Caleres Reports Second Quarter Results and Updates Guidance

Rhea-AI Summary

Caleres (NYSE: CAL) reported second quarter 2024 results and updated guidance. Key points include:

- Net sales of $683.3 million, down 1.8% year-over-year

- Famous Footwear sales up 1.5%, Brand Portfolio sales down 5.1%

- Gross margin improved to 45.5%, up 30 basis points

- Earnings per share of $0.85, below expectations

- Lowered fiscal 2024 outlook: net sales now expected to decline low-single-digits percent

- Revised EPS guidance to $3.94-$4.09, down from $4.30-$4.60 previously

- Announced restructuring actions for $7.5 million in annualized SG&A savings

The company cited operational challenges from SAP implementation and weak seasonal demand as factors impacting results.

Positive

• Gross margin improved to 45.5%, up 30 basis points year-over-year
• Famous Footwear sales increased 1.5% versus Q2 2023
• Brand Portfolio gross margin up 140 basis points to 42.7%
• Direct-to-consumer sales represented 75% of total net sales
• Famous Footwear gained market share in the Kids category
• Back-to-school sales surged in August, bringing season in-line with expectations
• Announced restructuring for $7.5 million in annualized SG&A savings

Negative

• Net sales decreased 1.8% year-over-year to $683.3 million
• Brand Portfolio sales declined 5.1% versus Q2 2023
• Earnings per share of $0.85, below expectations
• Lowered fiscal 2024 outlook for net sales and earnings per share
• Famous Footwear comparable sales down 2.9%
• Operational reporting challenges due to SAP ERP implementation
• SG&A as a percentage of net sales increased to 39.3%

Insights

Financial Analyst

Caleres' Q2 results paint a mixed picture. While Famous Footwear saw a 1.5% sales increase, the Brand Portfolio declined by 5.1%, leading to an overall revenue drop of 1.8% to $683.3 million. The gross margin improved by 30 basis points to 45.5%, showing some resilience in pricing power.

However, earnings fell short at $0.85 per share, down from $0.95 last year. The company's lowered guidance for fiscal 2024, with EPS now expected between $3.94 and $4.09, is concerning. This revision, coupled with operational challenges from the SAP implementation, suggests near-term headwinds.

On a positive note, the debt reduction of $98 million year-over-year and planned restructuring for $7.5 million in annual savings demonstrate proactive management. Investors should monitor the success of these efficiency measures and the resolution of operational issues in coming quarters.

Retail Industry Expert

The retail footwear landscape is showing signs of strain. Caleres' results reflect broader industry challenges, with a delayed back-to-school season and weak seasonal demand impacting sales. The 2.9% decline in comparable sales at Famous Footwear is particularly telling of the current consumer spending environment.

However, it's noteworthy that Famous Footwear gained market share in the important Kids category, which could be a strategic advantage moving forward. The surge in August back-to-school sales, bringing the season in line with expectations, suggests some resilience in consumer behavior.

The high direct-to-consumer sales percentage (75% of total net sales) is a positive indicator of Caleres' omnichannel strategy. This direct connection with consumers could provide valuable data and flexibility in navigating future market fluctuations. Investors should watch for how Caleres leverages this strength to adapt to changing retail dynamics.

Supply Chain Analyst

The implementation of the SAP ERP system has clearly caused significant disruptions in Caleres' operations. The lack of visibility leading to underperformance in the Brand Portfolio segment is a critical issue that needs swift resolution. Such challenges often persist beyond the initial implementation phase, potentially impacting future quarters.

On a positive note, inventory management appears solid, with levels flat compared to last year. This suggests the company has avoided overstock issues plaguing many retailers. The deferred vendor payment of $49 million contributing to reduced borrowings is a smart cash flow management move, but it's important to monitor if this becomes a recurring strategy.

The planned reduction in capital expenditures from $60-$70 million to $50-$55 million could impact future operational improvements. Investors should seek clarity on which projects are being delayed or canceled and the potential long-term effects on competitiveness and efficiency.

ST. LOUIS--(BUSINESS WIRE)-- Caleres (NYSE: CAL), a market-leading portfolio of consumer-driven footwear brands, today reported financial results for the second quarter 2024.

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 Guidance	Revised 2024 Annual Guidance	Third Quarter Guidance
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

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

		(Unaudited)
		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			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				—				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				173				487
Net earnings attributable to Caleres, Inc.		$	29,958			$	33,943			$	60,898			$	68,670
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 2

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

		(Unaudited)
($ thousands)		August 3, 2024			July 29, 2023
ASSETS
Cash and cash equivalents		$	51,753		$	47,098
Receivables, net			151,055			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			939,700			914,823
Lease right-of-use assets			588,842			505,423
Property and equipment, net			169,459			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
LIABILITIES AND EQUITY
Borrowings under revolving credit agreement		$	146,500		$	244,000
Trade accounts payable			396,450			350,020
Lease obligations			116,619			133,743
Other accrued expenses			200,854			228,608
Total current liabilities			860,423			956,371
Noncurrent lease obligations			508,950			429,192
Other liabilities			37,128			46,816
Total other liabilities			546,078			476,008
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

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		(Unaudited)
		Twenty-Six Weeks Ended
($ thousands)		August 3, 2024				July 29, 2023
OPERATING ACTIVITIES:
Net cash provided by operating activities		$	115,696			$	125,176
INVESTING ACTIVITIES:
Purchases of property and equipment			(20,886	)			(15,044	)
Capitalized software			(922	)			(1,833	)
Net cash used for investing activities			(21,808	)			(16,877	)
FINANCING ACTIVITIES:
Borrowings under revolving credit agreement			306,868				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				33,700
Cash and cash equivalents at end of period		$	51,753			$	47,098

SCHEDULE 4

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)

		(Unaudited)
		Thirteen Weeks Ended
		August 3, 2024									July 29, 2023
		Pre-Tax			Net Earnings						Pre-Tax			Net 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					$	29,958		$	0.85					$	33,943		$	0.95
Charges/other items:
Expense reduction initiatives			—			—			—			1,647			1,224			0.03
Total charges/other items		$	—		$	—		$	—		$	1,647		$	1,224		$	0.03
Adjusted earnings					$	29,958		$	0.85					$	35,167		$	0.98

		(Unaudited)
		Twenty-Six Weeks Ended
		August 3, 2024									July 29, 2023
		Pre-Tax			Net Earnings						Pre-Tax			Net 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					$	60,898		$	1.73					$	68,670		$	1.91
Charges/other items:
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					$	69,894		$	1.95

		(Unaudited)
		Trailing Twelve Months Ended
		August 3, 2024								July 29, 2023
		Pre-Tax			Net Earnings (Loss)					Pre-Tax			Net Earnings (Loss)
		Impact of			Attributable					Impact of			Attributable
		Charges/Other			to Caleres,					Charges/Other			to Caleres,
($ thousands)		Items			Inc.					Items			Inc.
GAAP earnings					$	163,619							$	148,725
Charges/other items:
Deferred tax valuation allowance adjustments		$	—			(26,654	)			$	—			(17,374	)
Expense reduction initiatives			4,456			3,308					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							$	135,298

SCHEDULE 5
CALERES, INC.
SUMMARY FINANCIAL RESULTS BY SEGMENT
SUMMARY FINANCIAL 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
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 (NON-GAAP)

		(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 (NON-GAAP)

		(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/

Investor Contact:

Liz Dunn

ldunn@caleres.com

Source: Caleres

FAQ

What were Caleres' (CAL) Q2 2024 earnings per share?

Caleres reported earnings per diluted share of $0.85 for the second quarter of 2024.

How did Caleres' (CAL) net sales change in Q2 2024 compared to Q2 2023?

Caleres' net sales decreased by 1.8% to $683.3 million in Q2 2024 compared to the same period in 2023.

What is Caleres' (CAL) updated EPS guidance for fiscal 2024?

Caleres lowered its fiscal 2024 EPS guidance to $3.94-$4.09, down from the previous guidance of $4.30-$4.60.

How did Famous Footwear's sales perform in Q2 2024 for Caleres (CAL)?

Famous Footwear sales increased by 1.5% in Q2 2024 compared to Q2 2023, although comparable sales were down 2.9%.

What factors impacted Caleres' (CAL) Brand Portfolio sales in Q2 2024?

Brand Portfolio sales declined 5.1% due to operational reporting challenges from SAP ERP implementation and pockets of weak seasonal demand.