Ahead of its Investor Day event, Caleres presented a three-year strategic and financial plan that calls for earnings to grow annually in the low-single-digit range with sales expanding 3 percent to 5 percent on average. However, the parent of Famous Footwear warned that sales for the third quarter and the current year will land at the low end of guidance.

“Caleres has a rich 145-year heritage and has always been committed to superior fit and innovation,” said Jay Schmidt, president and chief executive officer, in a statement. “Our company has consistently adapted to consumer needs and economic changes while building trust with consumers. Over the last four years, we have transformed the earnings power of the organization. Importantly, the structural changes implemented over this period have established a new baseline earnings level of $4.00 per diluted share. And, fiscal 2023 is expected to mark our third year of achieving this result.”

“Today, we are introducing a three-year strategic and financial plan expected to take our company to an even higher level of growth and profitability,” said Schmidt. “We believe our brand assets, competitive advantages, and core competencies put us in a unique position to achieve these results and deliver long-term value for our shareholders.”

The three-year strategic plan focuses on four key areas:

  • Brand Portfolio Segment Expected to Accelerate Growth and deliver an outsized contribution to the company’s earnings. Caleres expects a double-digit operating margin in 2023 and beyond with about 50 percent of revenue to be derived from the segment by 2026.
  • Famous Footwear Deepens its Connection to the Millennial Family and leverages its dominant position in Kids, enhanced omni experience, and consumer analytics to maintain its profitability and generate significant cash flow.
  • One Caleres Platform and Capabilities Enhance Profitable Growth and this synergistic structure enables the company to increase customer acquisition, further vertical integration, and leverage consumer insights and investment spend across the enterprise.
  • Deliver Strong Financial Performance that Generates Value for Shareholders with the long-term plan expected to result in:
    • Net sales to grow at a three-year CAGR of 3 percent to 5 percent;
    • Diluted adjusted EPS to increase at a three-year CAGR of 11 percent to 13 percent to reach $6.00 at the mid-point of the range; and
    • Annual Total Shareholder Return in low-to-mid-teens.

Third Quarter and Fiscal Year 2023 Business Update
The company is reiterating its guidance for consolidated net sales for the third quarter and fiscal year 2023. However, given the challenging consumer demand environment in September, it expects to be at the low end of the sales range for both the third quarter and fiscal year 2023. In addition, Caleres is maintaining its expectations for diluted earnings per share and adjusted diluted earnings per share for the third quarter and fiscal 2023 year reflecting its strong financial discipline and increased operational flexibility.

For the third quarter 2023, the company still expects:

  • Consolidated net sales down low-single-digits, as compared to the third quarter of fiscal 2022;
  • Diluted earnings per share of $1.25 to $1.30; and
  • Adjusted diluted earnings per share of $1.30 to $1.35.

For the fiscal year 2023, the company still expects:

  • Consolidated net sales down 3 percent to 5 percent, as compared to fiscal 2022, including the 53rd week;
  • Diluted earnings per share of $4.02 to $4.22; and
  • Adjusted diluted earnings per share of $4.10 to $4.30.

The Branded Portfolio segment includes Allen Edmonds, Blowfish Malibu, Bzees, Circus NY, Dr. Scholl’s Shoes, Franco Sarto, LifeStride, Naturalizer, Rykä, Sam Edelman, Veronica Beard, Vince, Vionic, and Zodiac.

Photo courtesy Famous Footwear