Caleres Beats Q1 Estimates Despite Overall Sales Decline
Caleres surpassed analyst expectations for Q1 despite an overall sales decline.
Net earnings in the quarter were $34.7 million, or earnings per diluted share of $0.97, compared to net earnings of $50.5 million, or earnings per diluted share of $1.32 in the first quarter of 2022. The company beat analyst estimates for the quarter.
More from Footwear News
The St. Louis-based parent company to Famous Footwear, Allen Edmonds, Sam Edelman and more brands reported overall sales in the first quarter fell 9.8 percent to $662.7 million compared to the same time last year.
By segment, net sales at Famous Footwear declined 9.2 percent, due to soft consumer demand in shoe chains, Caleres noted in its earnings release on Thursday. As for the company’s Branded Portfolio, net sales decreased 11 percent, which Caleres said is in-line with expectations and primarily due to the timing of wholesale shipments in first quarter of last year.
Jay Schmidt, president and CEO of Caleres, said in a statement that Caleres delivered “solid financial performance” at the upper end of its earnings per share guidance driven by record quarterly profit from the Brand Portfolio and despite a challenging operating environment at Famous Footwear. “These first quarter results underscore the value of our diversified structure, the strength of our omnichannel capabilities and the power of our portfolio,” Schmidt said.
But as a result of the more challenging operating environment, Caleres said it has taken several steps to reduce expenses across its business.
These actions include eliminating open corporate positions, reducing non-merchandise procurement costs, realizing additional brand portfolio synergies, and lowering depreciation expense. Caleres said that these actions are expected to result in $20 million of in-year savings.
The company also anticipates better-than-expected freight costs, which is expected to be an additional $10 million in savings. These cost savings are versus prior guidance assumptions, some of which were realized in the first quarter. Caleres anticipates a one-time cash charge of approximately $4 million in the second quarter of 2023 associated with these actions.
Caleres is lowering its net sales guidance for the full year due revised expectations at Famous Footwear. Now, the company expects net sales to fall between 3 percent and 5 percent in fiscal 2023. This is down from its previous guidance of net sales for the year to be between flat and up 2 percent.
“Looking ahead, we are encouraged by the increased financial contribution from the Brand Portfolio and the strong momentum in our lead brands – Sam Edelman, Vionic, Naturalizer and Allen Edmonds,” said Schmidt. “While we expect near-term pressure to persist at Famous Footwear, we are highly confident in our ability to remain the leader in footwear for the family, which we believe plays an essential role in the footwear sector overall.”
Best of Footwear News
With Minimum Wage on the Rise, These Are Some of the Highest Paid Retail Jobs
What Is Nike's Return Policy? Before You Shop at Nike, Know These Hacks
Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
