Famous Footwear’s ‘Record’ Sales Lead Caleres to Stellar Quarterly Earnings but Outlook Remains Flat

Caleres Inc. kicked off the year with a stronger-than-anticipated quarter as Famous Footwear notched “record” earnings and sales.

For the three months ended May 1, the St. Louis-based retail group reported an adjusted income of $22.8 million, or adjusted earnings of 60 cents per share, compared with the prior year’s adjusted loss of $50.4 million, or adjusted loss of $1.30 per share. Wall Street had predicted earnings of just 3 cents per share. Revenues were up 60.8% to $638.6 million, versus market watchers’ forecasts of $573.1 million.

“Caleres had a strong start to the year, maintaining its solid upward momentum in the first quarter of 2021, driven in large part by an outstanding performance in our Famous Footwear business, where we achieved record quarterly earnings and delivered record first-quarter sales levels,” chairman and CEO Diane Sullivan said in a statement.

At Famous Footwear, sales surged 108.2% from the prior year and rose 13% over the first quarter of 2019 — attributed to strong demand, increased consumer confidence and improved in-store traffic trends. The brand also saw a gain of 13.2% in new rewards members. Separately, the company’s brand portfolio segment logged a 15.2% hike in sales from the year-ago period.

“We remain positive about our outlook and expect continued strength at Famous Footwear to be combined with an improving performance in our brand portfolio as we progress through the year,” added Sullivan. “We are particularly enthusiastic about the recent strong performances from our Vionic, Sam Edelman, Blowfish Malibu and Ryka brands.”

Overall, direct-to-consumer sales represented 74.5% of Caleres’ total net sales. Total company-owned e-commerce website sales jumped 21.4%, with online penetration of 25.6%.

Sullivan added that the retail group was “increasingly optimistic” about its ability to return to 2019 earnings levels in the year’s second half. While it did not provide an outlook for the fiscal year, Caleres projected sales levels for the second quarter to be between $625 million and $650 million — effectively flat to the first quarter. Adjusted earnings per share are expected between 50 cents and 55 cents.

“Looking ahead, we plan to lean into the robust momentum at Famous Footwear and our enhanced direct-to-consumer capabilities; ensure alignment of supply and demand; and, as always, maintain our balanced approach to capital allocation,” Sullivan explained. “In short, we are excited about our strategy for continued value creation and believe we are exceptionally well positioned to capitalize on the accelerated recovery in the marketplace and to chase and capture market share opportunities as they develop throughout the year.”

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