Caleres updated its full year 2023 sales outlook and tightened its earnings per share range following continued soft consumer demand environment in its Famous Footwear segment in the third quarter.
On Tuesday, the St. Louis-based company said net sales were $761.9 million, down 4.6 percent from $798.3 million in the third quarter of 2022. Net earnings in Q3 were $46.9 million, or $1.32 a share, compared with $39.2 million, or $1.08 in the third quarter of 2022.
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By business segment, Famous Footwear saw sales decline 6.7 percent, with comparable sales down 6.9 percent. Caleres’ brand portfolio reported net sales decreased 0.8 percent in the period.
Caleres president and CEO Jay Schmidt said that the company continued its “strong operational” and “financial execution” during the third quarter, citing 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,” Schmidt said. “Most notably, the segment contributed more than half of total company operating profit through the first nine months of the fiscal year.”
At the same time, Schmidt said 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. “Despite near-term macro challenges, we remain confident that Famous is well-situated to grow its leadership position with the millennial family,” he said.
The CEO added that the company is confident in its leading brand assets, unique One Caleres strategy and strong balance sheet have set the stage for a third consecutive year of adjusted earnings in excess of our $4.00-per-share baseline. “Longer term, we remain sharply focused on the strategies we outlined at our recent Investor Day, and the Caleres team is dedicated and poised to execute on this clear and actionable plan for long-term value creation and growth,” Schmidt said.
As a result of the soft consumer demand environment in its Famous Footwear segment, Caleres now expects consolidated net sales to be down 4.5 percent to 5.5 percent, including the impact of the 53rd week, for full year 2023.
In addition, the company is tightening its diluted earnings per share guidance range to $3.96 to $4.06, inclusive of $7 million of restructuring charges associated with expense reduction actions, and adjusted diluted earnings per share range to $4.10 to $4.20.
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