15 Mar Caleres Sees Robust Q4 Earnings Gains
Caleres Inc. reported healthy gains in earnings in the fourth quarter as Famous Footwear’s comps grew 2.8 percent and sales in its Branded Portfolio gained 13.8 percent.
“We capped off an outstanding year by delivering a consolidated fourth quarter sales increase of nearly 10 percent and earnings improvement on both a reported and adjusted basis. Famous Footwear and Brand Portfolio both contributed to this growth and delivered fourth quarter sales increases of 7.0 percent and 13.8 percent, respectively,” said Diane Sullivan, CEO, president and chairman of Caleres. “Our success in 2017 is reflective of the foundational strength of our diversified portfolio of brands and is directly attributable to our ability to move to where the consumer is going. We expect to leverage our success in both of these areas in 2018 and to deliver adjusted earnings per share of between $2.40 and $2.50.”
Fourth Quarter 2017 Results Versus 2016
- Consolidated sales of $702.5 million were up 9.8 percent, including Allen Edmonds.
- Famous Footwear total sales of $393.1 million were up 7.0 percent, while same-store-sales were up 2.8 percent on a 13-week basis.
- Brand Portfolio sales of $309.4 million were up 13.8 percent, including contribution from Allen Edmonds, which was acquired on December 13, 2016.
- Gross profit was $293.4 million, while gross margin of 41.8 percent was up 97 basis points.
- SG&A expense of $262.1 million was up 7.9 percent, including Allen Edmonds.
- Operating earnings were $30.3 million and operating margin was 4.3 percent, while adjusted operating earnings were $31.3 million–up more than 50 percent–and adjusted operating margin of 4.5 percent was up 122 basis points.
- Net earnings were $20.3 million, while diluted earnings per share were $0.47 and included a $0.02 charge for operations restructuring and a $0.01 benefit related to the Tax Cuts and Jobs Act.
- Adjusted net earnings of $20.6 million were up 44.5 percent, while adjusted diluted net earnings per share of $0.48 were up 45.5 percent.
Full Year 2017 Results Versus 2016
- Consolidated sales of $2,785.6 million were up 8.0 percent, including Allen Edmonds.
- Famous Footwear total sales of $1,637.6 million were up 3.0 percent, while same-store-sales were up 1.4 percent on a 52-week basis.
- Brand Portfolio sales of $1,148.0 million were up 16.0 percent including contribution from Allen Edmonds, which was acquired on December 13, 2016.
- Gross profit of $1,168.6 million–including $4.9 million of expected fair value inventory adjustment amortization related to the Allen Edmonds acquisition–was up 10.0 percent, while gross margin of 42.0 percent was up 78 basis points.
- SG&A expense of $1,023.7 million was up 10.4 percent, including Allen Edmonds.
- Operating earnings were $140.0 million and operating margin was 5.0 percent, while adjusted operating earnings were $149.9 million–up 9.3 percent–and adjusted operating margin was 5.4 percent.
- Net earnings were $87.2 million, while diluted earnings per share were $2.02 and included $0.13 of charges related to the acquisition, integration and reorganization of men’s brands, a $0.02 charge for operations restructuring and a $0.01 benefit related to the Tax Cuts and Jobs Act.
- Adjusted net earnings of $93.1 million were up 7.5 percent, while adjusted diluted earnings per share of $2.16 were up 8.0 percent.
Balance Sheet and Cash Flow
- Cash and equivalents were $64.0 million and up $8.7 million year-over-year.
- There were no outstanding borrowings under the revolving credit facility, as the company paid down the entirety of the $110 million associated with the December 2016 acquisition of Allen Edmonds.
- Inventory of $569.4 million was down 2.8 percent year-over-year, including Allen Edmonds.
- Capital expenditures of $51.2 million were down 14.1 percent year-over-year.
2017 Benefit from 53rd Week
|Consolidated net sales||$23.4 million|
|Famous Footwear sales||$19.7 million|
|Brand Portfolio sales||$3.7 million|
|Consolidated net sales||~$2.8B|
|Famous Footwear same-store-sales||Up low-single digits|
|Brand Portfolio sales||Up low-single digits|
|Gross margin||Up ~5 to 10 bps|
|SG&A as a percent of revenue||Down ~5 to 10 bps|
|Effective tax rate||25% to 26%|
|Adjusted earnings per diluted share||$2.40 to $2.50|