Caleres Reports Fourth Quarter and Full Year 2015 Results

ST. LOUIS--(BUSINESS WIRE)--Caleres (NYSE: CAL) (caleres.com), a diverse portfolio of global footwear brands which fit people’s lives, today reported fourth quarter and full year 2015 financial results.

Consolidated Results

Fourth Quarter

• Net sales of $608.7 million up 0.4%, excluding sales from Shoes.com, which was sold in December of 2014
• Gross margin up 55 basis points to 40.8%
• Adjusted operating margin up 13 basis points to 2.8%
• Adjusted diluted EPS of $0.26 up 30.0%, on adjusted net earnings of $11.4 million
• Cash and equivalents of $118.2 million, with inventory up less than 1%

Full Year

• Net sales of $2,577.4 million up 2.0%, excluding sales from Shoes.com
• Gross margin up 21 basis points to 40.7%
• Adjusted operating margin up 21 basis points to 5.2%
• Adjusted diluted EPS of $2.00 up 16.3%, on adjusted net earnings of $88.0 million
• ROIC improved to 12.6% from 11.6%

“At Caleres, we actively managed through what was poised to be a difficult quarter. We cut through the noise in the marketplace during the holiday season and delivered improved gross and operating margin, while maintaining our inventory position,” said Diane Sullivan, CEO, president and chairman of Caleres. “For the full year, we saw improvement at both the top and bottom line and delivered double digit earnings per share growth for the fourth year in a row.”

Fourth Quarter Segment Results

Famous Footwear

• Same-store-sales up 0.8%
• Gross margin up 58 basis points to 45.5%
• Inventory up 1.2% on average store basis
• Opened 12 new stores and closed 10

Brand Portfolio

• Sales up 0.8%
• Gross margin up 74 basis points to 33.8%
• Inventory down 1.8%

Full Year Segment Results

Famous Footwear

• Same-store-sales up 1.9%
• Gross margin up 51 basis points to 44.9%
• Opened 50 new stores and closed 42, with average revenue per square foot improving to $217

Brand Portfolio

• Sales up 2.3% as segment crossed $1 billion
• Gross margin down 5 basis points to 33.9%

“Caleres reported annual adjusted EPS growth of 16.3%, as we delivered margin enhancement related to continued improvement in inventory management throughout the year,” said Ken Hannah, chief financial officer of Caleres. “While we’re pleased with our performance in 2015, we realistically expect fourth quarter 2015 industry-related challenges and uncertainty to continue into the first half of 2016.”

Investor Conference Call

Caleres will host an investor conference call at 4:30 p.m. ET today, March 15, 2016. The webcast and slides will be available at investor.caleres.com/news/events. A live conference call will be available at (877) 217-9089 for analysts in North America or (706) 679-1723 for international analysts by using the conference ID 50807421. A replay will be available at investor.caleres.com/news/events/archive for a limited period. Investors may also access the replay by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 50807421 through Tuesday, March 29, 2016.

Definitions

All references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings attributable to Caleres, Inc. and diluted earnings per common share attributable to Caleres, Inc. shareholders, are presented as net earnings and earnings per diluted share, respectively.

Non-GAAP Financial Measures

In this press release, the company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the company provides historic and estimated future gross profit, operating earnings, net earnings and earnings per diluted share adjusted to exclude certain gains, charges and recoveries, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results. Reconciliations to the applicable GAAP financial measures have been included in the attached schedules.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This press release contains certain forward-looking statements and expectations regarding the company’s future performance and the performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions; (ii) rapidly changing fashion trends and purchasing patterns; (iii) intense competition within the footwear industry; (iv) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the Company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (v) the ability to accurately forecast sales and manage inventory levels; (vi) cybersecurity threats or other major disruption to the Company’s information technology systems; (vii) customer concentration and increased consolidation in the retail industry; (viii) a disruption in the Company’s distribution centers; (ix) the ability to recruit and retain senior management and other key associates; (x) foreign currency fluctuations; (xi) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xii) the ability to secure/exit leases on favorable terms; (xiii) the ability to attract, retain, and maintain good relationships with licensors and protect intellectual property rights; and (xiv) the ability to maintain relationships with current suppliers. The company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption Risk Factors in Item 1A of the company’s Annual Report on Form 10-K for the year ended January 31, 2015, which information is incorporated by reference herein and updated by the company’s Quarterly Reports on Form 10-Q. The company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.

About Caleres

Caleres is a diverse portfolio of global footwear brands, which fit people’s lives: Family, Healthy Living and Contemporary Fashion. Our products are available virtually everywhere - in the over 1,200 retail stores we operate, in hundreds of major department and specialty stores, on our branded ecommerce sites, and on many additional third-party retail websites. Famous Footwear and Famous.com serve as our Family brands. Our Contemporary Fashion brands include Sam Edelman, Franco Sarto, Vince, Via Spiga, Diane von Furstenberg, Fergie Footwear and Carlos Santana. Naturalizer, Dr. Scholl's, LifeStride, Bzees and Ryka represent our Healthy Living brands. Combined, these brands help make Caleres a company with both a legacy and a mission. Our legacy is our more than 130 years of craftsmanship, our passion for fit and our business savvy, while our mission is to continue to inspire people to feel better feet first. Visit caleres.com to learn more about us.