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]

Financial Performance - Net sales for the thirteen weeks ended August 3, 2024, were $683.3 million, a decrease of 1.7% compared to $695.5 million for the same period last year[5]. - Gross profit for the same period was $310.9 million, resulting in a gross margin of 45.5%, slightly down from 45.2% year-over-year[5]. - Operating earnings decreased to $42.5 million, down 14.4% from $49.7 million in the prior year[5]. - Net earnings for the thirteen weeks were $30.3 million, a decline of 12.3% compared to $34.4 million in the same period last year[5]. - Basic and diluted earnings per share attributable to Caleres, Inc. shareholders were both $0.85, down from $0.95 in the prior year[5]. - Comprehensive income for the period was $34.8 million, compared to $34.7 million in the same period last year[7]. - For the twenty-six weeks ended August 3, 2024, total net sales reached $1,342.5 million, a decrease from $1,358.3 million for the same period in the prior year, representing a decline of approximately 1.2%[26][27]. - Operating earnings for the twenty-six weeks ended August 3, 2024, were $85.3 million, compared to $99.3 million for the same period in 2023, reflecting a decline of approximately 14.1%[43]. - Net earnings attributable to Caleres, Inc. for the twenty-six weeks ended August 3, 2024, were $60.9 million, a decrease of 11.3% from $68.7 million in the same period in 2023[5]. Cash Flow and Investments - Net cash provided by operating activities was $115.7 million, a decrease from $125.2 million in the prior year[9]. - Cash and cash equivalents at the end of the period increased to $51.8 million from $47.1 million year-over-year[9]. - The company reported a net cash used for investing activities of $21.8 million, compared to $16.9 million in the prior year[9]. - Borrowings under the revolving credit agreement increased to $306.9 million, up from $252.0 million in the previous year[9]. - Cash used for investing activities increased by $4.9 million to $21.8 million for the twenty-six weeks ended August 3, 2024, primarily due to higher capital expenditures[147]. - Cash used for financing activities decreased by $31.6 million to $63.4 million for the twenty-six weeks ended August 3, 2024, compared to $95.0 million in the prior year[148]. Equity and Shareholder Information - The total equity as of August 3, 2024, was $613,484 thousand, an increase from $471,581 thousand as of July 29, 2023, representing a growth of approximately 30%[10]. - The company declared dividends of $0.07 per share, totaling $2,456 thousand for the quarter ended August 3, 2024[10]. - The company repurchased 416,000 shares during the twenty-six weeks ended August 3, 2024, compared to 763,000 shares during the same period in 2023[39]. - The total equity for Caleres, Inc. was reported at $570,304,000, compared to $451,881,000 in the previous year, showing a significant increase of approximately 26.2%[10]. Inventory and Accounts Payable - The net inventory balance as of August 3, 2024, was $661.1 million, slightly up from $660.7 million as of July 29, 2023[45]. - The company had $15.8 million in accounts payable subject to the supplier finance program as of August 3, 2024, down from $32.9 million the previous year[18]. - The company recorded a returns reserve of $13,229,000 as of August 3, 2024, indicating expected returns of merchandise[35]. Segment Performance - Direct-to-consumer sales for the same period totaled $966.5 million, compared to $963.1 million in the prior year, indicating a slight increase of approximately 0.4%[26][27]. - Retail store sales for the twenty-six weeks ended August 3, 2024, were $709.3 million, down from $709.9 million in the previous year, reflecting a decrease of about 0.1%[26][27]. - The Company reported a total of $51.5 million in wholesale e-commerce sales for the twenty-six weeks ended August 3, 2024[24]. - The Famous Footwear segment net sales increased by $6.1 million, or 1.5%, while the Brand Portfolio segment net sales decreased by $15.4 million, or 5.1%[99]. Operational Challenges and Strategic Initiatives - The implementation of a multi-year cloud-based ERP system has caused operational challenges, negatively impacting net sales during the second quarter of 2024[96]. - The company continues to focus on cost control and strategic initiatives to position itself for sustainable, long-term growth despite macroeconomic challenges[97]. Other Financial Metrics - The loyalty programs liability increased by $15.5 million during the twenty-six weeks ended August 3, 2024, due to points earned on purchases[35]. - The allowance for expected credit losses decreased to $8.4 million as of August 3, 2024, from $9.9 million as of July 29, 2023[36]. - The company recognized share-based compensation expense of $4.2 million for the thirteen weeks ended August 3, 2024, compared to $4.0 million for the same period in 2023[12]. - The company incurred restructuring costs of approximately $1.7 million during the thirteen weeks ended July 29, 2023, with no corresponding costs for the period ended August 3, 2024[40].

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.85, down from $0.98 year-over-year [18] - Total sales for the second quarter were $683 million, a decline of 1.8% year-over-year [16] - Consolidated gross margin increased by 30 basis points to 45.5% [17] - Operating earnings were $42.5 million, with an operating margin of 6.2% [18] Business Line Data and Key Metrics Changes - Brand Portfolio sales declined by 5.1%, impacted by the ERP upgrade and weakness in seasonal categories [8] - Famous Footwear's total sales increased by 1.5%, but comparable sales were down 2.9% [11][16] - The Brand Portfolio's gross margin improved by 140 basis points to 42.7% [17] - Famous Footwear's gross margin decreased by 120 basis points to 45% [17] Market Data and Key Metrics Changes - The kids' category at Famous Footwear grew, capturing 21% of total sales and gaining 0.5 points of market share in shoe chains [11] - The international market, particularly in Asia, showed strong momentum for Sam Edelman [9] - The athletic segment represented over 50% of Famous Footwear's total business, indicating a strong trend [24] Company Strategy and Development Direction - The company is focused on cost reduction initiatives, including a restructuring expected to save approximately $7.5 million annually [7] - There is a commitment to align inventory with consumer demand, particularly in the trending sneaker category [10] - The company plans to close an additional 10 stores, ending the year with 850 stores [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the ERP upgrade caused execution issues but expressed confidence in the long-term vision [3][4] - The company expects to recover from the missed sales but does not anticipate full recovery in seasonal categories [7] - Management is optimistic about the back-to-school season and the overall consumer demand [42] Other Important Information - The company generated $80 million in cash flow from operations, aided by deferred vendor payments [19] - Inventory levels were flat compared to last year, with a reduction in aged inventory [9] Q&A Session Summary Question: Impact of ERP implementation on the back half of the year - Management indicated that the ERP issues should be considered immaterial moving forward, with systems now operational [22] Question: Drivers of August rebound in sales - The rebound was attributed to strong performance from key athletic brands, effective promotions, and targeted marketing efforts [24] Question: Concerns about wholesale partners' confidence - Management reported no significant loss of confidence from retail partners, with positive trends observed in key categories [28] Question: Comp assumptions for Q3 - A modest positive comp is expected for Famous Footwear in Q3, despite total sales being down mid-single digits due to calendar shifts [31] Question: Gross margin expectations for Q3 - Management anticipates a decline in Famous Footwear's gross margin for Q3, while expecting overall improvement at the consolidated level [32] Question: Full year sales guidance revision - The revision reflects lost sales from ERP issues and seasonal weaknesses, with management expressing satisfaction with back-to-school performance [34]

Core Viewpoint - The Schall Law Firm is investigating potential securities law violations by Caleres, Inc. following disappointing financial results and a significant drop in share price [1][2]. Financial Performance - Caleres reported its second quarter 2024 results on September 12, 2024, with sales falling below analyst expectations and a reduction in yearly guidance [2]. - Following the announcement, shares of Caleres experienced a decline of over 19% during intraday trading on the same day [2].

Core Insights - Caleres, the parent company of Famous Footwear, reported weak demand and challenges with its resource planning system, leading to disappointing second-quarter results [1][2] - The company missed profit and sales estimates, prompting a reduction in its full-year outlook [1][2] - Caleres shares fell nearly 20%, entering negative territory for 2024 [5] Financial Performance - Caleres reported second-quarter earnings per share (EPS) of 85 cents, which is over 30% below the consensus estimate [2] - Revenue decreased by 1.8% year-over-year to $683.3 million, also falling short of forecasts [2] - Famous Footwear unit sales increased by 1.5%, but comparable-store sales declined by 2.9% [3] Management Commentary - CEO Jay Schmidt acknowledged that the results were "below expectations" and that both segments did not meet their potential [4] - The CEO attributed the poor performance to weak seasonal demand and a delayed back-to-school sales period [4] - Challenges with the implementation of the enterprise resource planning (ERP) system resulted in a lack of visibility for products, negatively impacting sales [4] Revised Outlook - Caleres now expects full-year adjusted EPS to be between $4.00 and $4.15, down from the previous range of $4.30 to $4.60 [5] - The company anticipates sales to decline by a low-single-digit percentage, compared to earlier guidance of flat to up 2% [5]

Core Insights - Caleres, Inc. reported disappointing second-quarter results for fiscal 2024, with adjusted earnings of 85 cents per share, missing the Zacks Consensus Estimate of $1.21 and down from 98 cents per share year over year [1][2]. Financial Performance - Consolidated net sales were $683.3 million, a decline of 1.8% year over year, and below the Zacks Consensus Estimate of $716 million [3]. - The Famous Footwear segment saw a 1.5% increase in net sales, while the Brand Portfolio segment experienced a 5.1% drop in sales [3]. - Gross profit decreased by 1.1% to $310.9 million, with a gross margin increase of 30 basis points to 45.5% [4]. - Adjusted EBITDA fell 12.4% to $57.2 million, with an adjusted EBITDA margin contraction of 100 basis points to 8.4% [5]. Segment Performance - The Famous Footwear segment's gross margin decreased by 120 basis points to 45%, while the Brand Portfolio segment's gross margin increased by 140 basis points to 42.7% [4]. - Direct-to-consumer sales accounted for approximately 75% of total quarterly sales [3]. Balance Sheet and Cash Flow - At the end of the quarter, Caleres had cash and cash equivalents of $51.8 million and total shareholders' equity of $613.5 million [6]. - Cash generated from operating activities was $115.7 million for the 26 weeks ended August 3, 2024 [6]. - The company had borrowings of $146.5 million under its asset-based revolving credit facility [6]. Future Outlook - For Q3, Caleres expects sales to be flat to down 2% year over year, with adjusted EPS projected between $1.30 and $1.40 [7]. - For fiscal 2024, the company anticipates consolidated net sales to decline in the low single digits, down from previous guidance of flat to up 2% [8]. - The projected consolidated operating margin is now expected to be in the range of 7-7.1%, compared to earlier projections of 7.3-7.5% [8].