Caleres, the US shoe company known for brands such as Sam Edelman and Allen Edmonds, as well as the retail company Famous Footwear, was mostly in the red in the second quarter of the fiscal year. Sales fell short of expectations, with revenue of 683.3 million euros, a decrease of 1.8% compared to the previous year. Sales of the brand portfolio fell by 5.1% compared to the second quarter of 2023. Caleres sees the reason for this in the growing operational challenges and the seasonally weak demand. Earnings per share fell to $0.85, which is below expectations.
“Caleres’ second quarter results were below expectations,” said CEO and President Jay Schmidt. “While our brands and products continue to resonate with consumers and we are confident in our long-term vision, second quarter results in both segments fell short of our potential. Our systems implementation resulted in a lack of visibility that prevented us from achieving the results we expected. Additionally, we experienced weak seasonal demand and back-to-school business came later than expected.”
In contrast, the consolidated gross margin improved by 30 basis points to 45.5%. The manufacturer also generated EBITDA of $57.2 million in the second quarter. The retail chain Famous Footwear was able to achieve a 1.5% increase in sales during the period. “Despite the sales shortfall, our gross margin remained strong, which is due to the brand portfolio,” Schmidt continued. “At the same time, Famous Footwear was able to gain market share in the strategically important children’s category. In addition, back-to-school sales rose sharply in August, so that the season as a whole met our expectations.”
The shoe company has announced restructuring measures for the future. This will result in annual savings of US$7.5 million, with savings of US$2 million expected by 2024.
For the full year 2024, a further decline in net sales is also expected. This would settle at a low single-digit percentage range. The previous forecast was for a constant to 2% increase. The 2024 earnings per share forecast is estimated at $3.94 to $4.09, and adjusted earnings per share are estimated at $4.00 to $4.15. These exclude around $3 million in restructuring costs that will be incurred in the third quarter.
