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Caleres Reports Third Quarter 2020 Results

11/19/2020

Generated $34.2 million of cash from operations

Paid down $50 million of debt during the third quarter

Announces strategic exit of Naturalizer stores to drive digital growth

ST. LOUIS--(BUSINESS WIRE)-- Caleres (NYSE: CAL, caleres.com) a diverse portfolio of consumer-driven footwear brands, today reported financial results for the third quarter ended October 31, 2020. Caleres continued its steady progress – recording sequential top-line growth, a return to profitability, stronger gross margins and a further improved working capital position – despite the still uncertain economic environment. For the second straight quarter the company used free cash to markedly reduce its overall debt levels, paying down $50 million during the period and bringing total debt reduction since the end of the first quarter of 2020 to approximately $139 million.

“Caleres furthered its recovery during the third quarter delivering results significantly better than anticipated in nearly all major financial metrics,” said Diane Sullivan, Chairman, president and chief executive officer. “At the same time, the team has continued to overcome the ongoing COVID-related pressures in an impressive manner, further advancing the company’s key strategic objectives. During the quarter, we:

  • Maintained rigorous cost discipline leading to an approximately $38 million decline in expenses year-over-year – attributable to improved store productivity and prior actions to align our resources with the current market environment;
  • Adjusted effectively to and capitalized on the extended back-to-school season achieving a strong sequential increase in sales at Famous Footwear;
  • Gained momentum in the Brand Portfolio with an approximately 45 percent sequential increase in sales – led by positive consumer reaction to our casual, sport and athletic-inspired assortment across the portfolio; and
  • Used free cash to further strengthen the balance sheet and reduce overall indebtedness, which is now approaching pre-COVID levels.”

Third Quarter 2020 Highlights

(13-weeks ended October 31, 2020 compared to 13-weeks ended November 2, 2019)

  • Net sales were $647.5 million, down 18.3 percent from the third quarter of fiscal 2019
    • Direct-to-consumer sales represented 71.4 percent of total net sales;
    • A 12.3 percent sales decline in the Famous Footwear segment;
    • A 25.6 percent sales decline in the Brand Portfolio segment;
    • Total company owned ecommerce website sales increased 24.6 percent, with ecommerce penetration rising to 25.4 percent of net sales;
  • Gross profit was $257.0 million, while gross margin was 39.7 percent;
  • SG&A expense of $236.9 million, down $38.4 million compared to the third quarter of 2019;
  • Net income of $14.4 million, or earnings of $0.38 per diluted share, compared to net income of $28.0 million, or $0.69 per diluted share, in the third quarter of fiscal 2019. Earnings of $0.38 per share includes $0.10 of adjustments related to the fair value adjustment to the Blowfish purchase obligation;
  • Adjusted net income was $18.2 million, or adjusted earnings of $0.48 per diluted share compared to adjusted net income of $31.6 million, or adjusted earnings of $0.78 per diluted share, in the third quarter of fiscal 2019;
  • Generated $34.2 million in cash from operations and ended the third quarter with $124.3 million of cash on hand;
  • Reduced inventory levels approximately 21 percent year-over-year, reflecting ongoing actions taken to liquidate seasonal orders;
  • Reduced credit facility borrowings by $50 million from the second quarter of 2020 to end the third quarter at $300 million;
  • Returned $2.7 million to shareholders during the quarter through its long-standing quarterly dividend.

Strategic Realignment to Drive Digital Growth

In an effort to continue to improve future profitability and allow greater focus on high-growth, digital channels, the company has commenced a strategic realignment of the Naturalizer retail locations in the U.S. and Canada. In addition to the store closures, Caleres will right-size the back-office infrastructure to better align with the reduced store footprint, shift talent to amplify our digital presence, capture consumers where they want to shop and reallocate capital to further enhance our ecommerce platform and capabilities.

“Like the rest of the industry we have seen a structural shift in the shopping behavior of the consumer – a change that has been further accelerated by the global health crisis,” said Sullivan. “With a larger percentage of Naturalizer’s sales originating online, now is the opportune time to shed the legacy stores and evolve it to be more profitable. We are confident this step will better align the brand with the Naturalizer consumer of the future and position the brand for growth and further success.”

The company plans to close approximately 133 Naturalizer stores by the end of fiscal year 2020. The company expects pre-tax charges in the fourth quarter of 2020 of between $20 million and $25 million. Once complete, Caleres expects an annual pre-tax benefit of between $10 million and $12 million.

“Caleres is adjusting rapidly to the current and evolving market environment and I am excited about the value-creating potential of the business going forward,” said Sullivan. “The actions we have taken in recent months to fortify our financial position; leverage our digital investments to capitalize on shifting consumer behaviors; further align our merchandise mix to reflect ever-changing consumer desires; and right-size our cost structure and capital budget provide a strong and durable foundation upon which to build and grow. Moving forward, we plan to drive innovation in our brands, lean into our consumer insights, enhance our already significant digital capabilities still further, and continuously strengthen and hone our portfolio to expand greater cash generation and value creation in the future.”

Investor Conference Call

Caleres will host an investor conference call at 5:00 p.m. ET today, Thursday, November 19. 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 7391019. 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 7391019 through Wednesday, December 2.

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 outbreak 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) impairment charges resulting from a long-term decline in our stock price; (iv) rapidly changing fashion trends and consumer preferences and purchasing patterns; (v) intense competition within the footwear industry; (vi) 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; (vii) imposition of tariffs; (viii) the ability to accurately forecast sales and manage inventory levels; (ix) cybersecurity threats or other major disruption to the company’s information technology systems; (x) customer concentration and increased consolidation in the retail industry; (xi) transitional challenges with acquisitions; (xii) a disruption in the company’s distribution centers; (xiii) foreign currency fluctuations; (xiv) changes to tax laws, policies and treaties; (xv) the ability to recruit and retain senior management and other key associates; (xvi) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xvii) the ability to maintain relationships with current suppliers; (xviii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights; and (xix) the ability to secure/exit leases on favorable terms. 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 1, 2020, 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 1,100 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

 

Thirty-Nine Weeks Ended

(Thousands, except per share data)

 

October 31, 2020

 

November 2, 2019

 

October 31, 2020

 

November 2, 2019

Net sales

 

$

647,480

 

 

$

792,375

 

 

$

1,546,111

 

 

$

2,222,614

 

Cost of goods sold

 

 

390,508

 

 

 

472,605

 

 

 

984,621

 

 

 

1,317,064

 

Gross profit

 

 

256,972

 

 

 

319,770

 

 

 

561,490

 

 

 

905,550

 

Selling and administrative expenses

 

 

236,901

 

 

 

275,330

 

 

 

663,425

 

 

 

804,972

 

Impairment of goodwill and intangible assets

 

 

 

 

 

 

 

 

262,719

 

 

 

 

Restructuring and other special charges, net

 

 

 

 

 

969

 

 

 

65,625

 

 

 

2,434

 

Operating earnings (loss)

 

 

20,071

 

 

 

43,471

 

 

 

(430,279

)

 

 

98,144

 

Interest expense, net

 

 

(10,881

)

 

 

(10,559

)

 

 

(33,747

)

 

 

(25,288

)

Other income, net

 

 

5,461

 

 

 

2,633

 

 

 

12,718

 

 

 

7,902

 

Earnings (loss) before income taxes

 

 

14,651

 

 

 

35,545

 

 

 

(451,308

)

 

 

80,758

 

Income tax benefit (provision)

 

 

275

 

 

 

(7,784

)

 

 

89,393

 

 

 

(18,685

)

Net earnings (loss)

 

 

14,926

 

 

 

27,761

 

 

 

(361,915

)

 

 

62,073

 

Net earnings (loss) attributable to noncontrolling interests

 

 

509

 

 

 

(226

)

 

 

223

 

 

 

(338

)

Net earnings (loss) attributable to Caleres, Inc.

 

$

14,417

 

 

$

27,987

 

 

$

(362,138

)

 

$

62,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.38

 

 

$

0.69

 

 

$

(9.67

)

 

$

1.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.38

 

 

$

0.69

 

 

$

(9.67

)

 

$

1.51

 
 
 
 
 
SCHEDULE 2 
 

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

 

 

 

October 31, 2020

 

November 2, 2019

 

February 1, 2020

(Thousands)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

124,330

 

$

52,502

 

$

45,218

Receivables, net

 

 

141,059

 

 

156,253

 

 

162,181

Inventories, net

 

 

507,365

 

 

644,646

 

 

618,406

Prepaid expenses and other current assets

 

 

99,401

 

 

48,245

 

 

56,494

Total current assets

 

 

872,155

 

 

901,646

 

 

882,299

 

 

 

 

 

 

 

 

 

 

Lease right-of-use assets

 

 

601,574

 

 

704,244

 

 

695,594

Property and equipment, net

 

 

189,207

 

 

230,261

 

 

224,846

Goodwill and intangible assets, net

 

 

267,074

 

 

542,845

 

 

539,579

Other assets

 

 

97,050

 

 

92,214

 

 

89,389

Total assets

 

$

2,027,060

 

$

2,471,210

 

$

2,431,707

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

Borrowings under revolving credit agreement

 

$

300,000

 

$

295,000

 

$

275,000

Mandatory purchase obligation

 

 

30,146

 

 

 

 

Trade accounts payable

 

 

285,582

 

 

275,699

 

 

267,018

Lease obligations

 

 

156,200

 

 

144,501

 

 

127,869

Other accrued expenses

 

 

187,980

 

 

179,030

 

 

181,063

Total current liabilities

 

 

959,908

 

 

894,230

 

 

850,950

 

 

 

 

 

 

 

 

 

 

Noncurrent lease obligations

 

 

556,343

 

 

629,731

 

 

629,032

Long-term debt

 

 

198,736

 

 

198,276

 

 

198,391

Other liabilities

 

 

50,418

 

 

95,623

 

 

104,204

Total other liabilities

 

 

805,497

 

 

923,630

 

 

931,627

 

 

 

 

 

 

 

 

 

 

Total Caleres, Inc. shareholders’ equity

 

 

256,671

 

 

650,840

 

 

645,950

Noncontrolling interests

 

 

4,984

 

 

2,510

 

 

3,180

Total equity

 

 

261,655

 

 

653,350

 

 

649,130

Total liabilities and equity

 

$

2,027,060

 

$

2,471,210

 

$

2,431,707

 
 
 
 
 

SCHEDULE 3

 

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

(Unaudited)

 

 

Thirty-Nine Weeks Ended

(Thousands)

 

October 31, 2020

 

November 2, 2019

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net cash provided by operating activities

 

$

101,766

 

 

$

145,737

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(12,016

)

 

 

(37,354

)

Disposals of property and equipment

 

 

 

 

 

636

 

Capitalized software

 

 

(3,525

)

 

 

(4,893

)

Net cash used for investing activities

 

 

(15,541

)

 

 

(41,611

)

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

Borrowings under revolving credit agreement

 

 

340,500

 

 

 

237,000

 

Repayments under revolving credit agreement

 

 

(315,500

)

 

 

(277,000

)

Dividends paid

 

 

(8,148

)

 

 

(8,631

)

Acquisition of treasury stock

 

 

(23,348

)

 

 

(31,168

)

Issuance of common stock under share-based plans, net

 

 

(1,078

)

 

 

(2,605

)

Contributions by noncontrolling interests

 

 

1,500

 

 

 

1,500

 

Other

 

 

(980

)

 

 

(1,022

)

Net cash used for financing activities

 

 

(7,054

)

 

 

(81,926

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(59

)

 

 

102

 

Increase in cash and cash equivalents

 

 

79,112

 

 

 

22,302

 

Cash and cash equivalents at beginning of period

 

 

45,218

 

 

 

30,200

 

Cash and cash equivalents at end of period

 

$

124,330

 

 

$

52,502

 

 
 
 
 
 

SCHEDULE 4

 

CALERES, INC.

 

RECONCILIATION OF NET EARNINGS (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE (GAAP BASIS) TO ADJUSTED NET EARNINGS (LOSS) AND ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE (NON-GAAP BASIS)

 

 

 

(Unaudited)

 

 

Thirteen Weeks Ended

 

 

October 31, 2020

 

November 2, 2019

 

 

 

 

 

Net

 

 

 

 

 

 

 

Net

 

 

 

 

 

Pre-Tax

 

Earnings

 

 

 

 

Pre-Tax

 

Earnings

 

 

 

 

 

Impact of

 

Attributable

 

 

Diluted

 

Impact of

 

Attributable

 

Diluted

 

 

Charges/Other

 

to Caleres,

 

 

Earnings

 

Charges/Other

 

to Caleres,

 

Earnings

(Thousands, except per share data)

 

Items

 

Inc.

 

 

Per Share

 

Items

 

Inc.

 

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings

 

 

 

 

$

14,417

 

$

0.38

 

 

 

 

$

27,987

 

$

0.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges/other items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value adjustment to Blowfish purchase obligation

 

$

5,124

 

 

3,805

 

 

0.10

 

 

3,883

 

$

2,884

 

 

0.07

Vionic integration-related costs

 

 

 

 

 

 

 

 

969

 

 

719

 

 

0.02

Total charges/other items

 

$

5,124

 

$

3,805

 

$

0.10

 

$

4,852

 

$

3,603

 

$

0.09

Adjusted earnings

 

 

 

 

$

18,222

 

$

0.48

 

 

 

 

$

31,590

 

$

0.78

 

 

 

(Unaudited)

 

 

Thirty-Nine Weeks Ended

 

 

October 31, 2020

 

November 2, 2019

 

 

 

 

 

Net (Loss)

 

 

 

 

 

 

 

Net

 

 

 

 

 

Pre-Tax

 

Earnings

 

Diluted

 

Pre-Tax

 

Earnings

 

 

 

 

 

Impact of

 

Attributable

 

(Loss)

 

Impact of

 

Attributable

 

Diluted

 

 

Charges/Other

 

to Caleres,

 

Earnings

 

Charges/Other

 

to Caleres,

 

Earnings

(Thousands, except per share data)

 

Items

 

Inc.

 

Per Share

 

Items

 

Inc.

 

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP (loss) earnings

 

 

 

 

$

(362,138

)

 

$

(9.67

)

 

 

 

 

$

62,411

 

$

1.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges/other items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill and intangible asset impairment charges

 

$

262,719

 

 

218,506

 

 

 

5.84

 

 

$

 

 

 

 

COVID-19-related expenses (1)

 

 

99,040

 

 

78,047

 

 

 

2.08

 

 

 

 

 

 

 

Fair value adjustment to Blowfish purchase obligation

 

 

14,946

 

 

11,098

 

 

 

0.30

 

 

 

3,883

 

 

2,884

 

 

0.07

Brand Portfolio - business exits

 

 

1,598

 

 

1,187

 

 

 

0.03

 

 

 

1,905

 

 

1,415

 

 

0.03

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

7,696

 

 

5,714

 

 

0.14

Total charges/other items

 

$

378,303

 

$

308,838

 

 

$

8.25

 

 

$

13,484

 

$

10,013

 

$

0.24

Adjusted (loss) earnings

 

 

 

 

$

(53,300

)

 

$

(1.42

)

 

 

 

 

$

72,424

 

$

1.75

__________________________________

(1)

 

Represents costs associated with the economic impact of the COVID‑19 pandemic, primarily consisting of impairment charges associated with property and equipment and lease right of use assets, inventory markdowns, expenses associated with factory order cancellations, provision for expected credit losses and severance.

 
 
 
 
 

SCHEDULE 5

 

CALERES, INC.

SUMMARY FINANCIAL RESULTS BY SEGMENT

 

SUMMARY FINANCIAL RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

Thirteen Weeks Ended

 

 

Famous Footwear

 

 

Brand Portfolio

 

Eliminations and Other

 

Consolidated

 

 

October 31,

 

November 2,

 

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

(Thousands)

 

2020

 

2019

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Net sales

 

$

391,706

 

 

$

446,583

 

 

$

267,587

 

 

$

359,863

 

 

$

(11,813

)

 

$

(14,071

)

 

$

647,480

 

 

$

792,375

 

Gross profit

 

 

160,019

 

 

 

183,267

 

 

 

94,312

 

 

 

133,761

 

 

 

2,641

 

 

 

2,742

 

 

 

256,972

 

 

 

319,770

 

Adjusted gross profit

 

 

160,019

 

 

 

183,267

 

 

 

94,312

 

 

 

133,761

 

 

 

2,641

 

 

 

2,742

 

 

 

256,972

 

 

 

319,770

 

Gross profit rate

 

 

40.9

%

 

 

41.0

%

 

 

35.2

%

 

 

37.2

%

 

 

(22.4

)%

 

 

(19.5

)%

 

 

39.7

%

 

 

40.4

%

Adjusted gross profit rate

 

 

40.9

%

 

 

41.0

%

 

 

35.2

%

 

 

37.2

%

 

 

(22.4

)%

 

 

(19.5

)%

 

 

39.7

%

 

 

40.4

%

Operating earnings (loss)

 

 

27,845

 

 

 

27,681

 

 

 

7,304

 

 

 

19,398

 

 

 

(15,078

)

 

 

(3,608

)

 

 

20,071

 

 

 

43,471

 

Adjusted operating earnings (loss)

 

 

27,845

 

 

 

27,681

 

 

 

7,304

 

 

 

19,398

 

 

 

(15,078

)

 

 

(2,639

)

 

 

20,071

 

 

 

44,440

 

Operating earnings %

 

 

7.1

%

 

 

6.2

%

 

 

2.7

%

 

 

5.4

%

 

 

127.6

%

 

 

25.6

%

 

 

3.1

%

 

 

5.5

%

Adjusted operating earnings %

 

 

7.1

%

 

 

6.2

%

 

 

2.7

%

 

 

5.4

%

 

 

127.6

%

 

 

18.8

%

 

 

3.1

%

 

 

5.6

%

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

 

 

(9.1

)%

 

 

2.5

%

 

 

(41.0

)%

 

 

(5.1

)%

 

 

%

 

 

%

 

 

%

 

 

%

Number of stores

 

 

925

 

 

 

960

 

 

 

197

 

 

 

232

 

 

 

 

 

 

 

 

 

1,122

 

 

 

1,192

 

 
 

RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

Thirteen Weeks Ended

 

 

Famous Footwear

 

Brand Portfolio

 

Eliminations and Other

 

Consolidated

 

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

(Thousands)

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Gross profit

 

$

160,019

 

$

183,267

 

$

94,312

 

$

133,761

 

$

2,641

 

 

$

2,742

 

 

$

256,972

 

$

319,770

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vionic integration-related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total charges/other items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

 

$

160,019

 

$

183,267

 

$

94,312

 

$

133,761

 

$

2,641

 

 

$

2,742

 

 

$

256,972

 

$

319,770

Operating earnings (loss)

 

$

27,845

 

$

27,681

 

$

7,304

 

$

19,398

 

$

(15,078

)

 

$

(3,608

)

 

$

20,071

 

$

43,471

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vionic integration-related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

969

 

 

 

 

 

969

Total charges/other items

 

 

 

 

 

 

 

 

 

 

 

 

 

969

 

 

 

 

 

969

Adjusted operating (loss) earnings

 

$

27,845

 

$

27,681

 

$

7,304

 

$

19,398

 

$

(15,078

)

 

$

(2,639

)

 

$

20,071

 

$

44,440

 
 
 
 
 

SCHEDULE 5

 

CALERES, INC.

SUMMARY FINANCIAL RESULTS BY SEGMENT

 

SUMMARY FINANCIAL RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

Thirty-Nine Weeks Ended

 

 

Famous Footwear

 

Brand Portfolio

 

Eliminations and Other

 

Consolidated

 

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

(Thousands)

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Net sales

 

$

916,893

 

 

$

1,218,589

 

 

$

668,447

 

 

$

1,060,488

 

 

$

(39,229

)

 

$

(56,463

)

 

$

1,546,111

 

 

$

2,222,614

 

Gross profit

 

 

348,267

 

 

 

518,261

 

 

 

211,707

 

 

 

385,461

 

 

 

1,516

 

 

 

1,828

 

 

 

561,490

 

 

 

905,550

 

Adjusted gross profit

 

 

354,225

 

 

 

518,261

 

 

 

240,763

 

 

 

392,628

 

 

 

1,516

 

 

 

1,828

 

 

 

596,504

 

 

 

912,717

 

Gross profit rate

 

 

38.0

%

 

 

42.5

%

 

 

31.7

%

 

 

36.3

%

 

 

(3.9

)%

 

 

(3.2

)%

 

 

36.3

%

 

 

40.7

%

Adjusted gross profit rate

 

 

38.6

%

 

 

42.5

%

 

 

36.0

%

 

 

37.0

%

 

 

(3.9

)%

 

 

(3.2

)%

 

 

38.6

%

 

 

41.1

%

Operating (loss) earnings

 

 

(38,651

)

 

 

70,036

 

 

 

(352,556

)

 

 

46,225

 

 

 

(39,072

)

 

 

(18,117

)

 

 

(430,279

)

 

 

98,144

 

Adjusted (loss) operating earnings

 

 

(16,100

)

 

 

70,036

 

 

 

(12,386

)

 

 

54,019

 

 

 

(38,436

)

 

 

(16,310

)

 

 

(66,922

)

 

 

107,745

 

Operating (loss) earnings%

 

 

(4.2

)%

 

 

5.7

%

 

 

(52.7

)%

 

 

4.4

%

 

 

99.6

%

 

 

32.1

%

 

 

(27.8

)%

 

 

4.4

%

Adjusted (loss) operating earnings%

 

 

(1.8

)%

 

 

5.7

%

 

 

(1.9

)%

 

 

5.1

%

 

 

98.0

%

 

 

28.9

%

 

 

(4.3

)%

 

 

4.8

%

Same-store sales % (on a 39-week basis)

 

 

3.0

%

 

 

1.1

%

 

 

(32.3

)%

 

 

(7.6

)%

 

 

%

 

 

%

 

 

%

 

 

%

Number of stores

 

 

925

 

 

 

960

 

 

 

197

 

 

 

232

 

 

 

 

 

 

 

 

 

1,122

 

 

 

1,192

 

 
 
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

Thirty-Nine Weeks Ended

 

 

Famous Footwear

 

Brand Portfolio

 

Eliminations and Other

 

Consolidated

 

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

 

October 31,

 

November 2,

(Thousands)

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Gross profit

 

$

348,267

 

 

$

518,261

 

$

211,707

 

 

$

385,461

 

$

1,516

 

 

$

1,828

 

 

$

561,490

 

 

$

905,550

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19-related expenses

 

 

5,958

 

 

 

 

 

27,458

 

 

 

 

 

 

 

 

 

 

 

33,416

 

 

 

Brand Portfolio - brand exits

 

 

 

 

 

 

 

1,598

 

 

 

1,355

 

 

 

 

 

 

 

 

1,598

 

 

 

1,355

Vionic integration-related costs

 

 

 

 

 

 

 

 

 

 

5,812

 

 

 

 

 

 

 

 

 

 

 

5,812

Brand Portfolio - brand exits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total charges/other items

 

 

5,958

 

 

 

 

 

29,056

 

 

 

7,167

 

 

 

 

 

 

 

 

35,014

 

 

 

7,167

Adjusted gross profit

 

$

354,225

 

 

$

518,261

 

$

240,763

 

 

$

392,628

 

$

1,516

 

 

$

1,828

 

 

$

596,504

 

 

$

912,717

Operating (loss) earnings

 

$

(38,651

)

 

$

70,036

 

$

(352,556

)

 

$

46,225

 

$

(39,072

)

 

$

(18,117

)

 

$

(430,279

)

 

$

98,144

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill and intangible asset impairment charges

 

 

 

 

 

 

 

262,719

 

 

 

 

 

 

 

 

 

 

 

262,719

 

 

 

COVID-19-related expenses

 

 

22,551

 

 

 

 

 

75,853

 

 

 

 

 

636

 

 

 

 

 

 

99,040

 

 

 

Brand Portfolio - brand exits

 

 

 

 

 

 

 

1,598

 

 

 

1,905

 

 

 

 

 

 

 

 

1,598

 

 

 

1,905

Vionic acquisition and integration-related costs

 

 

 

 

 

 

 

 

 

 

5,889

 

 

 

 

 

1,807

 

 

 

 

 

 

7,696

Total charges/other items

 

 

22,551

 

 

 

 

 

340,170

 

 

 

7,794

 

 

636

 

 

 

1,807

 

 

 

363,357

 

 

 

9,601

Adjusted operating (loss) earnings

 

$

(16,100

)

 

$

70,036

 

$

(12,386

)

 

$

54,019

 

$

(38,436

)

 

$

(16,310

)

 

$

(66,922

)

 

$

107,745

 
 
 
 
 

SCHEDULE 6

 

CALERES, INC.

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE RECONCILIATION

 

 

 

(Unaudited)

 

 

Thirteen Weeks Ended

 

Thirty-Nine Weeks Ended

 

 

October 31,

 

November 2,

 

October 31,

 

November 2,

(Thousands, except per share data)

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

14,926

 

 

$

27,761

 

 

$

(361,915

)

 

$

62,073

 

Net (earnings) loss attributable to noncontrolling interests

 

 

(509

)

 

 

226

 

 

 

(223

)

 

 

338

 

Net earnings (loss) attributable to Caleres, Inc.

 

 

14,417

 

 

 

27,987

 

 

 

(362,138

)

 

 

62,411

 

Net earnings allocated to participating securities

 

 

(512

)

 

 

(946

)

 

 

 

 

 

(2,042

)

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

 

$

13,905

 

 

$

27,041

 

 

$

(362,138

)

 

$

60,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

36,554

 

 

 

39,258

 

 

 

37,439

 

 

 

39,983

 

Dilutive effect of share-based awards

 

 

176

 

 

 

55

 

 

 

 

 

 

57

 

Diluted common shares attributable to Caleres, Inc.

 

 

36,730

 

 

 

39,313

 

 

 

37,439

 

 

 

40,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.38

 

 

$

0.69

 

 

$

(9.67

)

 

$

1.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.38

 

 

$

0.69

 

 

$

(9.67

)

 

$

1.51

 

 
 
 
 
 

SCHEDULE 7

 

CALERES, INC.

BASIC AND DILUTED ADJUSTED EARNINGS (LOSS) PER SHARE RECONCILIATION

 

 

 

(Unaudited)

 

 

Thirteen Weeks Ended

 

Thirty-Nine Weeks Ended

 

 

October 31,

 

November 2,

 

October 31,

 

November 2,

(Thousands, except per share data)

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings (loss) attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings (loss)

 

$

18,731

 

 

$

31,364

 

 

$

(53,077

)

 

$

72,086

 

Net (earnings) loss attributable to noncontrolling interests

 

 

(509

)

 

 

226

 

 

 

(223

)

 

 

338

 

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

 

 

18,222

 

 

 

31,590

 

 

 

(53,300

)

 

 

72,424

 

Net earnings allocated to participating securities

 

 

(647

)

 

 

(1,070

)

 

 

 

 

 

(2,376

)

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

 

$

17,575

 

 

$

30,520

 

 

$

(53,300

)

 

$

70,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

36,554

 

 

 

39,258

 

 

 

37,439

 

 

 

39,983

 

Dilutive effect of share-based awards

 

 

176

 

 

 

55

 

 

 

 

 

 

57

 

Diluted common shares attributable to Caleres, Inc.

 

 

36,730

 

 

 

39,313

 

 

 

37,439

 

 

 

40,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.48

 

 

$

0.78

 

 

$

(1.42

)

 

$

1.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.48

 

 

$

0.78

 

 

$

(1.42

)

 

$

1.75

 

 
 
 
 

 

Investor Contact:
Logan Bonacorsi
lbonacorsi@caleres.com

Source: Caleres

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