Caleres (CAL 23.59, -2.16, -8.39%), a footwear retailer better known as Famous
Footwear, is under pressure this morning after it reported Q4 (Jan) earnings
after the close last night. The holiday quarter is always important for Caleres
so this was a disappointment for investors.
Non-GAAP EPS fell 21% yr/yr to $0.38 while revenue rose 2.5% yr/yr to $720.3 mln. Both results were a good bit below market expectations. Breaking it down by segment, Famous Footwear segment sales declined to $365.2 mln, while same-store-sales were up +1.1%.
Caleres also has a Brand Portfolio segment, which is quite large and sells a variety of footwear to many different third party retailers for sale in their stores. BP customers include DSW, TJX, Ross Stores, Macy's, Target etc. BP sales in the quarter were up 14.8% yr/yr to $355.1 mln. Part of this growth was from CAL's recent acquisition of Vionic. As you can see, this BP segment is now nearly as large as its Famous Footwear segment. In terms of FY20 Guidance, CAL expects Brand Portfolio sales up low- to mid-teens, including acquisitions while Famous Footwear same-store comps should be up low-to mid-single digits.
Overall, 2018 was a busy year for Caleres as it gained market share in Brand Portfolio, delivered its seventh consecutive year of same-store-sales improvement at Famous Footwear, it also transitioned to an in-house distribution center facility, and acquired two new brands. In 2019, CAL says it's focused on elevating its product assortment and its marketing at Famous Footwear.
At Brand Portfolio, CAL plans to continue to expand its market share gains with strong organic growth and contribution from its new brands, Vionic and Blowfish. CAL describes Vionic as a dual-gender footwear brand based on proprietary technology with strong consumer loyalty and great upside for growth. Blowfish Malibu is a smaller and more specialized brand with a casual California lifestyle point of view.
This was a disappointing way to close out FY19 for CAL. It's a tough environment right now for footwear retailers, in particular. Online shopping is disrupting the marketplace and impacting brick-and-mortar retailers, forcing them to adapt. CAL seems like it is making decent progress on this front. Hopefully results will improve in 2019.
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