ST. LOUIS - Caleres (NYSE: NYSE:CAL), a diversified portfolio of global footwear brands, reported first-quarter earnings that edged past Wall Street expectations, while revenues saw a marginal decline.
The company announced an adjusted earnings per share (EPS) of $0.88 for the first quarter, slightly above the analyst estimate of $0.87. However, revenue for the quarter was $659.2 million, falling short of the consensus estimate of $665.5 million.
The firm achieved a record first-quarter consolidated gross margin of 47 percent, a notable increase from the previous year. Despite a challenging consumer demand environment, Caleres saw growth in sales and profitability from its Lead Brands and robust margin performance across the Brand Portfolio.
The Brand Portfolio segment delivered more than half of the company's operating earnings during the quarter, with a 13 percent operating margin. Famous Footwear maintained year-over-year sales levels and generated solid gross margins, with significant sales and market share increases in the Kids category.
President and CEO Jay Schmidt expressed confidence in the company's ability to deliver earnings per share within the provided guidance range for fiscal 2024. Schmidt highlighted the company's strategic positioning and investment in growth initiatives, which are expected to drive sustained value for shareholders.
Looking ahead to fiscal 2024, Caleres reiterated its financial outlook, expecting consolidated net sales to be flat to up 2 percent compared to the previous year, with adjusted EPS projected in the range of $4.30 to $4.60. For the second quarter of 2024, the company anticipates consolidated net sales to increase by 3 to 4 percent, which includes a benefit of $20 to $25 million for Famous Footwear due to a calendar shift of a key back-to-school week. Adjusted EPS for the second quarter is forecasted to be between $1.20 and $1.25.
Caleres also emphasized its strategic inventory management, which resulted in a 5.2 percent reduction in inventory from the first quarter of the previous year. Additionally, the company continued to invest in value-driving opportunities and returned cash to shareholders through share buybacks and dividends.
The company's capital allocation strategy for the near term remains focused on reducing debt, with expectations that borrowings under its asset-based revolving credit facility will be less than $100 million by 2026. Caleres will continue to evaluate opportunities for free cash flow throughout the year, considering business performance and market conditions.
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