Caleres Reports First Quarter 2021 Results
Caleres (NYSE: CAL) (caleres.com), a diverse portfolio of consumer-centric footwear brands, today reported financial results for the first quarter ended May 1, 2021. Caleres continued its strong recovery in the quarter just ended – recording sequential top-line and earnings growth, stronger gross margins and an improved working capital and expense position. For the fourth straight period, the company put its free cash flow to work strengthening its balance sheet and reducing further its overall indebtedness, paying down an additional
“Caleres had a strong start to the year, maintaining its solid upward momentum in the first quarter of 2021, driven in large part by an outstanding performance in our Famous Footwear business, where we achieved record quarterly earnings and delivered record first quarter sales levels,” said Diane Sullivan, Chairman and Chief Executive Officer. “Notably, Famous Footwear’s quarterly sales increased 13 percent over the first quarter of 2019, benefitting from strong demand for the category, increased consumer confidence and improving in-store traffic trends. Famous continues to leverage its enhanced omni-channel capabilities and capitalize on its direct-to-consumer model, as evidenced by a 13.2 percent increase in new rewards members – compared to the first quarter 2019 – and still-strong ecommerce sales levels.”
“We remain positive about our outlook and expect continued strength at Famous Footwear to be combined with an improving performance in our Brand Portfolio as we progress through the year,” said Sullivan. We are particularly enthusiastic about the recent strong performances from our Vionic, Sam Edelman, Blowfish Malibu and Ryka brands, and are increasingly optimistic about our ability to drive margin growth and return to 2019 earnings levels for the segment in the year’s second half.”
“Looking ahead, we plan to lean into the robust momentum at Famous Footwear and our enhanced direct-to-consumer capabilities; ensure alignment of supply and demand; and – as always – maintain our balanced approach to capital allocation. In short, we are excited about our strategy for continued value creation and believe we are exceptionally well positioned to capitalize on the accelerated recovery in the marketplace and to chase and capture market share opportunities as they develop throughout the year.”
First Quarter 2021 Highlights
(13-weeks ended May 1, 2021 compared to 13-weeks ended May 2, 2020)
-
Net sales were
$638.6 million , up 60.8 percent from the first quarter of fiscal 2020- Direct-to-consumer sales represented 74.5 percent of total net sales;
- A 108.2 percent sales increase in the Famous Footwear segment;
- A 15.2 percent sales increase in the Brand Portfolio segment;
- Total company owned ecommerce website sales increased 21.4 percent, with ecommerce penetration of 25.6 percent of net sales;
-
Gross profit was
$274.9 million , while gross margin was 43.0 percent; -
SG&A expense of
$243.5 million , up$18.3 million compared to the first quarter of 2020; -
Net income of
$6.1 million , or earnings of$0.16 per diluted share, compared to net loss of$345.8 million , or a loss of$8.95 per diluted share, in the first quarter of fiscal 2020. Earnings of$0.16 per share includes$0.44 for the below items:-
Brand Portfolio expense of
$0.31 related to the Naturalizer brand retail exits; and -
Fair value adjustment of
$0.13 associated with the mandatory purchase obligation for Blowfish Malibu; and
-
Brand Portfolio expense of
-
Adjusted net income was
$22.8 million , or adjusted earnings of$0.60 per diluted share compared to adjusted net loss of$50.4 million , or adjusted loss of$1.30 per diluted share, in the first quarter of fiscal 2020; -
Generated
$70.4 million in cash from operations and ended the first quarter with$98.2 million of cash on hand; - Reduced inventory levels approximately 24 percent year-over-year, reflecting the final liquidation of Naturalizer store inventory and global/industry-wide supply chain disruptions;
-
Reduced credit facility borrowings by
$50 million from the fourth quarter of 2020 to end the first quarter at$200 million ; -
Returned
$2.7 million to shareholders during the quarter through its long-standing quarterly dividend.
Quarterly Cash Dividend
The company’s board of directors declared a regular quarterly cash dividend of
Fiscal Second Quarter 2021 Outlook
For the second quarter of 2021, Caleres expects sales levels to be between
Investor Conference Call
Caleres will host an investor conference call at 10:00 a.m. ET today, Friday, May 28. The webcast and associated 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 7644157. 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 7644157 through Thursday, June 10.
Definitions
All references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings (loss) attributable to Caleres, Inc. and diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders, are presented as net earnings (loss) and earnings (loss) 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 (loss), net earnings (loss) and earnings (loss) 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) the coronavirus pandemic and its adverse impact on our business operations, store traffic and financial condition (ii) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions and other factors; (iii) rapidly changing consumer preferences and purchasing patterns and fashion trends; (iv) intense competition within the footwear industry; (v) customer concentration and increased consolidation in the retail industry; (vi) foreign currency fluctuations; (vii) impairment charges resulting from a long-term decline in our stock price; (viii) 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; (ix) cybersecurity threats or other major disruption to the company’s information technology systems; (x) the ability to accurately forecast sales and manage inventory levels; (xi) a disruption in the company’s distribution centers; (xii) the ability to recruit and retain senior management and other key associates; (xiii) the ability to maintain relationships with current suppliers; (xiv) the ability to secure/exit leases on favorable terms; (xv) transitional challenges with acquisitions and divestitures; (xvi) changes to tax laws, policies and treaties; (xvii) compliance with applicable laws and standards with respect to labor, trade and product safety issues; and (xviii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights.
About Caleres
Caleres is a diverse portfolio of global footwear brands. Our products are available virtually everywhere - in the more than 1,000 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 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 |
||||||
($ thousands, except per share data) |
|
May 1, 2021 |
|
May 2, 2020 |
||||
Net sales |
|
$ |
638,636 |
|
|
$ |
397,184 |
|
Cost of goods sold |
|
|
363,749 |
|
|
|
275,286 |
|
Gross profit |
|
|
274,887 |
|
|
|
121,898 |
|
Selling and administrative expenses |
|
|
243,535 |
|
|
|
225,194 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
262,719 |
|
Restructuring and other special charges, net |
|
|
13,482 |
|
|
|
60,196 |
|
Operating earnings (loss) |
|
|
17,870 |
|
|
|
(426,211 |
) |
Interest expense, net |
|
|
(11,792 |
) |
|
|
(9,478 |
) |
Other income, net |
|
|
3,828 |
|
|
|
3,585 |
|
Earnings (loss) before income taxes |
|
|
9,906 |
|
|
|
(432,104 |
) |
Income tax (provision) benefit |
|
|
(3,521 |
) |
|
|
85,932 |
|
Net earnings (loss) |
|
|
6,385 |
|
|
|
(346,172 |
) |
Net earnings (loss) attributable to noncontrolling interests |
|
|
238 |
|
|
|
(334 |
) |
Net earnings (loss) attributable to Caleres, Inc. |
|
$ |
6,147 |
|
|
$ |
(345,838 |
) |
|
|
|
|
|
|
|
||
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.16 |
|
|
$ |
(8.95 |
) |
|
|
|
|
|
|
|
||
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders |
|
$ |
0.16 |
|
|
$ |
(8.95 |
) |
SCHEDULE 2 |
|
CALERES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
||||
($ thousands) |
|
May 1, 2021 |
|
May 2, 2020 |
|
January 30, 2021 |
|||
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
98,244 |
|
$ |
187,717 |
|
$ |
88,295 |
Receivables, net |
|
|
132,698 |
|
|
145,333 |
|
|
126,994 |
Inventories, net |
|
|
445,299 |
|
|
585,307 |
|
|
487,955 |
Prepaid expenses and other current assets |
|
|
80,877 |
|
|
91,433 |
|
|
79,312 |
Total current assets |
|
|
757,118 |
|
|
1,009,790 |
|
|
782,556 |
|
|
|
|
|
|
|
|
|
|
Lease right-of-use assets |
|
|
526,011 |
|
|
648,534 |
|
|
554,303 |
Property and equipment, net |
|
|
165,118 |
|
|
200,800 |
|
|
172,437 |
Goodwill and intangible assets, net |
|
|
236,924 |
|
|
273,648 |
|
|
240,071 |
Other assets |
|
|
117,652 |
|
|
90,913 |
|
|
117,683 |
Total assets |
|
$ |
1,802,823 |
|
$ |
2,223,685 |
|
$ |
1,867,050 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit agreement |
|
$ |
200,000 |
|
$ |
438,500 |
|
$ |
250,000 |
Mandatory purchase obligation - Blowfish Malibu |
|
|
45,523 |
|
|
— |
|
|
39,134 |
Trade accounts payable |
|
|
293,309 |
|
|
297,557 |
|
|
280,501 |
Lease obligations |
|
|
133,327 |
|
|
160,138 |
|
|
153,060 |
Other accrued expenses |
|
|
193,778 |
|
|
181,344 |
|
|
182,814 |
Total current liabilities |
|
|
865,937 |
|
|
1,077,539 |
|
|
905,509 |
|
|
|
|
|
|
|
|
|
|
Noncurrent lease obligations |
|
|
490,355 |
|
|
601,133 |
|
|
518,942 |
Long-term debt |
|
|
198,966 |
|
|
198,506 |
|
|
198,851 |
Other liabilities |
|
|
40,909 |
|
|
61,384 |
|
|
39,894 |
Total other liabilities |
|
|
730,230 |
|
|
861,023 |
|
|
757,687 |
|
|
|
|
|
|
|
|
|
|
Total Caleres, Inc. shareholders’ equity |
|
|
202,869 |
|
|
282,296 |
|
|
200,247 |
Noncontrolling interests |
|
|
3,787 |
Caleres, Inc.
NYSE:CALCAL RankingsCAL Latest NewsCAL Stock Data
1.29B
33.64M
3.68%
96.55%
13.2%
Footwear Merchant Wholesalers
Wholesale Trade
United States of America
ST LOUIS
About CALwe are caleres, a global footwear company with brands that fit people’s lives. our shoes are worn by people of all ages, from all walks of life. our diverse portfolio of brands includes naturalizer, lifestride, rykä, dr. scholl’s, sam edelman, via spiga, diane von furstenberg, vince, franco sarto, carlos by carlos santana and fergie footwear. and they’re available virtually everywhere – in our more than 1,200 famous footwear & naturalizer retail stores and online. we are a team working toward a shared mission of inspiring people to feel good, feet first. we seek people who share our values. we seek people passionate about their work. people who hold themselves and others accountable. people who think a $2.6 billion company should be as creative as a start-up. people driven by an insatiable curiosity. people who care about being the best, among the best. most of all, we seek believers who share in our ferocity for fit. people who believe remarkable things are possible and will n
| |||||