The St. Louis-based firm said its profits in Q1 dipped 7.8 percent, to $17.8 million, or 41 cents per diluted share, from $19.3 million, or 44 cents per diluted share, in the comparable period. Analysts were expecting the firm to post diluted earnings per share of 43 cents.
Caleres, which owns brands such as Sam Edelman and DVF as well as family-footwear retailer Famous Footwear, said its first-quarter sales decreased 3 percent, to $584.7 million, compared with the comparable period. Market watchers had predicted Q1 revenues of $610.6 million.
“Despite softness in the overall market, we delivered solid sales at Famous Footwear and improved gross margin at brand portfolio,” said Diane Sullivan, Caleres president, chairman and CEO, in a release. “We also invested in both businesses, reduced our inventory position and continued to drive omnichannel sales, while maintaining our rock-solid balance sheet. Quarter to date, we delivered a 27 percent improvement in cash and equivalents, while maintaining our inventory productivity.”
By segment, Famous Footwear continued to be the firm’s strongest division, producing a 1 percent gain in same-store sales in the quarter while comps in the brand portfolio slipped more than 9 percent.
During the firm’s conference call, Sullivan noted that — as had been the case for many other brands and retailers in Q1 — weather and shifts in consumer habits negatively impacted the company’s performance.
“There are a number of factors at play right now in the marketplace, including tailwinds in lifestyle athletics, lackluster brick-and-mortar traffic and a shift to nonstore channels, all combined with an expansion of buy now and wear now consumer behavior,” Sullivan said. “In the first quarter, these challenging opportunities were compounded by an industry-wide inventory hangover from the fourth quarter and unseasonably cold spring.”
Caleres CFO Ken Hannah said the firm would “continue with our existing investments for long-term growth, despite the current retail environment,” adding that the company would maintain its EPS guidance for fiscal 2016.
When it posted Q4 earnings in March, Caleres had predicted FY16 revenue in the range of $2.65 to $2.68 billion and diluted EPS in the range of $2 to $2.10.
The firm lowered its revenue guidance and now expects revenue in the range of $2.6 to $2.63 billion.