Caleres Reports Third Quarter 2020 Results
Caleres reported its Q3 2020 financial results, showing sequential sales growth and a return to profitability despite ongoing COVID-19 challenges. Key achievements include a net income of $14.4 million, a gross margin of 39.7%, and a $50 million reduction in debt. The company announced a strategic realignment of its Naturalizer brand, planning to close approximately 133 stores to focus on digital growth, while expecting annual savings of $10-12 million post-realignment. Direct-to-consumer sales made up 71.4% of total sales, with a notable increase in e-commerce revenue.
- Net income increased to $14.4 million for Q3 2020.
- Gross margin improved to 39.7%.
- Sales growth in e-commerce increased by 24.6%.
- Reduced overall debt by $50 million, totaling $139 million since Q1 2020.
- Cost reductions of approximately $38 million year-over-year.
- Net sales down 18.3% compared to Q3 2019.
- Famous Footwear segment sales declined by 12.3%.
- Brand Portfolio segment sales decreased by 25.6%.
ST. LOUIS--(BUSINESS WIRE)--Caleres (NYSE: CAL, caleres.com) a diverse portfolio of consumer-driven footwear brands, today reported financial results for the third quarter ended October 31, 2020. Caleres continued its steady progress – recording sequential top-line growth, a return to profitability, stronger gross margins and a further improved working capital position – despite the still uncertain economic environment. For the second straight quarter the company used free cash to markedly reduce its overall debt levels, paying down
“Caleres furthered its recovery during the third quarter delivering results significantly better than anticipated in nearly all major financial metrics,” said Diane Sullivan, Chairman, president and chief executive officer. “At the same time, the team has continued to overcome the ongoing COVID-related pressures in an impressive manner, further advancing the company’s key strategic objectives. During the quarter, we:
-
Maintained rigorous cost discipline leading to an approximately
$38 million decline in expenses year-over-year – attributable to improved store productivity and prior actions to align our resources with the current market environment; - Adjusted effectively to and capitalized on the extended back-to-school season achieving a strong sequential increase in sales at Famous Footwear;
- Gained momentum in the Brand Portfolio with an approximately 45 percent sequential increase in sales – led by positive consumer reaction to our casual, sport and athletic-inspired assortment across the portfolio; and
- Used free cash to further strengthen the balance sheet and reduce overall indebtedness, which is now approaching pre-COVID levels.”
Third Quarter 2020 Highlights
(13-weeks ended October 31, 2020 compared to 13-weeks ended November 2, 2019)
-
Net sales were
$647.5 million , down 18.3 percent from the third quarter of fiscal 2019- Direct-to-consumer sales represented 71.4 percent of total net sales;
- A 12.3 percent sales decline in the Famous Footwear segment;
- A 25.6 percent sales decline in the Brand Portfolio segment;
- Total company owned ecommerce website sales increased 24.6 percent, with ecommerce penetration rising to 25.4 percent of net sales;
-
Gross profit was
$257.0 million , while gross margin was 39.7 percent; -
SG&A expense of
$236.9 million , down$38.4 million compared to the third quarter of 2019; -
Net income of
$14.4 million , or earnings of$0.38 per diluted share, compared to net income of$28.0 million , or$0.69 per diluted share, in the third quarter of fiscal 2019. Earnings of$0.38 per share includes$0.10 of adjustments related to the fair value adjustment to the Blowfish purchase obligation; -
Adjusted net income was
$18.2 million , or adjusted earnings of$0.48 per diluted share compared to adjusted net income of$31.6 million , or adjusted earnings of$0.78 per diluted share, in the third quarter of fiscal 2019; -
Generated
$34.2 million in cash from operations and ended the third quarter with$124.3 million of cash on hand; - Reduced inventory levels approximately 21 percent year-over-year, reflecting ongoing actions taken to liquidate seasonal orders;
-
Reduced credit facility borrowings by
$50 million from the second quarter of 2020 to end the third quarter at$300 million ; -
Returned
$2.7 million to shareholders during the quarter through its long-standing quarterly dividend.
Strategic Realignment to Drive Digital Growth
In an effort to continue to improve future profitability and allow greater focus on high-growth, digital channels, the company has commenced a strategic realignment of the Naturalizer retail locations in the U.S. and Canada. In addition to the store closures, Caleres will right-size the back-office infrastructure to better align with the reduced store footprint, shift talent to amplify our digital presence, capture consumers where they want to shop and reallocate capital to further enhance our ecommerce platform and capabilities.
“Like the rest of the industry we have seen a structural shift in the shopping behavior of the consumer – a change that has been further accelerated by the global health crisis,” said Sullivan. “With a larger percentage of Naturalizer’s sales originating online, now is the opportune time to shed the legacy stores and evolve it to be more profitable. We are confident this step will better align the brand with the Naturalizer consumer of the future and position the brand for growth and further success.”
The company plans to close approximately 133 Naturalizer stores by the end of fiscal year 2020. The company expects pre-tax charges in the fourth quarter of 2020 of between
“Caleres is adjusting rapidly to the current and evolving market environment and I am excited about the value-creating potential of the business going forward,” said Sullivan. “The actions we have taken in recent months to fortify our financial position; leverage our digital investments to capitalize on shifting consumer behaviors; further align our merchandise mix to reflect ever-changing consumer desires; and right-size our cost structure and capital budget provide a strong and durable foundation upon which to build and grow. Moving forward, we plan to drive innovation in our brands, lean into our consumer insights, enhance our already significant digital capabilities still further, and continuously strengthen and hone our portfolio to expand greater cash generation and value creation in the future.”
Investor Conference Call
Caleres will host an investor conference call at 5:00 p.m. ET today, Thursday, November 19. 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 7391019. 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 7391019 through Wednesday, December 2.
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 outbreak 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) impairment charges resulting from a long-term decline in our stock price; (iv) rapidly changing fashion trends and consumer preferences and purchasing patterns; (v) intense competition within the footwear industry; (vi) 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; (vii) imposition of tariffs; (viii) the ability to accurately forecast sales and manage inventory levels; (ix) cybersecurity threats or other major disruption to the company’s information technology systems; (x) customer concentration and increased consolidation in the retail industry; (xi) transitional challenges with acquisitions; (xii) a disruption in the company’s distribution centers; (xiii) foreign currency fluctuations; (xiv) changes to tax laws, policies and treaties; (xv) the ability to recruit and retain senior management and other key associates; (xvi) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xvii) the ability to maintain relationships with current suppliers; (xviii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights; and (xix) the ability to secure/exit leases on favorable terms. 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, 2020, 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 more than 1,100 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 |
|
Thirty-Nine Weeks Ended |
||||||||||||
(Thousands, except per share data) |
|
October 31, 2020 |
|
November 2, 2019 |
|
October 31, 2020 |
|
November 2, 2019 |
||||||||
Net sales |
|
$ |
647,480 |
|
|
$ |
792,375 |
|
|
$ |
1,546,111 |
|
|
$ |
2,222,614 |
|
Cost of goods sold |
|
|
390,508 |
|
|
|
472,605 |
|
|
|
984,621 |
|
|
|
1,317,064 |
|
Gross profit |
|
|
256,972 |
|
|
|
319,770 |
|
|
|
561,490 |
|
|
|
905,550 |
|
Selling and administrative expenses |
|
|
236,901 |
|
|
|
275,330 |
|
|
|
663,425 |
|
|
|
804,972 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
— |
|
|
|
262,719 |
|
|
|
— |
|
Restructuring and other special charges, net |
|
|
— |
|
|
|
969 |
|
|
|
65,625 |
|
|
|
2,434 |
|
Operating earnings (loss) |
|
|
20,071 |
|
|
|
43,471 |
|
|
|
(430,279 |
) |
|
|
98,144 |
|
Interest expense, net |
|
|
(10,881 |
) |
|
|
(10,559 |
) |
|
|
(33,747 |
) |
|
|
(25,288 |
) |
Other income, net |
|
|
5,461 |
|
|
|
2,633 |
|
|
|
12,718 |
|
|
|
7,902 |
|
Earnings (loss) before income taxes |
|
|
14,651 |
|
|
|
35,545 |
|
|
|
(451,308 |
) |
|
|
80,758 |
|
Income tax benefit (provision) |
|
|
275 |
|
|
|
(7,784 |
) |
|
|
89,393 |
|
|
|
(18,685 |
) |
Net earnings (loss) |
|
|
14,926 |
|
|
|
27,761 |
|
|
|
(361,915 |
) |
|
|
62,073 |
|
Net earnings (loss) attributable to noncontrolling interests |
|
|
509 |
|
|
|
(226 |
) |
|
|
223 |
|
|
|
(338 |
) |
Net earnings (loss) attributable to Caleres, Inc. |
|
$ |
14,417 |
|
|
$ |
27,987 |
|
|
$ |
(362,138 |
) |
|
$ |
62,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.38 |
|
|
$ |
0.69 |
|
|
$ |
(9.67 |
) |
|
$ |
1.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.38 |
|
|
$ |
0.69 |
|
|
$ |
(9.67 |
) |
|
$ |
1.51 |
SCHEDULE 2 | |||||||||
CALERES, INC. |
|||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||
|
|
(Unaudited) |
|
|
|
||||
|
|
October 31, 2020 |
|
November 2, 2019 |
|
February 1, 2020 |
|||
(Thousands) |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
124,330 |
|
$ |
52,502 |
|
$ |
45,218 |
Receivables, net |
|
|
141,059 |
|
|
156,253 |
|
|
162,181 |
Inventories, net |
|
|
507,365 |
|
|
644,646 |
|
|
618,406 |
Prepaid expenses and other current assets |
|
|
99,401 |
|
|
48,245 |
|
|
56,494 |
Total current assets |
|
|
872,155 |
|
|
901,646 |
|
|
882,299 |
|
|
|
|
|
|
|
|
|
|
Lease right-of-use assets |
|
|
601,574 |
|
|
704,244 |
|
|
695,594 |
Property and equipment, net |
|
|
189,207 |
|
|
230,261 |
|
|
224,846 |
Goodwill and intangible assets, net |
|
|
267,074 |
|
|
542,845 |
|
|
539,579 |
Other assets |
|
|
97,050 |
|
|
92,214 |
|
|
89,389 |
Total assets |
|
$ |
2,027,060 |
|
$ |
2,471,210 |
|
$ |
2,431,707 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit agreement |
|
$ |
300,000 |
|
$ |
295,000 |
|
$ |
275,000 |
Mandatory purchase obligation |
|
|
30,146 |
|
|
— |
|
|
— |
Trade accounts payable |
|
|
285,582 |
|
|
275,699 |
|
|
267,018 |
Lease obligations |
|
|
156,200 |
|
|
144,501 |
|
|
127,869 |
Other accrued expenses |
|
|
187,980 |
|
|
179,030 |
|
|
181,063 |
Total current liabilities |
|
|
959,908 |
|
|
894,230 |
|
|
850,950 |
|
|
|
|
|
|
|
|
|
|
Noncurrent lease obligations |
|
|
556,343 |
|
|
629,731 |
|
|
629,032 |
Long-term debt |
|
|
198,736 |
|
|
198,276 |
|
|
198,391 |
Other liabilities |
|
|
50,418 |
|
|
95,623 |
|
|
104,204 |
Total other liabilities |
|
|
805,497 |
|
|
923,630 |
|
|
931,627 |
|
|
|
|
|
|
|
|
|
|
Total Caleres, Inc. shareholders’ equity |
|
|
256,671 |
|
|
650,840 |
|
|
645,950 |
Noncontrolling interests |
|
|
4,984 |
|
|
2,510 |
|
|
3,180 |
Total equity |
|
|
261,655 |
|
|
653,350 |
|
|
649,130 |
Total liabilities and equity |
|
$ |
2,027,060 |
|
$ |
2,471,210 |
|
$ |
2,431,707 |
SCHEDULE 3 |
||||||||
CALERES, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
||||||||
|
|
(Unaudited) |
||||||
|
|
Thirty-Nine Weeks Ended |
||||||
(Thousands) |
|
October 31, 2020 |
|
November 2, 2019 |
||||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
$ |
101,766 |
|
|
$ |
145,737 |
|
|
|
|
|
|
|
|
||
INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(12,016 |
) |
|
|
(37,354 |
) |
Disposals of property and equipment |
|
|
— |
|
|
|
636 |
|
Capitalized software |
|
|
(3,525 |
) |
|
|
(4,893 |
) |
Net cash used for investing activities |
|
|
(15,541 |
) |
|
|
(41,611 |
) |
|
|
|
|
|
|
|
||
FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Borrowings under revolving credit agreement |
|
|
340,500 |
|
|
|
237,000 |
|
Repayments under revolving credit agreement |
|
|
(315,500 |
) |
|
|
(277,000 |
) |
Dividends paid |
|
|
(8,148 |
) |
|
|
(8,631 |
) |
Acquisition of treasury stock |
|
|
(23,348 |
) |
|
|
(31,168 |
) |
Issuance of common stock under share-based plans, net |
|
|
(1,078 |
) |
|
|
(2,605 |
) |
Contributions by noncontrolling interests |
|
|
1,500 |
|
|
|
1,500 |
|
Other |
|
|
(980 |
) |
|
|
(1,022 |
) |
Net cash used for financing activities |
|
|
(7,054 |
) |
|
|
(81,926 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(59 |
) |
|
|
102 |
|
Increase in cash and cash equivalents |
|
|
79,112 |
|
|
|
22,302 |
|
Cash and cash equivalents at beginning of period |
|
|
45,218 |
|
|
|
30,200 |
|
Cash and cash equivalents at end of period |
|
$ |
124,330 |
|
|
$ |
52,502 |
|
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 |
||||||||||||||||
|
|
October 31, 2020 |
|
November 2, 2019 |
||||||||||||||
|
|
|
|
|
Net |
|
|
|
|
|
|
|
Net |
|
|
|
||
|
|
Pre-Tax |
|
Earnings |
|
|
|
|
Pre-Tax |
|
Earnings |
|
|
|
||||
|
|
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 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings |
|
|
|
|
$ |
14,417 |
|
$ |
0.38 |
|
|
|
|
$ |
27,987 |
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charges/other items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment to Blowfish purchase obligation |
|
$ |
5,124 |
|
|
3,805 |
|
|
0.10 |
|
|
3,883 |
|
$ |
2,884 |
|
|
0.07 |
Vionic integration-related costs |
|
|
— |
|
|
— |
|
|
— |
|
|
969 |
|
|
719 |
|
|
0.02 |
Total charges/other items |
|
$ |
5,124 |
|
$ |
3,805 |
|
$ |
0.10 |
|
$ |
4,852 |
|
$ |
3,603 |
|
$ |
0.09 |
Adjusted earnings |
|
|
|
|
$ |
18,222 |
|
$ |
0.48 |
|
|
|
|
$ |
31,590 |
|
$ |
0.78 |
|
||||||||||||||||||||
|
|
(Unaudited) |
||||||||||||||||||
|
|
Thirty-Nine Weeks Ended |
||||||||||||||||||
|
|
October 31, 2020 |
|
November 2, 2019 |
||||||||||||||||
|
|
|
|
|
Net (Loss) |
|
|
|
|
|
|
|
Net |
|
|
|
||||
|
|
Pre-Tax |
|
Earnings |
|
Diluted |
|
Pre-Tax |
|
Earnings |
|
|
|
|||||||
|
|
Impact of |
|
Attributable |
|
(Loss) |
|
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 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
GAAP (loss) earnings |
|
|
|
|
$ |
(362,138 |
) |
|
$ |
(9.67 |
) |
|
|
|
|
$ |
62,411 |
|
$ |
1.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Charges/other items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Goodwill and intangible asset impairment charges |
|
$ |
262,719 |
|
|
218,506 |
|
|
|
5.84 |
|
|
$ |
— |
|
|
— |
|
|
— |
COVID-19-related expenses (1) |
|
|
99,040 |
|
|
78,047 |
|
|
|
2.08 |
|
|
|
— |
|
|
— |
|
|
— |
Fair value adjustment to Blowfish purchase obligation |
|
|
14,946 |
|
|
11,098 |
|
|
|
0.30 |
|
|
|
3,883 |
|
|
2,884 |
|
|
0.07 |
Brand Portfolio - business exits |
|
|
1,598 |
|
|
1,187 |
|
|
|
0.03 |
|
|
|
1,905 |
|
|
1,415 |
|
|
0.03 |
Vionic acquisition and integration-related costs |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
7,696 |
|
|
5,714 |
|
|
0.14 |
Total charges/other items |
|
$ |
378,303 |
|
$ |
308,838 |
|
|
$ |
8.25 |
|
|
$ |
13,484 |
|
$ |
10,013 |
|
$ |
0.24 |
Adjusted (loss) earnings |
|
|
|
|
$ |
(53,300 |
) |
|
$ |
(1.42 |
) |
|
|
|
|
$ |
72,424 |
|
$ |
1.75 |
__________________________________ | ||
(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 |
|||||||||||||||||||||||
|
|
October 31, |
|
November 2, |
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|||||||||||||||
(Thousands) |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||||
Net sales |
|
$ |
391,706 |
|
$ |
446,583 |
|
$ |
267,587 |
|
$ |
359,863 |
|
$ |
(11,813 |
) |
$ |
(14,071 |
) |
$ |
647,480 |
|
$ |
792,375 |
|
|||||||
Gross profit |
|
|
160,019 |
|
|
183,267 |
|
|
94,312 |
|
|
133,761 |
|
|
2,641 |
|
|
2,742 |
|
|
256,972 |
|
|
319,770 |
|
|||||||
Adjusted gross profit |
|
|
160,019 |
|
|
183,267 |
|
|
94,312 |
|
|
133,761 |
|
|
2,641 |
|
|
2,742 |
|
|
256,972 |
|
|
319,770 |
|
|||||||
Gross profit rate |
|
|
40.9 |
% |
|
41.0 |
% |
|
35.2 |
% |
|
37.2 |
% |
|
(22.4 |
)% |
|
(19.5 |
)% |
|
39.7 |
% |
|
40.4 |
% |
|||||||
Adjusted gross profit rate |
|
|
40.9 |
% |
|
41.0 |
% |
|
35.2 |
% |
|
37.2 |
% |
|
(22.4 |
)% |
|
(19.5 |
)% |
|
39.7 |
% |
|
40.4 |
% |
|||||||
Operating earnings (loss) |
|
|
27,845 |
|
|
27,681 |
|
|
7,304 |
|
|
19,398 |
|
|
(15,078 |
) |
|
(3,608 |
) |
|
20,071 |
|
|
43,471 |
|
|||||||
Adjusted operating earnings (loss) |
|
|
27,845 |
|
|
27,681 |
|
|
7,304 |
|
|
19,398 |
|
|
(15,078 |
) |
|
(2,639 |
) |
|
20,071 |
|
|
44,440 |
|
|||||||
Operating earnings % |
|
|
7.1 |
% |
|
6.2 |
% |
|
2.7 |
% |
|
5.4 |
% |
|
127.6 |
% |
|
25.6 |
% |
|
3.1 |
% |
|
5.5 |
% |
|||||||
Adjusted operating earnings % |
|
|
7.1 |
% |
|
6.2 |
% |
|
2.7 |
% |
|
5.4 |
% |
|
127.6 |
% |
|
18.8 |
% |
|
3.1 |
% |
|
5.6 |
% |
|||||||
Same-store sales % (on a 13-week basis) |
|
|
(9.1 |
)% |
|
2.5 |
% |
|
(41.0 |
)% |
|
(5.1 |
)% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|||||||
Number of stores |
|
|
925 |
|
|
960 |
|
|
197 |
|
|
232 |
|
|
— |
|
|
— |
|
|
1,122 |
|
|
1,192 |
|
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
(Unaudited) |
||||||||||||||||||||||||
|
|
Thirteen Weeks Ended |
||||||||||||||||||||||||
|
|
Famous Footwear |
|
Brand Portfolio |
|
Eliminations and Other |
|
Consolidated |
||||||||||||||||||
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
||||||||||
(Thousands) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
Gross profit |
|
$ |
160,019 |
|
$ |
183,267 |
|
$ |
94,312 |
|
$ |
133,761 |
|
$ |
2,641 |
|
|
$ |
2,742 |
|
|
$ |
256,972 |
|
$ |
319,770 |
Charges/Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Vionic integration-related costs |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
Total charges/other items |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
Adjusted gross profit |
|
$ |
160,019 |
|
$ |
183,267 |
|
$ |
94,312 |
|
$ |
133,761 |
|
$ |
2,641 |
|
|
$ |
2,742 |
|
|
$ |
256,972 |
|
$ |
319,770 |
Operating earnings (loss) |
|
$ |
27,845 |
|
$ |
27,681 |
|
$ |
7,304 |
|
$ |
19,398 |
|
$ |
(15,078 |
) |
|
$ |
(3,608 |
) |
|
$ |
20,071 |
|
$ |
43,471 |
Charges/Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Vionic integration-related costs |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
969 |
|
|
|
— |
|
|
969 |
Total charges/other items |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
969 |
|
|
|
— |
|
|
969 |
Adjusted operating (loss) earnings |
|
$ |
27,845 |
|
$ |
27,681 |
|
$ |
7,304 |
|
$ |
19,398 |
|
$ |
(15,078 |
) |
|
$ |
(2,639 |
) |
|
$ |
20,071 |
|
$ |
44,440 |
SCHEDULE 5 |
||||||||||||||||||||||||||||||||
CALERES, INC. |
||||||||||||||||||||||||||||||||
SUMMARY FINANCIAL RESULTS BY SEGMENT |
||||||||||||||||||||||||||||||||
SUMMARY FINANCIAL RESULTS |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
(Unaudited) |
||||||||||||||||||||||||||||||
|
|
Thirty-Nine Weeks Ended |
||||||||||||||||||||||||||||||
|
|
Famous Footwear |
|
Brand Portfolio |
|
Eliminations and Other |
|
Consolidated |
||||||||||||||||||||||||
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
||||||||||||||||
(Thousands) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||||||
Net sales |
|
$ |
916,893 |
|
$ |
1,218,589 |
|
$ |
668,447 |
|
$ |
1,060,488 |
|
$ |
(39,229 |
) |
$ |
(56,463 |
) |
$ |
1,546,111 |
|
$ |
2,222,614 |
|
|||||||
Gross profit |
|
|
348,267 |
|
|
518,261 |
|
|
211,707 |
|
|
385,461 |
|
|
1,516 |
|
|
1,828 |
|
|
561,490 |
|
|
905,550 |
|
|||||||
Adjusted gross profit |
|
|
354,225 |
|
|
518,261 |
|
|
240,763 |
|
|
392,628 |
|
|
1,516 |
|
|
1,828 |
|
|
596,504 |
|
|
912,717 |
|
|||||||
Gross profit rate |
|
|
38.0 |
% |
|
42.5 |
% |
|
31.7 |
% |
|
36.3 |
% |
|
(3.9 |
)% |
|
(3.2 |
)% |
|
36.3 |
% |
|
40.7 |
% |
|||||||
Adjusted gross profit rate |
|
|
38.6 |
% |
|
42.5 |
% |
|
36.0 |
% |
|
37.0 |
% |
|
(3.9 |
)% |
|
(3.2 |
)% |
|
38.6 |
% |
|
41.1 |
% |
|||||||
Operating (loss) earnings |
|
|
(38,651 |
) |
|
70,036 |
|
|
(352,556 |
) |
|
46,225 |
|
|
(39,072 |
) |
|
(18,117 |
) |
|
(430,279 |
) |
|
98,144 |
|
|||||||
Adjusted (loss) operating earnings |
|
|
(16,100 |
) |
|
70,036 |
|
|
(12,386 |
) |
|
54,019 |
|
|
(38,436 |
) |
|
(16,310 |
) |
|
(66,922 |
) |
|
107,745 |
|
|||||||
Operating (loss) earnings% |
|
|
(4.2 |
)% |
|
5.7 |
% |
|
(52.7 |
)% |
|
4.4 |
% |
|
99.6 |
% |
|
32.1 |
% |
|
(27.8 |
)% |
|
4.4 |
% |
|||||||
Adjusted (loss) operating earnings% |
|
|
(1.8 |
)% |
|
5.7 |
% |
|
(1.9 |
)% |
|
5.1 |
% |
|
98.0 |
% |
|
28.9 |
% |
|
(4.3 |
)% |
|
4.8 |
% |
|||||||
Same-store sales % (on a 39-week basis) |
|
|
3.0 |
% |
|
1.1 |
% |
|
(32.3 |
)% |
|
(7.6 |
)% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|||||||
Number of stores |
|
|
925 |
|
|
960 |
|
|
197 |
|
|
232 |
|
|
— |
|
|
— |
|
|
1,122 |
|
|
1,192 |
|
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(Unaudited) |
|||||||||||||||||||||||||||
|
|
Thirty-Nine Weeks Ended |
|||||||||||||||||||||||||||
|
|
Famous Footwear |
|
Brand Portfolio |
|
Eliminations and Other |
|
Consolidated |
|||||||||||||||||||||
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
|||||||||||||
(Thousands) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||
Gross profit |
|
$ |
348,267 |
|
|
$ |
518,261 |
|
$ |
211,707 |
|
|
$ |
385,461 |
|
$ |
1,516 |
|
|
$ |
1,828 |
|
|
$ |
561,490 |
|
|
$ |
905,550 |
Charges/Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
COVID-19-related expenses |
|
|
5,958 |
|
|
|
— |
|
|
27,458 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
33,416 |
|
|
|
— |
Brand Portfolio - brand exits |
|
|
— |
|
|
|
— |
|
|
1,598 |
|
|
|
1,355 |
|
|
— |
|
|
|
— |
|
|
|
1,598 |
|
|
|
1,355 |
Vionic integration-related costs |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
5,812 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,812 |
Brand Portfolio - brand exits |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
Total charges/other items |
|
|
5,958 |
|
|
|
— |
|
|
29,056 |
|
|
|
7,167 |
|
|
— |
|
|
|
— |
|
|
|
35,014 |
|
|
|
7,167 |
Adjusted gross profit |
|
$ |
354,225 |
|
|
$ |
518,261 |
|
$ |
240,763 |
|
|
$ |
392,628 |
|
$ |
1,516 |
|
|
$ |
1,828 |
|
|
$ |
596,504 |
|
|
$ |
912,717 |
Operating (loss) earnings |
|
$ |
(38,651 |
) |
|
$ |
70,036 |
|
$ |
(352,556 |
) |
|
$ |
46,225 |
|
$ |
(39,072 |
) |
|
$ |
(18,117 |
) |
|
$ |
(430,279 |
) |
|
$ |
98,144 |
Charges/Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill and intangible asset impairment charges |
|
|
— |
|
|
|
— |
|
|
262,719 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
262,719 |
|
|
|
— |
COVID-19-related expenses |
|
|
22,551 |
|
|
|
— |
|
|
75,853 |
|
|
|
— |
|
|
636 |
|
|
|
— |
|
|
|
99,040 |
|
|
|
— |
Brand Portfolio - brand exits |
|
|
— |
|
|
|
— |
|
|
1,598 |
|
|
|
1,905 |
|
|
— |
|
|
|
— |
|
|
|
1,598 |
|
|
|
1,905 |
Vionic acquisition and integration-related costs |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
5,889 |
|
|
— |
|
|
|
1,807 |
|
|
|
— |
|
|
|
7,696 |
Total charges/other items |
|
|
22,551 |
|
|
|
— |
|
|
340,170 |
|
|
|
7,794 |
|
|
636 |
|
|
|
1,807 |
|
|
|
363,357 |
|
|
|
9,601 |
Adjusted operating (loss) earnings |
|
$ |
(16,100 |
) |
|
$ |
70,036 |
|
$ |
(12,386 |
) |
|
$ |
54,019 |
|
$ |
(38,436 |
) |
|
$ |
(16,310 |
) |
|
$ |
(66,922 |
) |
|
$ |
107,745 |
SCHEDULE 6 |
||||||||||||||||
CALERES, INC. |
||||||||||||||||
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE RECONCILIATION |
||||||||||||||||
|
|
(Unaudited) |
||||||||||||||
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
||||||||||||
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
||||||||
(Thousands, except per share data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings (loss) attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings (loss) |
|
$ |
14,926 |
|
|
$ |
27,761 |
|
|
$ |
(361,915 |
) |
|
$ |
62,073 |
|
Net (earnings) loss attributable to noncontrolling interests |
|
|
(509 |
) |
|
|
226 |
|
|
|
(223 |
) |
|
|
338 |
|
Net earnings (loss) attributable to Caleres, Inc. |
|
|
14,417 |
|
|
|
27,987 |
|
|
|
(362,138 |
) |
|
|
62,411 |
|
Net earnings allocated to participating securities |
|
|
(512 |
) |
|
|
(946 |
) |
|
|
— |
|
|
|
(2,042 |
) |
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities |
|
$ |
13,905 |
|
|
$ |
27,041 |
|
|
$ |
(362,138 |
) |
|
$ |
60,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted common shares attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic common shares |
|
|
36,554 |
|
|
|
39,258 |
|
|
|
37,439 |
|
|
|
39,983 |
|
Dilutive effect of share-based awards |
|
|
176 |
|
|
|
55 |
|
|
|
— |
|
|
|
57 |
|
Diluted common shares attributable to Caleres, Inc. |
|
|
36,730 |
|
|
|
39,313 |
|
|
|
37,439 |
|
|
|
40,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.38 |
|
|
$ |
0.69 |
|
|
$ |
(9.67 |
) |
|
$ |
1.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.38 |
|
|
$ |
0.69 |
|
|
$ |
(9.67 |
) |
|
$ |
1.51 |
|
SCHEDULE 7 |
||||||||||||||||
CALERES, INC. |
||||||||||||||||
BASIC AND DILUTED ADJUSTED EARNINGS (LOSS) PER SHARE RECONCILIATION |
||||||||||||||||
|
||||||||||||||||
|
|
(Unaudited) |
||||||||||||||
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
||||||||||||
|
|
October 31, |
|
November 2, |
|
October 31, |
|
November 2, |
||||||||
(Thousands, except per share data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net earnings (loss) attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net earnings (loss) |
|
$ |
18,731 |
|
|
$ |
31,364 |
|
|
$ |
(53,077 |
) |
|
$ |
72,086 |
|
Net (earnings) loss attributable to noncontrolling interests |
|
|
(509 |
) |
|
|
226 |
|
|
|
(223 |
) |
|
|
338 |
|
Adjusted net earnings (loss) attributable to Caleres, Inc. |
|
|
18,222 |
|
|
|
31,590 |
|
|
|
(53,300 |
) |
|
|
72,424 |
|
Net earnings allocated to participating securities |
|
|
(647 |
) |
|
|
(1,070 |
) |
|
|
— |
|
|
|
(2,376 |
) |
Adjusted net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities |
|
$ |
17,575 |
|
|
$ |
30,520 |
|
|
$ |
(53,300 |
) |
|
$ |
70,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted common shares attributable to Caleres, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic common shares |
|
|
36,554 |
|
|
|
39,258 |
|
|
|
37,439 |
|
|
|
39,983 |
|
Dilutive effect of share-based awards |
|
|
176 |
|
|
|
55 |
|
|
|
— |
|
|
|
57 |
|
Diluted common shares attributable to Caleres, Inc. |
|
|
36,730 |
|
|
|
39,313 |
|
|
|
37,439 |
|
|
|
40,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic adjusted earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.48 |
|
|
$ |
0.78 |
|
|
$ |
(1.42 |
) |
|
$ |
1.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted adjusted earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.48 |
|
|
$ |
0.78 |
|
|
$ |
(1.42 |
) |
|
$ |
1.75 |
|