Caleres pulls itself out of loss, provides update on coronavirus impact
Caleres, the Clayton, Missouri-based owner of the Sam Edelman, Famous Footwear and Naturalizer brands, among others, announced fourth-quarter earnings of $0.4 million, or $0.01 per diluted share, on Thursday, up from a loss of $75.5 million, or $1.83 per diluted share, in the prior-year period.
Caleres managed to pull itself out of loss in the fourth quarter ended February 1, 2020, despite declines in its sales, which as previously reported, fell 3.0% year over year, from $720.3 million to $698.9 million.
Quarterly sales at the company’s Famous Footwear retail banner increased 1.2% to $369.5 million, but this progress was more than offset by a 9.4% decrease in revenues in the group’s brand portfolio, where sales totaled $346.0 million.
Caleres was able to make progress with its earnings in the quarter by reducing the cost of goods, as well as selling and administrative expenses. Q4 2018’s bottom line was also negatively impacted by a $98.0 million impairment charge related to goodwill and intangible assets.
For the full fiscal year 2019, Caleres reported net earnings of $62.8 million, or $1.53 per diluted share, up from a loss of $5.4 million, or $0.13 per diluted share, in fiscal 2018.
Annual sales at the company came to $2.9 billion, up 3.1% from $2.8 billion. This growth was led by a 7.1% increase in brand portfolio revenues totaling $1.4 billion, while sales at Famous Footwear fell 1.2% to $1.6 billion.
“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,” commented Caleres CEO, president and chairman Diane Sullivan in a release.
In particular, the executive highlighted a 23% increase in revenues in the company’s e-commerce-based direct-to-consumer business and the successful launch of the Famous Footwear rewards program.
Sullivan also spotlighted the relaunch of the Zodiac brand, the signing of an exclusive partnership with the Veronica Beard label and the repositioning of Via Spiga, as well as its shift away from DvF and Carlos Santana.
“Looking ahead, in the short-term, we do anticipate disruptions related to the coronavirus and are expecting headwinds between $0.15 and $0.20 per share in the first quarter of 2020,” she added. “While potential impacts on full year 2020 results are difficult to quantify at this early stage, we will continue to actively assess the situation.”
“In these times of uncertainty, we are leaning in and taking actions to ensure we are protecting the business overall,” Sullivan explained in an earnings call on Thursday, revealing that the company has implemented travel bans and work-from-home policies in response to the ongoing health crisis.
Worker return rates at the company’s partner factories in China are currently over 70%, but Caleres’ concerns are now focused on falling consumer demand in the U.S., where the effects of the pandemic on the retail sector are still difficult to predict accurately.
In 2020 Caleres expects its net sales to remain flat at around $2.95 billion, while annual earnings per diluted share are expected to be in the range of $1.95 to $2.15.
Copyright © 2020 FashionNetwork.com All rights reserved.