Caleres (CAL, Financial) reported a first-quarter revenue of $614.2 million, falling short of the anticipated $622.05 million. Despite the enduring consumer appeal of its brands and increased market share in both business segments, the overall quarterly performance did not meet expectations, with a notable downturn in February sales. Although sales trends improved in subsequent months, the company faced challenges with lower gross margins, heightened reserves, and inventory-related costs, leading to pressured operating earnings.
CEO Jay Schmidt highlighted the improved retail momentum and international business growth, despite a challenging operating climate. Moving forward, Caleres plans to enhance its growth and profitability strategies by optimizing sourcing and cutting structural expenses, aiming to reduce SG&A by $15 million annually. Schmidt emphasized their intent to fortify the company's future position, remain committed to their strategic initiatives, and deliver sustained value to shareholders. Long-term confidence remains strong as Caleres focuses on executing its strategic plan and investing in future growth opportunities.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Caleres Inc (CAL, Financial) is $20.00 with a high estimate of $23.00 and a low estimate of $16.00. The average target implies an upside of 22.10% from the current price of $16.38. More detailed estimate data can be found on the Caleres Inc (CAL) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Caleres Inc's (CAL, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Caleres Inc (CAL, Financial) in one year is $27.85, suggesting a upside of 70.02% from the current price of $16.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Caleres Inc (CAL) Summary page.
CAL Key Business Developments
Release Date: March 20, 2025
- Fourth Quarter Revenue: $639.2 million, down 8.3% year-over-year.
- Full Year Revenue: $2.72 billion, down 3.4% year-over-year.
- Fourth Quarter Adjusted Earnings Per Share (EPS): $0.33.
- Full Year Adjusted Earnings Per Share (EPS): $3.30.
- Fourth Quarter Gross Margin: 43%, a decrease of 80 basis points year-over-year.
- Full Year Gross Margin: 44.9%, an increase of 10 basis points year-over-year.
- Fourth Quarter Operating Earnings: $13.4 million, 2.1% of sales.
- Full Year Operating Earnings: $157 million, 5.8% of sales.
- Fourth Quarter SG&A Expenses: $261.7 million, 40.9% of sales.
- Full Year SG&A Expenses: $1.07 billion, 39.1% of sales.
- Fourth Quarter Net Interest Expense: $3.9 million.
- Full Year Net Interest Expense: $14 million.
- Inventory at Year-End: $565 million, up 4.5% year-over-year.
- Debt-to-EBITDA Ratio: 1 times.
- Cash Flow from Operations: $105 million.
- 2025 Revenue Guidance: Consolidated sales expected to be down 1% to up 1%.
- 2025 Earnings Per Share Guidance: $2.80 to $3.20.
- 2025 Capital Expenditures Guidance: $50 million to $55 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Caleres Inc (CAL, Financial) was honored with the Nordstrom Vendor Partner and Excellence Award for Footwear in 2024, highlighting the strength of its brands and products.
- Fourth quarter earnings were at the high end of guidance, with market share gains in women's fashion footwear.
- The company successfully reduced its reliance on China for direct product sourcing, expecting 75% of sourcing to be outside China by mid-2025.
- Lead Brands such as Sam Edelman, Allen Edmonds, Naturalizer, and Vionic outperformed, reinforcing their strategic importance.
- Caleres Inc (CAL) returned approximately $75 million to shareholders through buybacks and dividends in 2024.
Negative Points
- Fourth quarter sales were down approximately 4% year-over-year, excluding the impact of the 53rd week, due to weak boot sales and softer wholesale demand.
- Brand Portfolio sales declined 7.2% in the fourth quarter, with weakness in boots and value-oriented brands.
- Famous Footwear's comp-store sales were down 2.9%, with brick-and-mortar sales declining 4.1%.
- The company faces challenges from persistent inflation and new tariffs, impacting its 2025 outlook.
- Caleres Inc (CAL) anticipates continued headwinds with value-based consumers and cautious retail partner inventory management.
