29 Aug Caleres Q2 Tops Estimates
Caleres Inc. reported earnings in the second quarter on an adjusted basis rose 5.1 percent, exceeding Wall Street’s estimates, as sales grew 6.5 percent. Same-store sales rose 1.5 percent at Famous Footwear and the chain is track to deliver its eighth consecutive year of positive back-to-school same-store-sales.
“During the quarter we successfully executed on our strategies to strengthen the emotional connections we have with our consumers. Our deep insights, combined with our industry-leading footwear capabilities, allowed us to deliver relevant product, supporting growth in the Brand Portfolio and positive same-store-sales growth at Famous Footwear,” said Diane Sullivan, CEO, president and chairman of Caleres. “A continued focus on expense discipline improved profitability for the quarter. As a company, we remain focused on creating consistent, profitable and sustainable growth over the long term.”
Second Quarter 2019 Results Versus Second Quarter 2018
- Consolidated sales of $752.5 million, up 6.5 percent. Results were in line with analysts’ consensus estimate of 752 million.
- Brand Portfolio sales of $359.6 million, up 17.9 percent.
- Famous Footwear total sales of $419.8 million, with same-store sales up 1.5 percent.
- Gross profit of $305.9 million, up 4.4 percent, representing gross margin of 40.7 percent.
- SG&A expense of $267.5 million, up 3.4 percent, representing 35.6 percent of sales.
- Operating earnings of $37.8 million, up 17.6 percent, representing operating margin of 5.0 percent.
- Adjusted operating earnings of $38.4 million, up 10.4 percent, representing adjusted operating margin of 5.1 percent.
- Net earnings of $25.3 million, resulting in earnings per diluted share of $0.61, up 10.9 percent.
- Adjusted net earnings of $25.8 million, resulting in adjusted earnings per diluted share of $0.62, up 5.1 percent. Wall Street’s consensus estimate had been 58 cents a share.
First Half 2019 Results Versus First Half 2018
- Consolidated sales of $1,430.2 million, up 6.8 percent.
- Brand Portfolio sales of $700.6 million, up 19.0 percent.
- Famous Footwear total sales of $772.0 million, with same-store sales up 0.4 percent.
- Gross profit of $585.8 million, up 3.1 percent, representing gross margin of 41.0 percent.
- Adjusted gross margin of 41.5 percent, excluding $7.2 million related to Vionic inventory adjustment amortization and
- Brand Portfolio business exit expense.
- SG&A expense of $529.6 million, up 4.0 percent, representing 37.0 percent of sales.
- Operating earnings of $54.7 million, down 0.8 percent, representing operating margin of 3.8 percent.
- Adjusted operating earnings of $63.3 million, up 6.3 percent, representing adjusted operating margin of 4.4 percent.
- Net earnings of $34.4 million, resulting in earnings per diluted share of $0.82, down 12.8 percent.
- Adjusted net earnings of $40.8 million, resulting in adjusted earnings per diluted share of $0.98, down 3.9 percent.
Balance Sheet and Cash Flow
- Cash and equivalents of $42.6 million and cash from operations of $116.6 million, year-to-date.
- There were $300.0 million of outstanding borrowings under the revolving credit facility, following the October 18, 2018 acquisition of Vionic.
- Inventory of $792.1 million, up 10.7 percent year-over-year, including $50.7 million of Vionic inventory.
- Year-to-date capital expenditures of $30.2 million, up 40.3 percent year-over-year due to the investment in automation at the new Brand Portfolio fulfillment center.
- Returned $35.8 million to shareholders in the first half of 2019, via share repurchases and dividends.
Caleres’ businesses include Famous Footwear, Sam Edelman, Naturalizer, Allen Edmonds, Vionic, Dr. Scholl’s Shoes, Franco Sarto and more.