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Caleres Succeeds in Q4 But Expresses Cautious Outlook

Caleres, owner of Famous Footwear, Sam Edelman, Vince and more, saw an impressive fourth quarter and fiscal year 2016. However, due to a tough retail climate, the company urges a cautious outlook moving forward into 2017.

Callers increased consolidated sales 5.1%, $639.5 million in the fourth quarter. Famous Footwear total sales increased 1.9% to $367.5 million, while the brand portfolio sales grew to $272 million, up 9.6% from the year before. This number includes the recently acquired Allen Edmonds.

The company saw a gross profit of $260.9 million in the fourth quarter, with a gross margin increase of 40.8%, up four basis points. Net loss of $6.6 million in the fourth quarter, with a loss per diluted share of $0.16, was due to a variety of reasons like reorganization of men’s brands, business exits and restructuring.

However, the company saw adjusted net earnings up 25 percent to $14.3 million in the fourth quarter.

“Despite a promotional and challenging retail environment in the fourth quarter, we maintained our consistent approach of managing the areas under our control while continuing to rapidly respond to changing consumer shopping behaviors,” said Diane Sullivan, Caleres CEO, president and chairman. “We also took proactive steps to continue the diversification of our portfolio with the acquisition of Allen Edmonds in December, which allowed us to rapidly increase our exposure in men’s footwear.”

For fiscal year 2016, Caleres saw consolidated sales of $2579.4 million, showing flat sales compared to $2,577.4 million last year. Famous Footwear’s total sales saw a minimal increase of 1.1%, while brand portfolio sales dropped 1.5% compared to last year.

Caleres reported net earnings of $65.7 million, with diluted earnings per share of $1.52, with adjusted net earnings down 1.6% to $86.5 million.

“While we are confident about the long-term outlook for our diversified portfolio, we are taking a cautious view of the near-term, as we expect to see continued pressure in retail based on the current environment,” said Sullivan. “However, as a company, we will remain forward looking and proactively manage outcomes, to deliver shareholder value in 2017.”

Caleres forecasts consolidated net sales between $2.7 billion to $2.8 billion, with Famous footwear same-store-sales expected in the low single digits while brand portfolio sales expected in the high teens. The company expect adjusted earnings per diluted share $2.10-$2.20.