Famous Footwear Owner Is Cautious About 2017 Despite Strong Sales

Famous Footwear
A Famous Footwear store.
Courtesy of brand.

Caleres today announced better-than-expected fourth-quarter sales while its profits fell short of forecasts. Pointing to ongoing pressures in the retail environment, Caleres chairman, president and CEO Diane Sullivan said the firm is cautious about the year ahead.

Management’s posturing likely sent shares tumbling after the market close. As of 4:45 p.m., Caleres shares were down nearly 9 percent, to $29 in after-hours trading.

The owner of Famous Footwear and a portfolio of shoe brands — including Sam Edelman, Dr. Scholl’s Shoes and Franco Sarto — said its total Q4 sales advanced 5.1 percent, to $639.5 million, topping estimates for sales of $630.2 million.

By division, Famous Footwear total sales delivered a year-over-year sales gain of 1.9 percent, to $367.5 million, in Q4. Its same-store sales edged up 0.3 percent. Sales at the brand portfolio rose 9.6 percent, to $272 million.

The company — which acquired men’s footwear brand Allen Edmonds for $255 million in December — posted a net loss of $6.6 million, or 16 cents per diluted share. On an adjusted basis, Caleres’ profits increased 25 percent to $14.3 million, or 33 cents per diluted share.

“Despite a promotional and challenging retail environment in the fourth quarter, we maintained our consistent approach of managing the areas under our control while continuing to rapidly respond to changing consumer shopping behaviors, Sullivan said in a release.

For the full year, Caleres’ total sales remained flat at $2.6 billion, and net income fell 19 percent, to $65.7 million, or $1.52 per diluted share. Adjusted net income declined 1.6 percent, to $86.5 million, or $2 per diluted share.

Sales at Famous Footwear were up 1.1 percent, to $1.6 billion with a 0.6 percent gain in same-store sales. Brand portfolio sales of $989.3 million were down 1.5 percent.

“While we are confident about the long-term outlook for our diversified portfolio, we are taking a cautious view of the near-term, as we expect to see continued pressure in retail based on the current environment,” Sullivan noted.

Specifically, Caleres expects full-year consolidated net sales of $2.7 to $2.8 billion with Famous Footwear up low-single digits and the brand portfolio up high-teens. Adjusted earnings per share are predicted to range from $2.10 to $2.20.