Caleres Inc 10-Q for FY2023 Q1

Caleres Inc (CAL)

10-Q 2022-06-07 For: 2022-04-30

Added on April 09, 2026

About this 10-Q

Caleres Inc filed this 10-Q on June 7, 2022, covering the quarter ended April 30, 2022 (FY2023 Q1).

Headline figures

Quarter ended April 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $735.12M; up 15.1% from $638.64M a year earlier
Net income: $50.51M; up 721.7% from net income of $6.15M a year earlier
Diluted EPS: $1.32; up 725.0% from $0.16 a year earlier

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☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended April 30, 2022

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to _____________


CALERES, INC.
(Exact name of registrant as specified in its charter)

New York	43-0197190
(State or other jurisdiction	(IRS Employer Identification Number)
of incorporation or organization)

8300 Maryland Avenue	63105
St. Louis, Missouri	(Zip Code)
(Address of principal executive offices)

(314) 854-4000
(Registrant’s telephone number, including area code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - par value of $0.01 per share	CAL	New York Stock Exchange


Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

INDEX

PART I		Page
Item 1	Financial Statements	3
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4	Controls and Procedures	34

PART II		34
Item 1	Legal Proceedings	34
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3	Defaults Upon Senior Securities	35
Item 4	Mine Safety Disclosures	35
Item 5	Other Information	35
Item 6	Exhibits	36
	Signature	37



	(Unaudited)
($ thousands)	April 30, 2022		May 1, 2021		January 29, 2022
Assets
Current assets:
Cash and cash equivalents	$	33,717	$	98,244	$	30,115
Receivables, net		181,551		132,698		122,236
Inventories, net		643,527		445,299		596,807
Income taxes		11,815		35,850		33,073
Property and equipment, held for sale		16,777		—		5,455
Prepaid expenses and other current assets		46,254		45,027		48,790
Total current assets		933,641		757,118		836,476

Prepaid pension costs		101,609		91,397		99,139
Lease right-of-use assets		503,393		526,011		503,430
Property and equipment, net		137,600		165,118		150,238
Goodwill and intangible assets, net		224,475		236,924		227,503
Other assets		27,580		26,255		27,140
Total assets	$	1,928,298	$	1,802,823	$	1,843,926

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	305,000	$	200,000	$	290,000
Mandatory purchase obligation - Blowfish Malibu		—		45,523		—
Trade accounts payable		386,821		293,309		331,470
Income taxes		39,418		11,359		22,622
Lease obligations		118,692		133,327		128,495
Other accrued expenses		219,956		182,419		253,026
Total current liabilities		1,069,887		865,937		1,025,613

Other liabilities:
Noncurrent lease obligations		452,742		490,355		452,909
Long-term debt		—		198,966		—
Income taxes		7,786		2,464		2,464
Deferred income taxes		14,811		10,256		14,731
Other liabilities		25,044		28,189		24,822
Total other liabilities		500,383		730,230		494,926

Equity:
Common stock		374		383		376
Additional paid-in capital		169,025		159,381		168,830
Accumulated other comprehensive loss		(8,328)		(8,936)		(8,606)
Retained earnings		191,165		52,041		157,970
Total Caleres, Inc. shareholders’ equity		352,236		202,869		318,570
Noncontrolling interests		5,792		3,787		4,817
Total equity		358,028		206,656		323,387
Total liabilities and equity	$	1,928,298	$	1,802,823	$	1,843,926



	Thirteen Weeks Ended
($ thousands, except per share amounts)	April 30, 2022		May 1, 2021
Net sales	$	735,116	$	638,636
Cost of goods sold		408,122		363,749
Gross profit		326,994		274,887
Selling and administrative expenses		260,799		243,535
Restructuring and other special charges, net		—		13,482
Operating earnings		66,195		17,870
Interest expense, net		(2,299)		(11,792)
Other income, net		3,422		3,828
Earnings before income taxes		67,318		9,906
Income tax provision		(17,333)		(3,521)
Net earnings		49,985		6,385
Net (loss) earnings attributable to noncontrolling interests		(524)		238
Net earnings attributable to Caleres, Inc.	$	50,509	$	6,147

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.34	$	0.16

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	0.16


						Accumulated
						Other				Total Caleres, Inc.		Non-
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		controlling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE AS OF JANUARY 29, 2022	37,635,145	$	376	$	168,830	$	(8,606)	$	157,970	$	318,570	$	4,817	$	323,387
Net earnings (loss)									50,509		50,509		(524)		49,985
Foreign currency translation adjustment							(162)				(162)		(1)		(163)
Pension and other postretirement benefits adjustments, net of tax of $141							440				440		—		440
Comprehensive income (loss)							278		50,509		50,787		(525)		50,262
Contributions by noncontrolling interests											—		1,500		1,500
Dividends ($0.07 per share)									(2,648)		(2,648)				(2,648)
Acquisition of treasury stock	(701,324)		(7)						(14,666)		(14,673)				(14,673)
Issuance of common stock under share-based plans, net	512,508		5		(3,604)						(3,599)				(3,599)
Share-based compensation expense					3,799						3,799				3,799
BALANCE APRIL 30, 2022	37,446,329	$	374	$	169,025	$	(8,328)	$	191,165	$	352,236	$	5,792	$	358,028

BALANCE JANUARY 30, 2021	37,966,204	$	380	$	160,446	$	(9,136)	$	48,557	$	200,247	$	3,607	$	203,854
Net earnings									6,147		6,147		238		6,385
Foreign currency translation adjustment							(166)				(166)		(58)		(224)
Pension and other postretirement benefits adjustments, net of tax of $97							366				366				366
Comprehensive income							200		6,147		6,347		180		6,527
Dividends ($0.07 per share)									(2,663)		(2,663)				(2,663)
Issuance of common stock under share-based plans, net	327,268		3		(3,504)						(3,501)				(3,501)
Share-based compensation expense					2,439						2,439				2,439
BALANCE MAY 1, 2021	38,293,472	$	383	$	159,381	$	(8,936)	$	52,041	$	202,869	$	3,787	$	206,656


	Thirteen Weeks Ended May 1, 2021
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total

Retail stores	$	334,745	$	15,008	$	—	$	349,753
Landed wholesale - e-commerce - drop ship ⁽¹⁾		—		20,814		(394)		20,420
E-commerce - Company websites ⁽¹⁾		63,122		42,738		—		105,860
Total direct-to-consumer sales		397,867		78,560		(394)		476,033
Wholesale - e-commerce ⁽¹⁾		—		37,480		—		37,480
Landed wholesale		—		115,347		(9,379)		105,968
First-cost wholesale		—		16,718		—		16,718
Licensing and royalty		—		2,164		—		2,164
Other ⁽²⁾		237		36		—		273
Net sales	$	398,104	$	250,305	$	(9,773)	$	638,636


	Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021
Balance, beginning of period	$	9,601	$	14,928
Provision/adjustment for expected credit losses		(617)		(152)
Uncollectible accounts written off, net of recoveries		(526)		(3,404)
Balance, end of period	$	8,458	$	11,372


	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
Thirteen Weeks Ended April 30, 2022
Net sales	$	384,502	$	365,740	$	(15,126)	$	735,116
Intersegment sales ⁽¹⁾		—		15,126		—		15,126
Operating earnings (loss)		49,688		41,349		(24,842)		66,195
Segment assets		790,778		987,397		150,123		1,928,298

Thirteen Weeks Ended May 1, 2021
Net sales	$	398,104	$	250,305	$	(9,773)	$	638,636
Intersegment sales⁽¹⁾		—		9,773		—		9,773
Operating earnings (loss)		47,873		(2,821)		(27,182)		17,870
Segment assets		758,823		794,430		249,570		1,802,823


($ thousands)	April 30, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	114,528	$	10,200	$	174,760
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		10,836		4,005		29,359
		$	451,088	$	125,364	$	106,205	$	219,519


	May 1, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	104,459	$	10,200	$	184,829
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		8,456		4,005		31,739
		$	451,088	$	112,915	$	106,205	$	231,968

	January 29, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	112,061	$	10,200	$	177,227
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		10,275		4,005		29,920
		$	451,088	$	122,336	$	106,205	$	222,547


			Pension and
			Other		Accumulated
	Foreign		Postretirement		Other
	Currency		Transactions		Comprehensive
($ thousands)	Translation		(1)		(Loss) Income
Balance at January 29, 2022	$	(788)	$	(7,818)	$	(8,606)
Other comprehensive loss before reclassifications		(162)		—		(162)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		581		581
Tax benefit		—		(141)		(141)
Net reclassifications		—		440		440
Other comprehensive (loss) income		(162)		440		278
Balance at April 30, 2022	$	(950)	$	(7,378)	$	(8,328)

Balance at January 30, 2021	$	(111)	$	(9,025)	$	(9,136)
Other comprehensive loss before reclassifications		(166)		—		(166)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		463		463
Tax benefit		—		(97)		(97)
Net reclassifications		—		366		366
Other comprehensive (loss) income		(166)		366		200
Balance at May 1, 2021	$	(277)	$	(8,659)	$	(8,936)


	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021		April 30, 2022		May 1, 2021
Service cost	$	1,762	$	1,942	$	—	$	—
Interest cost		2,971		2,813		10		10
Expected return on assets		(6,984)		(7,114)		—		—
Amortization of:
Actuarial loss (gain)		681		615		(25)		(27)
Prior service income		(75)		(125)		—		—
Total net periodic benefit income	$	(1,645)	$	(1,869)	$	(15)	$	(17)


	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
April 30, 2022:
Non-qualified deferred compensation plan assets	$	7,567	$	7,567	$	—	$	—
Non-qualified deferred compensation plan liabilities		(7,567)		(7,567)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,765)		(1,765)		—		—
Restricted stock units for non-employee directors		(2,559)		(2,559)		—		—
May 1, 2021:
Cash equivalents – money market funds	$	57,000	$	57,000	$	—	$	—
Non-qualified deferred compensation plan assets		8,169		8,169		—		—
Non-qualified deferred compensation plan liabilities		(8,169)		(8,169)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,185)		(1,185)		—		—
Restricted stock units for non-employee directors		(2,571)		(2,571)		—		—
Mandatory purchase obligation - Blowfish Malibu		(45,523)		—		—		(45,523)
January 29, 2022:
Non-qualified deferred compensation plan assets		7,463		7,463		—		—
Non-qualified deferred compensation plan liabilities		(7,463)		(7,463)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,770)		(1,770)		—		—
Restricted stock units for non-employee directors		(2,568)		(2,568)		—		—


($ thousands)	April 30, 2022		May 1, 2021		January 29, 2022
Customer allowances and discounts	$	22,896	$	19,260	$	20,328
Loyalty programs liability		18,152		16,177		18,814
Returns reserve		16,376		14,469		12,468
Gift card liability		6,130		5,423		6,804


($ millions)	April 30, 2022		May 1, 2021		⁽¹⁾	January 29, 2022
Borrowings under revolving credit agreement	$	305.0	$	200.0		$	290.0
Long-term debt		—		199.0			—
Total debt	$	305.0	$	399.0		$	290.0


				Total Number	Maximum Number
				Purchased as Part	of Shares that May
	Total Number of			of Publicly	Yet be Purchased
	Shares	Average Price Paid		Announced	Under the
Fiscal Period	Purchased⁽¹⁾		per Share ⁽¹⁾	Program ⁽²⁾	Program ⁽²⁾
January 30, 2022 - February 26, 2022	—	$	—	—	1,990,224

February 27, 2022 - April 2, 2022	424,662		20.37	250,000	8,740,224

April 3, 2022 - April 30, 2022	451,324		21.32	451,324	8,288,900

Total	875,986	$	20.86	701,324	8,288,900


Exhibit No.
3.1		Restated Certificate of Incorporation of Caleres, Inc. (the “Company”) incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed May 29, 2020.
3.2		Bylaws of the Company as amended through May 26, 2022, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed May 27, 2022.
10.1*		Caleres, Inc. Incentive and Stock Compensation Plan of 2022, incorporated herein by reference to Exhibit A to the Company’s Proxy Statement filed on April 14, 2022.
10.4a*	†	Form of Performance Award Agreement under the Company’s Incentive and Stock Compensation Plan of 2022, filed herewith.
10.4b*	†	Form of Restricted Stock Award Agreement under the Company’s Incentive and Stock Compensation Plan of 2022, filed herewith.
10.5a*	†	Form of Non-Employee Director Restricted Stock Unit Agreement between the Company and its Non-Employee Directors under the Company’s Incentive and Stock Compensation Plan of 2022, filed herewith.
10.5b*	†	Form of Non-Employee Director Restricted Stock Award Agreement between the Company and its Non-Employee Directors under the Company’s Incentive and Stock Compensation Plan of 2022, filed herewith.
31.1	†	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	†	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	†	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	†	iXBRL Instance Document
101.SCH	†	iXBRL Taxonomy Extension Schema Document
101.CAL	†	iXBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	†	iXBRL Taxonomy Extension Label Linkbase Document
101.PRE	†	iXBRL Taxonomy Presentation Linkbase Document
101.DEF	†	iXBRL Taxonomy Definition Linkbase Document
104	†	Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.

		CALERES, INC.

Date: June 7, 2022		/s/ Kenneth H. Hannah
		Kenneth H. Hannah Senior Vice President and Chief Financial Officer on behalf of the Registrant and as the Principal Financial Officer