- Exceeded first quarter 2019 earnings levels
- Drove sequential sales and operating earnings improvement
- Famous Footwear achieved first quarter record sales and
operating earnings
- Paid down an additional $50 million of debt during the first
quarter
Caleres (NYSE: CAL) (caleres.com), a diverse portfolio of
consumer-centric footwear brands, today reported financial results
for the first quarter ended May 1, 2021. Caleres continued its
strong recovery in the quarter just ended – recording sequential
top-line and earnings growth, stronger gross margins and an
improved working capital and expense position. For the fourth
straight period, the company put its free cash flow to work
strengthening its balance sheet and reducing further its overall
indebtedness, paying down an additional $50 million during the
quarter. In total, the company has reduced its total debt levels by
approximately $240 million since March of 2020.
“Caleres had a strong start to the year, maintaining its solid
upward momentum in the first quarter of 2021, driven in large part
by an outstanding performance in our Famous Footwear business,
where we achieved record quarterly earnings and delivered record
first quarter sales levels,” said Diane Sullivan, Chairman and
Chief Executive Officer. “Notably, Famous Footwear’s quarterly
sales increased 13 percent over the first quarter of 2019,
benefitting from strong demand for the category, increased consumer
confidence and improving in-store traffic trends. Famous continues
to leverage its enhanced omni-channel capabilities and capitalize
on its direct-to-consumer model, as evidenced by a 13.2 percent
increase in new rewards members – compared to the first quarter
2019 – and still-strong ecommerce sales levels.”
“We remain positive about our outlook and expect continued
strength at Famous Footwear to be combined with an improving
performance in our Brand Portfolio as we progress through the
year,” said Sullivan. We are particularly enthusiastic about the
recent strong performances from our Vionic, Sam Edelman, Blowfish
Malibu and Ryka brands, and are increasingly optimistic about our
ability to drive margin growth and return to 2019 earnings levels
for the segment in the year’s second half.”
“Looking ahead, we plan to lean into the robust momentum at
Famous Footwear and our enhanced direct-to-consumer capabilities;
ensure alignment of supply and demand; and – as always – maintain
our balanced approach to capital allocation. In short, we are
excited about our strategy for continued value creation and believe
we are exceptionally well positioned to capitalize on the
accelerated recovery in the marketplace and to chase and capture
market share opportunities as they develop throughout the
year.”
First Quarter 2021 Highlights (13-weeks ended May 1, 2021
compared to 13-weeks ended May 2, 2020)
- Net sales were $638.6 million, up 60.8 percent from the first
quarter of fiscal 2020
- Direct-to-consumer sales represented 74.5 percent of total net
sales;
- A 108.2 percent sales increase in the Famous Footwear
segment;
- A 15.2 percent sales increase in the Brand Portfolio
segment;
- Total company owned ecommerce website sales increased 21.4
percent, with ecommerce penetration of 25.6 percent of net
sales;
- Gross profit was $274.9 million, while gross margin was 43.0
percent;
- SG&A expense of $243.5 million, up $18.3 million compared
to the first quarter of 2020;
- Net income of $6.1 million, or earnings of $0.16 per diluted
share, compared to net loss of $345.8 million, or a loss of $8.95
per diluted share, in the first quarter of fiscal 2020. Earnings of
$0.16 per share includes $0.44 for the below items:
- Brand Portfolio expense of $0.31 related to the Naturalizer
brand retail exits; and
- Fair value adjustment of $0.13 associated with the mandatory
purchase obligation for Blowfish Malibu; and
- Adjusted net income was $22.8 million, or adjusted earnings of
$0.60 per diluted share compared to adjusted net loss of $50.4
million, or adjusted loss of $1.30 per diluted share, in the first
quarter of fiscal 2020;
- Generated $70.4 million in cash from operations and ended the
first quarter with $98.2 million of cash on hand;
- Reduced inventory levels approximately 24 percent
year-over-year, reflecting the final liquidation of Naturalizer
store inventory and global/industry-wide supply chain
disruptions;
- Reduced credit facility borrowings by $50 million from the
fourth quarter of 2020 to end the first quarter at $200
million;
- Returned $2.7 million to shareholders during the quarter
through its long-standing quarterly dividend.
Quarterly Cash Dividend
The company’s board of directors declared a regular quarterly
cash dividend of $0.07 per share to be paid on June 30, 2021 to
shareholders of record as of June 11, 2021. This dividend will be
the 393rd consecutive quarterly dividend paid by the company.
Fiscal Second Quarter 2021 Outlook
For the second quarter of 2021, Caleres expects sales levels to
be between $625 million and $650 million – effectively flat to the
first quarter of 2021 – and adjusted earnings per share of between
$0.50 and $0.55, which excludes $0.06 related to the fair value
adjustment to Blowfish purchase obligation.
Investor Conference Call
Caleres will host an investor conference call at 10:00 a.m. ET
today, Friday, May 28. The webcast and associated 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 7644157. 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 7644157 through Thursday, June 10.
Definitions
All references in this press release, outside of the condensed
consolidated financial statements that follow, unless otherwise
noted, related to net earnings (loss) attributable to Caleres, Inc.
and diluted earnings (loss) per common share attributable to
Caleres, Inc. shareholders, are presented as net earnings (loss)
and earnings (loss) 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 (loss), net earnings (loss) and
earnings (loss) 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) the coronavirus pandemic and
its adverse impact on our business operations, store traffic and
financial condition (ii) changing consumer demands, which may be
influenced by consumers' disposable income, which in turn can be
influenced by general economic conditions and other factors; (iii)
rapidly changing consumer preferences and purchasing patterns and
fashion trends; (iv) intense competition within the footwear
industry; (v) customer concentration and increased consolidation in
the retail industry; (vi) foreign currency fluctuations; (vii)
impairment charges resulting from a long-term decline in our stock
price; (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; (x) the ability to
accurately forecast sales and manage inventory levels; (xi) a
disruption in the company’s distribution centers; (xii) the ability
to recruit and retain senior management and other key associates;
(xiii) the ability to maintain relationships with current
suppliers; (xiv) the ability to secure/exit leases on favorable
terms; (xv) transitional challenges with acquisitions and
divestitures; (xvi) changes to tax laws, policies and treaties;
(xvii) compliance with applicable laws and standards with respect
to labor, trade and product safety issues; and (xviii) the ability
to attract, retain, and maintain good relationships with licensors
and protect our intellectual property rights.
About Caleres
Caleres is a diverse portfolio of global footwear brands. Our
products are available virtually everywhere - in the more than
1,000 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 offers
great casual and athletic brands for the entire family with
convenient, curated, affordable collections. Sam Edelman keeps
expressive women in step with the latest trends in a playful,
whimsical way. Naturalizer shoes are beautiful from the inside out,
with elegant simplicity and legendary fit re-imagined for today’s
consumer. Allen Edmonds combines old world craft with new world
technology to create luxe footwear for the discerning man who wants
sophisticated, modern classics. Rounding out our family of brands
are Vionic, Vince, Franco Sarto, Dr. Scholl’s Shoes, LifeStride,
Blowfish Malibu, Bzees, Circus by Sam Edelman and Ryka. Combined,
these brands make Caleres a company with both a legacy and a
mission. Our legacy is our more than 140 years of craftsmanship and
our passion for fit, while our mission is to continue to inspire
people to feel great… feet first. Visit caleres.com to learn more
about us.
SCHEDULE 1
CALERES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS (LOSS)
(Unaudited)
Thirteen Weeks Ended
($ thousands, except per share data)
May 1, 2021
May 2, 2020
Net sales
$
638,636
$
397,184
Cost of goods sold
363,749
275,286
Gross profit
274,887
121,898
Selling and administrative expenses
243,535
225,194
Impairment of goodwill and intangible
assets
—
262,719
Restructuring and other special charges,
net
13,482
60,196
Operating earnings (loss)
17,870
(426,211
)
Interest expense, net
(11,792
)
(9,478
)
Other income, net
3,828
3,585
Earnings (loss) before income taxes
9,906
(432,104
)
Income tax (provision) benefit
(3,521
)
85,932
Net earnings (loss)
6,385
(346,172
)
Net earnings (loss) attributable to
noncontrolling interests
238
(334
)
Net earnings (loss) attributable to
Caleres, Inc.
$
6,147
$
(345,838
)
Basic earnings (loss) per common share
attributable to Caleres, Inc. shareholders
$
0.16
$
(8.95
)
Diluted earnings (loss) per common share
attributable to Caleres, Inc. shareholders
$
0.16
$
(8.95
)
SCHEDULE 2
CALERES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
($ thousands)
May 1, 2021
May 2, 2020
January 30, 2021
ASSETS
Cash and cash equivalents
$
98,244
$
187,717
$
88,295
Receivables, net
132,698
145,333
126,994
Inventories, net
445,299
585,307
487,955
Prepaid expenses and other current
assets
80,877
91,433
79,312
Total current assets
757,118
1,009,790
782,556
Lease right-of-use assets
526,011
648,534
554,303
Property and equipment, net
165,118
200,800
172,437
Goodwill and intangible assets, net
236,924
273,648
240,071
Other assets
117,652
90,913
117,683
Total assets
$
1,802,823
$
2,223,685
$
1,867,050
LIABILITIES AND EQUITY
Borrowings under revolving credit
agreement
$
200,000
$
438,500
$
250,000
Mandatory purchase obligation - Blowfish
Malibu
45,523
—
39,134
Trade accounts payable
293,309
297,557
280,501
Lease obligations
133,327
160,138
153,060
Other accrued expenses
193,778
181,344
182,814
Total current liabilities
865,937
1,077,539
905,509
Noncurrent lease obligations
490,355
601,133
518,942
Long-term debt
198,966
198,506
198,851
Other liabilities
40,909
61,384
39,894
Total other liabilities
730,230
861,023
757,687
Total Caleres, Inc. shareholders’
equity
202,869
282,296
200,247
Noncontrolling interests
3,787
2,827
3,607
Total equity
206,656
285,123
203,854
Total liabilities and equity
$
1,802,823
$
2,223,685
$
1,867,050
SCHEDULE 3
CALERES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Thirteen Weeks Ended
($ thousands)
May 1, 2021
May 2, 2020
OPERATING ACTIVITIES:
Net cash provided by operating
activities
$
70,378
$
728
INVESTING ACTIVITIES:
Purchases of property and equipment
(2,659
)
(3,523
)
Capitalized software
(1,218
)
(977
)
Net cash used for investing activities
(3,877
)
(4,500
)
FINANCING ACTIVITIES:
Borrowings under revolving credit
agreement
110,500
168,500
Repayments under revolving credit
agreement
(160,500
)
(5,000
)
Dividends paid
(2,663
)
(2,810
)
Acquisition of treasury stock
—
(12,932
)
Issuance of common stock under share-based
plans, net
(3,501
)
(906
)
Other
(450
)
(323
)
Net cash (used for) provided by financing
activities
(56,614
)
146,529
Effect of exchange rate changes on cash
and cash equivalents
62
(258
)
Increase in cash and cash equivalents
9,949
142,499
Cash and cash equivalents at beginning of
period
88,295
45,218
Cash and cash equivalents at end of
period
$
98,244
$
187,717
SCHEDULE 4
CALERES, INC.
RECONCILIATION OF NET EARNINGS (LOSS)
AND DILUTED EARNINGS (LOSS) PER SHARE (GAAP BASIS) TO ADJUSTED NET
EARNINGS (LOSS) AND ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE
(NON-GAAP BASIS)
(Unaudited)
Thirteen Weeks Ended
May 1, 2021
May 2, 2020
Net
Net (Loss)
Pre-Tax
Earnings
Pre-Tax
Earnings
Diluted
Impact of
Attributable
Diluted
Impact of
Attributable
(Loss)
Charges/Other
to Caleres,
Earnings
Charges/Other
to Caleres,
Earnings
($ thousands, except per share data)
Items
Inc.
Per Share
Items
Inc.
Per Share
GAAP earnings (loss)
$
6,147
$
0.16
$
(345,838
)
$
(8.95
)
Charges/other
items:
Brand Portfolio - business exits
$
13,482
11,927
0.31
$
1,598
1,187
0.03
Fair value adjustment to Blowfish purchase
obligation
6,389
4,745
0.13
3,233
2,401
0.06
Goodwill and intangible asset impairment
charges
—
—
—
262,719
218,506
5.66
COVID-19-related expenses (1)
—
—
—
93,612
73,338
1.90
Total charges/other items
$
19,871
$
16,672
$
0.44
$
361,162
$
295,432
$
7.65
Adjusted earnings (loss)
$
22,819
$
0.60
$
(50,406
)
$
(1.30
)
__________________________
(1)
Represents costs associated with the
economic impact of the COVID‑19 pandemic, primarily consisting of
impairment charges associated with property and equipment and lease
right-of-use assets, inventory markdowns, expenses associated with
factory order cancellations, provision for expected credit losses
and severance.
SCHEDULE 5
CALERES, INC.
SUMMARY FINANCIAL RESULTS BY
SEGMENT
SUMMARY FINANCIAL
RESULTS
(Unaudited)
Thirteen Weeks Ended
Famous Footwear
Brand Portfolio
Eliminations and Other
Consolidated
($ thousands)
May 1, 2021
May 2, 2020
May 1, 2021
May 2, 2020
May 1, 2021
May 2, 2020
May 1, 2021
May 2, 2020
Net sales
$
398,104
$
191,252
$
250,305
$
217,238
$
(9,773
)
$
(11,306
)
$
638,636
$
397,184
Gross profit
179,815
69,093
94,003
53,393
1,069
(588
)
274,887
121,898
Adjusted gross profit
179,815
75,051
94,003
82,449
1,069
(588
)
274,887
156,912
Gross profit rate
45.2
%
36.1
%
37.6
%
24.6
%
(10.9
)
%
5.2
%
43.0
%
30.7
%
Adjusted gross profit rate
45.2
%
39.2
%
37.6
%
38.0
%
(10.9
)
%
5.2
%
43.0
%
39.5
%
Operating earnings (loss)
47,873
(67,540
)
(2,821
)
(345,748
)
(27,182
)
(12,923
)
17,870
(426,211
)
Adjusted operating earnings (loss)
47,873
(45,578
)
10,661
(10,138
)
(27,182
)
(12,566
)
31,352
(68,282
)
Operating earnings (loss) %
12.0
%
(35.3
)
%
(1.1
)
%
(159.2
)
%
278.1
%
114.3
%
2.8
%
(107.3
)
%
Adjusted operating earnings (loss) %
12.0
%
(23.8
)
%
4.3
%
(4.7
)
%
278.1
%
111.1
%
4.9
%
(17.2
)
%
Same-store sales % (on a 13-week
basis)
3.3
%
12.6
%
5.1
%
(24.8
)
%
—
%
—
%
—
%
—
%
Number of stores
913
934
95
203
—
—
1,008
1,137
RECONCILIATION OF ADJUSTED
RESULTS (NON-GAAP)
(Unaudited)
Thirteen Weeks Ended
Famous Footwear
Brand Portfolio
Eliminations and Other
Consolidated
($ thousands)
May 1, 2021
May 2, 2020
May 1, 2021
May 2, 2020
May 1, 2021
May 2, 2020
May 1, 2021
May 2, 2020
Gross profit
$
179,815
$
69,093
$
94,003
$
53,393
$
1,069
$
(588
)
$
274,887
$
121,898
Charges/Other
Items:
COVID-19-related expenses
—
5,958
—
27,458
—
—
—
33,416
Brand Portfolio - business exits
—
—
—
1,598
—
—
—
1,598
Total charges/other items
—
5,958
—
29,056
—
—
—
35,014
Adjusted gross profit
$
179,815
$
75,051
$
94,003
$
82,449
$
1,069
$
(588
)
$
274,887
$
156,912
Operating earnings (loss)
$
47,873
$
(67,540
)
$
(2,821
)
$
(345,748
)
$
(27,182
)
$
(12,923
)
$
17,870
$
(426,211
)
Charges/Other
Items:
Brand Portfolio - business exits
—
—
13,482
1,598
—
—
13,482
1,598
Goodwill and intangible asset impairment
charges
—
—
—
262,719
—
—
—
262,719
COVID-19-related expenses
—
21,962
—
71,293
—
357
—
93,612
Total charges/other items
—
21,962
13,482
335,610
—
357
13,482
357,929
Adjusted operating earnings (loss)
$
47,873
$
(45,578
)
$
10,661
$
(10,138
)
$
(27,182
)
$
(12,566
)
$
31,352
$
(68,282
)
SCHEDULE 6
CALERES, INC.
BASIC AND DILUTED EARNINGS (LOSS) PER
SHARE RECONCILIATION
(Unaudited)
Thirteen Weeks Ended
May 1, 2021
May 2, 2020
($ thousands, except per share data)
Net earnings (loss) attributable to
Caleres, Inc.:
Net earnings (loss)
$
6,385
$
(346,172
)
Net (earnings) loss attributable to
noncontrolling interests
(238
)
334
Net earnings (loss) attributable to
Caleres, Inc.
6,147
(345,838
)
Net earnings allocated to participating
securities
(210
)
—
Net earnings (loss) attributable to
Caleres, Inc. after allocation of earnings to participating
securities
$
5,937
$
(345,838
)
Basic and diluted common shares
attributable to Caleres, Inc.:
Basic common shares
36,707
38,649
Dilutive effect of share-based awards
158
—
Diluted common shares attributable to
Caleres, Inc.
36,865
38,649
Basic earnings (loss) per common share
attributable to Caleres, Inc. shareholders
$
0.16
$
(8.95
)
Diluted earnings (loss) per common share
attributable to Caleres, Inc. shareholders
$
0.16
$
(8.95
)
SCHEDULE 7
CALERES, INC.
BASIC AND DILUTED ADJUSTED EARNINGS
(LOSS) PER SHARE RECONCILIATION
(Unaudited)
Thirteen Weeks Ended
May 1, 2021
May 2, 2020
($ thousands, except per share data)
Adjusted net earnings (loss) attributable
to Caleres, Inc.:
Adjusted net earnings (loss)
$
23,057
$
(50,740
)
Net (earnings) loss attributable to
noncontrolling interests
(238
)
334
Adjusted net earnings (loss) attributable
to Caleres, Inc.
22,819
(50,406
)
Net earnings allocated to participating
securities
(828
)
—
Adjusted net earnings (loss) attributable
to Caleres, Inc. after allocation of earnings to participating
securities
$
21,991
$
(50,406
)
Basic and diluted common shares
attributable to Caleres, Inc.:
Basic common shares
36,707
38,649
Dilutive effect of share-based awards
158
—
Diluted common shares attributable to
Caleres, Inc.
36,865
38,649
Basic adjusted earnings (loss) per common
share attributable to Caleres, Inc. shareholders
$
0.60
$
(1.30
)
Diluted adjusted earnings (loss) per
common share attributable to Caleres, Inc. shareholders
$
0.60
$
(1.30
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210528005052/en/
Logan Bonacorsi lbonacorsi@caleres.com
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