“Caleres continued its strong operational and financial execution during the third quarter, delivering a 19-percent increase in adjusted earnings per share and exceeding the top end of the guidance range despite ongoing softness in the macroeconomic environment. The Brand Portfolio once again led the way, achieving a sequential improvement in sales and generating record third quarter operating profit and operating margin (…). At the same time, Famous Footwear continued to effectively navigate the challenging consumer demand landscape, delivering double-digit operating margin, demonstrating strength in its cornerstone Kids business, and achieving market share growth in shoe chains”, commented Jay Schmidt, President and Chief Executive Officer of Caleres.

Third Quarter Results

In the second quarter of fiscal 2023, the company’s net sales decreased by 4.6%, on a comparable basis to the same period of last year, totalling 761.9 million US dollars.

The Famous Footwear segment contributed 449.7 million US dollars to Caleres’ total sales in the third quarter of the year, down by 6.7% year-over-year, and the Brand Portfolio segment was responsible for the remaining 320.8 million US dollars, down by 0.8% year-over-year. The company also indicated that direct-to-consumer sales accounted for about 73% of total sales.

In the three months to the 29^th of October, the footwear company’s gross profit increased to 340.4 million US dollars from the 339.8 million US dollars recorded in the same period of 2022; the gross margin for the period was 44.7%.

In the third quarter of 2023, Caleres’ net earnings rose to 46.9 million US dollars, or earnings per diluted share of 1.32 US dollars, as compared to net earnings of 39.2 million US dollars, or earnings per diluted share of 1.08 US dollars, registered in a similar period a year ago. Moreover, the company reported adjusted net earnings of 48.6 million US dollars, or adjusted earnings per diluted share of 1.37 US dollars.

Full Year Guidance

“Looking ahead, we are confident that our leading brand assets, unique One Caleres capabilities and strong balance sheet have set the stage for a third consecutive year of adjusted earnings in excess of our 4.00 US dollars-per-share baseline”, added Schmidt.

But given the soft consumer demand witnessed in the Famous Footwear segment, Caleres now expects consolidated net sales for fiscal 2023 to decline between 4.5% and 5.5%, including the impact of the 53^rd week, on a comparable basis to a previous forecast of a fall in net sales between 3% and 5%.

In addition, diluted earnings per share are anticipated to be between 3.96 US dollars to 4.06 US dollars and adjusted diluted earnings per share are expected in the range of 4.10 US dollars to 4.20 US dollars.