Caleres, Inc. reported a decline in financial performance for the third quarter of 2024, with net sales totaling $740.9 million, a decrease of 2.8% from $761.9 million in the same period last year. The company's net earnings attributable to Caleres, Inc. were $41.4 million, down from $46.9 million in the prior year, reflecting a 9.8% decrease in diluted earnings per share, which fell to $1.19 from $1.32. The decrease in sales was primarily driven by a 4.8% decline in the Famous Footwear segment, attributed to a retail calendar shift and softer demand in the boots category.
In comparison to the previous fiscal period, Caleres experienced a decrease in gross profit, which fell to $327.0 million from $340.4 million, resulting in a gross margin of 44.1%, down from 44.7%. Operating earnings also decreased by 12.0% to $56.7 million, reflecting the impact of lower sales and increased promotional activity. Selling and administrative expenses decreased slightly to $268.7 million, but as a percentage of net sales, these expenses increased to 36.2% from 35.9% in the prior year.
Strategically, Caleres has been focusing on enhancing its operational capabilities, including the ongoing implementation of a multi-year cloud-based Enterprise Resource Planning (ERP) system. The wholesale and financial modules of this system went live in the second quarter of 2024. Additionally, the company has been actively managing its store footprint, opening six new stores while closing ten during the third quarter, resulting in a total of 851 stores at the end of the quarter.
Operationally, Caleres reported a decline in customer traffic, which contributed to a 0.9% decrease in comparable sales for the nine months ended November 2, 2024. The company’s direct-to-consumer sales represented approximately 72% of total net sales, consistent with the previous year. The Famous Footwear segment saw a notable increase in e-commerce penetration, which rose to 15% of net sales, compared to 13% in the same quarter of 2023. The Brand Portfolio segment, however, experienced a slight increase in net sales, indicating some resilience in premium positioned brands.
Looking ahead, Caleres remains cautious about the macroeconomic environment, which includes inflation and elevated interest rates that could continue to impact consumer discretionary spending. The company is focused on cost control and strategic initiatives to drive long-term growth. With $33.4 million in cash and cash equivalents and $252.1 million in available borrowing capacity under its revolving credit agreement, Caleres is positioned to navigate the current economic challenges while continuing to invest in its brand portfolio and operational improvements.