Caleres Sees Momentum in Q3, but Takes Hit From Tariffs and Stuart Weitzman Earnings Dilution

Core Insights - Caleres Inc. reported third-quarter earnings that fell below analyst expectations, leading to an over 18% drop in pre-market trading [1] - The company achieved net sales of $790.1 million, a 6.6% increase from $740.9 million in the same quarter last year, but adjusted net earnings decreased significantly [1][2] Financial Performance - Net sales for the third quarter of fiscal 2025 were $790.1 million, exceeding analyst expectations of $768.59 million [1][2] - Adjusted net earnings were $13.1 million, or 38 cents per diluted share, down from $42.6 million, or $1.23 per diluted share, in the third quarter of 2024 [1] Segment Analysis - Famous Footwear experienced a net sales decrease of 2.2%, with comparable sales down 1.2% [3] - The brand portfolio division reported a net sales increase of 18.8%, with a 4.6% increase when excluding Stuart Weitzman [3] Management Commentary - CEO Jay Schmidt stated that the company’s sales results were ahead of internal expectations, highlighting organic sales growth and strong performance from lead brands [4][5] - The CEO acknowledged pressures on earnings from tariffs and acquisition dilution but noted improvements in business fundamentals [5] Future Outlook - The company expects continued tariff pressure on gross margin and earnings dilution from Stuart Weitzman [6] - Caleres anticipates a GAAP loss per diluted share for the fourth quarter, with full-year GAAP loss projected between 13 cents to 18 cents and adjusted earnings per diluted share between 55 cents to 60 cents, including dilution from Stuart Weitzman [7]