The net earnings of the company were $41.4 million, or earnings per diluted share of $1.19, compared to net earnings of $46.9 million, or earnings per diluted share of $1.32 in Q3 2023. Direct-to-consumer (DTC) sales represented approximately 72 per cent of total net sales. SG&A as a percentage of net sales was 36.3 per cent, up 30 basis points versus the prior year and reflecting expense deleverage on the decline in sales, Caleres said in a press release.
Caleres has reported net sales of $740.9 million in Q3 2024, down 2.8 per cent YoY, with gross profit of $327 million and diluted EPS of $1.19.
DTC sales were 72 per cent of total sales.
Famous Footwear sales fell 4.8 per cent, while Brand Portfolio grew 0.7 per cent.
For 9M 2024, net sales reached $2.08 billion, with diluted EPS of $2.92.
FY24 outlook forecasts a 2.5–3 per cent sales decline.
Segment-wise, Famous Footwear sales declined 4.8 per cent YoY with comparable store sales up 2.5 per cent, with comparable store sales up 2.5 per cent, and Brand Portfolio segment net sales increased 0.7 per cent YoY. Famous Footwear segment gross margin was 42.9 per cent, down 130 basis points versus last year, and Brand Portfolio’s gross margin was 43.8 per cent, up 15 basis points versus last year.
The company reported earnings per diluted share of $1.19 and adjusted earnings per diluted share of $1.23, compared to adjusted net earnings of $48.6 million, or adjusted earnings per diluted share of $1.37 in the third quarter of 2023. It generated third quarter (Q3) EBITDA of $71.4 million, and inventory was up 5 per cent YoY.
“The third quarter saw progress toward our strategy highlighted by the Brand Portfolio delivering growth, Famous Footwear delivering positive comparable store sales, and both segments increasing market share. That said, performance was below our expectations reflecting softer seasonal demand in the boot category, late receipts of key athletic product at Famous Footwear, and a discrete customer credit issue that impacted shipments. In addition, our business in China was also weaker than planned,” said Jay Schmidt, president and chief executive officer of Caleres.
“As we begin the fourth quarter, our strategies are working to drive market share and we are aligning our expenses with expected sales, while appropriately investing behind areas of the business that are expected to deliver a strong ROI. However, we have reduced our outlook as we expect our season-to-date sales trend to continue in the final quarter of the year and anticipate pressure on our gross margin as we take action to move through excess inventory and position ourselves well for 2025,” added Schmidt.
Nine-month (9M) financials
For the first nine months of fiscal 2024, net sales of the company reached $2.08 billion, slightly below the $2.12 billion achieved during the corresponding period in 2023. Gross profit for 9M was $946.9 million, compared to $957.2 million in 2023, reflecting stable margins amid challenging market dynamics. Operating earnings for 9M were $142.0 million, down from $163.7 million in 2023. Net earnings attributable to company shareholders for 9M stood at $102.3 million ($2.92 per diluted share), compared to $115.6 million ($3.23 per diluted share) in the previous year, reflecting higher administrative expenses and restructuring charges.
Outlook
For the full year, Caleres has revised its financial outlook and now anticipates a sales decline of 2.5 to 3 per cent, a slight adjustment from its earlier expectation of a low single-digit decrease. The operating margins are also expected to be lower, ranging from 6.1 to 6.3 per cent, compared to the prior guidance of 7.0 to 7.1 per cent.
The tax rate projection remains steady at approximately 24 per cent. However, the company has adjusted its earnings expectations. GAAP earnings per share (EPS) are now forecast between $3.35 and $3.45, a reduction from the previous range of $3.94 to $4.09. Similarly, adjusted EPS is expected to range from $3.45 to $3.55, down from the earlier guidance of $4.00 to $4.15. Capital expenditures remain unchanged, estimated at $50 to $55 million for the year.
Fibre2Fashion News Desk (SG)
