Caleres, Inc. Q4 FY2024 earnings call

• Jay Schmidt mentioned Caleres was honored with the Nordstrom Vendor Partner and Excellence Award for Footwear in 2024. Fourth quarter earnings were at the high end of guidance, with Lead Brands outperforming and supply chain evolution to mitigate tariffs. 2024 made progress on strategic priorities and returned $75 million to shareholders. - Jack Calandra reviewed fourth quarter and full-year 2024 results, including consolidated sales, gross margin, SG&A, earnings per share, inventory details, and cash flow from operations.

Brand Portfolio: Fourth quarter sales declined 7.2% (or 5% excluding the impact of the 53rd week). Adjusted operating margin was 9.4%. Lead Brands (Sam Edelman, Allen Edmonds, Naturalizer, Vionic) outperformed. Internationally, new premium wholesale partnerships were activated in Europe, and expansion continued in China and Southeast Asia. Famous Footwear: Comp-store sales were down 2.9%, with brick-and-mortar comp sales down 4.1% and comparable web sales up 3.1%. Men's performed best, kids were in line with the overall comp trend, and women saw the biggest decline. The boot category had high single-digit sales declines, and Caleres own brands increased penetration by 1.5 points.

• 2025 consolidated sales expected to be down 1% to up 1%, with Famous sales down low-single digits and Brand Portfolio sales up 1% to 2%. - Consolidated operating margin expected to be 5.1% to 5.6%, effective tax rate ~23%, earnings per diluted share $2.80 to $3.20, and capital expenditures $50 million to $55 million. - Q1 sales expected to be down 5% to 6%, with earnings per diluted share $0.35 to $0.40.

• Macroeconomic environment with persistent inflation and tariffs, impacting consumer spending and retail partners' inventory cautiousness.

Q: Ashley Owens asked about the EPS guide assumptions for the balance of the year and the path back to $4 threshold.

A: Jack Calandra said they expect sequential quarterly improvement, with Famous benefiting from new product introductions and new leadership, and Brand Portfolio from SAP upgrade anniversary, international growth, Favorite Daughter launch, and contemporary brand momentum.

Q: Ashley Owens inquired about contemporary trends and resilience.

A: Jay Schmidt said contemporary brands are trending as designer has weakened, with fashion and newness driving strength, including strong fashion sneaker business.

Q: Laura Champine asked about Brand Portfolio improvement without same-doors sales improvement.

A: Jack Calandra said initiatives like SAP upgrade anniversary and international growth can accommodate declines and still hit guidance.

Q: Laura Champine asked about Q1 markdowns.

A: Jay Schmidt said some markdowns are behind them, with Brand Portfolio having more current inventory and Famous having more core, and Jack Calandra mentioned contemplated gross margin decline in Q1 with sales guidance.

Q: Mitch Kummetz asked about Q1 op margin and tariffs.

A: Jack Calandra said Q1 op margin will be lowest of the year, and Jay Schmidt and Jack Calandra discussed retail price increases and gross margin impact from tariffs.

Q: Dana Telsey asked about gross margins, category performance, wholesale orders, and FLAIR stores.

A: Jay Schmidt talked about Sam Edelman's fashion focus and FLAIR store plans, Jack Calandra discussed gross margin levers and Brand Portfolio mix benefits, and Jay Schmidt and Jack Calandra addressed wholesale orders and FLAIR store performance and remodels.