Caleres Inc 10-Q for FY2024 Q2

Caleres Inc (CAL)

10-Q 2023-09-05 For: 2023-07-29

Added on April 09, 2026

About this 10-Q

Caleres Inc filed this 10-Q on September 5, 2023, covering the quarter ended July 29, 2023 (FY2024 Q2).

Headline figures

Quarter ended July 29, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $695.53M; down 5.8% from $738.33M a year earlier
Net income: $33.94M; down 33.7% from net income of $51.18M a year earlier
Diluted EPS: $0.95; down 31.2% from $1.38 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 July 29, 2023

☐	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
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Earnings	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Shareholders’ Equity	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4	Controls and Procedures	36

PART II		37
Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	39
	Signature	40


	(Unaudited)
($ thousands)	July 29, 2023		July 30, 2022		January 28, 2023
Assets
Current assets:
Cash and cash equivalents	$	47,098	$	45,955	$	33,700
Receivables, net		136,549		127,580		132,802
Inventories, net		660,690		770,652		580,215
Income taxes		6,461		12,129		17,527
Property and equipment, held for sale		16,777		16,777		16,777
Prepaid expenses and other current assets		47,248		45,698		50,434
Total current assets		914,823		1,018,791		831,455

Prepaid pension costs		86,189		104,214		83,396
Lease right-of-use assets		505,423		516,486		518,196
Property and equipment, net		157,717		137,007		160,883
Goodwill and intangible assets, net		209,314		221,447		215,392
Other assets		30,494		27,263		27,150
Total assets	$	1,903,960	$	2,025,208	$	1,836,472

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	244,000	$	348,500	$	307,500
Trade accounts payable		350,020		399,265		229,908
Income taxes		18,896		20,139		7,650
Lease obligations		133,743		131,601		136,051
Other accrued expenses		209,712		240,295		230,087
Total current liabilities		956,371		1,139,800		911,196

Other liabilities:
Noncurrent lease obligations		429,192		451,657		444,074
Income taxes		2,464		7,786		7,786
Deferred income taxes		19,335		14,939		19,001
Other liabilities		25,017		26,149		28,302
Total other liabilities		476,008		500,531		499,163

Equity:
Common stock		355		364		357
Additional paid-in capital		177,602		173,246		180,747
Accumulated other comprehensive loss		(25,530)		(7,280)		(26,750)
Retained earnings		312,565		212,803		266,329
Total Caleres, Inc. shareholders’ equity		464,992		379,133		420,683
Noncontrolling interests		6,589		5,744		5,430
Total equity		471,581		384,877		426,113
Total liabilities and equity	$	1,903,960	$	2,025,208	$	1,836,472


	(Unaudited)
	Thirteen Weeks Ended				Twenty-Six Weeks Ended
($ thousands, except per share amounts)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net sales	$	695,533	$	738,330	$	1,358,267	$	1,473,445
Cost of goods sold		381,360		401,515		741,412		809,636
Gross profit		314,173		336,815		616,855		663,809
Selling and administrative expenses		262,823		268,395		515,918		529,194
Restructuring and other special charges, net		1,647		—		1,647		—
Operating earnings		49,703		68,420		99,290		134,615
Interest expense, net		(5,128)		(2,584)		(10,751)		(4,883)
Other income, net		1,616		3,217		3,108		6,639
Earnings before income taxes		46,191		69,053		91,647		136,371
Income tax provision		(11,826)		(17,500)		(22,490)		(34,833)
Net earnings		34,365		51,553		69,157		101,538
Net earnings (loss) attributable to noncontrolling interests		422		375		487		(149)
Net earnings attributable to Caleres, Inc.	$	33,943	$	51,178	$	68,670	$	101,687

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	0.95	$	1.40	$	1.91	$	2.74

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	0.95	$	1.38	$	1.91	$	2.70


						Accumulated				Total
						Other				Caleres, Inc.
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		Noncontrolling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE APRIL 29, 2023	36,274,599	$	363	$	173,640	$	(26,260)	$	298,574	$	446,317	$	5,564	$	451,881
Net earnings									33,943		33,943		422		34,365
Foreign currency translation adjustment							120				120		(397)		(277)
Pension and other postretirement benefits adjustments, net of tax of $211							610				610				610
Comprehensive income							730		33,943		34,673		25		34,698
Contributions by noncontrolling interests											—		1,000		1,000
Dividends ($0.07 per share)									(2,515)		(2,515)				(2,515)
Acquisition of treasury stock	(763,000)		(8)						(17,437)		(17,445)				(17,445)
Issuance of common stock under share-based plans, net	28,494		0		(4)						(4)				(4)
Share-based compensation expense					3,966						3,966				3,966
BALANCE JULY 29, 2023	35,540,093	$	355	$	177,602	$	(25,530)	$	312,565	$	464,992	$	6,589	$	471,581

BALANCE APRIL 30, 2022	37,446,329	$	374	$	169,025	$	(8,328)	$	191,165	$	352,236	$	5,792	$	358,028
Net earnings									51,178		51,178		375		51,553
Foreign currency translation adjustment							465				465		(423)		42
Pension and other postretirement benefits adjustments, net of tax of $190							583				583				583
Comprehensive income (loss)							1,048		51,178		52,226		(48)		52,178
Dividends ($0.07 per share)									(2,552)		(2,552)				(2,552)
Acquisition of treasury stock	(1,083,496)		(11)						(26,988)		(26,999)				(26,999)
Issuance of common stock under share-based plans, net	87,947		1		(216)						(215)				(215)
Share-based compensation expense					4,437						4,437				4,437
BALANCE JULY 30, 2022	36,450,780	$	364	$	173,246	$	(7,280)	$	212,803	$	379,133	$	5,744	$	384,877


						Accumulated
						Other				Total Caleres, Inc.
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		Noncontrolling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE JANUARY 28, 2023	35,715,752	$	357	$	180,747	$	(26,750)	$	266,329	$	420,683	$	5,430	$	426,113
Net earnings									68,670		68,670		487		69,157
Foreign currency translation adjustment							(100)				(100)		(328)		(428)
Pension and other postretirement benefits adjustments, net of tax of $456							1,320				1,320				1,320
Comprehensive income							1,220		68,670		69,890		159		70,049
Contributions by noncontrolling interests											—		1,000		1,000
Dividends ($0.14 per share)									(4,997)		(4,997)				(4,997)
Acquisition of treasury stock	(763,000)		(8)						(17,437)		(17,445)				(17,445)
Issuance of common stock under share-based plans, net	587,341		6		(10,016)						(10,010)				(10,010)
Share-based compensation expense					6,871						6,871				6,871
BALANCE JULY 29, 2023	35,540,093	$	355	$	177,602	$	(25,530)	$	312,565	$	464,992	$	6,589	$	471,581

BALANCE JANUARY 29, 2022	37,635,145	$	376	$	168,830	$	(8,606)	$	157,970	$	318,570	$	4,817	$	323,387
Net earnings (loss)									101,687		101,687		(149)		101,538
Foreign currency translation adjustment							303				303		(424)		(121)
Pension and other postretirement benefits adjustments, net of tax of $331							1,023				1,023				1,023
Comprehensive income (loss)							1,326		101,687		103,013		(573)		102,440
Contributions by noncontrolling interests											—		1,500		1,500
Dividends ($0.14 per share)									(5,200)		(5,200)				(5,200)
Acquisition of treasury stock	(1,784,820)		(18)						(41,654)		(41,672)				(41,672)
Issuance of common stock under share-based plans, net	600,455		6		(3,820)						(3,814)				(3,814)
Share-based compensation expense					8,236						8,236				8,236
BALANCE JULY 30, 2022	36,450,780	$	364	$	173,246	$	(7,280)	$	212,803	$	379,133	$	5,744	$	384,877


	Thirteen Weeks Ended July 30, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total

Retail stores	$	385,610	$	14,344	$	—	$	399,954
E-commerce - Company websites ⁽¹⁾		50,116		49,527		—		99,643
E-commerce - wholesale drop-ship ⁽¹⁾		—		33,903		(907)		32,996
Total direct-to-consumer sales		435,726		97,774		(907)		532,593
Wholesale - e-commerce ⁽¹⁾		—		49,539		—		49,539
Wholesale - landed		—		131,056		(21,198)		109,858
Wholesale - first cost		—		41,705		—		41,705
Licensing and royalty		515		3,969		—		4,484
Other ⁽²⁾		134		17		—		151
Net sales	$	436,375	$	324,060	$	(22,105)	$	738,330


	Twenty-Six Weeks Ended July 30, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total

Retail stores	$	717,598	$	28,561	$	—	$	746,159
E-commerce - Company websites ⁽¹⁾		102,054		102,025		—		204,079
E-commerce - wholesale drop-ship ⁽¹⁾		—		65,676		(1,905)		63,771
Total direct-to-consumer sales		819,652		196,262		(1,905)		1,014,009
Wholesale - e-commerce ⁽¹⁾		—		108,459		—		108,459
Wholesale - landed		—		306,383		(35,327)		271,056
Wholesale - first cost		—		71,781		—		71,781
Licensing and royalty		937		6,875		—		7,812
Other ⁽²⁾		288		40		—		328
Net sales	$	820,877	$	689,800	$	(37,232)	$	1,473,445


	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
Thirteen Weeks Ended July 29, 2023
Net sales	$	414,238	$	300,873	$	(19,578)	$	695,533
Intersegment sales ⁽¹⁾		—		19,578		—		19,578
Operating earnings (loss)		40,630		26,828		(17,755)		49,703
Segment assets		881,483		861,782		160,695		1,903,960

Thirteen Weeks Ended July 30, 2022
Net sales	$	436,375	$	324,060	$	(22,105)	$	738,330
Intersegment sales⁽¹⁾		—		22,105		—		22,105
Operating earnings (loss)		62,496		29,410		(23,486)		68,420
Segment assets		882,303		992,238		150,667		2,025,208

Twenty-Six Weeks Ended July 29, 2023
Net sales	$	763,396	$	626,389	$	(31,518)	$	1,358,267
Intersegment sales ⁽¹⁾		—		31,518		—		31,518
Operating earnings (loss)		57,686		69,497		(27,893)		99,290

Twenty-Six Weeks Ended July 30, 2022
Net sales	$	820,877	$	689,800	$	(37,232)	$	1,473,445
Intersegment sales ⁽¹⁾		—		37,232		—		37,232
Operating earnings (loss)		112,184		70,760		(48,329)		134,615


($ thousands)	July 29, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	126,174	$	10,200	$	163,114
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		14,351		4,005		25,844
		$	451,088	$	140,525	$	106,205	$	204,358

	July 30, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	116,995	$	10,200	$	172,293
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		11,397		4,005		28,798
		$	451,088	$	128,392	$	106,205	$	216,491

	January 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	121,928	$	10,200	$	167,360
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		12,519		4,005		27,676
		$	451,088	$	134,447	$	106,205	$	210,436


			Pension and		Accumulated
	Foreign		Other		Other
	Currency		Postretirement		Comprehensive
($ thousands)	Translation		Transactions ⁽¹⁾		(Loss) Income
Balance at April 29, 2023	$	(1,433)	$	(24,827)	$	(26,260)
Other comprehensive income before reclassifications		120		—		120
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		821		821
Tax benefit		—		(211)		(211)
Net reclassifications		—		610		610
Other comprehensive income		120		610		730
Balance at July 29, 2023	$	(1,313)	$	(24,217)	$	(25,530)

Balance at April 30, 2022	$	(950)	$	(7,378)	$	(8,328)
Other comprehensive income before reclassifications		465		—		465
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		773		773
Tax benefit		—		(190)		(190)
Net reclassifications		—		583		583
Other comprehensive income		465		583		1,048
Balance at July 30, 2022	$	(485)	$	(6,795)	$	(7,280)

Balance at January 28, 2023	$	(1,213)	$	(25,537)	$	(26,750)
Other comprehensive loss before reclassifications		(100)		—		(100)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		1,776		1,776
Tax benefit		—		(456)		(456)
Net reclassifications		—		1,320		1,320
Other comprehensive (loss) income		(100)		1,320		1,220
Balance at July 29, 2023	$	(1,313)	$	(24,217)	$	(25,530)

Balance at January 29, 2022	$	(788)	$	(7,818)	$	(8,606)
Other comprehensive income before reclassifications		303		—		303
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		1,354		1,354
Tax benefit		—		(331)		(331)
Net reclassifications		—		1,023		1,023
Other comprehensive income		303		1,023		1,326
Balance at July 30, 2022	$	(485)	$	(6,795)	$	(7,280)


	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Service cost	$	1,253	$	1,810	$	—	$	—
Interest cost		3,655		3,026		12		8
Expected return on assets		(6,104)		(7,024)		—		—
Amortization of:
Actuarial loss (gain)		883		883		(27)		(27)
Prior service income		(35)		(83)		—		—
Total net periodic benefit income	$	(348)	$	(1,388)	$	(15)	$	(19)


($ thousands)	July 29, 2023		July 30, 2022		January 28, 2023
Customer allowances and discounts	$	19,699	$	19,357	$	21,917
Loyalty programs liability		16,621		17,492		17,732
Returns reserve		11,933		13,172		12,038
Gift card liability		5,774		5,987		6,659


	Twenty-Six Weeks Ended
($ thousands)	July 29, 2023		July 30, 2022
Balance, beginning of period	$	8,903	$	9,601
Adjustment to expected credit losses		840		(1,004)
Uncollectible accounts written off, net of recoveries		145		(209)
Balance, end of period	$	9,888	$	8,388


	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
July 29, 2023:
Non-qualified deferred compensation plan assets	$	9,215	$	9,215	$	—	$	—
Non-qualified deferred compensation plan liabilities		(9,215)		(9,215)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,790)		(1,790)		—		—
Restricted stock units for non-employee directors		(2,207)		(2,207)		—		—
July 30, 2022:
Non-qualified deferred compensation plan assets		7,793		7,793		—		—
Non-qualified deferred compensation plan liabilities		(7,793)		(7,793)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,756)		(176)		—		—
Restricted stock units for non-employee directors		(1,991)		(1,991)		—		—
January 28, 2023:
Non-qualified deferred compensation plan assets		7,890		7,890		—		—
Non-qualified deferred compensation plan liabilities		(7,890)		(7,890)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,662)		(1,662)		—		—
Restricted stock units for non-employee directors		(2,028)		(2,028)		—		—


	Thirteen Weeks Ended
($ millions, except per share amounts)	July 29, 2023		July 30, 2022		Change ⁽¹⁾
Consolidated net sales	$695.5		$738.3		($42.8)	(5.8)	%
Famous Footwear segment net sales	$414.2		$436.4		($22.2)	(5.1)	%
Famous Footwear comparable sales % change	(4.3)	%	(3.1)	%	n/m	n/m
Brand Portfolio segment net sales	$300.9		$324.1		($23.2)	(7.2)	%
Gross profit	$314.2		$336.8		($22.6)	(6.7)	%
Gross margin	45.2	%	45.6	%	n/m	(45) bps
Operating earnings	$49.7		$68.4		($18.7)	(27.3)	%
Diluted earnings per share	$0.95		$1.38		($0.43)	(31.2)	%


	Twenty-Six Weeks Ended
($ millions)	July 29, 2023		July 30, 2022		Change
Net cash provided by operating activities	$	125.2	$	27.2	$	98.0
Net cash used for investing activities		(16.9)		(20.7)		3.8
Net cash (used for) provided by financing activities		(95.0)		9.3		(104.3)
Effect of exchange rate changes on cash and cash equivalents		0.1		—		0.1
Increase in cash and cash equivalents	$	13.4	$	15.8	$	(2.4)


				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⁾
April 30, 2023 - May 27, 2023	—	$	—	—	6,367,379

May 28, 2023 - July 1, 2023	763,205		22.86	763,000	5,604,379

July 2, 2023 - July 29, 2023	—		—	—	5,604,379
Total	763,205	$	—	763,000	5,604,379


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 June 1, 2020.
3.2		Bylaws of the Company as amended through March 9, 2023, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed March 15, 2023.
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: September 5, 2023		/s/ Jack P. Calandra
		Jack P. Calandra Senior Vice President and Chief Financial Officer on behalf of the Registrant and as the Principal Financial Officer