Caleres Q2 net sales down 2.3 percent

Caleres said net sales of 622.9 million dollars for the second quarter were down 2.3 percent due to a challenging retail environment. First half net sales of 1,207.7 million dollars were down 2.6 percent due in part to planned reductions in Healthy Living sales. The company reported diluted EPS of 0.46 dollar for the second quarter and 0.86 dollar for the first half.

“Our second quarter results show the benefit of good execution during a challenging environment, as we improved gross margin, maintained SG&A spend, and continued to invest for long-term growth” said Diane Sullivan, CEO, President and Chairman of Caleres, adding, “At 41.7 percent, gross margin was up nearly 50 basis points, with both Famous Footwear and Brand Portfolio contributing to this improvement.”

Second quarter segment review

Same-store-sales at Famous Footwear were down 1.1 percent for the second quarter, with positive conversion in-store and online unable to offset the decline in retail traffic. For the first half, same-store-sales declined 0.1 percent. Gross margin went up 14 basis points to 45.5 percent for the quarter, with improvement for seasonal styles in a less promotional environment. The company opened 21 new stores during the first half including 11 new openings during the second quarter.

Brand portfolio sales were down 3.8 percent for the second quarter and 6.5 percent for the first half, with strength at Contemporary Fashion unable to offset weakness at Healthy Living. Gross margin improved 85 basis points to 35.3 percent, benefitting from improved channel mix. For the first half, gross margin went up 180 basis points to 35.6percent.

Maintains EPS outlook for FY16

For the fiscal year 2016, the company expects consolidated net sales to range between 2.57 billion dollars and 2.60 billion dollars, EPS between 2 to 2.10 dollars. Same-store sales growth at Famous Footwear is anticipated to be range between flat to up-single digit. Brand portfolio sales are expected to be between Flat to down low-single digit.

“While realistic about the retail environment for the second half of the year, we are maintaining our fiscal 2016 EPS guidance,” said Ken Hannah, CFO of Caleres.

On August 24, 2016, the company declared a quarterly dividend of 0.07 dollar per share.

Picture:Famous Footwear Blog