Caleres(US:CAL) The Motley Fool·2024-09-12 16:41Core Insights - Caleres reported disappointing second-quarter earnings, leading to a significant drop in its stock price by 19.1% [1] - The company experienced a revenue decline of 1.8% to $683.3 million, falling short of the estimated $723.8 million [2] - Gross margin improved by 30 basis points to 45.5%, but profit per share decreased to $0.85 from $0.95 year-over-year, missing the consensus estimate of $1.22 [3] Financial Performance - Revenue for the quarter was $683.3 million, down 1.8% compared to the previous year [2] - Famous Footwear sales increased by 1.5%, but overall brand portfolio sales declined by 5.1% due to weak seasonal demand and challenges with a new enterprise resource planning system [2] - Selling, general, and administrative expenses rose by 2% to $268.3 million [3] Management Commentary - CEO Jay Schmidt acknowledged the disappointing results and expressed confidence in the long-term vision despite the shortfall [4] - The company has lowered its full-year sales guidance to a decline in the low single digits, down from a previous forecast of flat to up 2% [4] - Adjusted earnings per share guidance was cut to $4.00-$4.15 from $4.30-$4.60 [4] Market Context - The disappointing results from Caleres follow similar trends in the footwear industry, as seen with Designer Brands [5] - The stock is perceived as undervalued with a forward price-to-earnings ratio of less than 8, suggesting potential for recovery if the business can return to positive growth [6]