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Caleres Reports Lackluster Q2, Comfort Brands Takes a Dip

Caleres reported unexceptional second quarter 2015 financial results, with success in their fashion brands unable to offset a nearly flat performance from their Famous Footwear stores and losses in the comfort category.

Second quarter 2015 net sales were $637.8 million, versus second quarter 2014 net sales of $635.9 million. Net earnings were $16.8 million, or $0.38 per diluted share. This included $5.3 million of after-tax expense related to the company’s debt extinguishment.

Brand portfolio sales were up 4.4% to $242 million in the second quarter, with performance in the quarter led by a 14.1% improvement in the contemporary fashion category, which includes Sam Edelman, Vince and Franco Sarto.

Sales in the healthy living category were down 1.5%, as increases in wholesale sales could not make up for weakness on the retail side, where the company operated nine fewer stores year-over-year. Healthy living is made up of comfort and fitness brands Naturalizer, Dr. Scholl’s Shoes, LifeStride and Rykä.

Famous Footwear reported sales of $395.9 million in the second quarter 2015, which was up 0.6% year-over-year, excluding Shoes.com, which was sold in December 2014. For the quarter, same-store-sales were up 0.1%, with strong growth in canvas outweighing weakness in performance athletic product and sandals. During the quarter, 10 new stores were opened and six stores were closed.

Diane Sullivan, CEO, president and chairman of Caleres, said, “Today we reported a solid quarter, as expected, with improved sales, margins and adjusted earnings.” She added, “Total sales were up 2%, excluding Shoes.com, while gross and operating margin both expanded in the quarter. We also improved bottom-line performance by 22%, thanks to continued progress toward our long-term strategic initiatives.”

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