ST. LOUIS--(BUSINESS WIRE)--Sep 4, 2018--Caleres (NYSE: CAL)( caleres.com ), a diverse portfolio of global footwear brands, today reported second quarter 2018 financial results.

“Record second quarter consolidated sales were up 4.4%, while adjusted earnings per share were up 22.9%. Famous Footwear also delivered a record second quarter – for both sales and operating profit – with strength in women’s sandals and athletic-inspired styles driving improvement,” said Diane Sullivan, CEO, president and chairman of Caleres. “For Brand Portfolio, second quarter sales were up 1.9%, as Sam Edelman delivered the largest second quarter in its history, and Naturalizer reported its fourth consecutive quarter of wholesale growth in North America. During the quarter, we also announced the acquisition of Blowfish Malibu, which allows us to continue to expand and diversify our overall business.”

Second Quarter 2018 Results Versus 2017

Consolidated sales of $706.6 million, up 4.4%. Famous Footwear total sales of $429.5 million were up 6.1%, while same-store-sales were up 2.6%.Brand Portfolio sales of $277.1 million were up 1.9%. Gross profit was $293.1 million, while gross margin was 41.5%. SG&A expense of $258.8 million represented 36.6% of sales – a 121 basis point improvement. Operating earnings were $32.1 million and operating margin was 4.5%, while adjusted operating earnings were $34.8 million and adjusted operating margin was 4.9%. Net earnings were $23.6 million, while diluted earnings per share were $0.55 and included a $0.04 charge for the previously announced transition of Allen Edmonds’ consumer-facing activities to St. Louis and for the July acquisition of Blowfish Malibu. Adjusted net earnings of $25.6 million were up 24.1%, while adjusted diluted net earnings per share of $0.59 were up 22.9%.

First Half 2018 Results Versus 2017

Consolidated sales of $1,338.8 million, up 2.3%. Famous Footwear total sales of $792.9 million were up 2.8%, while same-store-sales were up 1.0% – in-line with FY’18 guidance.Brand Portfolio sales of $545.9 million were up 1.6%. Gross profit was $568.0 million, while gross margin was 42.4%. SG&A expense of $509.0 million represented 38.0% of sales – a 39 basis point improvement. Operating earnings were $55.1 million and operating margin was 4.1%, while adjusted operating earnings were $59.5 million and adjusted operating margin was 4.4%. Net earnings were $40.9 million, while diluted earnings per share were $0.94 and included an $0.08 charge for the previously announced transition of Allen Edmonds’ consumer-facing activities to St. Louis and for the acquisition of Blowfish Malibu. Adjusted net earnings of $44.1 million were up 16.0%, while adjusted diluted net earnings per share of $1.02 were up 15.9%.

Balance Sheet and Cash Flow

Cash and equivalents were $102.9 million and up $49.9 million year-over-year, including the acquisition of Blowfish Malibu. There were no outstanding borrowings under the revolving credit facility. Inventory of $715.7 million was down 0.9% year-over-year. Capital expenditures of $12.1 million were down 19.2% year-over-year.

2018 Outlook

Pension Presentation

Results for this year reflect the new accounting standard related to the presentation of retirement benefits, which impacted reported and adjusted 2017 operating income and margin. The effect of this new standard resulted in a shift of $2.7 million of retirement plan income from second quarter 2017 SG&A expense to other income, net. For the first half of 2017, this amount was $5.1 million. There was no impact to second quarter or first half 2017 net earnings or earnings per share, due to the adoption of this standard.

Investor Conference Call

Caleres will host an investor conference call at 4:30 p.m. ET today, Tuesday, September 4. The webcast and slides will be available at investor.caleres.com/news/events. A live conference call will be available at (877) 217-9089 for analysts in North America or (706) 679-1723 for international analysts by using the conference ID 2559419. A replay will be available at investor.caleres.com/news/events/archive for a limited period. Investors may also access the replay by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 2559419 through Tuesday, September 11.

Definitions

All references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings attributable to Caleres, Inc. and diluted earnings per common share attributable to Caleres, Inc. shareholders, are presented as net earnings and earnings per diluted share, respectively.

Non-GAAP Financial Measures

In this press release, the company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the company provides historic and estimated future gross profit, operating earnings, net earnings and earnings per diluted share adjusted to exclude certain gains, charges and recoveries, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This press release contains certain forward-looking statements and expectations regarding the company’s future performance and the performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions and other factors; (ii) rapidly changing fashion trends and consumer preferences and purchasing patterns; (iii) intense competition within the footwear industry; (iv) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the Company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (v) foreign currency fluctuations; (vi) the ability to accurately forecast sales and manage inventory levels; (vii) cybersecurity threats or other major disruption to the Company’s information technology systems; (viii) customer concentration and increased consolidation in the retail industry; (ix) transitional challenges with acquisitions; (x) a disruption in the Company’s distribution centers; (xi) changes to tax laws, policies and treaties; (xii) the ability to recruit and retain senior management and other key associates; (xiii) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xiv) the ability to secure/exit leases on favorable terms; (xv) the ability to maintain relationships with current suppliers; and (xvi) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights. The company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption Risk Factors in Item 1A of the company’s Annual Report on Form 10-K for the year ended February 3, 2018, which information is incorporated by reference herein and updated by the company’s Quarterly Reports on Form 10-Q. The company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.

About Caleres

Caleres is a diverse portfolio of global footwear brands. Our products are available virtually everywhere - in the over 1,200 retail stores we operate, in hundreds of major department and specialty stores, on our branded e-commerce sites, and on many additional third-party retail websites. Famous Footwear offers great casual and athletic brands for the entire family with convenient, curated, affordable collections. Sam Edelman keeps expressive women in step with the latest trends in a playful, whimsical way. Naturalizer shoes are beautiful from the inside out, with elegant simplicity and legendary fit re-imagined for today’s consumer. Allen Edmonds combines old world craft with new world technology to create luxe footwear for the discerning man who wants sophisticated, modern classics. Rounding out our family of brands are Vince, Franco Sarto, Dr. Scholl’s Shoes, LifeStride, Via Spiga, Diane von Furstenberg, Blowfish Malibu, Bzees, Carlos by Carlos Santana, Circus by Sam Edelman, Fergie and Ryka. Combined, these brands make Caleres a company with both a legacy and a mission. Our legacy is our more than 140 years of craftsmanship, our passion for fit and our business savvy, while our mission is to continue to inspire people to feel good… feet first. Visit caleres.com to learn more about us.

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