Sales up 8.0%, gross margin up +50 basis
pointsCompany maintains fiscal 2017 guidance
Caleres (NYSE: CAL) (caleres.com), a diverse portfolio of global
footwear brands which fit people’s lives, today reported first
quarter 2017 financial results.
“Our first quarter results – including 8.0% sales growth and
more than 50 basis points of gross margin improvement – provided a
solid start to the year, despite the continued tough retail
environment,” said Diane Sullivan, CEO, president and chairman of
Caleres. “We are pleased with the performance of our Allen Edmonds
acquisition, the success of our integration to date, and with our
continued shift toward more balanced earnings contribution from
both Famous Footwear and Brand Portfolio. And although retail
continues to rapidly and significantly evolve, we remain on track
for 2017.”
First Quarter 2017 Results Versus 2016
Consolidated sales of $631.5 million were up 8.0%, including
$42.5 million of Allen Edmonds sales
- Famous Footwear total sales of $366.5
million, up 0.5%
- Same-store-sales down 0.6%
- Famous.com sales increased 25.7% to
5.7% of sales
- Brand Portfolio sales of $265.0 million
were up 20.4% including contribution from Allen Edmonds, which was
acquired in December of 2016
- Organic growth of 1.1%
- Ecommerce was up 56.3% and represented
25.8% of sales
Gross profit of $270.9 million was up 9.3%
- Gross margin of 42.9% was up 52 basis
points, while adjusted gross margin of 43.4% was up 100 basis
points, excluding $3.0 million of expected fair value inventory
adjustment amortization related to the Allen Edmonds acquisition
- Famous Footwear gross margin of 45.8%
was down 51 basis points, primarily reflecting increased shipping
expense related to continued sales growth at famous.com
- Brand Portfolio gross margin of 38.9%
was up 301 basis points, while adjusted gross margin of 40.1% was
up 415 basis points with contributions from both Healthy Living and
Contemporary Fashion, including Allen Edmonds
SG&A expense of $244.1 million was up 11.4%
- Famous Footwear SG&A expense was up
3.1%, primarily due to increased rent and facilities expenses
related to higher door count and increased depreciation related to
the ramp up of the Lebanon, Tennessee distribution center
expansion
- Brand Portfolio SG&A expense was
flat, excluding Allen Edmonds
Operating earnings of $25.7 million, with adjusted operating
earnings of $29.9 million
- Famous Footwear operating earnings of
$20.3 million
- Brand Portfolio operating earnings of
$13.3 million, with adjusted operating earnings of $17.2
million
Operating margin of 4.1%, while adjusted operating margin of
4.7% was down 19 basis points
- Famous Footwear operating margin of
5.5% was down 153 basis points
- Brand Portfolio operating margin of
5.0% was up 65 basis points, while adjusted operating margin of
6.5% was up 211 basis points with contributions from both Healthy
Living and Contemporary Fashion, including Allen Edmonds
Net earnings of $14.9 million included $2.5 million after-tax of
expected charges related to the acquisition, integration and
reorganization of men’s brands, while adjusted net earnings of
$17.4 million were down 2.0%
- Diluted earnings per share of $0.35
included $0.05 of expected charges related to the acquisition,
integration and reorganization of men’s brands, while adjusted
diluted earnings per share were $0.40
Balance sheet and cash flow
- Cash and equivalents of $71.8 million
were up 29.8% from $55.3 million at the end of 2016
- Cash from operations of $65.4 million
was up slightly year-over-year
- Borrowings against the revolving credit
facility of $85 million – associated with the December 2016
acquisition of Allen Edmonds – were down 22.7% from $110 million at
the end of 2016
- Inventory of $565.1 million was down
3.5% from $585.8 million at the end of 2016
- Capital expenditures of $12.4 million
were down 32.0% year-over-year
Shareholder distributions
- Repurchased 225,000 shares of CAL
common stock for a total of $6.0 million
- Declared 377th consecutive quarterly
dividend, with $0.07 per share payable on July 1, 2017, to
shareholders of record as of June 17, 2017
“We’re pleased with our performance in the first quarter, as we
reported sales growth of 8.0% and adjusted gross margin improvement
of 100 basis points, while delivering $0.40 of adjusted earnings
per share,” said Ken Hannah, chief financial officer of Caleres.
“We also ended the quarter with cash and equivalents up 29.8% from
the end of 2016, even as we paid down another $25 million of our
revolver borrowings related to our Allen Edmonds acquisition. We
expect to pay off the remainder of this amount by the end of the
year.”
Outlook for 2017 all including
Allen Edmonds
Consolidated net sales
$2.7B to $2.8B Famous Footwear same-store-sales Up low-single
digits Brand Portfolio sales Up high-teens Gross margin Up 45 to 55
bps SG&A as a percent of revenue Up 30 to 40 bps Effective tax
rate 31% to 33% Adjusted earnings per diluted share
$2.10 to $2.20
Investor Conference Call
Caleres will host an investor conference call at 4:45 p.m. ET
today, Thursday, May 25, 2017. The webcast and slides will be
available at investor.caleres.com/news/events. A live conference
call will be available at (877) 217-9089 for analysts in North
America or (706) 679-1723 for international analysts by using the
conference ID 21000361. A replay will be available at
investor.caleres.com/news/events/archive for a limited period.
Investors may also access the replay by dialing (855) 859-2056 in
North America or (404) 537-3406 internationally and using the
conference ID 21000361 through Thursday, June 8, 2017.
Definitions
All 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
In 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. In
particular, the company provides historic and estimated future
gross profit, operating earnings, net earnings and earnings per
diluted share adjusted to exclude certain gains, charges and
recoveries, which are non-GAAP financial measures. These results
are included as a complement to results provided in accordance with
GAAP because management believes these non-GAAP financial measures
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. These measures should not be considered a
substitute for or superior to GAAP results.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This 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) changing consumer demands,
which may be influenced by consumers' disposable income, which in
turn can be influenced by general economic conditions; (ii) rapidly
changing fashion trends and purchasing patterns; (iii) intense
competition within the footwear industry; (iv) 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; (v) the
ability to accurately forecast sales and manage inventory levels;
(vi) cybersecurity threats or other major disruption to the
Company’s information technology systems; (vii) transitional
challenges with acquisitions; (viii) customer concentration and
increased consolidation in the retail industry; (ix) a disruption
in the Company’s distribution centers; (x) the ability to recruit
and retain senior management and other key associates; (xi) foreign
currency fluctuations; (xii) compliance with applicable laws and
standards with respect to labor, trade and product safety
issues; (xiii) the ability to secure/exit leases on favorable
terms; (xiv) the ability to maintain relationships with current
suppliers; (xv) the ability to attract, retain and maintain good
relationships with licensors and protect intellectual property
rights; and (xvi) changes to tax laws, policies and treaties. 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
January 28, 2017, 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.
About Caleres
Caleres is a diverse portfolio of global footwear brands. Our
products are available virtually everywhere - in the over 1,200
retail stores we operate, in hundreds of major department and
specialty stores, on our branded e-commerce sites, and on many
additional third-party retail websites. Famous Footwear
and Famous.com serve as our Family brands. Our
Contemporary Fashion brands include Sam Edelman, Allen Edmonds,
Franco Sarto, Vince, Via Spiga, George Brown Bilt, Diane von
Furstenberg, Fergie Footwear and Carlos Santana. Naturalizer, Dr.
Scholl's Shoes, LifeStride, Bzees and Ryka represent our Healthy
Living brands. Combined, these brands help make Caleres a company
with both a legacy and a mission. Our legacy is our more than
130-years of craftsmanship, our passion for fit and our business
savvy, while our mission is to continue to inspire people to feel
good…feet first. Visit caleres.com to learn more about
us.
SCHEDULE 1 CALERES,
INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited) Thirteen Weeks Ended (Thousands, except per
share data) April 29, 2017 April 30, 2016 Net sales $ 631,509 $
584,733 Cost of goods sold 360,601 336,940 Gross
profit 270,908 247,793 Selling and
administrative expenses 244,075 219,050 Restructuring and other
special charges, net 1,108 — Operating earnings
25,725 28,743 Interest expense (5,044 ) (3,610
) Interest income 235 247 Earnings before income
taxes 20,916 25,380 Income tax provision
(6,032 ) (7,502 ) Net earnings 14,884 17,878 Net
(loss) earnings attributable to noncontrolling interests (18 ) 96
Net earnings attributable to Caleres, Inc. $ 14,902 $
17,782 Basic earnings per common share attributable
to Caleres, Inc. shareholders $ 0.35 $ 0.41
Diluted earnings per common share attributable to Caleres, Inc.
shareholders $ 0.35 $ 0.41
SCHEDULE 2 CALERES, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited) April 29, 2017 April 30, 2016 January 28, 2017
(Thousands)
ASSETS Cash and cash equivalents $ 71,816 $
149,534 $ 55,332 Receivables, net 107,021 116,961 153,121
Inventories, net 565,051 487,876 585,764 Prepaid expenses and other
current assets 38,318 39,809 49,528 Total current
assets 782,206 794,180 843,745 Property and
equipment, net 217,854 185,586 219,196 Goodwill and intangible
assets, net 342,208 129,979 343,758 Other assets 67,289
116,347 68,574 Total assets $ 1,409,557 $ 1,226,092
$ 1,475,273
LIABILITIES AND EQUITY Borrowings
under revolving credit agreement $ 85,000 $ — $ 110,000 Trade
accounts payable 225,032 189,154 266,370 Other accrued expenses
146,315 125,405 151,225 Total current liabilities
456,347 314,559 527,595 Long-term debt 197,118
196,659 197,003 Deferred rent 50,881 46,728 51,124 Other
liabilities 83,478 60,169 85,065 Total other
liabilities 331,477 303,556 333,192 Total
Caleres, Inc. shareholders’ equity 620,387 606,879 613,117
Noncontrolling interests 1,346 1,098 1,369 Total
equity 621,733 607,977 614,486 Total liabilities and
equity $ 1,409,557 $ 1,226,092 $ 1,475,273
SCHEDULE 3 CALERES,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Thirteen Weeks Ended (Thousands) April 29, 2017
April 30, 2016 OPERATING ACTIVITIES: Net cash
provided by operating activities $ 65,384 $ 65,160
INVESTING ACTIVITIES: Purchases of property and equipment
(10,978 ) (16,367 ) Capitalized software (1,390 ) (1,820 ) Net cash
used for investing activities (12,368 ) (18,187 ) FINANCING
ACTIVITIES: Borrowings under revolving credit agreement 195,000
103,000 Repayments under revolving credit agreement (220,000 )
(103,000 ) Dividends paid (3,025 ) (3,068 ) Acquisition of treasury
stock (5,993 ) (12,130 ) Issuance of common stock under share-based
plans, net (2,422 ) (4,149 ) Excess tax benefit related to
share-based plans — 3,163 Net cash used for financing
activities (36,440 ) (16,184 ) Effect of exchange rate changes on
cash and cash equivalents (92 ) 594 Increase in cash and
cash equivalents 16,484 31,383 Cash and cash equivalents at
beginning of period 55,332 118,151 Cash and cash
equivalents at end of period $ 71,816 $ 149,534
SCHEDULE 4
CALERES, INC.
RECONCILIATION OF NET EARNINGS AND
DILUTED EARNINGS PER SHARE (GAAP BASIS) TO ADJUSTED NET EARNINGS
AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS)
(Unaudited) Thirteen Weeks Ended April 29, 2017 April 30,
2016 (Thousands, except per share data)
Pre-TaxImpact ofCharges/Other Items
NetEarningsAttributable toCaleres,
Inc.
DilutedEarningsPer Share
Pre-TaxImpact ofCharges/Other Items
NetEarningsAttributable toCaleres,
Inc.
DilutedEarningsPer Share
GAAP earnings $ 14,902 $ 0.35 $ 17,782 $ 0.41
Charges/other
items:
Acquisition, integration and reorganization of men's brands $ 4,137
2,528 0.05 $ — —
— Total charges/other items $ 4,137 $
2,528 $ 0.05 $ — $ —
$ — Adjusted earnings $ 17,430 $ 0.40 $
17,782 $ 0.41
SCHEDULE 5
CALERES, INC.
SUMMARY FINANCIAL RESULTS BY SEGMENT SUMMARY
FINANCIAL RESULTS
(Unaudited) Thirteen Weeks Ended
Famous Footwear Brand Portfolio Other
Consolidated (Thousands)
April 29,2017
April 30,2016
April 29,2017
April 30,2016
April 29,2017
April 30,2016
April 29,2017
April 30,2016
Net sales $ 366,494 $ 364,596 $ 265,015 $ 220,137 $ — $ — $ 631,509
$ 584,733 Gross profit $ 167,690 $ 168,679 $ 103,218 $ 79,114 $ — $
— $ 270,908 $ 247,793 Adjusted gross profit $ 167,690 $ 168,679 $
106,247 $ 79,114 $ — $ — $ 273,937 $ 247,793 Gross profit rate 45.8
% 46.3 % 38.9 % 35.9 % — % — % 42.9 % 42.4 % Adjusted gross profit
rate 45.8 % 46.3 % 40.1 % 35.9 % — % — % 43.4 % 42.4 % Operating
earnings (loss) $ 20,279 $ 25,753 $ 13,314 $ 9,623 $ (7,868 ) $
(6,633 ) $ 25,725 $ 28,743 Adjusted operating earnings (loss) $
20,279 $ 25,753 $ 17,189 $ 9,623 $ (7,606 ) $ (6,633 ) $ 29,862 $
28,743 Operating earnings % 5.5 % 7.1 % 5.0 % 4.4 % — % — % 4.1 %
4.9 % Adjusted operating earnings % 5.5 % 7.1 % 6.5 % 4.4 % — % — %
4.7 % 4.9 % Same-store sales % (on a 13-week basis) (1) (0.6 )% 1.0
% 2.3 % (1.7 )% — % — % — % — % Number of stores 1,052
1,043 233 168
— — 1,285 1,211
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)
(Unaudited) Thirteen Weeks Ended Famous Footwear Brand
Portfolio Other Consolidated (Thousands)
April 29,2017
April 30,2016
April 29,2017
April 30,2016
April 29,2017
April 30,2016
April 29,2017
April 30,2016
Gross profit $ 167,690 $ 168,679 $ 103,218 $ 79,114 $ — $ — $
270,908 $ 247,793
Charges/Other
Items:
Acquisition, integration and reorganization of men's brands —
— 3,029 — —
— 3,029 — Total
charges/other items — — 3,029
— — — 3,029
—
Adjusted gross profit
$ 167,690 $ 168,679 $ 106,247
$ 79,114 $ — $ — $
273,937 $ 247,793 Operating earnings (loss) $
20,279 $ 25,753 $ 13,314 $ 9,623 $ (7,868 ) $ (6,633 ) $ 25,725 $
28,743
Charges/Other
Items:
Acquisition, integration and reorganization of men's brands —
— 3,875 —
262 — 4,137 —
Total charges/other items — — 3,875
— 262 —
4,137 — Adjusted operating earnings (loss)
$ 20,279 $ 25,753 $ 17,189
$ 9,623 $ (7,606 ) $ (6,633 )
$ 29,862 $ 28,743
(1) Excludes sales from Allen Edmonds
SCHEDULE 6
CALERES, INC. BASIC AND DILUTED EARNINGS PER SHARE
RECONCILIATION (Unaudited) Thirteen Weeks Ended
(Thousands, except per share data) April 29, 2017
April 30, 2016 Net earnings attributable to Caleres, Inc.:
Net earnings $ 14,884 $ 17,878 Net loss (earnings) attributable to
noncontrolling interests 18 (96 ) Net earnings
attributable to Caleres, Inc. 14,902 17,782 Net earnings allocated
to participating securities (408 ) (486 ) Net
earnings attributable to Caleres, Inc. after allocation of earnings
to participating securities $ 14,494 $ 17,296
Basic and diluted common shares attributable to
Caleres, Inc.: Basic common shares 41,832 42,433 Dilutive effect of
share-based awards 169 163 Diluted
common shares attributable to Caleres, Inc. 42,001
42,596 Basic earnings per common share
attributable to Caleres, Inc. shareholders $ 0.35
$ 0.41 Diluted earnings per common share
attributable to Caleres, Inc. shareholders $ 0.35
$ 0.41
SCHEDULE 7
CALERES, INC. BASIC AND DILUTED ADJUSTED
EARNINGS PER SHARE RECONCILIATION (Unaudited) Thirteen
Weeks Ended (Thousands, except per share data) April 29, 2017
April 30, 2016 Adjusted net earnings
attributable to Caleres, Inc.: Adjusted net earnings $ 17,430 $
17,878 Net loss (earnings) attributable to noncontrolling interests
18 (96 ) Adjusted net earnings attributable to
Caleres, Inc. 17,448 17,782 Net earnings allocated to participating
securities (477 ) (486 ) Adjusted net earnings
attributable to Caleres, Inc. after allocation of earnings to
participating securities $ 16,971 $ 17,296
Basic and diluted common shares attributable to
Caleres, Inc.: Basic common shares 41,832 42,433 Dilutive effect of
share-based awards 169 163 Diluted
common shares attributable to Caleres, Inc. 42,001
42,596 Basic adjusted earnings per common
share attributable to Caleres, Inc. shareholders $ 0.41
$ 0.41 Diluted adjusted earnings per
common share attributable to Caleres, Inc. shareholders $ 0.40
$ 0.41
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170525005949/en/
CaleresPeggy Reilly Tharp, 314-854-4134ptharp@caleres.com
Caleres (NYSE:CAL)
Historical Stock Chart
From Apr 2024 to May 2024
Caleres (NYSE:CAL)
Historical Stock Chart
From May 2023 to May 2024