“While our brands continue to resonate with consumers and both segments of our business gained market share in the period, our first quarter results fell short of expectations. February sales were particularly weak, and although trends improved in March and April, overall performance was below plan. Furthermore, operating earnings were pressured by lower gross margins, increased reserves, and costs to cancel and move inventory”, said Jay Schmidt, president and chief executive officer. 

First Quarter Results

In the first quarter of fiscal 2025, which ended in the 3^rd of May, the company’s net sales totalled 614.2 million US dollars, a decrease of 6.8% on a comparable basis to the same period of last fiscal year. 

During this period, net sales from the Famous Footwear segment decreased by 6.3% year-on-year to 327.7 million US dollars, with comparable sales falling by 4.6%. Net sales from the Brand Portfolio segment also declined by 6.9% year-on-year to 295.4 million US dollars. Direct-to-consumer sales accounted for around 70% of total net sales.

In the first quarter of the current fiscal year, Caleres’ gross profit amounted to 278.7 million US dollars, with a gross margin of 45.4%. This represented a decrease of 150 basis points, as compared to the same quarter of the previous year.

The US footwear company reported an SG&A percentage of 43.4% in the period, up by 300 basis points, on a comparable basis to the same period last year, reflecting deleveraging due to the sales decline.

Caleres recorded first quarter net earnings of 6.9 million US dollars and adjusted net earnings of 7.4 million US dollars, both compared to 30.9 million US dollars in the first quarter of fiscal 2024. 

During the first quarter, inventory increased by 8.1% and borrowings under the asset-based credit facility rose by 67.5 million US dollars to 258.5 million US dollars, on a comparable basis to a similar period of the prior year.

The company has suspended its fiscal 2025 guidance. Amid a difficult environment and the planned acquisition of Stuart Weitzman, Caleres is also reassessing its capital spending. 

“The operating environment has become more challenging, and we must redouble our efforts to drive growth and profitability. In the near term, we are focused on controlling what we can control, including optimizing our sourcing strategy. Additionally, we expect to decrease SG&A by 15 million US dollars on an annualized basis through structural expense cuts”, announced Schmidt.