Soft Boot Demand and Late Athletic Deliveries Hit Caleres Q3 Sales
Stephen Garner
Senior Editor
Caleres is lowering its yearly guidance after reporting performance below its expectations in the third quarter of 2024.
According to the St. Louis-based footwear company, net sales in Q3 were $740.9 million, down 2.8 percent from $761.9 million in the third quarter of 2023. Net earnings in the third quarter $41.4 million, or earnings per diluted share of $1.19, compared to net earnings of $46.9 million, or earnings per diluted share of $1.32, in the same period last year.
By business segment, Caleres reported that net sales at Famous Footwear decreased 4.8 percent, with comparable store sales up 2.5 percent. The company’s brand portfolio segment saw net sales increase 0.7 percent.
These results missed the company’s Q3 guidance, which were expected to see net sales between flat for the period to down 2 percent. Earnings per diluted share in Q3 were expected to be between $1.24 and $1.34.
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The miss led to the company’s stock dipping nearly 19 percent in pre-market trading on Thursday.
Jay Schmidt, president and chief executive officer of Caleres, said in a statement on Thursday that performance in the quarter was due to “softer seasonal demand in the boot category, late receipts of key athletic product at Famous Footwear, and a discrete customer credit issue that impacted shipments.” The company’s business in China was also weaker than planned in Q3, the CEO noted.
Despite the lower sales, Schmidt remains confident in the business. “The third quarter saw progress toward our strategy highlighted by the Brand Portfolio delivering growth, Famous Footwear delivering positive comparable store sales, and both segments increasing market share,” he said.
“As we begin the fourth quarter, our strategies are working to drive market share and we are aligning our expenses with expected sales, while appropriately investing behind areas of the business that are expected to deliver a strong ROI,” Schmidt continued.
Looking ahead, the company is lowering its full-year outlook as it expects its season-to-date sales trend to continue in the final quarter of the year and anticipates pressure on its gross margin as it takes action to move through excess inventory in order to position itself well for 2025.
Caleres now expects net sales for the full fiscal year 2024 to be down between 2.5 percent and 3 percent versus previous guidance of sales down in the low single digits. Caleres is also lowering its fiscal 2024 outlook for earnings per diluted share to the range of $3.35 to $3.45 versus prior guidance of $3.94 to $4.09.
“Longer term, we believe we are well-positioned to execute our strategic plan, invest to fuel our ambition, and drive sustained value for our shareholders,” Schmidt added.
