Provides Annual 2020 Guidance

Caleres (NYSE: CAL) (caleres.com), a diverse portfolio of global footwear brands, today reported fourth quarter 2019 financial results.

“Despite a challenging footwear market that resulted in our earnings to be less than expected, Caleres made excellent progress on a range of value-creating strategic objectives during 2019,” said Diane Sullivan, CEO, president and chairman of Caleres. “These accomplishments include:

  • Strengthening the connections with our consumers with a 23% year-over-year growth in our ecommerce-related direct to consumer business and the successful launch and execution of the Famous Footwear rewards program;
  • Broadening the reach and power of our brands by strategically managing the portfolio to include our exclusive partnership with Veronica Beard and the relaunch of the legacy Zodiac brand while at the same time shifting away from DvF and Carlos Santana and repositioning Via Spiga; and
  • Aggressively managing the variables within our control with a year-over-year reduction of capital expenditures and inventory levels and the implementation of further cost-containment initiatives that will carry into 2020.

“Furthermore, we generated $170.8 million of cash flow from operations and put that cash to good use by investing wisely in our businesses, returning approximately $45 million to shareholders through our share repurchase program and long-standing dividend and reducing the borrowing under our credit facility by $60 million.”

Coronavirus

Caleres is actively monitoring the Coronavirus, focusing first and foremost on the health and well-being of its global workforce. The executive management team is meeting regularly to rigorously evaluate the potential impact of the virus on the supply chain and broader consumer sentiment, and is taking prudent steps to protect the business and adjust its short term strategy in response to this dynamic health crisis.

Fourth Quarter 2019 Results Versus Fourth Quarter 2018

  • Consolidated sales of $698.9 million were down approximately 3.0%
    • Famous Footwear total sales of $369.5 million, up 1.2%, with same-store-sales up 5.1%
    • Brand Portfolio sales of $346.0 million, down 9.4%
  • Gross profit was $278.8 million, while gross margin was 39.9% and adjusted gross margin was 40.1%
  • SG&A expense of $260.8 million represented 37.3% of sales
  • Operating earnings were $5.7 million and adjusted operating earnings were $19.6 million
  • Net earnings for the quarter were $0.4 million, resulting in an earnings per diluted share of $0.01, including $0.33 for the below items
    • Cost containment initiatives of $0.27, including the voluntary early retirement program and other restructuring actions
    • Brand Portfolio expense of $0.03 related to brand exit costs
    • Fair value adjustment of $0.03 associated with the mandatory purchase obligation for Blowfish Malibu
  • Adjusted net earnings were $13.94 million, while adjusted diluted net earnings per share were $0.34 and included approximately $0.07 of dilution related to Vionic interest and amortization expense

Fiscal 2019 Results Versus 2018

  • Consolidated sales of $2,921.6 million were up 3.1%
    • Brand Portfolio sales of $1,406.5 million, up 7.1%, driven by the company’s 2018 acquisitions
    • Famous Footwear total sales of $1,588.1 million, down 1.2%, with same-store-sales up 2.0%
  • Gross profit was $1,184.4 million, while gross margin was 40.5% and adjusted gross margin was 40.8%
  • SG&A expense of $1,065.8 million represented 36.5% of sales
  • Operating earnings were $103.8 million and adjusted operating earnings were $127.4 million
  • Net earnings for the year were $62.8 million, resulting in an earnings per diluted share of $1.53, including $0.57 for the below items
    • Cost containment initiatives of $0.27, including the voluntary early retirement program and other restructuring actions
    • Vionic acquisition and integration-related costs of $0.14
    • Brand Portfolio expense of $0.06 related to brand exits
    • Fair value adjustment of $0.10 associated with the mandatory purchase obligation for Blowfish Malibu
  • Adjusted net earnings of $86.4 million were down approximately 9%, while adjusted diluted net earnings per share were down approximately 5% to $2.10 per share, including approximately $0.22 of dilution primarily related to Vionic interest and amortization expense

Balance Sheet and Cash Flow

  • Cash and equivalents were $45.2 million and cash from operations was $170.8 million
  • Outstanding borrowings under the revolving credit facility totaled $275.0 million, down $60 million for the year
  • Inventory of $618.4 million was down 9.5% year-over-year
  • Capital expenditures were $50.2 million, a decline of $16.7 million year-over-year
  • Share repurchases and dividends totaled $45 million in 2019

2020 Outlook

“Looking ahead, in the short-term, we do anticipate disruptions related to the Coronavirus and are expecting headwinds between $0.15 and $0.20 per share in the first quarter of 2020. While potential impacts on full year 2020 results are difficult to quantify at this early stage, we will continue to actively assess the situation. We are approaching 2020 with a laser focus on managing the variables within our control and leveraging the capabilities of our operations and the investments we’ve made for the future. We are confident in the strength of our portfolio and firmly believe we have the right team and right strategy in place to manage through this dynamic marketplace,” Sullivan said.

 

2020 Guidance

Consolidated net sales

Flat at $2.95 billion

Brand Portfolio sales

Flat-to-low single digits

Famous Footwear same-store-sales

Up low single digits

Earnings per diluted share

$ 1.95 to $2.15

Investor Conference Call

Caleres will host an investor conference call at 4:30 p.m. ET today, Thursday, March 12. The webcast and slides will be available at investor.caleres.com/news/events. A live conference call will be available at (877) 217-9089 for analysts in North America or (706) 679-1723 for international analysts by using the conference ID 5282859. A replay will be available at investor.caleres.com/news/events/archive for a limited period. Investors may also access the replay by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 5282859 through Wednesday, March 18.

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

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. In particular, the company provides historic and estimated future gross profit, operating earnings, EBITDA (earnings before interest, taxes, depreciation, and amortization), net earnings and earnings per diluted share adjusted to exclude certain gains, charges and recoveries, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures 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. These measures 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 consumers' disposable income, which in turn can be influenced by general economic conditions and other factors; (ii) rapidly changing fashion trends and consumer preferences and purchasing patterns; (iii) intense competition within the footwear industry; (iv) 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; (v) imposition of tariffs; (vi) the ability to accurately forecast sales and manage inventory levels; (vii) cybersecurity threats or other major disruption to the Company’s information technology systems; (viii) customer concentration and increased consolidation in the retail industry; (ix) transitional challenges with acquisitions; (x) a disruption in the Company’s distribution centers; (xi) foreign currency fluctuations; (xii) changes to tax laws, policies and treaties; (xiii) the ability to recruit and retain senior management and other key associates; (xiv) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xv) the ability to secure/exit leases on favorable terms; (xvi) the ability to maintain relationships with current suppliers; (xvii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights; and (xviii) the recent coronavirus outbreak and its adverse impact on our supply chain operations and our business, sales and results of operations around the world. 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 2, 2019, 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.

About Caleres

Caleres is a diverse portfolio of global footwear brands. Our products are available virtually everywhere - in the more than 1,175 retail stores we operate, in hundreds of major department and specialty stores, on our branded e-commerce sites, and on many additional third-party retail websites. Famous Footwear offers great casual and athletic brands for the entire family with convenient, curated, affordable collections. Sam Edelman keeps expressive women in step with the latest trends in a playful, whimsical way. Naturalizer shoes are beautiful from the inside out, with elegant simplicity and legendary fit re-imagined for today’s consumer. Allen Edmonds combines old world craft with new world technology to create luxe footwear for the discerning man who wants sophisticated, modern classics. Rounding out our family of brands are Vionic, Vince, Franco Sarto, Dr. Scholl’s Shoes, LifeStride, Blowfish Malibu, Bzees, Circus by Sam Edelman, Fergie and Ryka. Combined, these brands make Caleres a company with both a legacy and a mission. Our legacy is our more than 140 years of craftsmanship and our passion for fit, while our mission is to continue to inspire people to feel great… feet first. Visit caleres.com to learn more about us.

SCHEDULE 1

 

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

Fifty-Two Weeks Ended

 

(Thousands, except per share data)

 

February 1,

2020

 

 

February 2,

2019

 

 

February 1,

2020

 

 

February 2,

2019

 

Net sales

 

$

698,948

 

 

$

720,263

 

 

$

2,921,562

 

 

$

2,834,846

 

Cost of goods sold

 

 

420,138

 

 

 

442,551

 

 

 

1,737,202

 

 

 

1,678,502

 

Gross profit

 

 

278,810

 

 

 

277,712

 

 

 

1,184,360

 

 

 

1,156,344

 

Selling and administrative expenses

 

 

260,788

 

 

 

267,210

 

 

 

1,065,760

 

 

 

1,041,765

 

Impairment of goodwill and intangible assets

 

 

 

 

 

98,044

 

 

 

 

 

 

98,044

 

Restructuring and other special charges, net

 

 

12,353

 

 

 

6,895

 

 

 

14,787

 

 

 

16,134

 

Operating earnings (loss)

 

 

5,669

 

 

 

(94,437

)

 

 

103,813

 

 

 

401

 

Interest expense, net

 

 

(7,835

)

 

 

(6,782

)

 

 

(33,123

)

 

 

(18,277

)

Loss on early extinguishment of debt

 

 

 

 

 

(186

)

 

 

 

 

 

(186

)

Other income, net

 

 

1

 

 

 

3,054

 

 

 

7,903

 

 

 

12,308

 

(Loss) earnings before income taxes

 

 

(2,165

)

 

 

(98,351

)

 

 

78,593

 

 

 

(5,754

)

Income tax benefit (provision)

 

 

2,174

 

 

 

22,924

 

 

 

(16,511

)

 

 

273

 

Net earnings (loss)

 

 

9

 

 

 

(75,427

)

 

 

62,082

 

 

 

(5,481

)

Net (loss) earnings attributable to noncontrolling interests

 

 

(399

)

 

 

25

 

 

 

(737

)

 

 

(40

)

Net earnings (loss) attributable to Caleres, Inc.

 

$

408

 

 

$

(75,452

)

 

$

62,819

 

 

$

(5,441

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders

 

$

0.01

 

 

$

(1.83

)

 

$

1.53

 

 

$

(0.13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders

 

$

0.01

 

 

$

(1.83

)

 

$

1.53

 

 

$

(0.13

)

SCHEDULE 2

 

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

(Unaudited)

 

 

 

February 1, 2020

 

 

February 2, 2019

 

(Thousands)

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

45,218

 

 

$

30,200

 

Receivables, net

 

 

162,181

 

 

 

191,722

 

Inventories, net

 

 

618,406

 

 

 

683,171

 

Prepaid expenses and other current assets

 

 

56,494

 

 

 

71,354

 

Total current assets

 

 

882,299

 

 

 

976,447

 

 

 

 

 

 

 

 

 

 

Lease right-of-use assets

 

 

695,594

 

 

 

 

Property and equipment, net

 

 

224,846

 

 

 

230,784

 

Goodwill and intangible assets, net

 

 

539,579

 

 

 

549,897

 

Other assets

 

 

89,389

 

 

 

81,440

 

Total assets

 

$

2,431,707

 

 

$

1,838,568

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Borrowings under revolving credit agreement

 

$

275,000

 

 

$

335,000

 

Trade accounts payable

 

 

267,018

 

 

 

316,298

 

Lease obligations

 

 

127,869

 

 

 

 

Other accrued expenses

 

 

181,063

 

 

 

202,038

 

Total current liabilities

 

 

850,950

 

 

 

853,336

 

 

 

 

 

 

 

 

 

 

Noncurrent lease obligations

 

 

629,032

 

 

 

 

Long-term debt

 

 

198,391

 

 

 

197,932

 

Deferred rent

 

 

 

 

 

54,850

 

Other liabilities

 

 

104,204

 

 

 

97,015

 

Total other liabilities

 

 

931,627

 

 

 

349,797

 

 

 

 

 

 

 

 

 

 

Total Caleres, Inc. shareholders’ equity

 

 

645,950

 

 

 

634,053

 

Noncontrolling interests

 

 

3,180

 

 

 

1,382

 

Total equity

 

 

649,130

 

 

 

635,435

 

Total liabilities and equity

 

$

2,431,707

 

 

$

1,838,568

 

SCHEDULE 3

 

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

(Unaudited)

 

 

 

Fifty-Two Weeks Ended

 

(Thousands)

 

February 1, 2020

 

 

February 2, 2019

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

170,786

 

 

$

129,589

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(44,533

)

 

 

(62,483

)

Disposals of property and equipment

 

 

636

 

 

 

 

Capitalized software

 

 

(5,619

)

 

 

(4,416

)

Acquisition of Blowfish Malibu, net of cash received

 

 

 

 

 

(16,792

)

Acquisition of Vionic, net of cash received

 

 

 

 

 

(352,666

)

Net cash used for investing activities

 

 

(49,516

)

 

 

(436,357

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Borrowings under revolving credit agreement

 

 

288,500

 

 

 

360,000

 

Repayments under revolving credit agreement

 

 

(348,500

)

 

 

(25,000

)

Dividends paid

 

 

(11,422

)

 

 

(11,983

)

Debt issuance costs

 

 

 

 

 

(1,298

)

Acquisition of treasury stock

 

 

(33,424

)

 

 

(43,771

)

Issuance of common stock under share-based plans, net

 

 

(2,644

)

 

 

(4,372

)

Contributions by noncontrolling interests

 

 

2,500

 

 

 

 

Other

 

 

(1,342

)

 

 

(406

)

Net cash (used for) provided by financing activities

 

 

(106,332

)

 

 

273,170

 

Effect of exchange rate changes on cash and cash equivalents

 

 

80

 

 

 

(249

)

Increase (decrease) in cash and cash equivalents

 

 

15,018

 

 

 

(33,847

)

Cash and cash equivalents at beginning of period

 

 

30,200

 

 

 

64,047

 

Cash and cash equivalents at end of period

 

$

45,218

 

 

$

30,200

 

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

 

 

 

February 1, 2020

 

 

February 2, 2019

 

(Thousands, except per share data)

 

Pre-Tax

Impact of

Charges/Other

Items

 

 

Net

Earnings

Attributable

to Caleres, Inc.

 

 

Diluted

Earnings

Per Share

 

 

Pre-Tax

Impact of

Charges/Other

Items

 

 

Net (Loss)

Earnings

Attributable

to Caleres, Inc.

 

 

Diluted (Loss)

Earnings

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings

 

 

 

 

 

$

408

 

 

$

0.01

 

 

 

 

 

 

$

(75,452

)

 

$

(1.83

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges/other items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense containment initiatives

 

$

15,033

 

 

 

11,189

 

 

 

0.27

 

 

$

 

 

 

 

 

 

 

Fair value adjustment to Blowfish purchase obligation

 

 

1,545

 

 

 

1,147

 

 

 

0.03

 

 

 

 

 

 

 

 

 

 

Brand Portfolio - business exits

 

 

1,615

 

 

 

1,198

 

 

 

0.03

 

 

 

2,395

 

 

 

1,779

 

 

 

0.04

 

Impairment of goodwill and intangible assets

 

 

 

 

 

 

 

 

 

 

 

98,044

 

 

 

83,044

 

 

 

2.01

 

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

8,346

 

 

 

5,756

 

 

 

0.14

 

Integration and reorganization of men's brands

 

 

 

 

 

 

 

 

 

 

 

1,014

 

 

 

754

 

 

 

0.02

 

Logistics transition

 

 

 

 

 

 

 

 

 

 

 

4,488

 

 

 

3,326

 

 

 

0.08

 

Blowfish Malibu acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

244

 

 

 

238

 

 

 

0.01

 

Retail operations restructuring

 

 

 

 

 

 

 

 

 

 

 

392

 

 

 

287

 

 

 

0.01

 

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

186

 

 

 

138

 

 

 

0.00

 

Income tax reform

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,891

)

 

 

(0.10

)

Total charges/other items

 

$

18,193

 

 

$

13,534

 

 

$

0.33

 

 

$

115,109

 

 

$

91,431

 

 

$

2.21

 

Adjusted earnings

 

 

 

 

 

$

13,942

 

 

$

0.34

 

 

 

 

 

 

$

15,979

 

 

$

0.38

 

 

 

 

(Unaudited)

 

 

 

Fifty-Two Weeks Ended

 

 

 

February 1, 2020

 

 

February 2, 2019

 

(Thousands, except per share data)

 

Pre-Tax

Impact of

Charges/Other

Items

 

 

Net

Earnings

Attributable

to Caleres, Inc.

 

 

Diluted

Earnings

Per Share

 

 

Pre-Tax

Impact of

Charges/Other

Items

 

 

Net (Loss)

Earnings

Attributable

to Caleres, Inc.

 

 

Diluted (Loss)

Earnings

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings

 

 

 

 

 

$

62,819

 

 

$

1.53

 

 

 

 

 

 

$

(5,441

)

 

$

(0.13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges/other items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense containment initiatives

 

$

15,033

 

 

 

11,189

 

 

 

0.27

 

 

$

 

 

 

 

 

 

 

Vionic acquisition and integration-related costs

 

 

7,696

 

 

 

5,714

 

 

 

0.14

 

 

 

13,368

 

 

 

9,926

 

 

 

0.23

 

Fair value adjustment to Blowfish purchase obligation

 

 

5,428

 

 

 

4,031

 

 

 

0.10

 

 

 

 

 

 

 

 

 

 

Brand Portfolio - business exits

 

 

3,520

 

 

 

2,613

 

 

 

0.06

 

 

 

2,395

 

 

 

1,779

 

 

 

0.04

 

Impairment of goodwill and intangible assets

 

 

 

 

 

 

 

 

 

 

 

98,044

 

 

 

83,044

 

 

 

1.93

 

Integration and reorganization of men's brands

 

 

 

 

 

 

 

 

 

 

 

5,841

 

 

 

4,328

 

 

 

0.10

 

Logistics transition

 

 

 

 

 

 

 

 

 

 

 

4,488

 

 

 

3,326

 

 

 

0.08

 

Blowfish Malibu acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

2,022

 

 

 

1,557

 

 

 

0.04

 

Retail operations restructuring

 

 

 

 

 

 

 

 

 

 

 

392

 

 

 

287

 

 

 

0.01

 

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

186

 

 

 

138

 

 

 

0.00

 

Income tax reform

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,891

)

 

 

(0.09

)

Total charges/other items

 

$

31,677

 

 

$

23,547

 

 

$

0.57

 

 

$

126,736

 

 

$

100,494

 

 

$

2.34

 

Adjusted earnings

 

 

 

 

 

$

86,366

 

 

$

2.10

 

 

 

 

 

 

$

95,053

 

 

$

2.21

 

SCHEDULE 5

 

CALERES, INC.

SUMMARY FINANCIAL RESULTS BY SEGMENT

 

SUMMARY FINANCIAL RESULTS

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

 

Famous Footwear

 

 

Brand Portfolio

 

 

Eliminations and Other

 

 

Consolidated

 

(Thousands)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

Net sales

 

$

369,468

 

 

$

365,160

 

 

$

345,972

 

 

$

382,001

 

 

$

(16,492

)

 

$

(26,898

)

 

$

698,948

 

 

$

720,263

 

Gross profit

 

 

157,140

 

 

 

156,028

 

 

 

121,095

 

 

 

123,212

 

 

 

575

 

 

 

(1,528

)

 

 

278,810

 

 

 

277,712

 

Adjusted gross profit

 

 

157,140

 

 

 

156,028

 

 

 

122,710

 

 

 

133,197

 

 

 

575

 

 

 

(1,528

)

 

 

280,425

 

 

 

287,697

 

Gross profit rate

 

 

42.5

%

 

 

42.7

%

 

 

35.0

%

 

 

32.3

%

 

 

(3.5

)%

 

 

5.7

%

 

 

39.9

%

 

 

38.6

%

Adjusted gross profit rate

 

 

42.5

%

 

 

42.7

%

 

 

35.5

%

 

 

34.9

%

 

 

(3.5

)%

 

 

5.7

%

 

 

40.1

%

 

 

39.9

%

Operating earnings (loss)

 

 

6,860

 

 

 

5,757

 

 

 

11,928

 

 

 

(93,450

)

 

 

(13,119

)

 

 

(6,744

)

 

 

5,669

 

 

 

(94,437

)

Adjusted operating earnings (loss)

 

 

10,343

 

 

 

6,149

 

 

 

18,621

 

 

 

20,678

 

 

 

(9,327

)

 

 

(6,341

)

 

 

19,637

 

 

 

20,486

 

Operating earnings %

 

 

1.9

%

 

 

1.6

%

 

 

3.4

%

 

 

(24.5

)%

 

 

79.5

%

 

 

25.1

%

 

 

0.8

%

 

 

(13.1

)%

Adjusted operating earnings %

 

 

2.8

%

 

 

1.7

%

 

 

5.4

%

 

 

5.4

%

 

 

56.6

%

 

 

23.6

%

 

 

2.8

%

 

 

2.8

%

Same-store sales % (on a 13-week basis)

 

 

5.1

%

 

 

1.1

%

 

 

(0.6

)%

 

 

0.2

%

 

 

%

 

 

%

 

 

%

 

 

%

Number of stores

 

 

949

 

 

 

992

 

 

 

228

 

 

 

229

 

 

 

 

 

 

 

 

 

1,177

 

 

 

1,221

 

RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

 

Famous Footwear

 

 

Brand Portfolio

 

 

Eliminations and Other

 

 

Consolidated

 

(Thousands)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

Gross profit

 

$

157,140

 

 

$

156,028

 

 

$

121,095

 

 

$

123,212

 

 

$

575

 

 

$

(1,528

)

 

$

278,810

 

 

$

277,712

 

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blowfish Malibu acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

244

 

 

 

 

 

 

 

 

 

 

 

 

244

 

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

7,973

 

 

 

 

 

 

 

 

 

 

 

 

7,973

 

Brand Portfolio - business exits

 

 

 

 

 

 

 

 

1,615

 

 

 

1,768

 

 

 

 

 

 

 

 

 

1,615

 

 

 

1,768

 

Total charges/other items

 

 

 

 

 

 

 

 

1,615

 

 

 

9,985

 

 

 

 

 

 

 

 

 

1,615

 

 

 

9,985

 

Adjusted gross profit

 

$

157,140

 

 

$

156,028

 

 

$

122,710

 

 

$

133,197

 

 

$

575

 

 

$

(1,528

)

 

$

280,425

 

 

$

287,697

 

Operating earnings (loss)

 

$

6,860

 

 

$

5,757

 

 

$

11,928

 

 

$

(93,450

)

 

$

(13,119

)

 

$

(6,744

)

 

$

5,669

 

 

$

(94,437

)

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense containment initiatives

 

 

3,483

 

 

 

 

 

 

5,078

 

 

 

 

 

 

3,792

 

 

 

 

 

 

12,353

 

 

 

 

Brand Portfolio - business exits

 

 

 

 

 

 

 

 

1,615

 

 

 

2,395

 

 

 

 

 

 

 

 

 

1,615

 

 

 

2,395

 

Impairment of goodwill and intangible assets

 

 

 

 

 

 

 

 

 

 

 

98,044

 

 

 

 

 

 

 

 

 

 

 

 

98,044

 

Integration and reorganization of men's brands

 

 

 

 

 

 

 

 

 

 

 

984

 

 

 

 

 

 

30

 

 

 

 

 

 

1,014

 

Logistics transition

 

 

 

 

 

 

 

 

 

 

 

4,488

 

 

 

 

 

 

 

 

 

 

 

 

4,488

 

Blowfish Malibu acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

244

 

 

 

 

 

 

 

 

 

 

 

 

244

 

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

7,973

 

 

 

 

 

 

373

 

 

 

 

 

 

8,346

 

Retail operations restructuring

 

 

 

 

 

392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

392

 

Total charges/other items

 

 

3,483

 

 

 

392

 

 

 

6,693

 

 

 

114,128

 

 

 

3,792

 

 

 

403

 

 

 

13,968

 

 

 

114,923

 

Adjusted operating earnings (loss)

 

$

10,343

 

 

$

6,149

 

 

$

18,621

 

 

$

20,678

 

 

$

(9,327

)

 

$

(6,341

)

 

$

19,637

 

 

$

20,486

 

SCHEDULE 5

 

CALERES, INC.

SUMMARY FINANCIAL RESULTS BY SEGMENT

 

SUMMARY FINANCIAL RESULTS

 

 

(Unaudited)

 

 

 

Fifty-Two Weeks Ended

 

 

 

Famous Footwear

 

 

Brand Portfolio

 

 

Eliminations and Other

 

 

Consolidated

 

(Thousands)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

Net sales

 

$

1,588,057

 

 

$

1,606,808

 

 

$

1,406,460

 

 

$

1,313,551

 

 

$

(72,955

)

 

$

(85,513

)

 

$

2,921,562

 

 

$

2,834,846

 

Gross profit

 

 

675,401

 

 

 

690,830

 

 

 

506,556

 

 

 

466,919

 

 

 

2,403

 

 

 

(1,405

)

 

 

1,184,360

 

 

 

1,156,344

 

Adjusted gross profit

 

 

675,401

 

 

 

690,830

 

 

 

515,337

 

 

 

479,291

 

 

 

2,403

 

 

 

(1,405

)

 

 

1,193,141

 

 

 

1,168,716

 

Gross profit rate

 

 

42.5

%

 

 

43.0

%

 

 

36.0

%

 

 

35.5

%

 

 

(3.3

)%

 

 

1.6

%

 

 

40.5

%

 

 

40.8

%

Adjusted gross profit rate

 

 

42.5

%

 

 

43.0

%

 

 

36.6

%

 

 

36.5

%

 

 

(3.3

)%

 

 

1.6

%

 

 

40.8

%

 

 

41.2

%

Operating earnings (loss)

 

 

76,896

 

 

 

85,268

 

 

 

58,153

 

 

 

(40,799

)

 

 

(31,236

)

 

 

(44,068

)

 

 

103,813

 

 

 

401

 

Adjusted operating earnings (loss)

 

 

80,379

 

 

 

85,660

 

 

 

72,640

 

 

 

80,152

 

 

 

(25,637

)

 

 

(38,861

)

 

 

127,382

 

 

 

126,951

 

Operating earnings %

 

 

4.8

%

 

 

5.3

%

 

 

4.1

%

 

 

(3.1

)%

 

 

42.8

%

 

 

51.5

%

 

 

3.6

%

 

 

0.0

%

Adjusted operating earnings %

 

 

5.1

%

 

 

5.3

%

 

 

5.2

%

 

 

6.1

%

 

 

35.1

%

 

 

45.4

%

 

 

4.4

%

 

 

4.5

%

Same-store sales % (on a 52-week basis)

 

 

2.0

%

 

 

1.5

%

 

 

(5.8

)%

 

 

(0.1

)%

 

 

%

 

 

%

 

 

%

 

 

%

Number of stores

 

 

949

 

 

 

992

 

 

 

228

 

 

 

229

 

 

 

 

 

 

 

 

 

1,177

 

 

 

1,221

 

RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)

 

 

(Unaudited)

 

 

 

Fifty-Two Weeks Ended

 

 

 

Famous Footwear

 

 

Brand Portfolio

 

 

Eliminations and Other

 

 

Consolidated

 

(Thousands)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

Gross profit

 

$

675,401

 

 

$

690,830

 

 

$

506,556

 

 

$

466,919

 

 

$

2,403

 

 

$

(1,405

)

 

$

1,184,360

 

 

$

1,156,344

 

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

5,812

 

 

 

8,886

 

 

 

 

 

 

 

 

 

5,812

 

 

 

8,886

 

Brand Portfolio - business exits

 

 

 

 

 

 

 

 

2,969

 

 

 

1,769

 

 

 

 

 

 

 

 

 

2,969

 

 

 

1,769

 

Blowfish Malibu acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

1,717

 

 

 

 

 

 

 

 

 

 

 

 

1,717

 

Total charges/other items

 

 

 

 

 

 

 

 

8,781

 

 

 

12,372

 

 

 

 

 

 

 

 

 

8,781

 

 

 

12,372

 

Adjusted gross profit

 

$

675,401

 

 

$

690,830

 

 

$

515,337

 

 

$

479,291

 

 

$

2,403

 

 

$

(1,405

)

 

$

1,193,141

 

 

$

1,168,716

 

Operating earnings (loss)

 

$

76,896

 

 

$

85,268

 

 

$

58,153

 

 

$

(40,799

)

 

$

(31,236

)

 

$

(44,068

)

 

$

103,813

 

 

$

401

 

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense containment initiatives

 

 

3,483

 

 

 

 

 

 

5,078

 

 

 

 

 

 

3,792

 

 

 

 

 

 

12,353

 

 

 

 

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

5,889

 

 

 

8,886

 

 

 

1,807

 

 

 

4,482

 

 

 

7,696

 

 

 

13,368

 

Brand Portfolio - business exits

 

 

 

 

 

 

 

 

3,520

 

 

 

2,395

 

 

 

 

 

 

 

 

 

3,520

 

 

 

2,395

 

Impairment of goodwill and intangible assets

 

 

 

 

 

 

 

 

 

 

 

98,044

 

 

 

 

 

 

 

 

 

 

 

 

98,044

 

Integration and reorganization of men's brands

 

 

 

 

 

 

 

 

 

 

 

5,421

 

 

 

 

 

 

420

 

 

 

 

 

 

5,841

 

Logistics transition

 

 

 

 

 

 

 

 

 

 

 

4,488

 

 

 

 

 

 

 

 

 

 

 

 

4,488

 

Blowfish Malibu acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

 

1,717

 

 

 

 

 

 

305

 

 

 

 

 

 

2,022

 

Retail operations restructuring

 

 

 

 

 

392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

392

 

Total charges/other items

 

 

3,483

 

 

 

392

 

 

 

14,487

 

 

 

120,951

 

 

 

5,599

 

 

 

5,207

 

 

 

23,569

 

 

 

126,550

 

Adjusted operating earnings (loss)

 

$

80,379

 

 

$

85,660

 

 

$

72,640

 

 

$

80,152

 

 

$

(25,637

)

 

$

(38,861

)

 

$

127,382

 

 

$

126,951

 

SCHEDULE 6

 

CALERES, INC.

BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

Fifty-Two Weeks Ended

 

(Thousands, except per share data)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

9

 

 

$

(75,427

)

 

$

62,082

 

 

$

(5,481

)

Net loss (earnings) attributable to noncontrolling interests

 

 

399

 

 

 

(25

)

 

 

737

 

 

 

40

 

Net earnings (loss) attributable to Caleres, Inc.

 

 

408

 

 

 

(75,452

)

 

 

62,819

 

 

 

(5,441

)

Net earnings allocated to participating securities

 

 

(45

)

 

 

 

 

 

(1,988

)

 

 

 

Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities

 

$

363

 

 

$

(75,452

)

 

$

60,831

 

 

$

(5,441

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted common shares attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

39,235

 

 

 

41,150

 

 

 

39,796

 

 

 

41,756

 

Dilutive effect of share-based awards

 

 

55

 

 

 

 

 

 

57

 

 

 

 

Diluted common shares attributable to Caleres, Inc.

 

 

39,290

 

 

 

41,150

 

 

 

39,853

 

 

 

41,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders

 

$

0.01

 

 

$

(1.83

)

 

$

1.53

 

 

$

(0.13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders

 

$

0.01

 

 

$

(1.83

)

 

$

1.53

 

 

$

(0.13

)

SCHEDULE 7

 

CALERES, INC.

BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

Fifty-Two Weeks Ended

 

(Thousands, except per share data)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings

 

$

13,543

 

 

$

16,004

 

 

$

85,629

 

 

$

95,013

 

Net loss (earnings) attributable to noncontrolling interests

 

 

399

 

 

 

(25

)

 

 

737

 

 

 

40

 

Adjusted net earnings attributable to Caleres, Inc.

 

 

13,942

 

 

 

15,979

 

 

 

86,366

 

 

 

95,053

 

Net earnings allocated to participating securities

 

 

(404

)

 

 

(462

)

 

 

(2,766

)

 

 

(2,678

)

Adjusted net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities

 

$

13,538

 

 

$

15,517

 

 

$

83,600

 

 

$

92,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted common shares attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

39,235

 

 

 

41,150

 

 

 

39,796

 

 

 

41,756

 

Dilutive effect of share-based awards

 

 

55

 

 

 

127

 

 

 

57

 

 

 

118

 

Diluted common shares attributable to Caleres, Inc.

 

 

39,290

 

 

 

41,277

 

 

 

39,853

 

 

 

41,874

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic adjusted earnings per common share attributable to Caleres, Inc. shareholders

 

$

0.35

 

 

$

0.38

 

 

$

2.10

 

 

$

2.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted earnings per common share attributable to Caleres, Inc. shareholders

 

$

0.34

 

 

$

0.38

 

 

$

2.10

 

 

$

2.21

 

SCHEDULE 8

 

CALERES, INC.

CALCULATION OF EBITDA AND ADJUSTED EBITDA (NON-GAAP METRICS)

 

 

(Unaudited)

 

 

 

Fifty-Two Weeks Ended

 

 

 

Famous Footwear

 

 

Brand Portfolio

 

 

Eliminations and Other

 

 

Consolidated

 

(Thousands)

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

 

February 1, 2020

 

 

February 2, 2019

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Caleres, Inc.

 

$

51,043

 

 

$

58,783

 

 

$

35,907

 

 

$

(43,477

)

 

$

(24,131

)

 

$

(20,747

)

 

$

62,819

 

 

$

(5,441

)

Income tax provision (benefit)

 

 

17,391

 

 

 

17,728

 

 

 

4,855

 

 

 

(9,558

)

 

 

(5,735

)

 

 

(8,443

)

 

 

16,511

 

 

 

(273

)

Interest expense, net

 

 

8,462

 

 

 

8,758

 

 

 

20,501

 

 

 

10,769

 

 

 

4,160

 

 

 

(1,250

)

 

 

33,123

 

 

 

18,277

 

Depreciation and amortization (1)

 

 

26,707

 

 

 

28,816

 

 

 

29,875

 

 

 

20,768

 

 

 

8,980

 

 

 

13,113

 

 

 

65,562

 

 

 

62,697

 

EBITDA

 

$

103,603

 

 

$

114,085

 

 

$

91,138

 

 

$

(21,498

)

 

$

(16,726

)

 

$

(17,327

)

 

$

178,015

 

 

$

75,260

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin

 

 

6.5

%

 

 

7.1

%

 

 

6.5

%

 

 

-1.6

%

 

 

22.9

%

 

 

20.3

%

 

 

6.1

%

 

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings attributable to Caleres, Inc. (2)

 

$

53,630

 

 

$

57,538

 

 

$

46,689

 

 

$

56,829

 

 

$

(13,953

)

 

$

(19,314

)

 

$

86,366

 

 

$

95,053

 

Income tax provision

 

 

18,287

 

 

 

19,364

 

 

 

8,560

 

 

 

11,087

 

 

 

(2,206

)

 

 

(4,482

)

 

 

24,641

 

 

 

25,969

 

Interest expense, net

 

 

8,462

 

 

 

8,758

 

 

 

20,501

 

 

 

10,769

 

 

 

(1,268

)

 

 

(1,250

)

 

 

27,695

 

 

 

18,277

 

Depreciation and amortization (1)

 

 

26,707

 

 

 

28,816

 

 

 

29,875

 

 

 

20,768

 

 

 

8,980

 

 

 

13,113

 

 

 

65,562

 

 

 

62,697

 

Adjusted EBITDA

 

$

107,086

 

 

$

114,476

 

 

$

105,625

 

 

$

99,453

 

 

$

(8,447

)

 

$

(11,933

)

 

$

204,264

 

 

$

201,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

6.7

%

 

 

7.1

%

 

 

7.5

%

 

 

7.6

%

 

 

11.6

%

 

 

14.0

%

 

 

7.0

%

 

 

7.1

%

 

 

(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.

 

 

Ken Hannah khannah@caleres.com Logan Bonacorsi lbonacorsi@caleres.com

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