Caleres, whose portfolio includes a range of footwear brands and the Famous Footwear retail stores, reported net income in the first quarter ended May 5 of $17.2 million and diluted earnings per share of $0.40, which included a 3 cent charge for the previously announced transition of Allen Edmonds’ consumer-facing activities to St. Louis.

Adjusted net earnings of $18.5 million were up 6.3 percent, while adjusted diluted net earnings per share of 43 cents were up 7.5 percent but missed analysts’ estimates of 47 cents per share.

The company reported sales of $632.1 million, up 0.1 percent from $631.5 million in the same quarter a year ago, with the brands (up 1.4 percent) outpacing Famous Footwear (down 0.8 percent) in the period.

“In the first quarter, we once again delivered improvement in gross margin, net earnings and earnings per share. Not surprisingly, the late start to spring delayed sales but–as expected–spring arrived and trends improved appreciably, with this momentum continuing into the second quarter,” said Diane Sullivan, CEO, president and chairman of Caleres. “In the first quarter, brand portfolio sales were up 1.4 percent, and both brand portfolio and Famous Footwear experienced continued growth in e-commerce-related sales. We remain on track for 2018 and are maintaining our guidance for the year.”

First Quarter 2018 Results Versus 2017

  • Consolidated sales of $632.1 million
    • Famous Footwear total sales of $363.4 million were down 0.8%, as were same-store-sales, and we operated 39 fewer doors year-over-year.
    • Brand Portfolio sales of $268.7 million were up 1.4%.
  • Gross profit was $274.9 million, while gross margin of 43.5% was up 59 basis points.
  • SG&A expense of $250.2 million was up 1.5%.
  • Operating earnings were $22.9 million and operating margin was 3.6%, while adjusted operating earnings were $24.7 million and adjusted operating margin was 3.9%, reflecting the new accounting standard related to the presentation of retirement benefits.
  • Net earnings were $17.2 million, while diluted earnings per share were $0.40 and included a $0.03 charge for the previously announced transition of Allen Edmonds’ consumer-facing activities to St. Louis.
  • Adjusted net earnings of $18.5 million were up 6.3%, while adjusted diluted net earnings per share of $0.43 were up 7.5%.

Balance Sheet and Cash Flow

  • Cash and equivalents were $96.5 million and up $24.7 million year-over-year.
  • There were no outstanding borrowings under the revolving credit facility.
  • Inventory of $579.9 million was up 2.6% year-over-year.
  • Capital expenditures of $9.4 million were down 24.3% year-over-year.

Shareholder Distributions

During the first quarter, Caleres repurchased 100,000 shares of CAL common stock for a total of $3.3 million. The company also declared a quarterly dividend of $0.07 per share, payable July 2, 2018, to shareholders of record as of June 18, 2018. This dividend will be the 381st consecutive quarterly dividend paid by the company.