In addition to a jolt from Famous Footwear, which saw adjusted sales growth of 5 percent in the quarter, Caleres CEO Diane Sullivan said solid inventory and expense management helped Caleres navigate a “challenging retail environment” in the third quarter.
Reported profit, helped by a 4.4 percent comparable-store-sales gain at Famous Footwear, climbed 2.6 percent to $34 million. Adjusted profit improved 6.2 percent to $35.2 million.
Still, the company’s reported revenue fell 0.1 percent year-over-year to $728.6 million, missing Wall Street’s forecasts, which predicted sales of $741.5 million.
“Our performance at both Famous Footwear and our Brand Portfolio is a reflection of the work we’ve done to manage inventory and expenses — while investing to grow our businesses — during a challenging third quarter,” said Ken Hannah, Caleres’ CFO, in a release. “While we expect the retail environment will be promotional during the fourth quarter, we remain focused on delivering consistent, profitable and sustainable growth.”
Inventory overages have been the story for much of the quarter as footwear companies struggled with unseasonably warm weather during the fall and into the start of winter. However, Caleres closed the third quarter with total inventory down 4.1 percent. Famous Footwear’s inventory was also down 5.6 percent in the quarter while the Brand Portfolio was down 0.6 percent.
Net Income: Reported net income for the third quarter rose 2.6 percent to $34 million.
EPS: Earnings per diluted share advanced 4 percent year-over-year to 78 cents from 75 cents in the comparable quarter.
Net Revenue: Net sales declined 0.1 percent to $728.6 million from $729.3 million in the same period last year.
Adjustments: Third quarter reported net earnings included $1.2 million of after-tax expense related to the company’s debt extinguishment in Q2. Excluding this expense, net earnings were $35.2 million, or 80 cents per diluted share, up 6.2 percent year-over-year. Also, excluding sales from Shoes.com, which was sold in December of 2014, sales were up 1.8 percent, the company said.
Hit, Miss or Beat: Analysts polled by Yahoo Finance had predicted EPS of 78 cents and revenue of $741.5 million.