Caleres Reports Second Quarter 2019 Results

Monday, August 26, 2019 3:10 pm CDT

Dateline:

ST. LOUIS

Public Company Information:

NYSE:
CAL
"A continued focus on expense discipline improved profitability for the quarter. As a company, we remain focused on creating consistent, profitable and sustainable growth over the long term."

ST. LOUIS--(BUSINESS WIRE)--Caleres (NYSE: CAL) (caleres.com), a diverse portfolio of global footwear brands, today reported second quarter 2019 financial results.

  • Delivered earnings per diluted share of $0.61, up 10.9%.
  • Record second quarter sales of $752.5 million, up 6.5% year-over-year
  • Positive same-store-sales of 1.5% at Famous Footwear
  • On-track to deliver eighth consecutive year of positive back-to-school same-store-sales
  • Continued to evolve portfolio, announcing partnership with Veronica Beard and relaunch of Zodiac

“During the quarter we successfully executed on our strategies to strengthen the emotional connections we have with our consumers. Our deep insights, combined with our industry-leading footwear capabilities, allowed us to deliver relevant product, supporting growth in the Brand Portfolio and positive same-store-sales growth at Famous Footwear,” said Diane Sullivan, CEO, president and chairman of Caleres. “A continued focus on expense discipline improved profitability for the quarter. As a company, we remain focused on creating consistent, profitable and sustainable growth over the long term.”

Second Quarter 2019 Results Versus Second Quarter 2018

  • Consolidated sales of $752.5 million, up 6.5%.
    • Brand Portfolio sales of $359.6 million, up 17.9%.
    • Famous Footwear total sales of $419.8 million, with same-store-sales up 1.5%.
  • Gross profit of $305.9 million, up 4.4%, representing gross margin of 40.7%.
  • SG&A expense of $267.5 million, up 3.4%, representing 35.6% of sales.
  • Operating earnings of $37.8 million, up 17.6%, representing operating margin of 5.0%.
  • Adjusted operating earnings of $38.4 million, up 10.4%, representing adjusted operating margin of 5.1%.
  • Net earnings of $25.3 million, resulting in earnings per diluted share of $0.61, up 10.9%.
  • Adjusted net earnings of $25.8 million, resulting in adjusted earnings per diluted share of $0.62, up 5.1%.

First Half 2019 Results Versus First Half 2018

  • Consolidated sales of $1,430.2 million, up 6.8%.
    • Brand Portfolio sales of $700.6 million, up 19.0%.
    • Famous Footwear total sales of $772.0 million, with same-store-sales up 0.4%.
  • Gross profit of $585.8 million, up 3.1%, representing gross margin of 41.0%.
  • Adjusted gross margin of 41.5%, excluding $7.2 million related to Vionic inventory adjustment amortization and Brand Portfolio business exit expense.
  • SG&A expense of $529.6 million, up 4.0%, representing 37.0% of sales.
  • Operating earnings of $54.7 million, down 0.8%, representing operating margin of 3.8%.
  • Adjusted operating earnings of $63.3 million, up 6.3%, representing adjusted operating margin of 4.4%.
  • Net earnings of $34.4 million, resulting in earnings per diluted share of $0.82, down 12.8%.
  • Adjusted net earnings of $40.8 million, resulting in adjusted earnings per diluted share of $0.98, down 3.9%.

Balance Sheet and Cash Flow

  • Cash and equivalents of $42.6 million and cash from operations of $116.6 million, year-to-date.
  • There were $300.0 million of outstanding borrowings under the revolving credit facility, following the October 18, 2018 acquisition of Vionic.
  • Inventory of $792.1 million, up 10.7% year-over-year, including $50.7 million of Vionic inventory.
  • Year-to-date capital expenditures of $30.2 million, up 40.3% year-over-year due to the investment in automation at the new Brand Portfolio fulfillment center.
  • Returned $35.8 million to shareholders in the first half of 2019, via share repurchases and dividends.

Investor Conference Call

Caleres will host an investor conference call at 4:30 p.m. ET today, Monday, August 26. The webcast and slides will be available at investor.caleres.com/news/events. The 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 3196093. A replay will be available at investor.caleres.com/news/events/archive for a limited period. Investors may also access a replay of the call through September 2 by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 3196093 .

Investor Day

Caleres also invites financial analysts and institutional investors to save the date for an Investor Day, to be held in New York on October 2, 2019. The event will be hosted by CEO, President and Chairman of the Board Diane Sullivan, Senior Vice President and Chief Financial Officer Ken Hannah, and other members of the executive leadership team. A formal invitation will be provided at a later date.

Definitions

All references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings attributable to Caleres, Inc. and diluted earnings per common share attributable to Caleres, Inc. shareholders, are presented as net earnings and earnings 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, net earnings and earnings 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) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions and other factors; (ii) rapidly changing fashion trends and consumer preferences and purchasing patterns; (iii) intense competition within the footwear industry; (iv) 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; (v) imposition of tariffs; (vi) the ability to accurately forecast sales and manage inventory levels; (vii) cybersecurity threats or other major disruption to the Company’s information technology systems; (viii) customer concentration and increased consolidation in the retail industry; (ix) transitional challenges with acquisitions; (x) a disruption in the Company’s distribution centers; (xi) foreign currency fluctuations; (xii) changes to tax laws, policies and treaties; (xiii) the ability to recruit and retain senior management and other key associates; (xiv) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xv) the ability to secure/exit leases on favorable terms; (xvi) the ability to maintain relationships with current suppliers; and (xvii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights. 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 2, 2019, 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 the home of today’s most coveted footwear brands and represents a diverse portfolio spanning all of life’s styles and experiences. Every shoe tells a story and Caleres has the perfect fit for every one of them. Our collections have been developed and acquired to meet the evolving needs of today’s assorted and growing global audiences, with consumer insights driving every aspect of the innovation, design, and craft that go into our distinctly positioned brands, including Famous Footwear, Sam Edelman, Naturalizer, Allen Edmonds, Vionic, Dr. Scholl’s Shoes, Franco Sarto, and more. The Caleres story is most simply defined by the company’s mission: Inspire people to feel great…feet first.

SCHEDULE 1

 

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

(Thousands, except per share data)

 

August 3,

2019

 

 

August 4,

2018

 

 

August 3,

2019

 

 

August 4,

2018

 

Net sales

 

$

752,485

 

 

$

706,612

 

 

$

1,430,239

 

 

$

1,338,754

 

Cost of goods sold

 

 

446,541

 

 

 

413,511

 

 

 

844,459

 

 

 

770,731

 

Gross profit

 

 

305,944

 

 

 

293,101

 

 

 

585,780

 

 

 

568,023

 

Selling and administrative expenses

 

 

267,531

 

 

 

258,835

 

 

 

529,642

 

 

 

509,033

 

Restructuring and other special charges, net

 

 

609

 

 

 

2,123

 

 

 

1,465

 

 

 

3,900

 

Operating earnings

 

 

37,804

 

 

 

32,143

 

 

 

54,673

 

 

 

55,090

 

Interest expense, net

 

 

(7,389

)

 

 

(3,602

)

 

 

(14,729

)

 

 

(7,285

)

Other income, net

 

 

2,650

 

 

 

3,078

 

 

 

5,269

 

 

 

6,169

 

Earnings before income taxes

 

 

33,065

 

 

 

31,619

 

 

 

45,213

 

 

 

53,974

 

Income tax provision

 

 

(7,838

)

 

 

(8,008

)

 

 

(10,901

)

 

 

(13,183

)

Net earnings

 

 

25,227

 

 

 

23,611

 

 

 

34,312

 

 

 

40,791

 

Net loss attributable to noncontrolling interests

 

 

(114

)

 

 

(35

)

 

 

(112

)

 

 

(67

)

Net earnings attributable to Caleres, Inc.

 

$

25,341

 

 

$

23,646

 

 

$

34,424

 

 

$

40,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.61

 

 

$

0.55

 

 

$

0.83

 

 

$

0.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.61

 

 

$

0.55

 

 

$

0.82

 

 

$

0.94

 

SCHEDULE 2

 

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

 

 

 

 

 

August 3, 2019

 

 

August 4, 2018

 

 

February 2, 2019

 

(Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

42,601

 

 

$

102,884

 

 

$

30,200

 

Receivables, net

 

 

167,727

 

 

 

153,421

 

 

 

191,722

 

Inventories, net

 

 

792,064

 

 

 

715,705

 

 

 

683,171

 

Prepaid expenses and other current assets

 

 

51,394

 

 

 

62,159

 

 

 

71,354

 

Total current assets

 

 

1,053,786

 

 

 

1,034,169

 

 

 

976,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease right-of-use assets

 

 

723,415

 

 

 

 

 

 

 

Property and equipment, net

 

 

232,045

 

 

 

207,726

 

 

 

230,784

 

Goodwill and intangible assets, net

 

 

546,110

 

 

 

362,049

 

 

 

549,897

 

Other assets

 

 

89,037

 

 

 

89,701

 

 

 

81,440

 

Total assets

 

$

2,644,393

 

 

$

1,693,645

 

 

$

1,838,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings under revolving credit agreement

 

$

300,000

 

 

$

 

 

$

335,000

 

Trade accounts payable

 

 

448,596

 

 

 

400,391

 

 

 

316,298

 

Lease obligations

 

 

143,202

 

 

 

 

 

 

 

Other accrued expenses

 

 

190,331

 

 

 

195,987

 

 

 

202,038

 

Total current liabilities

 

 

1,082,129

 

 

 

596,378

 

 

 

853,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent lease obligations

 

 

649,100

 

 

 

 

 

 

 

Long-term debt

 

 

198,161

 

 

 

197,702

 

 

 

197,932

 

Deferred rent

 

 

 

 

 

52,396

 

 

 

54,850

 

Other liabilities

 

 

90,325

 

 

 

109,975

 

 

 

97,015

 

Total other liabilities

 

 

937,586

 

 

 

360,073

 

 

 

349,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Caleres, Inc. shareholders’ equity

 

 

623,429

 

 

 

735,853

 

 

 

634,053

 

Noncontrolling interests

 

 

1,249

 

 

 

1,341

 

 

 

1,382

 

Total equity

 

 

624,678

 

 

 

737,194

 

 

 

635,435

 

Total liabilities and equity

 

$

2,644,393

 

 

$

1,693,645

 

 

$

1,838,568

 

SCHEDULE 3

 

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

(Unaudited)

 

 

 

Twenty-Six Weeks Ended

 

(Thousands)

 

August 3, 2019

 

 

August 4, 2018

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

116,578

 

 

$

91,007

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(26,741

)

 

 

(18,559

)

Disposals of property and equipment

 

 

636

 

 

 

 

Capitalized software

 

 

(4,084

)

 

 

(2,951

)

Acquisition cost, net of cash received

 

 

 

 

 

(16,793

)

Net cash used for investing activities

 

 

(30,189

)

 

 

(38,303

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Borrowings under revolving credit agreement

 

 

149,000

 

 

 

 

Repayments under revolving credit agreement

 

 

(184,000

)

 

 

 

Repayments of capital lease obligation

 

 

(609

)

 

 

 

Dividends paid

 

 

(5,808

)

 

 

(6,053

)

Acquisition of treasury stock

 

 

(29,995

)

 

 

(3,288

)

Issuance of common stock under share-based plans, net

 

 

(2,547

)

 

 

(4,365

)

Other

 

 

(85

)

 

 

 

Net cash used for financing activities

 

 

(74,044

)

 

 

(13,706

)

Effect of exchange rate changes on cash and cash equivalents

 

 

56

 

 

 

(161

)

Increase in cash and cash equivalents

 

 

12,401

 

 

 

38,837

 

Cash and cash equivalents at beginning of period

 

 

30,200

 

 

 

64,047

 

Cash and cash equivalents at end of period

 

$

42,601

 

 

$

102,884

 

SCHEDULE 4

 

CALERES, INC.

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

 

(Unaudited)

 

Thirteen Weeks Ended

 

August 3, 2019

August 4, 2018

(Thousands, except per share data)

Pre-Tax

Impact of

Charges/Other

Items

Net

Earnings

Attributable

to Caleres, Inc.

Diluted

Earnings

Per Share

Pre-Tax

Impact of

Charges/Other

Items

Net

Earnings

Attributable

to Caleres, Inc.

Diluted

Earnings

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings

 

 

$

25,341

$

0.61

 

 

$

23,646

$

0.55

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges/other items:

 

 

 

 

 

 

 

 

 

 

 

 

Vionic integration-related costs

$

609

 

452

 

0.01

$

 

 

Blowfish Malibu acquisition-related costs

 

 

 

 

778

 

576

 

0.01

Acquisition, integration and reorganization of men's brands

 

 

 

 

1,885

 

1,394

 

0.03

Total charges/other items

$

609

$

452

$

0.01

$

2,663

$

1,970

$

0.04

Adjusted earnings

 

 

$

25,793

$

0.62

 

 

$

25,616

$

0.59

 

 

(Unaudited)

 

Twenty-Six Weeks Ended

 

August 3, 2019

August 4, 2018

(Thousands, except per share data)

Pre-Tax

Impact of

Charges/Other

Items

Net

Earnings

Attributable to

Caleres, Inc.

Diluted

Earnings

Per Share

Pre-Tax

Impact of

Charges/Other

Items

Net

Earnings

Attributable

to Caleres, Inc.

Diluted

Earnings

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings

 

 

$

34,424

$

0.82

 

 

$

40,858

$

0.94

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges/other items:

 

 

 

 

 

 

 

 

 

 

 

 

Vionic acquisition and integration-related costs

$

6,727

 

4,996

 

0.13

$

 

 

Brand Portfolio - business exits

 

1,905

 

1,415

 

0.03

 

 

 

Blowfish Malibu acquisition-related costs

 

 

 

 

778

 

576

 

0.01

Acquisition, integration and reorganization of men's brands

 

 

 

 

3,662

 

2,709

 

0.07

Total charges/other items

$

8,632

$

6,411

$

0.16

$

4,440

$

3,285

$

0.08

Adjusted earnings

 

 

$

40,835

$

0.98

 

 

$

44,143

$

1.02

SCHEDULE 5

 

 

CALERES, INC.

SUMMARY FINANCIAL RESULTS BY SEGMENT

 

SUMMARY FINANCIAL RESULTS

 

(Unaudited)

 

 

Thirteen Weeks Ended

 

 

Famous Footwear

 

Brand Portfolio

 

Eliminations and Other

 

Consolidated

 

(Thousands)

August 3, 2019

 

August 4, 2018

 

August 3, 2019

 

August 4, 2018

 

August 3, 2019

 

August 4, 2018

 

August 3, 2019

 

August 4, 2018

 

Net sales

$

419,841

 

$

429,472

 

$

359,575

 

$

305,021

 

$

(26,931

)

$

(27,881

)

$

752,485

 

$

706,612

 

Gross profit

 

182,301

 

 

187,114

 

 

124,840

 

 

108,288

 

 

(1,197

)

 

(2,301

)

 

305,944

 

 

293,101

 

Adjusted gross profit

 

182,301

 

 

187,114

 

 

124,840

 

 

108,828

 

 

(1,197

)

 

(2,301

)

 

305,944

 

 

293,641

 

Gross profit rate

 

43.4

%

 

43.6

%

 

34.7

%

 

35.5

%

 

4.4

%

 

8.3

%

 

40.7

%

 

41.5

%

Adjusted gross profit rate

 

43.4

%

 

43.6

%

 

34.7

%

 

35.7

%

 

4.4

%

 

8.3

%

 

40.7

%

 

41.6

%

Operating earnings (loss)

 

31,542

 

 

33,240

 

 

13,898

 

 

15,909

 

 

(7,636

)

 

(17,006

)

 

37,804

 

 

32,143

 

Adjusted operating earnings (loss)

 

31,542

 

 

33,240

 

 

13,916

 

 

18,248

 

 

(7,045

)

 

(16,682

)

 

38,413

 

 

34,806

 

Operating earnings %

 

7.5

%

 

7.7

%

 

3.9

%

 

5.2

%

 

28.4

%

 

61.0

%

 

5.0

%

 

4.5

%

Adjusted operating earnings %

 

7.5

%

 

7.7

%

 

3.9

%

 

6.0

%

 

26.2

%

 

59.8

%

 

5.1

%

 

4.9

%

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

 

1.5

%

 

2.6

%

 

(9.3

)%

 

(1.3

)%

 

%

 

%

 

%

 

%

Number of stores

 

973

 

 

1,008

 

 

231

 

 

233

 

 

 

 

 

 

1,204

 

 

1,241

 

RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)

 

 

(Unaudited)

 

Thirteen Weeks Ended

 

Famous Footwear

Brand Portfolio

Eliminations and Other

 

Consolidated

(Thousands)

August 3, 2019

August 4, 2018

August 3, 2019

August 4, 2018

August 3, 2019

 

August 4, 2018

 

August 3, 2019

August 4, 2018

Gross profit

$

182,301

$

187,114

$

124,840

$

108,288

$

(1,197

)

$

(2,301

)

$

305,944

$

293,101

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blowfish Malibu acquisition-related costs

 

 

 

 

540

 

 

 

 

 

 

540

Total charges/other items

 

 

 

 

540

 

 

 

 

 

 

540

Adjusted gross profit

$

182,301

$

187,114

$

124,840

$

108,828

$

(1,197

)

$

(2,301

)

$

305,944

$

293,641

Operating earnings (loss)

$

31,542

$

33,240

$

13,898

$

15,909

$

(7,636

)

$

(17,006

)

$

37,804

$

32,143

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vionic integration-related costs

 

 

 

18

 

 

591

 

 

 

 

609

 

Blowfish Malibu acquisition-related costs

 

 

 

 

540

 

 

 

238

 

 

 

778

Acquisition, integration and reorganization of men's brands

 

 

 

 

1,799

 

 

 

86

 

 

 

1,885

Total charges/other items

 

 

 

18

 

2,339

 

591

 

 

324

 

 

609

 

2,663

Adjusted operating earnings (loss)

$

31,542

$

33,240

$

13,916

$

18,248

$

(7,045

)

$

(16,682

)

$

38,413

$

34,806

SCHEDULE 5

 

 

CALERES, INC.

SUMMARY FINANCIAL RESULTS BY SEGMENT

 

SUMMARY FINANCIAL RESULTS

 

(Unaudited)

 

 

Twenty-Six Weeks Ended

 

 

Famous Footwear

 

Brand Portfolio

 

Eliminations and Other

 

Consolidated

 

(Thousands)

August 3, 2019

 

August 4, 2018

 

August 3, 2019

 

August 4, 2018

 

August 3, 2019

 

August 4, 2018

 

August 3, 2019

 

August 4, 2018

 

Net sales

$

772,006

 

$

792,883

 

$

700,625

 

$

588,518

 

$

(42,392

)

$

(42,647

)

$

1,430,239

 

$

1,338,754

 

Gross profit

 

334,994

 

 

352,316

 

 

251,700

 

 

217,149

 

 

(914

)

 

(1,442

)

 

585,780

 

 

568,023

 

Adjusted gross profit

 

334,994

 

 

352,316

 

 

258,867

 

 

217,689

 

 

(914

)

 

(1,442

)

 

592,947

 

 

568,563

 

Gross profit rate

 

43.4

%

 

44.4

%

 

35.9

%

 

36.9

%

 

2.2

%

 

(3.4

)%

 

41.0

%

 

42.4

%

Adjusted gross profit rate

 

43.4

%

 

44.4

%

 

36.9

%

 

37.0

%

 

2.2

%

 

(3.4

)%

 

41.5

%

 

42.5

%

Operating earnings (loss)

 

42,355

 

 

55,097

 

 

26,827

 

 

27,536

 

 

(14,509

)

 

(27,543

)

 

54,673

 

 

55,090

 

Adjusted operating earnings (loss)

 

42,355

 

 

55,097

 

 

34,621

 

 

31,458

 

 

(13,671

)

 

(27,025

)

 

63,305

 

 

59,530

 

Operating earnings %

 

5.5

%

 

6.9

%

 

3.8

%

 

4.7

%

 

34.2

%

 

64.6

%

 

3.8

%

 

4.1

%

Adjusted operating earnings %

 

5.5

%

 

6.9

%

 

4.9

%

 

5.3

%

 

32.2

%

 

63.4

%

 

4.4

%

 

4.4

%

Same-store sales % (on a 26-week basis)

 

0.4

%

 

1.0

%

 

(8.9

)%

 

(1.2

)%

 

%

 

%

 

%

 

%

Number of stores

 

973

 

 

1,008

 

 

231

 

 

233

 

 

 

 

 

 

1,204

 

 

1,241

 

RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)

 

 

(Unaudited)

 

Twenty-Six Weeks Ended

 

Famous Footwear

Brand Portfolio

Eliminations and Other

 

Consolidated

(Thousands)

August 3, 2019

August 4, 2018

August 3, 2019

August 4, 2018

August 3, 2019

 

August 4, 2018

 

August 3, 2019

August 4, 2018

Gross profit

$

334,994

$

352,316

$

251,700

$

217,149

$

(914

)

$

(1,442

)

$

585,780

$

568,023

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vionic acquisition and integration-related costs

 

 

 

5,812

 

 

 

 

 

 

5,812

 

Brand Portfolio - business exits

 

 

 

1,355

 

 

 

 

 

 

1,355

 

Blowfish Malibu acquisition-related costs

 

 

 

 

540

 

 

 

 

 

 

540

Total charges/other items

 

 

 

7,167

 

540

 

 

 

 

 

7,167

 

540

Adjusted gross profit

$

334,994

$

352,316

$

258,867

$

217,689

$

(914

)

$

(1,442

)

$

592,947

$

568,563

Operating earnings (loss)

$

42,355

$

55,097

$

26,827

$

27,536

$

(14,509

)

$

(27,543

)

$

54,673

$

55,090

Charges/Other Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vionic acquisition and integration-related costs

 

 

 

5,889

 

 

838

 

 

 

 

6,727

 

Brand Portfolio - business exits

 

 

 

1,905

 

 

 

 

 

 

1,905

 

Blowfish Malibu acquisition-related costs

 

 

 

 

540

 

 

 

238

 

 

 

778

Acquisition, integration and reorganization of men's brands

 

 

 

 

3,382

 

 

 

280

 

 

 

3,662

Total charges/other items

 

 

 

7,794

 

3,922

 

838

 

 

518

 

 

8,632

 

4,440

Adjusted operating earnings (loss)

$

42,355

$

55,097

$

34,621

$

31,458

$

(13,671

)

$

(27,025

)

$

63,305

$

59,530

SCHEDULE 6

 

CALERES, INC.

BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION

 

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

(Thousands, except per share data)

 

August 3, 2019

 

 

August 4, 2018

 

 

August 3, 2019

 

 

August 4, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

25,227

 

 

$

23,611

 

 

$

34,312

 

 

$

40,791

 

Net loss attributable to noncontrolling interests

 

 

114

 

 

 

35

 

 

 

112

 

 

 

67

 

Net earnings attributable to Caleres, Inc.

 

 

25,341

 

 

 

23,646

 

 

 

34,424

 

 

 

40,858

 

Net earnings allocated to participating securities

 

 

(857

)

 

 

(673

)

 

 

(1,125

)

 

 

(1,148

)

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

 

 

24,484

 

 

 

22,973

 

 

$

33,299

 

 

$

39,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

39,951

 

 

 

41,964

 

 

 

40,346

 

 

 

41,937

 

Dilutive effect of share-based awards

 

 

55

 

 

 

117

 

 

 

58

 

 

 

120

 

Diluted common shares attributable to Caleres, Inc.

 

 

40,006

 

 

 

42,081

 

 

 

40,404

 

 

 

42,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.61

 

 

$

0.55

 

 

$

0.83

 

 

$

0.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.61

 

 

$

0.55

 

 

$

0.82

 

 

$

0.94

 

SCHEDULE 7

 

CALERES, INC.

BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION

 

 

 

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

(Thousands, except per share data)

 

August 3, 2019

 

 

August 4, 2018

 

 

August 3, 2019

 

 

August 4, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings attributable to Caleres, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings

 

$

25,679

 

 

$

25,581

 

 

$

40,723

 

 

$

44,076

 

Net loss attributable to noncontrolling interests

 

 

114

 

 

 

35

 

 

 

112

 

 

 

67

 

Adjusted net earnings attributable to Caleres, Inc.

 

 

25,793

 

 

 

25,616

 

 

 

40,835

 

 

 

44,143

 

Net earnings allocated to participating securities

 

 

(873

)

 

 

(729

)

 

 

(1,336

)

 

 

(1,241

)

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

 

 

24,920

 

 

 

24,887

 

 

$

39,499

 

 

$

42,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

39,951

 

 

 

41,964

 

 

 

40,346

 

 

 

41,937

 

Dilutive effect of share-based awards

 

 

55

 

 

 

117

 

 

 

58

 

 

 

120

 

Diluted common shares attributable to Caleres, Inc.

 

 

40,006

 

 

 

42,081

 

 

 

40,404

 

 

 

42,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.62

 

 

$

0.59

 

 

$

0.98

 

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.62

 

 

$

0.59

 

 

$

0.98

 

 

$

1.02

 

SCHEDULE 8

 

CALERES, INC.

CALCULATION OF EBITDA AND ADJUSTED EBITDA (NON-GAAP METRICS)

 

(Unaudited)

 

Twenty-Six Weeks Ended

 

August 3, 2019

 

August 4, 2018

(in 000's)

 

 

 

EBITDA

 

 

 

Net earnings attributable to Caleres, Inc.

$34,424

 

$40,858

Income tax provision

10,901

 

13,183

Interest expense, net

14,729

 

7,285

Depreciation and amortization (1)

32,774

 

29,520

EBITDA

$92,828

 

$90,846

 

 

 

 

Adjusted EBITDA

 

 

 

Adjusted net earnings attributable to Caleres, Inc.

$40,835

 

$44,143

Income tax provision

13,123

 

14,338

Interest expense, net

14,729

 

7,285

Depreciation and amortization (1)

32,774

 

29,520

Adjusted EBITDA

$101,461

 

$95,286

(1) Includes depreciation and amortization of capitalized software and intangible assets

 

Earnings before interest expense, income taxes and depreciation and amortization (EBITDA) and adjusted earnings before interest expense, income taxes and depreciation and amortization (Adjusted EBITDA) are non-GAAP financial measures that we believe provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results, including the amortization of intangible assets. These measures should not be considered a substitute for or superior to GAAP results.

 

Multimedia Files:

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Contact:

Ken Hannah
khannah@caleres.com
Jo Ann Stoda
jstoda@caleres.com