Caleres (CAL) Q2 2025 earnings summary

Executive summary

• Second quarter 2024 sales were $683.3 million, down 1.8% year-over-year, with Famous Footwear up 1.5% and Brand Portfolio down 5.1%.

• Net earnings were $30.0 million ($0.85 per diluted share), compared to $33.9 million ($0.95) in Q2 2023.

• Gross margin improved to 45.5%, up 30 basis points year-over-year, driven by higher merchandise margins and a greater mix of retail and e-commerce sales.

• ERP system upgrade caused operational disruptions, delayed reporting, and order fulfillment challenges, particularly impacting Brand Portfolio sales.

• Announced restructuring actions expected to yield $7.5 million in annualized SG&A savings and $2 million in fiscal 2024.

Financial highlights

• EBITDA for the quarter was $57.2 million, with an EBITDA margin of 8.4%.

• SG&A expense was $268 million, or 39.3% of sales, reflecting investments in marketing, international expansion, and SAP platform implementation.

• Inventory at quarter end was $661 million, flat year-over-year.

• Borrowings at quarter end were $146.5 million, down $98 million from Q2 2023; no long-term debt.

• Net cash provided by operating activities for the first half was $115.7 million.

Outlook and guidance

• Fiscal 2024 net sales outlook revised to down low single digits, from prior guidance of flat to up 2%.

• Fiscal 2024 GAAP EPS guidance lowered to $3.94–$4.09; adjusted EPS $4.00–$4.15, excluding $3 million in restructuring costs.

• Third quarter 2024 GAAP EPS guidance is $1.24–$1.34; adjusted EPS $1.30–$1.40.

• Operating margin for 2024 expected at 7.0%–7.1%; capital expenditures $50–$55 million; effective tax rate ~24%.

• 10 additional store closures planned in 2024, ending the year with 850 stores.