Caleres(CAL)2024-05-30 17:18Financial Data and Key Metrics Changes - The company achieved earnings per share of 0.97, with consolidated sales of 43 million, with an operating margin of 6.5% [37] Business Line Data and Key Metrics Changes - Brand Portfolio sales declined by 2.6%, while Famous Footwear sales were flat, with comparable sales down 2.3% [14][60] - Famous Footwear gross margin improved to 46.1%, up 50 basis points from last year, driven by lower freight costs and improved shrink [36][60] - The Brand Portfolio delivered a strong operating margin of 13.1%, contributing significantly to the company's operating earnings [37][60] Market Data and Key Metrics Changes - The company gained 1.9 points of market share in shoe chains, particularly in the kids' category, which saw high-single-digit sales growth [33][56] - The kids' category has outpaced the total business for 13 consecutive quarters, indicating strong demand [56] Company Strategy and Development Direction - The company is focusing on enhancing its marketing ecosystem and expanding its international presence, including opening new stores in Southeast Asia [6][29] - Investments in marketing and design are aimed at driving growth in key brands, with a particular emphasis on casual and athletic footwear [28][60] - The company plans to continue leveraging its speed to market capabilities to align inventory with consumer demand [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver earnings per share in line with guidance, with expectations for sales growth in the mid-single digits for Famous Footwear in Q2 [39][42] - The company anticipates continued improvement in gross margins, particularly in the Brand Portfolio, driven by cleaner inventory and a favorable channel mix [89] - Management noted a shift in consumer preferences towards casual and athletic footwear, which is expected to continue throughout the year [68][69] Other Important Information - The company returned 531 million, down 5.2% year-over-year, reflecting disciplined inventory management [38] Q&A Session Summary Question: Guidance for second quarter and fiscal year expectations - Management expects Famous to provide mid-single-digit sales growth due to a critical back-to-school week shift into Q2, while the Brand Portfolio is anticipated to generate low-single-digit comp growth [42] Question: Planning for back-to-school - Management emphasized the importance of newness in product offerings and expressed confidence in inventory availability, particularly for sneakers [49][50] Question: Current state of the consumer - Management noted strength in athletic brands and a focus on item-driven sales, with a continued pivot towards casual and athletic products [70][72] Question: Performance of FLAIR stores - FLAIR stores are performing well, with adjustments made to store layouts to enhance visibility and consumer experience [83] Question: Expectations for gross margin and SG&A in Q2 - Management anticipates continued improvement in gross margin for the Brand Portfolio, while SG&A investments will continue into Q2 [88][89]