Caleres Reports Second Quarter Results and Updates Guidance
ST. LOUIS--(BUSINESS WIRE)--Sep 12, 2024--
Caleres (NYSE: CAL), a market-leading portfolio of consumer-driven footwear brands, today reported financial results for the second quarter 2024.
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Sam Edelman Sylvia Knee High Boot (Photo: Business Wire)
- Reported Sales of $683.3 million, down 1.8% year-on-year;
- Famous Footwear sales increased 1.5% versus the second quarter of 2023 with a later than expected back- to-school season;
- Brand Portfolio sales declined 5.1% versus the second quarter of 2023 due to operational reporting challenges in connection with its SAP ERP implementation,and pockets of weak seasonal demand;
- Improved second quarter consolidated gross margin rate to 45.5 percent, up 30 basis points year-on-year;
- Reported $0.85 in earnings per share for the second quarter, below expectations;
- Generated second quarter EBITDA of $57.2 million;
- Announces restructuring actions that will result in $7.5 million in annualized SG&A savings and $2 million in SG&A savings in fiscal 2024;
- Lowers fiscal 2024 outlook of net sales to down low-single-digits percent versus previous guidance of flat to up 2 percent;
- Lowers fiscal 2024 outlook for earnings per diluted share to $3.94 - $4.09 versus prior guidance of $4.30 to $4.60 and provides guidance for adjusted earnings per diluted share of $4.00 to $4.15, which excludes $3 million in restructuring costs expected to occur in the third quarter.
“Caleres reported second quarter results that were below expectations. While our brands and products continue to resonate with consumers and we remain confident in our long-term vision, our second quarter results in both segments fell short of our potential. Our systems implementation led to lack of visibility that prevented us from delivering our expected results. We also experienced weak seasonal demand and back-to-school business came later than expected,” said Jay Schmidt, president and chief executive officer. “Despite the sales miss, our gross margin remained strong, driven by the Brand Portfolio. At the same time, Famous Footwear gained market share in the strategically important Kids category. Furthermore, back-to-school sales surged in August bringing the season in total in-line with our expectations.”
“We are confident in our ability to get back on track and have addressed the issues from the ERP implementation that temporarily impacted visibility. We are also accelerating certain restructuring actions to improve the efficiency and effectiveness of our teams. Looking ahead, we are confident in our ability to deliver earnings per share in line with our revised guidance,” said Schmidt. “Longer-term, we believe we are exceptionally well positioned to execute our strategic plan, invest to fuel our growth initiatives, and drive sustained value for our shareholders.”
Second Quarter 2024 Results
(13-weeks ended August 3, 2024 compared to 13-weeks ended July 29, 2023)
- Net sales were $683.3 million, down 1.8 percent from the second quarter of 2023;
- Famous Footwear segment net sales increased 1.5 percent, with comparable sales down 2.9 percent
- Brand Portfolio segment net sales declined 5.1 percent
- Direct-to-consumer sales represented approximately 75 percent of total net sales
- Gross profit was $310.9 million, while gross margin was 45.5 percent, up 30 basis points versus last year;
- Famous Footwear segment gross margin of 45.0 percent, down 120 basis points versus last year
- Brand Portfolio segment gross margin of 42.7 percent, up 140 basis points versus last year
- SG&A as a percentage of net sales was 39.3 percent, reflecting planned investment in marketing at certain Lead Brands, international expansion and the implementation of the integrated SAP platform;
- Net earnings of $30.0 million, or earnings per diluted share of $0.85, compared to net earnings of $33.9 million, or earnings per diluted share of $0.95 in the second quarter 2023 and adjusted net earnings of $35.2 million, or adjusted earnings per diluted share of $0.98 in the second quarter of 2023;
- Inventory was flat to the second quarter 2023 in total;
- Borrowings under the asset-based revolving credit facility were $146.5 million at the end of the period, down $98 million from the second quarter of 2023, and included the benefit from a deferred vendor payment of $49 million.
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 our dividend. 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, including share repurchases.
Fiscal 2024 Outlook:
Caleres is revising its fiscal 2024 financial outlook. As previously noted, its fiscal 2024 is a 52-week year and compares to a 53-week year in fiscal 2023. The revised assumptions are summarized in the table below. Our tax rate expectation of 24% is unchanged.
Metric | Prior 2024 Annual | Revised 2024 Annual | Third Quarter |
Sales Change | Flat to up 2% | Down low single digits | Flat to down 2% |
Operating Margin | 7.3% - 7.5% | 7.0% - 7.1% |
|
GAAP EPS | $4.30 - $4.60 | $3.94 - $4.09 | $1.24 - $1.34 |
Adjusted EPS | $4.30 - $4.60 | $4.00 - $4.15* | $1.30 - $1.40* |
Capital Expenditures | $60 - $70 million | $50 - $55 million |
|
* Adjusted EPS excludes $0.06 associated with restructuring costs in the third quarter.
Investor Conference Call
Caleres will host a conference call at 10:00 a.m. ET today, Thursday, September 12, 2024. 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 will be also available at investor.caleres.com/events-and-presentations/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 13748562.
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) 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 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 including those related to our ERP upgrade; (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 |
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CALERES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
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| (Unaudited) | ||||||||||||||
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| Thirteen Weeks Ended |
| Twenty-Six Weeks Ended | ||||||||||||
($ thousands, except per share data) |
| August 3, 2024 |
| July 29, 2023 |
| August 3, 2024 |
| July 29, 2023 | ||||||||
Net sales |
| $ | 683,317 |
|
| $ | 695,533 |
|
| $ | 1,342,515 |
|
| $ | 1,358,267 |
|
Cost of goods sold |
|
| 372,439 |
|
|
| 381,360 |
|
|
| 722,542 |
|
|
| 741,412 |
|
Gross profit |
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| 310,878 |
|
|
| 314,173 |
|
|
| 619,973 |
|
|
| 616,855 |
|
Selling and administrative expenses |
|
| 268,349 |
|
|
| 262,823 |
|
|
| 534,685 |
|
|
| 515,918 |
|
Restructuring and other special charges, net |
|
| — |
|
|
| 1,647 |
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|
| — |
|
|
| 1,647 |
|
Operating earnings |
|
| 42,529 |
|
|
| 49,703 |
|
|
| 85,288 |
|
|
| 99,290 |
|
Interest expense, net |
|
| (3,332 | ) |
|
| (5,128 | ) |
|
| (7,111 | ) |
|
| (10,751 | ) |
Other income, net |
|
| 1,177 |
|
|
| 1,616 |
|
|
| 2,169 |
|
|
| 3,108 |
|
Earnings before income taxes |
|
| 40,374 |
|
|
| 46,191 |
|
|
| 80,346 |
|
|
| 91,647 |
|
Income tax provision |
|
| (10,101 | ) |
|
| (11,826 | ) |
|
| (19,275 | ) |
|
| (22,490 | ) |
Net earnings |
|
| 30,273 |
|
|
| 34,365 |
|
|
| 61,071 |
|
|
| 69,157 |
|
Net earnings attributable to noncontrolling interests |
|
| 315 |
|
|
| 422 |
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|
| 173 |
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|
| 487 |
|
Net earnings attributable to Caleres, Inc. |
| $ | 29,958 |
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| $ | 33,943 |
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| $ | 60,898 |
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| $ | 68,670 |
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Basic earnings per common share attributable to Caleres, Inc. shareholders |
| $ | 0.85 |
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| $ | 0.95 |
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| $ | 1.73 |
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| $ | 1.91 |
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Diluted earnings per common share attributable to Caleres, Inc. shareholders |
| $ | 0.85 |
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| $ | 0.95 |
|
| $ | 1.73 |
|
| $ | 1.91 |
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SCHEDULE 2 |
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CALERES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
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| (Unaudited) | ||||
($ thousands) |
| August 3, 2024 |
| July 29, 2023 | ||
ASSETS |
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Cash and cash equivalents |
| $ | 51,753 |
| $ | 47,098 |
Receivables, net |
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| 151,055 |
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| 136,549 |
Inventories, net |
|
| 661,146 |
|
| 660,690 |
Property and equipment, held for sale |
|
| 16,777 |
|
| 16,777 |
Prepaid expenses and other current assets |
|
| 58,969 |
|
| 53,709 |
Total current assets |
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| 939,700 |
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| 914,823 |
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Lease right-of-use assets |
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| 588,842 |
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| 505,423 |
Property and equipment, net |
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| 169,459 |
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| 157,717 |
Goodwill and intangible assets, net |
|
| 197,792 |
|
| 209,314 |
Other assets |
|
| 124,192 |
|
| 116,683 |
Total assets |
| $ | 2,019,985 |
| $ | 1,903,960 |
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LIABILITIES AND EQUITY |
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|
Borrowings under revolving credit agreement |
| $ | 146,500 |
| $ | 244,000 |
Trade accounts payable |
|
| 396,450 |
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| 350,020 |
Lease obligations |
|
| 116,619 |
|
| 133,743 |
Other accrued expenses |
|
| 200,854 |
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| 228,608 |
Total current liabilities |
|
| 860,423 |
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| 956,371 |
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|
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Noncurrent lease obligations |
|
| 508,950 |
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| 429,192 |
Other liabilities |
|
| 37,128 |
|
| 46,816 |
Total other liabilities |
|
| 546,078 |
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| 476,008 |
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|
|
Total Caleres, Inc. shareholders’ equity |
|
| 606,062 |
|
| 464,992 |
Noncontrolling interests |
|
| 7,422 |
|
| 6,589 |
Total equity |
|
| 613,484 |
|
| 471,581 |
Total liabilities and equity |
| $ | 2,019,985 |
| $ | 1,903,960 |
SCHEDULE 3 |
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CALERES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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| (Unaudited) | ||||||
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| Twenty-Six Weeks Ended | ||||||
($ thousands) |
| August 3, 2024 |
| July 29, 2023 | ||||
OPERATING ACTIVITIES: |
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Net cash provided by operating activities |
| $ | 115,696 |
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| $ | 125,176 |
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INVESTING ACTIVITIES: |
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|
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Purchases of property and equipment |
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| (20,886 | ) |
|
| (15,044 | ) |
Capitalized software |
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| (922 | ) |
|
| (1,833 | ) |
Net cash used for investing activities |
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| (21,808 | ) |
|
| (16,877 | ) |
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|
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FINANCING ACTIVITIES: |
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|
| ||
Borrowings under revolving credit agreement |
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| 306,868 |
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|
| 252,000 |
|
Repayments under revolving credit agreement |
|
| (342,368 | ) |
|
| (315,500 | ) |
Dividends paid |
|
| (4,899 | ) |
|
| (4,997 | ) |
Acquisition of treasury stock |
|
| (15,070 | ) |
|
| (17,445 | ) |
Issuance of common stock under share-based plans, net |
|
| (8,457 | ) |
|
| (10,010 | ) |
Contributions by noncontrolling interests |
|
| 500 |
|
|
| 1,000 |
|
Net cash used for financing activities |
|
| (63,426 | ) |
|
| (94,952 | ) |
Effect of exchange rate changes on cash and cash equivalents |
|
| (67 | ) |
|
| 51 |
|
Increase in cash and cash equivalents |
|
| 30,395 |
|
|
| 13,398 |
|
Cash and cash equivalents at beginning of period |
|
| 21,358 |
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|
| 33,700 |
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Cash and cash equivalents at end of period |
| $ | 51,753 |
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| $ | 47,098 |
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SCHEDULE 4 |
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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) |
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| (Unaudited) | ||||||||||||||||
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| Thirteen Weeks Ended | ||||||||||||||||
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| August 3, 2024 |
| July 29, 2023 | ||||||||||||||
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| Pre-Tax |
| Net Earnings |
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| Pre-Tax |
| Net Earnings |
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| Impact of |
| Attributable |
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| Diluted |
| Impact of |
| Attributable |
| Diluted | |||||
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| Charges/Other |
| to Caleres, |
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| Earnings |
| Charges/Other |
| to Caleres, |
| Earnings | |||||
($ thousands, except per share data) |
| Items |
| Inc. |
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| Per Share |
| Items |
| Inc. |
| Per Share | |||||
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GAAP earnings |
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|
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| $ | 29,958 |
| $ | 0.85 |
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|
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| $ | 33,943 |
| $ | 0.95 |
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Charges/other items: |
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|
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Expense reduction initiatives |
|
| — |
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| — |
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| — |
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| 1,647 |
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| 1,224 |
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| 0.03 |
Total charges/other items |
| $ | — |
| $ | — |
| $ | — |
| $ | 1,647 |
| $ | 1,224 |
| $ | 0.03 |
Adjusted earnings |
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| $ | 29,958 |
| $ | 0.85 |
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| $ | 35,167 |
| $ | 0.98 |
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| (Unaudited) | ||||||||||||||||
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| Twenty-Six Weeks Ended | ||||||||||||||||
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| August 3, 2024 |
| July 29, 2023 | ||||||||||||||
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| Pre-Tax |
| Net Earnings |
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| Pre-Tax |
| Net Earnings |
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| Impact of |
| Attributable |
| Diluted |
| Impact of |
| Attributable |
| Diluted | ||||||
|
| Charges/Other |
| to Caleres, |
| Earnings |
| Charges/Other |
| to Caleres, |
| Earnings | ||||||
($ thousands, except per share data) |
| Items |
| Inc. |
| Per Share |
| Items |
| Inc. |
| Per Share | ||||||
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GAAP earnings |
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| $ | 60,898 |
| $ | 1.73 |
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| $ | 68,670 |
| $ | 1.91 |
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Charges/other items: |
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Expense reduction initiatives |
|
| — |
|
| — |
|
| — |
|
| 1,647 |
|
| 1,224 |
|
| 0.04 |
Total charges/other items |
| $ | — |
| $ | — |
| $ | — |
| $ | 1,647 |
| $ | 1,224 |
| $ | 0.04 |
Adjusted earnings |
|
|
|
| $ | 60,898 |
| $ | 1.73 |
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|
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| $ | 69,894 |
| $ | 1.95 |
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|
| (Unaudited) | |||||||||||||
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| Trailing Twelve Months Ended | |||||||||||||
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| August 3, 2024 |
| July 29, 2023 | |||||||||||
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|
| Pre-Tax |
| Net Earnings (Loss) |
|
| Pre-Tax |
| Net Earnings (Loss) | ||||||
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| Impact of |
| Attributable |
|
| Impact of |
| Attributable | ||||||
|
| Charges/Other |
| to Caleres, |
|
| Charges/Other |
| to Caleres, | ||||||
($ thousands) |
| Items |
| Inc. |
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| Items |
| Inc. | ||||||
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GAAP earnings |
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| $ | 163,619 |
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| $ | 148,725 |
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Charges/other items: |
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Deferred tax valuation allowance adjustments |
| $ | — |
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| (26,654 | ) |
|
| $ | — |
|
| (17,374 | ) |
Expense reduction initiatives |
|
| 4,456 |
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| 3,308 |
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|
|
| 1,647 |
|
| 1,224 |
|
Organizational changes |
|
| — |
|
| — |
|
|
|
| 2,910 |
|
| 2,723 |
|
Total charges/other items |
| $ | 4,456 |
| $ | (23,346 | ) |
|
| $ | 4,557 |
| $ | (13,427 | ) |
Adjusted earnings |
|
|
|
| $ | 140,273 |
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| $ | 135,298 |
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SCHEDULE 5 | ||||||||
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CALERES, INC. | ||||||||
SUMMARY FINANCIAL RESULTS BY SEGMENT | ||||||||
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SUMMARY FINANCIAL RESULTS |
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| (Unaudited) |
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| Thirteen Weeks Ended |
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| Famous Footwear |
| Brand Portfolio |
| Eliminations and Other |
| Consolidated |
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|
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, |
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($ thousands) |
| 2024 |
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| 2023 |
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| 2024 |
| 2023 |
| 2024 |
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| 2023 |
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| 2024 |
| 2023 |
| ||||||||
Net sales |
| $ | 420,289 |
|
| $ | 414,238 |
|
| $ | 285,497 |
| $ | 300,873 |
| $ | (22,469 | ) |
| $ | (19,578 | ) |
| $ | 683,317 |
| $ | 695,533 |
|
Gross profit |
|
| 189,337 |
|
|
| 191,479 |
|
|
| 121,883 |
|
| 124,124 |
|
| (342 | ) |
|
| (1,430 | ) |
|
| 310,878 |
|
| 314,173 |
|
Gross margin |
|
| 45.0 |
| % |
| 46.2 |
| % |
| 42.7 | % |
| 41.3 | % |
| 1.5 |
| % |
| 7.3 |
| % |
| 45.5 | % |
| 45.2 | % |
Operating earnings (loss) |
|
| 34,384 |
|
|
| 40,630 |
|
|
| 23,620 |
|
| 26,828 |
|
| (15,475 | ) |
|
| (17,755 | ) |
|
| 42,529 |
|
| 49,703 |
|
Adjusted operating earnings (loss) |
|
| 34,384 |
|
|
| 40,830 |
|
|
| 23,620 |
|
| 27,709 |
|
| (15,475 | ) |
|
| (17,189 | ) |
|
| 42,529 |
|
| 51,350 |
|
Operating margin |
|
| 8.2 |
| % |
| 9.8 |
| % |
| 8.3 | % |
| 8.9 | % |
| n/m |
| % |
| n/m |
| % |
| 6.2 | % |
| 7.1 | % |
Adjusted operating earnings % |
|
| 8.2 |
| % |
| 9.9 |
| % |
| 8.3 | % |
| 9.2 | % |
| n/m |
| % |
| n/m |
| % |
| 6.2 | % |
| 7.4 | % |
Comparable sales % (on a 13-week basis) |
|
| (2.9 | ) | % |
| (4.3 | ) | % |
| 4.4 | % |
| 3.9 | % |
| — |
| % |
| — |
| % |
| — | % |
| — | % |
Company-operated stores, end of period |
|
| 855 |
|
|
| 861 |
|
|
| 104 |
|
| 94 |
|
| — |
|
|
| — |
|
|
| 959 |
|
| 955 |
|
n/m – Not meaningful |
RECONCILIATION OF ADJUSTED RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| (Unaudited) | ||||||||||||||||||||||||
|
| Thirteen Weeks Ended | ||||||||||||||||||||||||
|
| Famous Footwear |
| Brand Portfolio |
| Eliminations and Other |
| Consolidated | ||||||||||||||||||
|
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, | ||||||||||
($ thousands) |
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| 2024 |
|
| 2023 |
|
| 2024 |
| 2023 | ||||||||
Operating earnings (loss) |
| $ | 34,384 |
| $ | 40,630 |
| $ | 23,620 |
| $ | 26,828 |
| $ | (15,475 | ) |
| $ | (17,755 | ) |
| $ | 42,529 |
| $ | 49,703 |
Charges/Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Expense reduction initiatives |
|
| — |
|
| 200 |
|
| — |
|
| 881 |
|
| — |
|
|
| 566 |
|
|
| — |
|
| 1,647 |
Total charges/other items |
|
| — |
|
| 200 |
|
| — |
|
| 881 |
|
| — |
|
|
| 566 |
|
|
| — |
|
| 1,647 |
Adjusted operating earnings (loss) |
| $ | 34,384 |
| $ | 40,830 |
| $ | 23,620 |
| $ | 27,709 |
| $ | (15,475 | ) |
| $ | (17,189 | ) |
| $ | 42,529 |
| $ | 51,350 |
SCHEDULE 5 | ||||||||
|
|
|
|
|
|
|
|
|
CALERES, INC. | ||||||||
SUMMARY FINANCIAL RESULTS BY SEGMENT | ||||||||
|
|
|
|
|
|
|
|
|
SUMMARY FINANCIAL RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| (Unaudited) |
| ||||||||||||||||||||||||||
|
| Twenty-Six Weeks Ended |
| ||||||||||||||||||||||||||
|
| Famous Footwear |
| Brand Portfolio |
| Eliminations and Other |
| Consolidated |
| ||||||||||||||||||||
|
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| ||||||||||||
($ thousands) |
| 2024 |
|
| 2023 |
|
| 2024 |
| 2023 |
| 2024 |
|
| 2023 |
|
| 2024 |
| 2023 |
| ||||||||
Net sales |
| $ | 769,841 |
|
| $ | 763,396 |
|
| $ | 602,708 |
| $ | 626,389 |
| $ | (30,034 | ) |
| $ | (31,518 | ) |
| $ | 1,342,515 |
| $ | 1,358,267 |
|
Gross profit |
|
| 350,342 |
|
|
| 350,611 |
|
|
| 269,695 |
|
| 267,982 |
|
| (64 | ) |
|
| (1,738 | ) |
|
| 619,973 |
|
| 616,855 |
|
Gross profit rate |
|
| 45.5 |
| % |
| 45.9 |
| % |
| 44.7 | % |
| 42.8 | % |
| 0.2 |
| % |
| 5.5 |
| % |
| 46.2 | % |
| 45.4 | % |
Operating earnings (loss) |
|
| 51,240 |
|
|
| 57,686 |
|
|
| 65,045 |
|
| 69,497 |
|
| (30,997 | ) |
|
| (27,893 | ) |
|
| 85,288 |
|
| 99,290 |
|
Adjusted operating earnings (loss) |
|
| 51,240 |
|
|
| 57,886 |
|
|
| 65,045 |
|
| 70,378 |
|
| (30,997 | ) |
|
| (27,327 | ) |
|
| 85,288 |
|
| 100,937 |
|
Operating earnings % |
|
| 6.7 |
| % |
| 7.6 |
| % |
| 10.8 | % |
| 11.1 | % |
| n/m |
| % |
| n/m |
| % |
| 6.4 | % |
| 7.3 | % |
Adjusted operating earnings % |
|
| 6.7 |
| % |
| 7.6 |
| % |
| 10.8 | % |
| 11.2 | % |
| n/m |
| % |
| n/m |
| % |
| 6.4 | % |
| 7.4 | % |
Comparable sales % (on a 26-week basis) |
|
| (2.6 | ) | % |
| (6.3 | ) | % |
| 1.9 | % |
| 7.0 | % |
| — |
| % |
| — |
| % |
| — | % |
| — | % |
Company-operated stores, end of period |
|
| 855 |
|
|
| 861 |
|
|
| 104 |
|
| 94 |
|
| — |
|
|
| — |
|
|
| 959 |
|
| 955 |
|
n/m – Not meaningful |
RECONCILIATION OF ADJUSTED RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| (Unaudited) | ||||||||||||||||||||||||
|
| Twenty-Six Weeks Ended | ||||||||||||||||||||||||
|
| Famous Footwear |
| Brand Portfolio |
| Eliminations and Other |
| Consolidated | ||||||||||||||||||
|
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, |
| August 3, |
| July 29, | ||||||||||
($ thousands) |
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| 2024 |
|
| 2023 |
|
| 2024 |
| 2023 | ||||||||
Operating earnings (loss) |
| $ | 51,240 |
| $ | 57,686 |
| $ | 65,045 |
| $ | 69,497 |
| $ | (30,997 | ) |
| $ | (27,893 | ) |
| $ | 85,288 |
| $ | 99,290 |
Charges/Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Expense reduction initiatives |
|
| — |
|
| 200 |
|
| — |
|
| 881 |
|
| — |
|
|
| 566 |
|
|
| — |
|
| 1,647 |
Total charges/other items |
|
| — |
|
| 200 |
|
| — |
|
| 881 |
|
| — |
|
|
| 566 |
|
|
| — |
|
| 1,647 |
Adjusted operating earnings (loss) |
| $ | 51,240 |
| $ | 57,886 |
| $ | 65,045 |
| $ | 70,378 |
| $ | (30,997 | ) |
| $ | (27,327 | ) |
| $ | 85,288 |
| $ | 100,937 |
SCHEDULE 6 |
|
CALERES, INC. |
BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| (Unaudited) | ||||||||||||||
|
| Thirteen Weeks Ended |
| Twenty-Six Weeks Ended | ||||||||||||
|
| August 3, 2024 |
| July 29, 2023 |
| August 3, 2024 |
| July 29, 2023 | ||||||||
($ thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net earnings attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net earnings |
| $ | 30,273 |
|
| $ | 34,365 |
|
| $ | 61,071 |
|
| $ | 69,157 |
|
Net earnings attributable to noncontrolling interests |
|
| (315 | ) |
|
| (422 | ) |
|
| (173 | ) |
|
| (487 | ) |
Net earnings attributable to Caleres, Inc. |
|
| 29,958 |
|
|
| 33,943 |
|
|
| 60,898 |
|
|
| 68,670 |
|
Net earnings allocated to participating securities |
|
| (1,065 | ) |
|
| (1,513 | ) |
|
| (2,278 | ) |
|
| (2,990 | ) |
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities |
| $ | 28,893 |
|
| $ | 32,430 |
|
| $ | 58,620 |
|
| $ | 65,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and diluted common shares attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic common shares |
|
| 33,883 |
|
|
| 34,280 |
|
|
| 33,838 |
|
|
| 34,343 |
|
Dilutive effect of share-based awards |
|
| 106 |
|
|
| — |
|
|
| 106 |
|
|
| — |
|
Diluted common shares attributable to Caleres, Inc. |
|
| 33,989 |
|
|
| 34,280 |
|
|
| 33,944 |
|
|
| 34,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per common share attributable to Caleres, Inc. shareholders |
| $ | 0.85 |
|
| $ | 0.95 |
|
| $ | 1.73 |
|
| $ | 1.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per common share attributable to Caleres, Inc. shareholders |
| $ | 0.85 |
|
| $ | 0.95 |
|
| $ | 1.73 |
|
| $ | 1.91 |
|
SCHEDULE 7 |
|
CALERES, INC. |
BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| (Unaudited) | ||||||||||||||
|
| Thirteen Weeks Ended |
| Twenty-Six Weeks Ended | ||||||||||||
|
| August 3, 2024 |
| July 29, 2023 |
| August 3, 2024 |
| July 29, 2023 | ||||||||
($ thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Adjusted net earnings attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Adjusted net earnings |
| $ | 30,273 |
|
| $ | 35,589 |
|
| $ | 61,071 |
|
| $ | 70,381 |
|
Net earnings attributable to noncontrolling interests |
|
| (315 | ) |
|
| (422 | ) |
|
| (173 | ) |
|
| (487 | ) |
Adjusted net earnings attributable to Caleres, Inc. |
|
| 29,958 |
|
|
| 35,167 |
|
|
| 60,898 |
|
|
| 69,894 |
|
Net earnings allocated to participating securities |
|
| (1,065 | ) |
|
| (1,568 | ) |
|
| (2,278 | ) |
|
| (3,044 | ) |
Adjusted net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities |
| $ | 28,893 |
|
| $ | 33,599 |
|
| $ | 58,620 |
|
| $ | 66,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and diluted common shares attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic common shares |
|
| 33,883 |
|
|
| 34,280 |
|
|
| 33,838 |
|
|
| 34,343 |
|
Dilutive effect of share-based awards |
|
| 106 |
|
|
| — |
|
|
| 106 |
|
|
| — |
|
Diluted common shares attributable to Caleres, Inc. |
|
| 33,989 |
|
|
| 34,280 |
|
|
| 33,944 |
|
|
| 34,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic adjusted earnings per common share attributable to Caleres, Inc. shareholders |
| $ | 0.85 |
|
| $ | 0.98 |
|
| $ | 1.73 |
|
| $ | 1.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted adjusted earnings per common share attributable to Caleres, Inc. shareholders |
| $ | 0.85 |
|
| $ | 0.98 |
|
| $ | 1.73 |
|
| $ | 1.95 |
|
SCHEDULE 8 |
|
CALERES, INC. |
CALCULATION OF EBITDA AND DEBT/EBITDA LEVERAGE RATIO (NON-GAAP METRICS) |
|
|
|
|
|
|
|
|
|
|
| (Unaudited) | ||||||
|
| Thirteen Weeks Ended | ||||||
($ thousands) |
| August 3, 2024 |
| July 29, 2023 | ||||
EBITDA: |
|
|
|
|
|
|
|
|
Net earnings attributable to Caleres, Inc. |
| $ | 29,958 |
|
| $ | 33,943 |
|
Income tax provision |
|
| 10,101 |
|
|
| 11,826 |
|
Interest expense, net |
|
| 3,332 |
|
|
| 5,128 |
|
Depreciation and amortization (1) |
|
| 13,818 |
|
|
| 12,734 |
|
EBITDA |
| $ | 57,209 |
|
| $ | 63,631 |
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
| 8.4 | % |
|
| 9.1 | % |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Adjusted net earnings attributable to Caleres, Inc. (2) |
| $ | 29,958 |
|
| $ | 35,167 |
|
Income tax provision (3) |
|
| 10,101 |
|
|
| 12,249 |
|
Interest expense, net |
|
| 3,332 |
|
|
| 5,128 |
|
Depreciation and amortization (1) |
|
| 13,818 |
|
|
| 12,734 |
|
Adjusted EBITDA |
| $ | 57,209 |
|
| $ | 65,278 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
| 8.4 | % |
|
| 9.4 | % |
|
|
|
|
|
|
|
|
|
|
| (Unaudited) | ||||||
|
| Trailing Twelve Months Ended | ||||||
($ thousands) |
| August 3, 2024 |
| July 29, 2023 | ||||
EBITDA: |
|
|
|
|
|
|
|
|
Net earnings attributable to Caleres, Inc. |
| $ | 163,619 |
|
| $ | 148,725 |
|
Income tax provision |
|
| 6,275 |
|
|
| 20,996 |
|
Interest expense, net |
|
| 15,703 |
|
|
| 20,132 |
|
Depreciation and amortization (1) |
|
| 55,140 |
|
|
| 50,105 |
|
EBITDA |
| $ | 240,737 |
|
| $ | 239,958 |
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
| 8.6 | % |
|
| 8.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Adjusted net earnings attributable to Caleres, Inc. (2) |
| $ | 140,273 |
|
| $ | 135,298 |
|
Income tax provision (3) |
|
| 34,077 |
|
|
| 38,980 |
|
Interest expense, net |
|
| 15,703 |
|
|
| 20,132 |
|
Depreciation and amortization (1) |
|
| 55,140 |
|
|
| 50,105 |
|
Adjusted EBITDA |
| $ | 245,193 |
|
| $ | 244,515 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
| 8.8 | % |
|
| 8.6 | % |
|
|
|
|
|
|
|
|
|
|
| (Unaudited) | ||||||
($ thousands) |
| August 3, 2024 |
| July 29, 2023 | ||||
Debt/EBITDA leverage ratio: |
|
|
|
|
|
|
|
|
Borrowings under revolving credit agreement (4) |
| $ | 146,500 |
|
| $ | 244,000 |
|
EBITDA (trailing twelve months) |
|
| 240,737 |
|
|
| 239,958 |
|
Debt/EBITDA |
|
| 0.6 |
|
|
| 1.0 |
|
| ________________________ | ||
(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 $344.1 million and $245.3 million as of August 3, 2024 and July 29, 2023, respectively. Total liquidity, which includes cash and cash equivalents and availability under the revolving credit agreement, was $395.9 million and $292.4 million for the respective periods. |
SCHEDULE 9 |
|
CALERES, INC. |
RECONCILIATION OF DILUTED EARNINGS PER SHARE (GAAP BASIS) TO ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS) – GUIDANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) | ||||||||||
|
| Third Quarter 2024 |
| Fiscal 2024 | ||||||||
|
| Low |
| High |
| Low |
| High | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share |
| $ | 1.24 |
| $ | 1.34 |
| $ | 3.94 |
| $ | 4.09 |
Charges/other items: |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
| 0.06 |
|
| 0.06 |
|
| 0.06 |
|
| 0.06 |
Adjusted diluted earnings per share |
| $ | 1.30 |
| $ | 1.40 |
| $ | 4.00 |
| $ | 4.15 |
View source version on businesswire.com:https://www.businesswire.com/news/home/20240911641867/en/
CONTACT: Investor Contact:
Liz Dunn
ldunn@caleres.com
KEYWORD: MISSOURI UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: ONLINE RETAIL FASHION OTHER RETAIL RETAIL SPECIALTY
SOURCE: Caleres
Copyright Business Wire 2024.
