Caleres Inc.’s stock is popping despite wider-than-anticipated losses.
The St. Louis-based shoe group posted a first-quarter adjusted net loss of $50.4 million, or a loss of $1.30 per diluted share, compared with the prior year’s income of $15 million, or adjusted earnings of 36 cents a share. Revenues for the three months ended May 2 dropped 41.4% to $397.2 million. The numbers fell well below analysts’ forecasts of a 34-cent loss and sales of $488.5 million.
Still, the company’s shares surged as much as 17% to more than $11 during Friday trading. The stock was likely bolstered by a general uptrend in the market due to an unexpectedly positive jobs report. However, the retailer also had good news to share with investors about its store reopenings.
According to Caleres, 553 of its Famous Footwear locations (or about 60% of the store fleet) have resumed operations as of Thursday afternoon. It shared that sales at the outposts that have reopened in recent weeks are “running ahead of expectations,” as well as noted “continued strength” in its e-commerce business. (During the period of store closures, Caleres saw a triple-digit increase in Famous Footwear’s online platform.)
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CEO Diane Sullivan said in the company’s earnings call that Famous Footwear benefited from “strong performances from its premium and iconic brands, growth in the kids category and improved consumer engagement and retention in our rewards program.”
Caleres has also reopened 33 Allen Edmonds and 36 Naturalizer units. The company plans to have nearly 85% of its units back in business late this month and has adapted its buy online, pick-up in-store service to include contactless curbside pickup. As previously announced in early May, Caleres brought back its furloughed store associates and said yesterday that it has a nearly 95% retention rate among store managers at locations that have reopened so far.
“Our branded portfolio of stores that have reopened are experiencing sales trends above our internal expectations, and our wholesale partners have begun to reopen their locations and place some new orders for delivery,” Sullivan added. “We are working closely with our key retail partners to ensure we are liquidating spring inventory very aggressively and that we are set up well for fall.”
During the quarter, Famous Footwear’s sales fell 45.7% to $191.3 million, with same-store sales up 12.8% through mid-March and 12.6% for the entire quarter. Sales for its brand portfolio — including Sam Edelman, Naturalizer, Dr. Scholl’s Shoes, Vionic and more — were down 36.3% to $217.2 million.
In order to maintain liquidity, the retailer said it has worked to manage inventory levels, leverage its partnerships to reduce product receipts and eliminated or deferred all nonessential capital projects. It has also began negotiations to modify leases, including the deferral and abatement of certain rent payments.
At the end of the quarter, Caleres reported $187.7 million of cash and $438.5 million of revolving credit facility borrowings. It did not provide an outlook for the fiscal year due to uncertainties stemming from the COVID-19 health crisis.