Caleres, Inc. Q3 FY2025 earnings call

• Organic sales growth led by brand portfolio, with lead brands showing double-digit growth. • Tariffs pressured gross margin, but organic sales exceeded internal expectations. • First quarter including Stuart Weitzman; working under transition service agreement with Tapestry. Plan to bring Stuart Weitzman to breakeven in 2026. • Sam Edelman had strong quarter with double-digit sales growth, own e-commerce best ever. • Allen Edmonds had positive comps, solid e-commerce, and wholesale strength. • Naturalizer saw sequential revenue improvement, direct-to-consumer growth. • Vionic had growth in wholesale and international, new product launches and campaign success. • Stuart Weitzman focus on stabilization, design and product quality resonating, but facing China D2C sales volatility and excess inventory. • Famous Footwear e-commerce up double digits, player format locations contributing, premium brands performing well.

Brand Portfolio: Organic sales increased 4.6% in the quarter, and 18.8% including Stuart Weitzman. Lead brands had double-digit organic growth. Premium brands were strong, while value-priced brands faced pressure. International business was robust, and direct-to-consumer channels showed growth. Famous Footwear: Total sales down 2.2%, comp sales declined 1.2%. E-commerce sales up double digits for the second quarter. Player format locations contributed to sales lift. Men's and kids performed better than women's, with premium brands outperforming.

• Tariffs continue to weigh on results. Annualized unmitigated tariff impact on Brand Portfolio ~$65M, mitigated ~$40M. • Famous: Expect comp store sales flat and total sales down low single digits. • Brand Portfolio: Expect sales flat to up 1% organic, Stuart Weitzman to add $55M-$60M. • Consolidated gross margin expected down 75-100 basis points vs last year. • SG and A excluding Stuart Weitzman expected modest increase; Stuart Weitzman SG and A slightly higher than 3Q. • Full year tax rate 27%-28%; 4Q loss per share range $0.35-$0.40 including Stuart Weitzman dilution; full year EPS $0.55-$0.60 excluding Stuart Weitzman.

• Tariffs continuing to pressure gross margin and earnings. • Stuart Weitzman facing China D2C sales volatility, global excess aged inventory impacting gross margin.

Q: About Stuart Weitzman's future and Famous Footwear's fashion side.

A: Jay Schmidt discussed achieving better 2026 through gross margin improvement and SG&A reductions, positive consumer response to Stuart Weitzman's product, wholesale and direct-to-consumer opportunities, and Famous Footwear's success with premium brands and fashion moments.

Q: On Stuart Weitzman inventory.

A: Liz Dunn mentioned part of inventory is aged excess, Jay Schmidt talked about working to dispose of inventory globally while protecting the brand.

Q: On normalized earnings power and growth.

A: Jay Schmidt and Jack Calandra discussed expectations for 2026 growth, impact of tariffs on margins, and targeting organic growth for Brand Portfolio, with focus on SG&A savings and integrating Stuart Weitzman to reach breakeven and improve margin profile.