- Achieved $0.88 in earnings per share, exceeding
expectations
- Generated record first quarter consolidated gross margin of 47
percent
- Reiterates fiscal 2024 outlook of net sales flat to up 2
percent and earnings per share of $4.30 to $4.60
Caleres (NYSE: CAL), a market-leading portfolio of
consumer-driven footwear brands, today reported financial results
for first quarter 2024 and reaffirmed its guidance for fiscal
2024.
“Caleres began 2024 in strong fashion, achieving earnings per
share ahead of expectations, generating record first quarter
consolidated gross margin, and making significant progress on our
key strategic initiatives, all while investing for the long-term,”
said Jay Schmidt, president and chief executive officer. “While the
consumer demand environment remained challenging, we achieved
growth in sales and profitability from our Lead Brands and strong
margin performance across the Brand Portfolio. Notably, the segment
delivered more than half of the company’s operating earnings during
the quarter, with a 13 percent operating margin, and is once again
expected to lead the financial performance of Caleres this year. At
the same time, Famous Footwear maintained total year-over-year
sales levels and generated solid gross margins, with sales and
market share up significantly in the strategically important Kids
category.”
“Looking ahead, we are confident in our ability to deliver
earnings per share in line with our guidance range in 2024,” said
Schmidt. “Longer-term, we believe we are exceptionally well
positioned to execute our clear and actionable strategic plan,
invest to fuel our growth initiatives, and drive sustained value
for our shareholders.”
First Quarter 2024 Results (13-weeks ended May 4, 2024,
compared to 13-weeks ended April 29, 2023)
- Net sales were $659.2 million, down 0.5 percent from the first
quarter of 2023;
- Famous Footwear segment net sales increased 0.1 percent, with
comparable sales down 2.3 percent
- Brand Portfolio segment net sales declined 2.6 percent
- Direct-to-consumer sales represented approximately 69 percent
of total net sales
- Gross profit was $309.1 million, while gross margin was 46.9
percent, up 120 basis points versus last year;
- Famous Footwear segment gross margin of 46.1 percent, up 50
basis points versus last year
- Brand Portfolio segment gross margin of 46.6 percent, up 240
basis points versus last year
- SG&A as a percentage of net sales was 40.4 percent,
reflecting planned investment in marketing at certain Lead Brands,
international expansion and the implementation of the integrated
SAP platform;
- Net earnings of $30.9 million, or earnings per diluted share of
$0.88, compared to net earnings of $34.7 million, or earnings per
diluted share of $0.97 in the first quarter 2023.
- Earnings before interest, taxes, depreciation, and amortization
(EBITDA) of $57.4 million, or 8.7 percent of sales;
- Inventory was down 5.2 percent from the first quarter 2023, due
to strategic inventory management – primarily in the Brand
Portfolio segment; and
- Borrowings under the asset-based revolving credit facility were
$191.0 million at the end of the period, down about $100 million
from the first quarter of 2023.
Capital Allocation Update
During the quarter, Caleres continued to invest in value-driving
growth opportunities while at the same time returning cash to
shareholders through share buybacks and dividends. More
specifically, the company repurchased 416,000 shares of common
stock, for $15.1 million and an average price of $36.23 per share.
It also returned $2.4 million to shareholders through quarterly
dividend payments.
In the near term, the company expects to continue to focus on
reducing debt and still expects borrowings under its asset-based
revolving credit facility will be less than $100 million by 2026.
Caleres will continue to consider business performance and market
conditions as it evaluates all opportunities for free cash flow as
the year progresses.
Fiscal 2024 Outlook:
Caleres is reiterating its fiscal 2024 financial outlook and as
previously noted, its fiscal 2024 is a 52-week year and compares to
a 53-week year in fiscal 2023. Specifically, the company still
expects consolidated net sales to be flat to up 2 percent, compared
to 2023, and earnings per diluted share to be in the range of $4.30
to $4.60.
In addition, for fiscal 2024, the company still expects:
- Consolidated operating margin of 7.3 percent to 7.5
percent;
- Effective tax rate of about 24 percent; and
- Capital expenditures of $60 million to $70 million.
For second quarter 2024 the company expects:
- Consolidated net sales to be up 3 percent to 4 percent. This
includes an estimated $20 to $25 million benefit in Famous Footwear
as a result of the calendar shift of an important back-to-school
week into second quarter 2024 from third quarter 2023; and
- Earnings per diluted share of $1.20 to $1.25.
Investor Conference Call
Caleres will host a conference call at 11:00 a.m. ET today,
Thursday, May 30. The webcast and associated slides will be
available at investor.caleres.com/news/events. 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 will be also available at
investor.caleres.com/news/events/archive for a limited period.
Investors may also access the replay by dialing (844) 512-2921 in
North America or (412) 317-6671 internationally and using the
conference pin 13746617.
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 and Metrics
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 and
metrics. In particular, the company provides earnings before
interest, taxes, depreciation and amortization (EBITDA), which is a
non-GAAP financial measure, 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 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 general economic conditions and other
factors; (ii) inflationary pressures and supply chain disruptions
(iii) rapidly changing consumer preferences and purchasing patterns
and fashion trends; (iv) supplier concentration, customer
concentration and increased consolidation in the retail industry;
(v) intense competition within the footwear industry; (vi) foreign
currency fluctuations; (vii) 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; (viii) cybersecurity threats or other major
disruption to the company’s information technology systems; (ix)
the ability to accurately forecast sales and manage inventory
levels; (x) a disruption in the company’s distribution centers;
(xi) the ability to recruit and retain senior management and other
key associates; (xii) the ability to secure/exit leases on
favorable terms; (xiii) the ability to maintain relationships with
current suppliers; (xiv) transitional challenges with acquisitions
and divestitures; (xiv) changes to tax laws, policies and treaties;
(xvi) our commitments and shareholder expectations related to
environmental, social and governance considerations; (xvii)
compliance with applicable laws and standards with respect to
labor, trade and product safety issues; and (xvii) 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 1
CALERES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
(Unaudited)
Thirteen Weeks Ended
($ thousands, except per share data)
May 4, 2024
April 29, 2023
Net sales
$
659,198
$
662,734
Cost of goods sold
350,103
360,052
Gross profit
309,095
302,682
Selling and administrative expenses
266,337
253,095
Operating earnings
42,758
49,587
Interest expense, net
(3,778
)
(5,623
)
Other income, net
992
1,492
Earnings before income taxes
39,972
45,456
Income tax provision
(9,174
)
(10,664
)
Net earnings
30,798
34,792
Net (loss) earnings attributable to
noncontrolling interests
(141
)
65
Net earnings attributable to Caleres,
Inc.
$
30,939
$
34,727
Basic earnings per common share
attributable to Caleres, Inc. shareholders
$
0.88
$
0.97
Diluted earnings per common share
attributable to Caleres, Inc. shareholders
$
0.88
$
0.97
SCHEDULE 2
CALERES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
($ thousands)
May 4, 2024
April 29, 2023
ASSETS
Cash and cash equivalents
$
30,709
$
36,151
Receivables, net
164,865
148,068
Inventories, net
530,570
559,467
Property and equipment, held for sale
16,777
16,777
Prepaid expenses and other current
assets
62,415
60,417
Total current assets
805,336
820,880
Lease right-of-use assets
565,822
513,817
Property and equipment, net
168,154
157,730
Goodwill and intangible assets, net
200,551
212,353
Other assets
121,247
113,303
Total assets
$
1,861,110
$
1,818,083
LIABILITIES AND EQUITY
Borrowings under revolving credit
agreement
$
191,000
$
291,500
Trade accounts payable
267,388
261,753
Lease obligations
120,872
136,297
Other accrued expenses
185,105
189,727
Total current liabilities
764,365
879,277
Noncurrent lease obligations
482,163
437,171
Other liabilities
37,553
49,754
Total other liabilities
519,716
486,925
Total Caleres, Inc. shareholders’
equity
570,304
446,317
Noncontrolling interests
6,725
5,564
Total equity
577,029
451,881
Total liabilities and equity
$
1,861,110
$
1,818,083
SCHEDULE 3
CALERES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Thirteen Weeks Ended
($ thousands)
May 4, 2024
April 29, 2023
OPERATING ACTIVITIES:
Net cash provided by operating
activities
$
36,074
$
37,497
INVESTING ACTIVITIES:
Purchases of property and equipment
(9,802
)
(5,750
)
Capitalized software
(524
)
(798
)
Net cash used for investing activities
(10,326
)
(6,548
)
FINANCING ACTIVITIES:
Borrowings under revolving credit
agreement
118,500
126,000
Repayments under revolving credit
agreement
(109,500
)
(142,000
)
Dividends paid
(2,442
)
(2,482
)
Acquisition of treasury stock
(15,070
)
—
Issuance of common stock under share-based
plans, net
(7,847
)
(10,006
)
Net cash used for financing activities
(16,359
)
(28,488
)
Effect of exchange rate changes on cash
and cash equivalents
(38
)
(10
)
Increase in cash and cash equivalents
9,351
2,451
Cash and cash equivalents at beginning of
period
21,358
33,700
Cash and cash equivalents at end of
period
$
30,709
$
36,151
SCHEDULE 4
CALERES, INC.
SUMMARY FINANCIAL RESULTS BY
SEGMENT
SUMMARY FINANCIAL
RESULTS
(Unaudited)
Thirteen Weeks Ended
Famous Footwear
Brand Portfolio
Eliminations and Other
Consolidated
May 4,
April 29,
May 4,
April 29,
May 4,
April 29,
May 4,
April 29,
($ thousands)
2024
2023
2024
2023
2024
2023
2024
2023
Net sales
$
349,553
$
349,158
$
317,211
$
325,516
$
(7,566
)
$
(11,940
)
$
659,198
$
662,734
Gross profit
161,005
159,133
147,812
143,858
278
(309
)
309,095
302,682
Gross margin
46.1
%
45.6
%
46.6
%
44.2
%
(3.7
)%
2.6
%
46.9
%
45.7
%
Operating earnings (loss)
16,855
17,056
41,425
42,669
(15,522
)
(10,138
)
42,758
49,587
Operating margin
4.8
%
4.9
%
13.1
%
13.1
%
n/m
%
n/m
%
6.5
%
7.5
%
Comparable sales % (on a 13-week
basis)
(2.3
)%
(8.5
)%
0.1
%
9.4
%
—
%
—
%
—
%
—
%
Number of stores
855
866
99
93
—
—
954
959
n/m – Not meaningful
SCHEDULE 5
CALERES, INC.
BASIC AND DILUTED EARNINGS PER SHARE
RECONCILIATION
(Unaudited)
Thirteen Weeks Ended
May 4, 2024
April 29, 2023
($ thousands, except per share data)
Net earnings attributable to Caleres,
Inc.:
Net earnings
$
30,798
$
34,792
Net loss (earnings) attributable to
noncontrolling interests
141
(65
)
Net earnings attributable to Caleres,
Inc.
30,939
34,727
Net earnings allocated to participating
securities
(1,208
)
(1,478
)
Net earnings attributable to Caleres, Inc.
after allocation of earnings to participating securities
$
29,731
$
33,249
Basic and diluted common shares
attributable to Caleres, Inc.:
Basic common shares
33,793
34,407
Dilutive effect of share-based awards
106
—
Diluted common shares attributable to
Caleres, Inc.
33,899
34,407
Basic earnings per common share
attributable to Caleres, Inc. shareholders
$
0.88
$
0.97
Diluted earnings per common share
attributable to Caleres, Inc. shareholders
$
0.88
$
0.97
SCHEDULE 6
CALERES, INC.
CALCULATION OF EBITDA AND DEBT/EBITDA
LEVERAGE RATIO (NON-GAAP METRICS)
(Unaudited)
Thirteen Weeks Ended
($ thousands)
May 4, 2024
April 29, 2023
EBITDA:
Net earnings attributable to Caleres,
Inc.
$
30,939
$
34,727
Income tax provision
9,174
10,664
Interest expense, net
3,778
5,623
Depreciation and amortization (1)
13,490
12,714
EBITDA
$
57,381
$
63,728
EBITDA margin
8.7
%
9.6
%
(Unaudited)
Trailing Twelve Months Ended
($ thousands)
May 4, 2024
April 29, 2023
EBITDA:
Net earnings attributable to Caleres,
Inc.
$
167,603
$
165,960
Income tax provision
8,000
26,670
Interest expense, net
17,498
17,588
Depreciation and amortization (1)
54,056
49,368
EBITDA
$
247,157
$
259,586
EBITDA margin
8.8
%
9.0
%
(Unaudited)
($ thousands)
May 4, 2024
April 29, 2023
Debt/EBITDA leverage ratio:
Borrowings under revolving credit
agreement (2)
$
191,000
$
291,500
EBITDA (trailing twelve months)
247,157
259,586
Debt/EBITDA
0.8
1.1
__________________________________
(1)
Includes depreciation and amortization of
capitalized software and intangible assets.
(2)
Total availability under the revolving
credit agreement was $299.6 million and $197.9 million as of May 4,
2024 and April 29, 2023, respectively. Total liquidity, which
includes cash and cash equivalents and availability under the
revolving credit agreement, was $330.3 million and $234.0 million
for the respective periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240529537132/en/
Investor Contact: Logan Bonacorsi
lbonacorsi@caleres.com
Caleres (NYSE:CAL)
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