Third Quarter 2025 Performance - Sales reached $790 million, a 6.6% increase compared to Q3 2024[11, 13] - Adjusted Earnings Per Share (EPS) stood at $0.38[11, 13] - Gross margin was 42.7%, a decrease of 140 bps compared to Q3 2024[13] - Inventory increased by 15.8%[13] Performance Excluding Stuart Weitzman - Sales were $744 million, a 0.4% increase compared to Q3 2024[14, 15] - Adjusted EPS was $0.67[14, 15] - Gross margin was 42.5%, a decrease of 160 bps compared to Q3 2024[14, 15] - Inventory increased by 2.6%[14, 15] Segment Performance - Famous Footwear sales were $419 million, a 2.2% decrease compared to Q3 2024, with comparable sales down 1.2%[16, 17, 18] - Brand Portfolio sales were $384 million, an 18.8% increase compared to Q3 2024 including Stuart Weitzman, and up 4.6% excluding Stuart Weitzman[22] Outlook - Q4 Famous Footwear comparable sales are expected to be flat, with total sales down low single digits[29] - Q4 Brand Portfolio sales are expected to be flat-to-up 1% on an organic basis, with Stuart Weitzman sales adding $55 - $60 million[29] - Full-year adjusted diluted EPS is projected to be $0.55 to $0.60 including Stuart Weitzman, and $1.15 to $1.25 excluding Stuart Weitzman[29]

Financial Data and Key Metrics Changes - Fourth quarter adjusted earnings per share were $0.33, and full year adjusted earnings per share were $3.3, at the high end of guidance [8][28] - Fourth quarter consolidated sales were $639.2 million, down 8.3% year-over-year, with a $30.3 million unfavorable impact from the fifty-third week [24][25] - Full year consolidated sales were $2.72 billion, down 3.4% compared to the previous year [25] - Fourth quarter consolidated gross margin was 43%, an 80 basis point decrease from last year [25] - Full year consolidated gross margin was 44.9%, up approximately 10 basis points from last year [25] Business Line Data and Key Metrics Changes - Brand portfolio sales declined 7.2% in the fourth quarter, with a 5% decline excluding the fifty-third week [8][25] - Famous Footwear sales were down 9.6% in total and down 2.9% on a comparable basis [25] - Lead brands, including Sam Edelman, Allen Edmonds, Naturalizer, and Vionic, outperformed the overall brand portfolio [6][9] - Allen Edmonds showed growth across all channels, with strong performance in sport and dress loafers [10][11] Market Data and Key Metrics Changes - Internationally, the company activated new premium wholesale partnerships in Europe and continued expansion in China and Southeast Asia [10] - Famous Footwear's comparable store sales were down 2.9%, with brick-and-mortar sales down 4.1% and comparable web sales up 3.1% [16] Company Strategy and Development Direction - The company is focused on long-term growth by investing in key areas while reducing expenses elsewhere [6] - The acquisition of Stuart Weitzman is expected to enhance exposure to the contemporary segment and premium price points [16] - The company plans to upgrade 25 more stores to the Flare format in 2025, which has shown strong performance [18][73] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, despite challenges from inflation and tariffs [20][21] - The company anticipates sequential improvement throughout the year, driven by new product introductions and improved leadership [36][38] - Management noted that the current macroeconomic environment presents headwinds for value-based consumers [20] Other Important Information - The company returned approximately $75 million to shareholders through buybacks and dividends [7] - Inventory at year-end was $565 million, up 4.5% year-over-year, with a focus on managing aged inventory [29] Q&A Session Summary Question: Can you elaborate on the EPS guidance assumptions for the year? - Management expects sequential quarterly improvement, with specific initiatives driving growth in both Famous and brand portfolio segments [36][38] Question: What trends are seen in the contemporary segment? - Management noted that contemporary brands are trending positively, with strong performance in fashion sneakers and seasonal items [40][41] Question: How will gross margins be affected by markdowns and tariffs? - Management anticipates some gross margin decline due to tariffs and markdowns, but expects improvements as inventory becomes more current [50][72] Question: What is the outlook for the first quarter's operating margin? - The first quarter's operating margin is expected to be the lowest of the year, with improvements anticipated as the year progresses [58] Question: How are order trends in wholesale accounts? - Management indicated that they are seeing positive trends in wholesale accounts, with plans for continued growth in remodeled stores [73]