Caleres, in its third quarter trading report said that the company’s net sales for the quarter were 647.5 million dollars, down 18.3 percent, while direct-to-consumer sales represented 71.4 percent of total net sales. The company added that there was a 12.3 percent sales decline in the Famous Footwear segment and a 25.6 percent sales decline in the Brand Portfolio segment; while total company owned ecommerce website sales increased 24.6 percent, with ecommerce penetration rising to 25.4 percent of net sales.
“Caleres furthered its recovery during the third quarter delivering results significantly better than anticipated in nearly all major financial metrics,” said Diane Sullivan, the company’s Chairman, President and Chief Executive Officer.
Gross profit for the quarter was 257 million dollars, while gross margin was 39.7 percent; net income was 14.4 million dollars or earnings of 38 cents per diluted share, compared to net income of 28 million dollars or 69 cents per diluted share, in the third quarter of fiscal 2019. The company recorded adjusted net income of 18.2 million dollars or adjusted earnings of 48 cents per diluted share compared to adjusted net income of 31.6 million dollars or adjusted earnings of 78 cents per diluted share, in the third quarter of fiscal 2019.
Caleres to close stores to drive growth
In an effort to continue to improve future profitability and allow greater focus on high-growth, digital channels, Caleres added that the company has commenced a strategic realignment of the Naturalizer retail locations in the U.S. and Canada. In addition to the store closures, Caleres will right-size the back-office infrastructure to better align with the reduced store footprint, shift talent to amplify digital presence, capture consumers where they want to shop and reallocate capital to further enhance ecommerce platform and capabilities.
The company plans to close approximately 133 Naturalizer stores by the end of fiscal year 2020. The company expects pre-tax charges in the fourth quarter of 2020 of between 20 million dollars and 25 million dollars. Once complete, Caleres expects an annual pre-tax benefit of between 10 million dollars and 12 million dollars.
“Caleres is adjusting rapidly to the current and evolving market environment and I am excited about the value-creating potential of the business going forward,” said Sullivan.
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