Caleres‘ reported net sales for Q2 2023 (13 weeks ended 29 July 2023) were down 5.8% from $738.3m to $695.5m.
Caleres Q2 reports challenging Q2
Operating earnings declined to $49.7m from last year’s $68.42m. While net earnings fell from $51.55m to $34.37m in this quarter.
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The company is keen to point out it outperformed in its brand portfolio e-commerce business and had an improved year-over-year inventory position heading into its key back-to-school period.
In addition to this, Caleres says its inventory was down 14.3% compared to the second quarter of 2022, due to disciplined inventory management and improved supply chain flow.
Jay Schmidt, president and chief executive officer at Caleres, says: “The Caleres team performed at a high level during the second quarter, delivering a strong consolidated operating margin and exceeding adjusted earnings per share expectations despite a choppy macro environment. Once again, we gained market share in our lead brands and famous footwear.”
He adds the company strengthened its financial and long-term competitive position by controlling expenses and by putting free cash to work, reducing revolver borrowings by nearly $50m.
Schmidt highlights that Caleres also invested in high-return growth opportunities, including enhancing the omnichannel experience and marketing technologies and analytics, while at the same time returning approximately $20m to shareholders through share buybacks and dividends.
In line with its capital allocation priorities, Caleres continued to reduce the borrowings under its asset-based revolving credit facility, paying down $47.5m during the second quarter.
Moving forward, the company is revising its forecasted capital expenditures to $50m-$60m from $55m-$65m. Caleres explains it is fully committed to its strategic initiatives and the change relates to additional visibility on the timing of certain projects.
Caleres Q3 outlook
- Consolidated net sales to be down low-single digits
- Diluted earnings per share of $1.25 to $1.30
- Adjusted diluted earnings per share of $1.30 to $1.35.
Caleres FY23 outlook
- Caleres reaffirms its 2023 sales and earnings guidance
- It remains on course to deliver earnings in excess of $4.00 per share baseline that it established in 2022
- The company reiterates diluted earnings per share guidance of $4.02 to $4.22, inclusive of the $4m of restructuring charges associated with expense reduction actions and adjusted diluted earnings of $4.10 to $4.30
- Consolidated net sales to be down 3% to down 5%.
