Caleres Reports 6.8% Decline in Net Sales and Plans Acquisition of Stuart Weitzman

Caleres, Inc. reported a significant decline in financial performance for the thirteen weeks ended May 3, 2025, with net sales totaling $614.2 million, down 6.8% from $659.2 million in the same period last year. The company's gross profit also decreased by 9.8% to $278.7 million, resulting in a gross margin of 45.4%, compared to 46.9% in the prior year. Operating earnings fell sharply to $11.6 million, a decrease of 72.9% from $42.8 million in the previous year, while net earnings attributable to Caleres, Inc. shareholders dropped to $6.9 million, down from $30.9 million.

The decline in revenue was attributed to reduced consumer traffic in both retail and e-commerce channels, particularly in the Famous Footwear segment, which saw a 6.3% decrease in net sales. Comparable sales for Famous Footwear fell by 4.6%, reflecting ongoing challenges in attracting customers. The Brand Portfolio segment also experienced a 6.9% decline in net sales. The company noted that its direct-to-consumer sales accounted for approximately 70% of total net sales, indicating a slight increase from the previous year.

Strategically, Caleres announced its intention to acquire the luxury footwear brand Stuart Weitzman from Tapestry, Inc. for $105 million, with the deal expected to close in the summer of 2025. This acquisition is part of the company's strategy to enhance its Brand Portfolio segment and expand its direct-to-consumer reach. The company incurred approximately $0.6 million in legal and related costs associated with this acquisition during the reporting period.

Operationally, Caleres reported a decrease in customer engagement metrics, with a notable decline in store counts as 11 stores were closed during the quarter, leaving a total of 835 stores. The company also experienced a decrease in sales per square foot, which fell to $51 from $54 in the previous year. Despite these challenges, Caleres is focusing on optimizing its sourcing strategy and reducing selling and administrative expenses by approximately $15 million annually to improve profitability.

Looking ahead, Caleres remains cautious about the macroeconomic environment, which continues to impact consumer discretionary spending. The company is committed to controlling costs and executing its strategic initiatives to position itself for sustainable long-term growth. With $33.1 million in cash and cash equivalents and $233.4 million in available borrowing capacity under its revolving credit agreement, Caleres maintains a strong liquidity position as it navigates these challenges.