Caleres Inc. today posted fourth-quarter earnings that fell short of expectations in what the firm’s management has described as a challenging footwear market.
For the quarter, the company posted adjusted earnings per share of 34 cents, compared with analysts’ forecasts of 40 cents per share. Caleres said those results included a $0.07 dilution related to Vionic interest and amortization expense. Overall, revenues declined 3% to $698.9 million, missing Wall Street’s forecast for sales of $711.1 million. Sales across the company’s brand portfolio, which includes Sam Edelman, Via Spiga and Dr. Scholl’s, dropped nearly 10%. Meanwhile, Famous Footwear, also a Caleres brand, posted sales of $369.5 million, a modest gain of 1.2%. Same-store sales for the chain were up 5.1%.
Still, Diane Sullivan, CEO, president and chairman, said the company did experience a few bright spots, including robust digital growth (23% year over year), the relaunch of legacy brand Zodiac and an exclusive new partnership with Veronica Beard.
“Despite a challenging footwear market that resulted in our earnings to be less than expected, Caleres made excellent progress on a range of value-creating strategic objectives during 2019,” she noted.
The company also has been taking steps to tighten inventory levels, reduce capital expenditures and implement other cost-control initiatives. “Furthermore, we generated $170.8 million in cash flow from operations and put that cash to good use by investing wisely in our businesses, returning approximately $45 million to shareholders through our share repurchase program and longstanding dividend, and reducing the borrowing under our credit facility by $60 million,” Sullivan added.
Looking ahead, Caleres said it is proceeding with a cautious outlook in the face of growing coronavirus-related uncertainty. “In the short-term, we do anticipate disruptions related to the virus, and we are expecting headwinds between 15 cents and 20 cents per share in the first quarter of 2020,” Sullivan said, noting that potential impacts on the company’s full-year results are difficult to quantify at this time and that her team continues to carefully monitor the situation.
“We are approaching 2020 with a laser focus on managing the variables within our control and leveraging the capabilities of our operations and the investments we’ve made for the future,” she said. “We are confident in the strength of our portfolio and firmly believe we have the right team and right strategy in place to manage through this dynamic marketplace.”
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