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Omar Venerio
Omar Venerio
Articles (1455) 

2 Footwear Stocks Decline Friday

Caleres and Nike fall on quarterly results

March 22, 2019 | About:

Shares of Caleres Inc. (NYSE:CAL) fell nearly 10% on Friday after the company announced fourth-quarter 2018 results on Thursday.

The footwear company posted earnings of 38 cents per share on $720.26 million in revenue, reflecting 2.5% growth from the prior-year quarter. Earnings fell 7 cents short  of analysts' estimates and revenue missed expectations by $17.95 million.

By segment, brand portfolio sales grew 18% to $355.1 million, including VionicFamous Footwear's same-store sales were up 1.1%.

“In 2018, we continued to build on our strategic plan, as we gained market share in Brand Portfolio, delivered our seventh consecutive year of same-store sales improvement at Famous Footwear, transitioned to an in-house distribution center facility, and acquired two new brands," Chairman, President and CEO Diane Sullivan said. "This work has prepared us for the future and also positioned us for growth.

The gross profit reached $277.7 million, registering a gross margin of 38.6% and adjusted gross margin of 39.9%.The operating loss was $94.4 million, but the adjusted operating earnings were $20.5 million.

For fiscal 2018, the company recorded a gross profit of  $1.15 billion with a gross margin of 40.8% and adjusted gross margin of 41.2%. Operating earnings were $0.4 million and adjusted operating earnings were $127 million.

Looking ahead to 2019, Caleres expects its total net revenue to be in the range of $3 billion to $3.05 billion.

During the quarter, several hedge fund managers increased their positions in the stock. Chuck Royce (Trades, Portfolio) boosted his holding 94.02% to725,923 shares and Jeremy Grantham (Trades, Portfolio) added 53.27% to 51,500 shares. Philippe Laffont opened a new position, buying 10,549 shares. Steven Cohen (Trades, Portfolio) purchased 2,524 shares.

Shares of Nike Inc. (NYSE:NKE) lost more than 6% on Friday after the company announced third-quarter earnings of 68 cents per share on $9.61 billion in revenue, reflecting 7% year-over-year growth. The company beat earnings estimates by 3 cents and revenue expectations by $10 million.

“Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world,” Chairman, President and CEO Mark Parker said.

The footwear manufacturer's gross margin inched up 130 basis points to 45.1% due to higher average selling prices, favorable changes in foreign currency exchange rates and growth in Nike Direct.

During the quarter, the company repurchased 9.8 million shares for a total of $754 million.

Lee Ainslie (Trades, Portfolio) opened a new position of 232,070 shares in the final quarter of 2018. Paul Tudor Jones (Trades, Portfolio) was also bullish on the stock, increasing his holding by 758.86% to 23,756 shares.

Disclosure:The author holds no positions in any stocks mentioned.

About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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