Caleres Reports Second Quarter 2024 Financial Results
Intellectia.AI2024-09-12
Caleres Reports Second Quarter 2024 Financial Results
St. Louis, MO - Caleres, Inc. (NYSE:CAL), a leading portfolio of consumer-driven footwear brands, has announced its financial results for the second quarter of fiscal 2024, covering the 13-week period ending August 3, 2024. Despite facing various operational challenges, the company remains optimistic about its long-term strategy.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | YoY Change | Consensus Estimates |
|---|---|---|---|---|
| Total Revenue | $683.3M | $696.0M | -1.8% | $723.8M |
| Earnings Per Share (EPS) | $0.85 | $0.95 | -10.5% | $1.22 |
Interpretation: Despite a slight year-over-year decline in revenue and earnings, Caleres managed to maintain a robust gross margin of 45.5%. However, the reported EPS fell short of Wall Street consensus estimates, indicating challenges in meeting market expectations amid operational headwinds.
Revenue Performance by Segment
| Segment | Revenue Q2 2024 | YoY Change | Commentary |
|---|---|---|---|
| Famous Footwear | Increased 1.5% | +1.5% | Gained market share despite a delayed back-to-school season. |
| Brand Portfolio | Declined 5.1% | -5.1% | Challenges due to SAP ERP implementation and weak seasonal demand. |
Interpretation: Famous Footwear’s positive sales growth, particularly in the strategically important Kids category, was a notable highlight. Conversely, the Brand Portfolio faced challenges, primarily due to issues with SAP ERP implementation affecting visibility and seasonal demand fluctuations.
Key Developments and Operational Highlights
- Improved consolidated gross margin by 30 basis points year-over-year, reaching 45.5%.
- Announced restructuring actions anticipated to result in $7.5M in annual SG&A savings.
- Generated second quarter EBITDA of $57.2M.
- Borrowings under the credit facility reduced by $98M compared to Q2 2023.
Comments from Company Officers
Jay Schmidt, President and CEO, highlighted that while current results were below expectations, the company is confident in its long-term vision. He noted that Famous Footwear was able to gain market share in the Kids category and the back-to-school season eventually aligned with expectations by August. The company has addressed the SAP ERP implementation issues affecting visibility and remains committed to delivering the revised EPS guidance.
Dividends and Share Repurchase Program
Caleres continues to return cash to shareholders via dividends and is evaluating conditions for share repurchases, emphasizing a focus on debt reduction.
Forward Guidance
The fiscal 2024 outlook has been revised. Net sales are now expected to decrease in the low-single-digits percentage, down from previous guidance of flat to a 2% increase. The updated EPS guidance for fiscal 2024 is $3.94 - $4.09, with adjusted EPS, excluding restructuring costs, at $4.00 - $4.15.
Stock Price Movement
Following the earnings release, Caleres' stock experienced a decrease of approximately 2.66%, reflecting the market's reaction to the below-expectations financial results and revised guidance.
With restructuring plans in place and an eye on strategic goals, Caleres aims to address current challenges and invest in initiatives to fuel future growth.
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