ST. LOUIS--(BUSINESS WIRE)--May 29, 2025--
Caleres (NYSE: CAL), a market-leading portfolio of consumer-driven footwear brands, today reported financial results for the first quarter 2025.
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“While our brands continue to resonate with consumers and both segments of our business gained market share in the period, our first quarter results fell short of expectations. February sales were particularly weak, and although trends improved in March and April, overall performance was below plan. Furthermore, operating earnings were pressured by lower gross margins, increased reserves, and costs to cancel and move inventory,” said Jay Schmidt, president and chief executive officer. “Despite the weak quarter, we did experience improving momentum at retail and growth in our strategically important international business.”
“The operating environment has become more challenging, and we must redouble our efforts to drive growth and profitability. In the near term, we are focused on controlling what we can control, including optimizing our sourcing strategy. Additionally, we expect to decrease SG&A by $15 million on an annualized basis through structural expense cuts. We are viewing this as an opportunity to strengthen Caleres and position our company for the future,” said Schmidt. “Longer term, we are confident in our ability to get back on track, execute our strategic plan, invest to fuel our growth initiatives, and drive sustained value for our shareholders.”
First Quarter 2025 Results
(13-weeks ended May 3, 2025 compared to 13-weeks ended May 4, 2024)
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. We also repurchased 300,000 shares at an average price of $16.81 per share to offset dilution from stock-based compensation. Given the current challenging environment and the planned acquisition of Stuart Weitzman later this year, the company is re-evaluating its capital spending plans. 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 2025 Outlook
Given the uncertainty in the environment, the company is suspending guidance.
Investor Conference Call
Caleres will host a conference call at 10:00 a.m. ET today, Thursday, May 29, 2025. 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 also be available at investor.caleres.com/events-and-presentations for a limited period. Investors can access the replay through June 12, 2025 by dialing (844) 512-2921 in North America or (412) 317-6671 internationally and using the conference pin 13753803.
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 these non-GAAP financial measures and metrics 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 and metrics 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) changes in United States and international trade policies, including tariffs and trade restrictions; (ii) changing consumer demands, which may be influenced by general economic conditions and other factors; (iii) inflationary pressures and supply chain disruptions; (iv) rapidly changing consumer preferences and purchasing patterns and fashion trends; (v) supplier concentration, customer concentration and increased consolidation in the retail industry; (vi) intense competition within the footwear industry; (vii) foreign currency fluctuations; (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 including those related to our ERP upgrade; (x) transitional challenges with acquisitions and divestitures; (xi) the ability to accurately forecast sales and manage inventory levels; (xii) a disruption in the company’s distribution centers; (xiii) the ability to recruit and retain senior management and other key associates; (xiv) the ability to secure/exit leases on favorable terms; (xv) the ability to maintain relationships with current suppliers; (xvi) changes to tax laws, policies and treaties; (xvii) our commitments and shareholder expectations related to responsible business initiatives; (xviii) compliance with applicable laws and standards with respect to labor, trade and product safety issues; and (xix) 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 1, 2025, 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.
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