3 million as of November 2, 2024[29]. - The company experienced operational disruptions due to the launch of a new cloud-based ERP system, impacting sales visibility[165]. - The company continues to implement its strategic initiatives focused on cost control to drive sustainable long-term growth despite challenging market conditions[123]. Shareholder Information - The Company repurchased 1,522,324 shares during the thirteen weeks ended November 2, 2024, and 1,938,324 shares during the thirty-nine weeks ended November 2, 2024[49]. - The company granted 2,783 restricted shares during the thirteen weeks ended November 2, 2024, with a weighted-average grant date fair value of $32.62[89]. - The company granted performance share awards for a targeted 165,854 shares, with a weighted-average grant date fair value of $41.05[90]. - The company recognized $0.5 million in excise taxes on share repurchases during the thirty-nine weeks ended November 2, 2024, due to the Inflation Reduction Act[50]. Tax and Compliance - The company's consolidated effective tax rates were 23.6% and 23.5% for the thirteen weeks ended November 2, 2024, and October 28, 2023, respectively, with a lower effective tax rate of 23.8% for the thirty-nine weeks ended November 2, 2024, compared to 24.1% in the previous year[112]. - The Company is in compliance with all covenants and restrictions under the Credit Agreement as of November 2, 2024[82].

Group 1 - Caleres, Inc. reported its Q3 2024 results, showing revenue growth in both retail and wholesale branded sectors on a comparable basis [1] - The company maintained strong operating margins despite a decrease in absolute terms [1] Group 2 - The analysis emphasizes a long-only investment approach, focusing on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The investment strategy suggests that only a small fraction of companies should be considered for buying at any given time, with most recommendations being holds [1]

Financial Data and Key Metrics Changes - Total sales for Q3 2024 were $741 million, down 2.8% year-over-year, with a decline of $21 million, including an unfavorable calendar shift of about $29 million at Famous Footwear [36][37] - Adjusted earnings per diluted share were $1.23, compared to $1.37 in the previous year [42] - Consolidated gross margin was 44.1%, a decrease of 55 basis points, driven by lower margins in Famous Footwear [39] - SG&A expenses were $269 million, or 36.3% of sales, up 30 basis points [41] - Operating earnings were $58 million, with an operating margin of 7.9% [41] Business Segment Data and Key Metrics Changes - Brand portfolio sales increased approximately 1%, with lead brands outperforming portfolio brands [10][11] - Famous Footwear total sales declined 5%, while comparable sales increased 2.5% [21][37] - The brand portfolio gross margin was 43.8%, up 15 basis points, while Famous Footwear's gross margin was 42.9%, down 130 basis points [39] - The Sam Edelman brand saw strength driven by positive responses to fashion newness, particularly in sneakers and tall shaft boots [15] Market Data and Key Metrics Changes - The footwear industry overall was down about 1%, with the fashion segment experiencing a decline greater than that [98] - Famous Footwear's market share gained 0.5 percentage points in shoe chains according to Circana data [24] - The kids category at Famous Footwear has outperformed the rest of the chain for 15 consecutive quarters, with a penetration of 25% in the total business [23] Company Strategy and Development Direction - The company is focusing on international expansion, particularly in China and other markets like the Middle East and EU [57] - A tactical decision was made to delay additional remodels until Q1 2025 to prevent lost holiday sales [27] - The company plans to take aggressive action on poor-performing items to end the year with a clean inventory position [30] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the future, noting that brands and products are resonating with consumers and gaining market share [9] - The company expects lower sales and earnings than previous guidance due to several negative trends impacting top-line performance [28][29] - Management acknowledged that the fashion segment of footwear has been softer than anticipated, impacting overall performance [52] Other Important Information - The company ended Q3 with $239 million in borrowings, up about $17 million from last year [43] - Inventory at quarter-end was $586 million, up 5.4% year-over-year [44] - The company expects to source about 70% of its products outside of China by the back half of 2025 [48] Q&A Session Summary Question: Can you provide thoughts around the confidence levels for top-line growth and scaling to that in next year and beyond? - Management believes they have the brand, strategies, capabilities, and people to return to previous earnings power, despite this year being a setback [52][54] Question: What is contributing to the softness in China? - Management is cautious on China in the near term but sees it as an important market with significant long-term opportunity [57][58] Question: How much of the guidance shift is due to markdowns to clear inventory in Q4? - Management expects a gross margin decline driven by markdowns to address slow-moving inventory [60][61] Question: How large is China as a percentage of total sales? - International sales, including China, are less than 5% of total sales, with China being the largest part of that [70][71] Question: What are the expectations for Famous Footwear's comp in Q4? - Management expects a marginally positive comp of about 1 to 1.5% for Q4 [77] Question: How significant was the impact of boots on the third quarter? - Boots accounted for about two-thirds of the sales drop in Q3, and similar declines are expected in Q4 [84]

Group 1: Earnings Performance - Caleres Inc. reported quarterly earnings of $1.23 per share, missing the Zacks Consensus Estimate of $1.34 per share, and down from $1.37 per share a year ago, representing an earnings surprise of -8.21% [1] - The company posted revenues of $740.94 million for the quarter ended October 2024, missing the Zacks Consensus Estimate by 1.46%, and down from $761.9 million year-over-year [2] - Over the last four quarters, Caleres has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Group 2: Stock Performance and Outlook - Caleres Inc. shares have increased by approximately 8% since the beginning of the year, while the S&P 500 has gained 27.6% [4] - The current consensus EPS estimate for the upcoming quarter is $0.95 on revenues of $675.63 million, and for the current fiscal year, it is $4.01 on revenues of $2.77 billion [8] - The estimate revisions trend for Caleres Inc. is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Group 3: Industry Context - The Shoes and Retail Apparel industry, to which Caleres belongs, is currently in the top 16% of over 250 Zacks industries, suggesting a favorable industry outlook [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Sales Performance - Reported sales of $740.9 million, down 2.8% year-on-year[3] - Famous Footwear sales declined 4.8%, with comparable store sales up 2.5%[3] - Brand Portfolio sales increased 0.7% compared to the third quarter of 2023[3] - Consolidated net sales for the thirteen weeks ended November 2, 2024, were $740,941 thousand, down from $761,904 thousand for the same period in 2023, a decline of 2.7%[25] - Net sales for the Famous Footwear segment were $1,198,105 thousand for the thirteen weeks ended November 2, 2024, compared to $1,213,169 thousand for the same period in 2023, reflecting a decrease of 1.2%[28] - The company experienced a comparable sales decline of 0.9% in company-operated stores for the thirty-nine weeks ended November 2, 2024, compared to a 3.5% increase for the same period in 2023[28] Earnings and Profitability - Reported earnings per diluted share of $1.19, down from $1.32 in Q3 2023[6] - Adjusted earnings per diluted share of $1.23, down from $1.37 in Q3 2023[7] - Fiscal 2024 earnings per diluted share guidance revised to $3.35 to $3.45[10] - Adjusted diluted earnings per share for the thirteen weeks ended November 2, 2024, were $1.23, down from $1.37 in the same period last year, a decrease of 10.2%[23] - Basic earnings per share attributable to Caleres, Inc. shareholders were $1.20 for the thirteen weeks ended November 2, 2024, down from $1.32 for the same period in 2023, a decline of 9.1%[31] - Adjusted operating earnings for the Famous segment were $29,568 thousand, down from $46,600 thousand in the prior year, a decrease of 36.6%[25] - Adjusted operating earnings for the consolidated results were $143,579 thousand for the thirty-nine weeks ended November 2, 2024, down from $167,659 thousand for the same period in 2023, representing a decline of 14.4%[29] - The gross profit margin for the consolidated results was 45.5% for the thirteen weeks ended November 2, 2024, compared to 45.1% for the same period in 2023, indicating an improvement of 0.4 percentage points[28] - The gross profit for the consolidated results was $946,934 thousand for the thirteen weeks ended November 2, 2024, compared to $957,229 thousand for the same period in 2023, a decrease of 1.1%[28] Financial Position - Total assets increased to $1,955,939 thousand as of November 2, 2024, up from $1,826,893 thousand on October 28, 2023, representing a growth of 7.1%[19] - Total current liabilities decreased to $806,430 thousand from $827,921 thousand, a reduction of 2.0%[19] - Cash and cash equivalents at the end of the period were $33,685 thousand, slightly down from $34,031 thousand at the end of the previous period[21] - Borrowings under revolving credit agreements increased to $238,500 thousand from $222,000 thousand, an increase of 7.5%[19] - Total equity increased to $606,306 thousand from $520,172 thousand, reflecting a growth of 16.5%[19] - Total liquidity, including cash and cash equivalents and availability under the revolving credit agreement, was $285.8 million as of November 2, 2024, down from $301.4 million as of October 28, 2023[37] Cash Flow - Net cash provided by operating activities for the thirty-nine weeks ended November 2, 2024, was $75,855 thousand, compared to $157,183 thousand for the same period in the previous year, a decrease of 51.8%[21] Guidance and Outlook - Fiscal 2024 outlook revised to net sales down 2.5% to 3%[3] - Caleres, Inc. provided guidance for fiscal 2024, projecting GAAP diluted earnings per share to be between $3.35 and $3.45, with adjusted diluted earnings per share expected to be between $3.45 and $3.55[39] Other Financial Metrics - The EBITDA for the thirteen weeks ended November 2, 2024, was $71,404 thousand, resulting in an EBITDA margin of 9.6%, compared to $78,826 thousand and an EBITDA margin of 10.3% for the same period last year[37] - Adjusted EBITDA for the same period was $72,997 thousand, with an adjusted EBITDA margin of 9.9%, down from $81,130 thousand and 10.6% in the prior year[37] - The debt/EBITDA leverage ratio improved to 1.0 as of November 2, 2024, compared to 0.9 as of October 28, 2023[37]

Core Viewpoint - Caleres Inc. is anticipated to report a year-over-year decline in earnings due to lower revenues, which could significantly influence its near-term stock price depending on how actual results compare to consensus estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for December 5, 2024, with an expected quarterly earnings of $1.34 per share, reflecting a year-over-year decrease of 2.2% [3][4]. - Revenues are projected to be $756.83 million, down 0.7% from the same quarter last year [4]. Estimate Revisions - The consensus EPS estimate has been revised 1.06% higher in the last 30 days, indicating a collective reassessment by analysts [5]. - The Most Accurate Estimate for Caleres Inc. is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.12%, suggesting a bearish outlook from analysts [11][12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a strong predictive power for positive readings [8][9]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced positive surprises nearly 70% of the time [9]. Historical Performance - In the last reported quarter, Caleres Inc. was expected to post earnings of $1.21 per share but only achieved $0.85, resulting in a surprise of -29.75% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Conclusion - Caleres Inc. does not appear to be a compelling candidate for an earnings beat, and investors should consider other factors when making decisions regarding this stock ahead of its earnings release [17].

Core Viewpoint - Crédit Agricole Leasing & Factoring (CAL&F) is acquiring Merca Leasing to enhance its presence in the German leasing market, aligning with its European development strategy [1][2][4]. Company Overview - Merca Leasing, founded in 1989, is one of the top ten independent leasing companies in Germany, focusing on SMEs and offering tailored leasing solutions, particularly in financing industrial equipment [3][10]. - Merca Leasing manages leasing assets with an acquisition cost of approximately €750 million in outstanding receivables [3]. Strategic Importance - The acquisition is part of CAL&F's strategy to expand its offerings in the dynamic German leasing market, where 75% of companies include leasing solutions in their investment plans [4]. - By integrating Merca Leasing's expertise, CAL&F aims to broaden its service offerings, particularly in Mobility, IT, and Machine-Tools, while strengthening its position in the Direct Sales channel [5][7]. Transaction Details - The Share Purchase Agreement was signed on October 30, 2024, and is subject to regulatory approvals from German BaFin and the German Competition Authority, with completion expected in early 2025 [6]. - The impact of the transaction on Crédit Agricole S.A.'s CET1 ratio is not significant [6]. Leadership and Management - Merca Leasing's CEO, Ulrich Helmdach, will continue in his role post-acquisition, ensuring continuity for employees, clients, and partners [8]. - The acquisition is seen as a way to strengthen Merca's growth ambitions with the support of the Crédit Agricole Group [8]. Market Context - CAL&F has been active in the German factoring market for over 30 years and began its leasing activities in 2020, indicating a long-term commitment to the region [4]. - The German leasing market is characterized as very dynamic, with leasing viewed as an enabler for innovation among SMEs [4].

Group 1 - Pomerantz LLP is investigating claims on behalf of investors of Caleres, Inc. regarding potential securities fraud or unlawful business practices by the company and its officers or directors [1] - On September 12, 2024, Caleres reported second-quarter financial results, with sales of $683.3 million, a decline of 1.8% year-on-year, and missed analyst expectations [1] - Following the financial report, Caleres lowered its guidance for fiscal year 2024 [1] Group 2 - As a result of the negative financial news, Caleres's stock price fell by $7.02 per share, or 18.85%, closing at $30.23 per share on September 12, 2024 [2]

Core Insights - Caleres, Inc. reported second quarter sales for 2024 that fell below analyst expectations and subsequently lowered its yearly guidance, leading to a significant stock drop of over 19% during intraday trading on September 12, 2024 [2] Investigation Details - The investigation is being conducted by Bronstein, Gewirtz & Grossman, LLC on behalf of purchasers of Caleres securities, encouraging investors to provide information related to the investigation [1][3] - The stock decline occurred immediately following the disappointing earnings report and guidance adjustment [2] Legal Representation - Bronstein, Gewirtz & Grossman, LLC operates on a contingency fee basis, meaning they will only seek reimbursement for expenses and fees if they are successful in the case [4] - The firm has a strong track record, having recovered hundreds of millions of dollars for investors in securities fraud class actions [5]

Core Insights - Caleres reported disappointing Q2 2024 results, leading to a 19% drop in stock price and a 32% decline from its recent peak of $44 [1] - The company revised its revenue guidance from a positive outlook to a low single-digit decline for the year [1][4] - Current earnings yield stands at 13%, but historical margin analysis suggests a potential yield drop to 9% if margins normalize [1][6] Revenue Performance - Unadjusted revenues fell by 2%, with a calendar shift in back-to-school sales contributing a 3.5% lift, resulting in an effective decline of approximately 5.5% [2] - The branded segment, accounting for 43% of sales, experienced a 5% decline due to issues related to a new SAP ERP system [2] - Retail sales were down 2.9% on a comparable basis, with gross margins decreasing by 140 basis points due to increased promotional activities [2] Operational Challenges - SG&A expenses increased by $6 million in Q2 and $18 million in the first half of 2024, driven by wage inflation and higher marketing costs [2] - Management indicated that the ERP implementation negatively impacted growth by 5 percentage points, suggesting that the branded segment would have been flat without these issues [2] Future Outlook - Management expressed cautious optimism regarding August results, noting flat comparable sales for Famous Footwear [3] - Q3 guidance suggests a potential decline of 2% in aggregate sales, with expectations of losing $23 million in sales year-over-year due to the absence of back-to-school sales [3] Valuation and Yield - The company lowered its revenue guidance for the year to a low single-digit decline and adjusted operating margin expectations to 7.1% [4] - Caleres is currently trading at approximately $30, the lowest price since coverage began, offering a current yield of 13% based on expected EPS of $4 [4] - Historical margin analysis indicates that a return to more normalized margins could reduce the earnings yield to 9%, making the stock less attractive [5][6]