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.
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.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
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%.