Caleres, Inc. (NYSE:CAL) shares plunged after it reported third-quarter 2025 results, with consolidated sales rising 6.6% year over year to $790.1 million, topping the $759.1 million estimate.
GAAP earnings per diluted share were $0.07, down from $1.19 a year earlier, while adjusted EPS was $0.38, down from $1.23. Adjusted EPS of $0.38 missed estimates (adjusted earnings per diluted share excluding Stuart Weitzman was $0.67).
“Caleres delivered third quarter sales results that were ahead of our internal expectations, highlighted by organic sales growth in our Brand Portfolio segment, strong Lead Brands performance, sequential improvement in trends at Famous Footwear, and accelerated eCommerce momentum in both segments of our business,” said Jay Schmidt, president and chief executive officer.
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“With the recent addition of Stuart Weitzman, our Brand Portfolio now drives nearly half our sales and more than half our operating earnings. As we expected, we experienced pressure on our earnings from tariffs and near-term acquisition dilution; however, the fundamentals of our business are improving.”
For the quarter, direct-to-consumer sales represented approximately 71% of total net sales. Gross profit was $329.9 million and gross margin was 41.8%, down 230 basis points from last year, while adjusted gross margin was 42.7%, down 140 basis points.
Brand Portfolio segment net sales increased 18.8% to $383.7 million from $322.9 million, including $45.8 million in contribution from Stuart Weitzman, and adjusted operating earnings were $20.0 million, compared with $35.1 million.
Famous Footwear segment net sales fell 2.2% to $418.8 million from $428.3 million, with comparable sales down 1.2%, and adjusted operating earnings were $20.9 million versus $29.8 million.
Caleres said owned eCommerce sales across Famous Footwear and Brand Portfolio were up double digits, with Lead Brands also up double digits. The company completed the Stuart Weitzman acquisition in August for a preliminary purchase price of $108.9 million, net of cash acquired.
“For the balance of the year, we will be working to transition the Stuart Weitzman business to Caleres systems and clean up aged and excess inventory as we hone our strategies for long-term growth and profitability of the brand. In fiscal 2026, we will begin to unlock synergistic cost savings,” Schmidt said.
At quarter-end, cash and cash equivalents were $34.0 million, compared with $33.7 million a year earlier, and inventory was $678.2 million, up from $585.9 million.
For the first 39 weeks of fiscal 2025, net cash provided by operating activities was $40.5 million, down from $75.9 million a year earlier.
Outlook
For fiscal 2025, Caleres lowered its GAAP EPS guidance from $2.80-$3.20 to a loss of 18 cents to 13 cents per diluted share, compared with the $1.88 estimate.
The company also forecast adjusted earnings per diluted share of 55 cents to 60 cents, compared with the $1.73 estimate, and said it expects “continued tariff pressure on gross margin and earnings dilution from Stuart Weitzman,” along with a full-year tax rate of 27% to 28% and a loss per diluted share for the fourth quarter on both a GAAP and adjusted basis.
CAL Price Action: Caleres shares were down 15.27% at $11.43 at the time of publication on Tuesday, according to Benzinga Pro data.
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