Caleres Reports Fourth Quarter & Full Year Results and Provides 2025 Outlook | CAL Stock News

03/20/2025 - 06:45 AM Reported fourth quarter sales of $639.2 million, down 8.3% year-on-year, and full-year sales of $2,722.7 million, down 3.4% year-on-year and in line with our most recent guidance;Reported fourth quarter and full year earnings per diluted share of $0.15 and $3.09, respectively, and fourth quarter and full year adjusted earnings per diluted share of $0.33 and $3.30, respectively, at the high end of our most recent guidance;Returned $74.7 million to shareholders in fiscal 2024 through share repurchases and quarterly dividends;Now expects 75% of our Brand Portfolio, and an even greater percentage of our Lead Brands’ sourcing to be outside of China by the second half of 2025Expects fiscal 2025 consolidated net sales to be down 1% to up 1% compared to fiscal 2024;Expects fiscal 2025 earnings per diluted share of $2.80 to $3.20;Guidance excludes the previously announced acquisition of Stuart Weitzman, which is expected to close in the summer of 2025.ST. LOUIS--(BUSINESS WIRE)--Caleres (NYSE: CAL), a market-leading portfolio of consumer-driven footwear brands, today reported its financial results for the fourth quarter and full year 2024 and provided guidance for first quarter and full year 2025.Sam Edelman Sarita Sneaker and Miles Sneaker“Our fourth quarter earnings were at the high end of our most recent guidance. We gained market share in women’s fashion footwear, our Lead Brands outperformed, and we grew our sneaker penetration. Famous Footwear’s business softened in the quarter, but we maximized key selling periods. We invested to support our long-term growth while continuing to evolve our supply chain and further mitigate the impact of additional tariffs,” said Jay Schmidt, president and chief executive officer. “While 2024 overall was disappointing relative to our initial expectations, we made meaningful progress in advancing our strategic priorities and positioning our brands for sustainable growth. We also returned $75 million to shareholders in the form of dividends and share repurchases.”“As we look forward to 2025 and the macroeconomic environment with persistent inflation and newer tariffs, we believe it is prudent to take a conservative view for the year. Despite this posture, I am optimistic about what we have in store for 2025. Our Lead Brands remain strong and are collectively gaining market share, and we have expanded our customer reach with greater focus on the significant opportunity we see in contemporary,” said Schmidt. “The hard work of our talented teams and the impact of new leadership across several areas of our business, along with strategic brand partnerships and the planned acquisition of Stuart Weitzman, position us well to drive significant value in 2025 and beyond.”Fourth Quarter 2024 Results(13 weeks ended February 1, 2025, compared to 14 weeks ended February 3, 2024)Net sales: $639.2 million, down 8.3% year-over-year, with net sales excluding the impact of the 53rd week down 4.0%Famous Footwear segment: Net sales decreased 9.6%, with comparable sales down 2.9%Brand Portfolio segment: Net sales decreased 7.2%Direct-to-consumer sales: Represented about 73% of total net salesGross profit: $275.1 million, with gross margin at 43.0%, down 80 basis points year-over-yearFamous Footwear segment gross margin: 42.5%, down 40 basis pointsBrand Portfolio segment gross margin: 41.6%, down 100 basis pointsSG&A expenses: 40.9% of net sales, up 180 basis points compared to the prior year, reflecting expense deleverage due to the decline in salesNet earnings: $4.9 million, or earnings per diluted share of $0.15, compared to net earnings of $55.8 million, or earnings per diluted share of $1.57 in the fourth quarter of 2023. Adjusted net earnings were $11.1 million, or adjusted earnings per diluted share of $0.33, compared to adjusted net earnings of $30.8 million, or adjusted earnings per diluted share of $0.86, in the fourth quarter of 2023.Fiscal Year 2024 Results(52-weeks ended February 1, 2025, compared to 53-weeks ended February 3, 2024)Net sales: $2.72 billion, down 3.4% from 2023Famous Footwear segment: Net sales declined 3.3%Brand Portfolio segment: Net sales declined 3.5%Direct-to-consumer sales: Represented about 72% of total net salesGross profit: $1.22 billion with a gross margin of 44.9%, up 10 basis points to 2023Famous Footwear segment gross margin: 44.1%, down 60 basis points to 2023Brand Portfolio segment gross margin: 43.7%, up 80 basis points to 2023SG&A expenses: 39.1% of net sales, up 140 basis points compared to the prior year, reflecting inflationary factors and strategic investmentsNet earnings: $107.3 million, down $64.1 million from 2023 and adjusted net earnings of $114.6 million, down $34.7 million from 2023Earnings per diluted share of $3.09 as compared with earnings per diluted share of $4.80 in 2023, and adjusted earnings per diluted share of $3.30 versus $4.18 in 2023EBITDA: $206.7 million, or 7.6% of sales, and adjusted EBITDA of $216.6 million or 8.0% of salesInventory: Up 4.5% compared to 2023Borrowings: Under the asset-based revolving credit facility, borrowings were $219.5 million at the end of the periodFiscal 2024 & Fourth Quarter Negative Impact from 53rd WeekFiscal 2024Fourth QuarterConsolidated Net Sales$25.0 million$30.3 millionFamous Footwear Sales$18.2 million$23.5 millionBrand Portfolio Sales$6.8 million$6.8 millionCapital Allocation UpdateDuring fiscal 2024, Caleres continued to invest in value-driving growth opportunities while at the same time returning $74.7 million in cash to shareholders through our dividend and share repurchases. Subsequent to quarter end, the company announced plans to acquire Stuart Weitzman for $105 million, subject to customary adjustments. The transaction is expected to close in the summer of 2025, and Caleres will fund the acquisition through the company’s revolving credit agreement. Caleres will continue to consider business performance and market conditions as it evaluates all opportunities for free cash flow.Fiscal 2025 OutlookMetric2025 Annual GuidanceNet SalesDown 1% to Up 1%Operating Margin5.1% to 5.6%Tax Rate~23%GAAP EPS$2.80 to $3.20Capital Expenditures$50 to $55 millionFirst Quarter 2025 OutlookMetricFirst Quarter GuidanceNet SalesDown 5% to 6%GAAP EPS$0.35 to $0.40Investor Conference CallCaleres company executives will host a conference call at 10:00 a.m. ET today, Thursday, March 20, 2025. The webcast and associated slides will be available at investor.caleres.com/events-and-presentations. A live conference call will be available at (877) 704-4453 for North America participants or (201) 389-0920 for international participants, no passcode necessary. A replay of the call will be available through Thursday, April 3, 2025, and can be accessed by dialing (844) 512-2921 in North America, or (412) 317-6671 internationally, and using the pin 13751796. A webcast replay will also be archived for a limited period on investor.caleres.com/events-and-presentations.DefinitionsAll references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings attributable to Caleres, Inc. and diluted earnings per common share attributable to Caleres, Inc. shareholders, are presented as net earnings and earnings per diluted share, respectively.Non-GAAP Financial Measures and MetricsIn this press release, the company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures and metrics. In particular, the company provides earnings before interest, taxes, depreciation and amortization (EBITDA) and estimated and future operating earnings, net earnings and earnings per diluted share, adjusted to exclude certain gains, charges and recoveries, which are non-GAAP financial measures, and the debt to EBITDA leverage ratio, which is a non-GAAP financial metric. These results are included as a complement to results provided in accordance with GAAP because management believes this non-GAAP financial measure and metric help identify underlying trends in the company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the company’s core operating results. This measure and metric should not be considered a substitute for or superior to GAAP results.Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995This press release contains certain forward-looking statements and expectations regarding the company’s future performance and the performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) changes in United States and international trade policies, including tariffs and trade restrictions; (ii) changing consumer demands, which may be influenced by general economic conditions and other factors; (iii) inflationary pressures and supply chain disruptions; (iv) rapidly changing consumer preferences and purchasing patterns and fashion trends; (v) supplier concentration, customer concentration and increased consolidation in the retail industry; (vi) intense competition within the footwear industry; (vii) foreign currency fluctuations; (viii) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (ix) cybersecurity threats or other major disruption to the company’s information technology systems including those related to our ERP upgrade; (x) transitional challenges with acquisitions and divestitures; (xi) the ability to accurately forecast sales and manage inventory levels; (xii) a disruption in the company’s distribution centers; (xiii) the ability to recruit and retain senior management and other key associates; (xiv) the ability to secure/exit leases on favorable terms; (xv) the ability to maintain relationships with current suppliers; (xvi) changes to tax laws, policies and treaties; (xvii) our commitments and shareholder expectations related to responsible business initiatives; (xviii) compliance with applicable laws and standards with respect to labor, trade and product safety issues; and (xix) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights. The company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption Risk Factors in Item 1A of the company’s Annual Report on Form 10-K for the year ended February 3, 2024, which information is incorporated by reference herein and updated by the company’s Quarterly Reports on Form 10-Q. The company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.SCHEDULE 1CALERES, INC.CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS(Unaudited)Thirteen WeeksEndedFourteen WeeksEndedFifty-twoWeeks EndedFifty-threeWeeks Ended($ thousands, except per share data)February 1, 2025February 3, 2024February 1, 2025February 3, 2024Net sales$639,226$697,123$2,722,683$2,817,294Cost of goods sold364,118391,3951,500,6411,554,337Gross profit275,108305,7281,222,0421,262,957Selling and administrative expenses261,664272,8301,065,0191,062,399Restructuring and other special charges, net5,5742,1517,1676,103Operating earnings7,87030,747149,856194,455Interest expense, net(3,932)(4,103)(13,957)(19,343)Other (expense) income, net(2,944)1,550(741)6,210Earnings before income taxes99428,194135,158181,322Income tax benefit (provision)2,91327,466(29,061)(9,490)Net earnings3,90755,660106,097171,832Net (loss) earnings attributable to noncontrolling interests(1,023)(148)(1,158)441Net earnings attributable to Caleres, Inc.$4,930$55,808$107,255$171,391Basic earnings per common share attributable to Caleres, Inc. shareholders$0.15$1.57$3.10$4.80Diluted earnings per common share attributable to Caleres, Inc. shareholders$0.15$1.57$3.09$4.80SCHEDULE 2CALERES, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)($ thousands)February 1, 2025February 3, 2024ASSETSCash and cash equivalents$29,636$21,358Receivables, net155,905140,400Inventories, net565,241540,674Property and equipment, held for sale16,77716,777Prepaid expenses and other current assets68,95069,700Total current assets836,509788,909Lease right-of-use assets564,330528,029Property and equipment, net175,213167,583Goodwill and intangible assets, net192,274203,310Other assets126,428116,915Total assets$1,894,754$1,804,746LIABILITIES AND EQUITYBorrowings under revolving credit agreement$219,500$182,000Trade accounts payable237,038251,912Lease obligations127,522112,764Other accrued expenses173,873196,280Total current liabilities757,933742,956Noncurrent lease obligations479,524453,097Other liabilities51,34841,123Total other liabilities530,872494,220Total Caleres, Inc. shareholders’ equity599,024560,631Noncontrolling interests6,9256,939Total equity605,949567,570Total liabilities and equity$1,894,754$1,804,746SCHEDULE 3CALERES, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)Fifty-twoWeeks EndedFifty-threeWeeks Ended($ thousands)February 1, 2025February 3, 2024OPERATING ACTIVITIES:Net cash provided by operating activities$104,562$200,151INVESTING ACTIVITIES:Purchases of property and equipment(49,147)(44,584)Capitalized software(2,539)(5,034)Net cash used for investing activities(51,686)(49,618)FINANCING ACTIVITIES:Borrowings under revolving credit agreement639,868532,500Repayments under revolving credit agreement(602,368)(658,000)Dividends paid(9,694)(9,954)Acquisition of treasury stock(65,039)(17,445)Issuance of common stock under share-based plans, net(9,276)(11,094)Contributions by noncontrolling interests2,0001,000Net cash used for financing activities(44,509)(162,993)Effect of exchange rate changes on cash and cash equivalents(89)118Increase (decrease) in cash and cash equivalents8,278(12,342)Cash and cash equivalents at beginning of period21,35833,700Cash and cash equivalents at end of period$29,636$21,358SCHEDULE 4CALERES, INC.RECONCILIATION OF NET EARNINGS AND DILUTED EARNINGS PER SHARE (GAAP BASIS) TOADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS)(Unaudited)Thirteen Weeks EndedFourteen Weeks EndedFebruary 1, 2025February 3, 2024Pre-TaxNet EarningsPre-TaxNet EarningsImpact ofAttributableDilutedImpact ofAttributableDilutedCharges/Otherto Caleres,EarningsCharges/Otherto Caleres,Earnings($ thousands, except per share data)ItemsInc.Per ShareItemsInc.Per ShareGAAP earnings$4,930$0.15$55,808$1.57Charges/other items:Exit of Naturalizer retail store operations$4,2163,1310.09———Restructuring costs1,3591,0090.03———Pension settlement cost2,7162,0170.06———Deferred tax valuation allowances adjustment———$—(26,654)(0.76)Expense reduction initiatives———2,1511,5970.05Total charges/other items$8,291$6,157$0.18$2,151$(25,057)$(0.71)Adjusted earnings$11,087$0.33$30,751$0.86(Unaudited)Fifty-two Weeks EndedFifty-three Weeks EndedFebruary 1, 2025February 3, 2024Pre-TaxNet EarningsPre-TaxNet EarningsImpact ofAttributableDilutedImpact ofAttributableDilutedCharges/Otherto Caleres,EarningsCharges/Otherto Caleres,Earnings($ thousands, except per share data)ItemsInc.Per ShareItemsInc.Per ShareGAAP earnings$107,255$3.09$171,391$4.80Charges/other items:Exit of Naturalizer retail store operations$4,2163,1310.09$———Restructuring costs2,9512,1920.06———Pension settlement cost2,7162,0170.06———Deferred tax valuation allowances adjustment————(26,654)(0.75)Expense reduction initiatives———6,1034,5320.13Total charges/other items$9,883$7,340$0.21$6,103$(22,122)$(0.62)Adjusted earnings$114,595$3.30$149,269$4.18SCHEDULE 5CALERES, INC.SUMMARY FINANCIAL RESULTS BY SEGMENTSUMMARY FINANCIAL RESULTS(Unaudited)Famous FootwearBrand PortfolioEliminations and OtherConsolidated13 weeks ended14 weeks ended13 weeks ended14 weeks ended13 weeks ended14 weeks ended13 weeks ended14 weeks endedFebruary 1,February 3,February 1,February 3,February 1,February 3,February 1,February 3,($ thousands)20252024202520242025202420252024Net sales$358,351$396,227$300,318$323,689$(19,443)$(22,793)$639,226$697,123Gross profit152,461170,129125,041137,868(2,393)(2,269)275,109305,728Gross margin42.5%42.9%41.6%42.6%12.3%10.0%43.0%43.9%Operating earnings (loss)6,26719,55123,02637,751(21,423)(26,555)7,87030,747Adjusted operating earnings (loss)6,71319,55128,27738,634(21,546)(25,287)13,44432,898Operating margin1.7%4.9%7.7%11.7%n/m%n/m%1.2%4.4%Adjusted operating earnings %1.9%4.9%9.4%11.9%n/m%n/m%2.1%4.7%Comparable sales % (on a 13-week basis)(2.9)%(5.9)%0.5%(3.8)%—%—%—%—%Company-operated stores, end of period84686011498——960958n/m – Not meaningfulRECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)(Unaudited)Famous FootwearBrand PortfolioEliminations and OtherConsolidated13 weeks ended14 weeks ended13 weeks ended14 weeks ended13 weeks ended14 weeks ended13 weeks ended14 weeks endedFebruary 1,February 3,February 1,February 3,February 1,February 3,February 1,February 3,($ thousands)20252024202520242025202420252024Operating earnings (loss)$6,267$19,551$23,026$37,751$(21,423)$(26,555)$7,870$30,747Charges/Other Items:Restructuring costs446—5,251—(123)—5,574—Expense reduction initiatives———883—1,268—2,151Total charges/other items446—5,251883(123)1,2685,5742,151Adjusted operating earnings (loss)$6,713$19,551$28,277$38,634$(21,546)$(25,287)$13,444$32,898SCHEDULE 5CALERES, INC.SUMMARY FINANCIAL RESULTS BY SEGMENTSUMMARY FINANCIAL RESULTS(Unaudited)Famous FootwearBrand PortfolioEliminations and OtherConsolidated52 weeks ended53 weeks ended52 weeks ended53 weeks ended52 weeks ended53 weeks ended52 weeks ended53 weeks endedFebruary 1,February 3,February 1,February 3,February 1,February 3,February 1,February 3,($ thousands)20252024202520242025202420252024Net sales$1,556,456$1,609,396$1,225,963$1,270,853$(59,736)$(62,955)$2,722,683$2,817,294Gross profit686,627719,549536,295546,005(880)(2,597)1,222,0421,262,957Gross profit rate44.1%44.7%43.7%43.0%1.5%4.1%44.9%44.8%Operating earnings (loss)87,076123,838122,122145,459(59,342)(74,842)149,856194,455Adjusted operating earnings (loss)87,715125,204128,465148,067(59,157)(72,713)157,023200,558Operating earnings %5.6%7.7%10.0%11.4%n/m%n/m%5.5%6.9%Adjusted operating earnings %5.6%7.8%10.5%11.7%n/m%n/m%5.8%7.1%Comparable sales % (on a 52-week basis)(1.3)%(6.3)%0.3%1.3%—%—%—%—%Company-operated stores, end of period84686011498——960958n/m – Not meaningfulRECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)(Unaudited)Famous FootwearBrand PortfolioEliminations and OtherConsolidated52 weeks ended53 weeks ended52 weeks ended53 weeks ended52 weeks ended53 weeks ended52 weeks ended53 weeks endedFebruary 1,February 3,February 1,February 3,February 1,February 3,February 1,February 3,($ thousands)20252024202520242025202420252024Operating earnings (loss)$87,076$123,838$122,122$145,459$(59,342)$(74,842)$149,856$194,455Charges/Other Items:Restructuring costs639—6,343—185—7,167—Expense reduction initiatives—1,366—2,608—2,129—6,103Total charges/other items6391,3666,3432,6081852,1297,1676,103Adjusted operating earnings (loss)$87,715$125,204$128,465$148,067$(59,157)$(72,713)$157,023$200,558SCHEDULE 6CALERES, INC.BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION(Unaudited)Thirteen Weeks EndedFourteen Weeks EndedFifty-two Weeks EndedFifty-three Weeks EndedFebruary 1,February 3,February 1,February 3,2025202420252024($ thousands, except per share data)Net earnings attributable to Caleres, Inc.:Net earnings$3,907$55,660$106,097$171,832Net loss (earnings) attributable to noncontrolling interests1,0231481,158(441)Net earnings attributable to Caleres, Inc.4,93055,808107,255171,391Net earnings allocated to participating securities(165)(2,414)(3,839)(7,517)Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities$4,765$53,394$103,416$163,874Basic and diluted common shares attributable to Caleres, Inc.:Basic common shares32,47733,96533,39734,142Dilutive effect of share-based awards14711511610Diluted common shares attributable to Caleres, Inc.32,62434,08033,51334,152Basic earnings per common share attributable to Caleres, Inc. shareholders$0.15$1.57$3.10$4.80Diluted earnings per common share attributable to Caleres, Inc. shareholders$0.15$1.57$3.09$4.80SCHEDULE 7CALERES, INC.BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION(Unaudited)Thirteen Weeks EndedFourteen Weeks EndedFifty-Two Weeks EndedFifty-Three Weeks EndedFebruary 1,February 3,February 1,February 3,2025202420252024($ thousands, except per share data)Adjusted net earnings attributable to Caleres, Inc.:Adjusted net earnings$10,064$30,603$113,437$149,710Net loss (earnings) attributable to noncontrolling interests1,0231481,158(441)Adjusted net earnings attributable to Caleres, Inc.11,08730,751114,595149,269Net earnings allocated to participating securities(377)(1,324)(4,106)(6,537)Adjusted net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities$10,710$29,427$110,489$142,732Basic and diluted common shares attributable to Caleres, Inc.:Basic common shares32,47733,96533,39734,142Dilutive effect of share-based awards14711511610Diluted common shares attributable to Caleres, Inc.32,62434,08033,51334,152Basic adjusted earnings per common share attributable to Caleres, Inc. shareholders$0.33$0.87$3.31$4.18Diluted adjusted earnings per common share attributable to Caleres, Inc. shareholders$0.33$0.86$3.30$4.18SCHEDULE 8CALERES, INC.CALCULATION OF EBITDA AND DEBT/EBITDA LEVERAGE RATIO (NON-GAAP METRICS)(Unaudited)Thirteen Weeks EndedFourteen Weeks Ended($ thousands)February 1, 2025February 3, 2024EBITDA:Net earnings attributable to Caleres, Inc.$4,930$55,808Income tax provision(2,913)(27,466)Interest expense, net3,9324,103Depreciation and amortization (1)14,75614,875EBITDA$20,705$47,320EBITDA margin3.2%6.8%Adjusted EBITDA:Adjusted net earnings attributable to Caleres, Inc. (2)$11,087$30,751Income tax provision (3)(779)(258)Interest expense, net3,9324,103Depreciation and amortization (1)14,75614,875Adjusted EBITDA$28,996$49,471Adjusted EBITDA margin4.5%7.1%(Unaudited)Trailing Twelve Months Ended($ thousands)February 1, 2025February 3, 2024EBITDA:Net earnings attributable to Caleres, Inc.$107,255$171,391Income tax provision29,0619,490Interest expense, net13,95719,343Depreciation and amortization (1)56,42853,280EBITDA$206,701$253,504EBITDA margin7.6%9.0%Adjusted EBITDA:Adjusted net earnings attributable to Caleres, Inc. (2)$114,595$149,269Income tax provision (3)31,60437,715Interest expense, net13,95719,343Depreciation and amortization (1)56,42853,280Adjusted EBITDA$216,584$259,607Adjusted EBITDA margin8.0%9.2%(Unaudited)($ thousands)February 1, 2025February 3, 2024Debt/EBITDA leverage ratio:Borrowings under revolving credit agreement (4)$219,500$182,000EBITDA (trailing twelve months)206,701253,504Debt/EBITDA1.10.7_____________________(1)Includes depreciation and amortization of capitalized software and intangible assets.(2)Refer to Schedule 4 for the consolidated reconciliation of net earnings attributable to Caleres, Inc. to adjusted net earnings attributable to Caleres, Inc.(3)Excludes the income tax impacts of the adjustments on Schedule 4.(4)Total availability under the revolving credit agreement was $272.3 million and $308.5 million as of February 1, 2025 and February 3, 2024, respectively. Total liquidity, which includes cash and cash equivalents and availability under the revolving credit agreement, was $301.9 million and $329.9 million for the respective periods.View source version on businesswire.com: https://www.businesswire.com/news/home/20250319156056/en/Investor Contact:Liz Dunnldunn@caleres.comSource: Caleres