On an analyst call, Jay Schmidt, president and CEO of Caleres Inc., said Famous Footwear saw success in the first quarter with its “Brand Elevation” strategy, FLAIR remodels and e-commerce. However, inflationary pressures reduced traffic and caused same-store sales to decline 2.3 percent, about in line with the low end of company guidance

The quarter started off promising, with February positive followed by comp declines in March and April. Schmidt said of Famous, “While we saw improving trends leading into Easter, we believe accelerated inflation put pressure on consumer traffic and sales, especially as we moved into April.”

Total sales declined 2.5 percent to $319.3 million. Famous ended the quarter with 812 stores, down from 835 at the same time a year ago.

Famous showed an operating loss in the period of $437,000 against  operating earnings of $4.97 million a year ago. Famous gross margin was 43.8 percent, down 150 basis points to last year with a greater proportion of clearance sales in the quarter, higher markdowns and higher shipping costs from a larger mix of web sales.  Inventory was up 3 percent at the close of the quarter.

Among the bright spots in the quarter for Famous, e-commerce continued to outperform stores, up almost 10 percent as the chain leveraged its CDP (customer data program) to deliver more personalized outreach to customers.

From a divisional perspective, kids performed best, followed by men’s, while women’s and accessories underperformed the total business. Fashion outperformed athletic with more pronounced softness in women’s athletic, while sandals were strong across both adults and kids categories.

On the brand side, Famous Elevate-and-Edit strategy “continues to resonate with our Famous consumers,” said Schmidt. Sales of elevated products increased nearly 50 percent in the quarter and penetration reached almost 20 percent year-over-year.

“We saw growth in the quarter from Jordan, Skechers, Birkenstock, New Balance, Reef and Brooks, while several brands in the Caleres portfolio finished among Famous’ top 15 best-selling brands,” said Schmidt.

Caleres’ owned brands that are part of its Brand Portfolio segment include Sam Edelman, Allen Edmonds , Naturalizer, Vionic, Stuart Weitzman, LifeStride, Dr. Scholl’s, Franco Sarto, Blowfish Malibu and Rykä.

Schmidt stated, “We continue to expand newness and key product launches across the assortment which we believe positions us well heading into the balance of the year.”

Famous also continued to invest in its brand elevation strategy with targeted brand activations in the quarter.

“We were especially pleased with the first Skechers takeover in February,” said the CEO. “These exclusive high-impact events drive strong visibility and brand excitement which we amplify through media, in-store and across digital.”

Schmidt added, “We’ve seen similar results with the Birkenstock takeover that began in April and continued into May. Considering the investments so far this spring, these events are delivering meaningful returns, and we have at least five additional brand events planned for the balance of the year.

Schmidt also said FLAIR format which plays up digitally-driven displays and localized merchandising are continuing to outperform, generating a 7-point sales lift overall and a 9-point sales lift for stores converted in the last year. Famous ended the quarter with 59 FLAIR locations and plan to end the year with 65. Said Schmidt, “These results continue to reinforce our confidence in the FLAIR strategy and underscore Famous’ ability to amplify elevated brands and products. As we evaluate the optimal markets for FLAIR, we are shifting our focus to FLAIR openings in the near term, which generate even higher returns than remodels.”

Outlook For Famous Footewar
The softer sales trend for Famous continued into May. For the second quarter, Caleres expects Famous sales and comparable sales to be down mid-single digits.

For the year, Famous sales and comparable sales are now expected to be down low-to-mid-single digits, versus prior guidance calling for sales down low single digits to flat, with comparable sales down 1 percent to up 1 percent.

Daniel Karpel, SVP and CFO, said Caleres is using “conservative guidance going forward” for Famous with expectations that the chain will perform better during peak selling periods such as back-to-school and holiday.

Schmidt said, “At Famous Footwear, while the environment is more challenging, we are encouraged by continued e-commerce growth, the progress we’ve made with our Elevate-and-Edit strategy and our efforts to enhance the shopping experience through FLAIR. We will continue to expand our penetration of elevated brands and products and we have exciting brand takeovers planned for the remainder of the year. And as always, we will lean into our strength in kids heading into this important back-to-school season.”

Caleres Inc’s’ First Quarter Sales
Companywide, net sales for Caleres were $666.6 million, up 8.5 percent versus first quarter 2025, and $622.7 million. Guidance had called for sales to be up mid to high-single digits. Excluding the recently-acquired Stuart Weitzman brand, sales were up 1.4 percent versus first quarter 2025.

Brand Portfolio Segment Highlights
Brand Portfolio net sales increased 20.6 percent from last year, and 5.8 percent when excluding Stuart Weitzman.

Among brands in the portfolio, Sam Edelman delivered double-digit sales growth, both domestically and internationally. Performance was strong across both existing and new doors, complemented by successful shop-in-shop rollouts and other distribution gains. Said Schmidt, “The consumer reaction to the brand’s spring fashion was very positive with standout increases in both casual and dress, solid results in sandals, and continued traction from both newness and key iconic styles.”

Sam Edelman gained significant market share in the quarter in women’s fashion footwear coming in at #9 for the quarter according to Circana. Internationally, growth was driven primarily by the brand’s joint venture in China.

Stuart Weitzman, acquired by Caleres in August 2025, “made meaningful progress in the quarter with results that support our continued expectations for breakeven in fiscal 2026 and lay the foundation for our long-term aspirations for the brand,” according to Schmidt.

Sales and profit at Stuart Weitzman exceeded internal expectations with “cleaner, more current inventory” supporting margins that were accretive to the total Brand Portfolio gross margin rate. Schmidt said, “We saw strengthening trends in both direct-to-consumer and wholesale, driven by key franchises and core icon styles and improving conversion following our e-commerce transition.”

Allen Edmonds brand delivered nearly 20 percent first quarter sales growth with broad-based momentum across the business. Brick-and-mortar stores, owned e-commerce and wholesale, all posted solid gains in the quarter with healthy demand, particularly in dress, loafers and handbags. During the quarter, Allen Edmonds gained market share and moved up 5 points to the #11 brand in the $200-plus segment for men’s fashion footwear in the premium channel, according to Circana

Naturalizer had a “solid quarter” with modest growth, led by continued strength in owned e-commerce.

Vionic delivered strong owned e-commerce performance in the first quarter, along with growth at key wholesale partners helping to offset planned declines in value channels. Premium wholesale accounts supported year-over-year gains with expanded assortments, early sneaker launches and exclusive styles. Said Schmidt of Vionic, “Targeted marketing drove solid sell-throughs across athletics, walking, sandals and casual categories. Consumer response to new products was positive, and the new City Walk sneaker sold out quickly online.”

Profitability and Expenses
Gross profit was $315.5 million with a gross margin of 47.3 percent, up 200 basis points from last year. Excluding Stuart Weitzman, adjusted gross profit was $291.2 million, with an adjusted gross margin of 46.8 percent, up 140 basis points from last year.

Brand Portfolio gross margin was 49.0 percent, up 520 basis points from last year.

Selling and administrative expenses were $293.7 million, or 44.1 percent of net sales, a 70-basis-point decrease from last year, primarily reflecting $25.6 million in expenses related to Stuart Weitzman. Excluding Stuart Weitzman, selling and administrative expenses were $268.1 million, or 43.1 percent of net sales, down 30 basis points from last year.

GAAP net earnings were $14.3 million, or 42 cents per diluted share, compared to $6.9 million, or 21 cents per diluted share, in Q1 last year. Adjusted net earnings were $12.7 million, or 38 cents per diluted share, in Q1, compared to adjusted net earnings of $7.4 million, or 22 cents per diluted share, in Q1 last year.

Guidance had called for GAAP EPS in the range of 21 cents to 26 cents and non-GAAP EPS between 21 cents to 26 cents.

Balance Sheet Summary
Inventory was $609.1 million at quarter-end, up $35 million from last year. Excluding Stuart Weitzman, inventory was down $22.7 million.

Borrowings under the asset-based revolving credit facility were $347.5 million at quarter-end, and liquidity was $229.2 million.

Second Quarter and Full Year Outlook
Said Schmidt on the call, “We continue to view 2026 as a build-back year, characterized by relatively modest organic sales growth and meaningful earnings recovery. In the Brand Portfolio, our momentum is building. Product strength, brand heat and marketing investments are set up to drive growth in wholesale, B2C and international for the balance of the year. At Famous Footwear, while the environment is more challenging, we are encouraged by continued e-commerce growth, the progress we’ve made with our Elevate-and-Edit strategy and our efforts to enhance the shopping experience through FLAIR. We will continue to expand our penetration of elevated brands and products and we have exciting brand takeovers planned for the remainder of the year. And as always, we will lean into our strength in Kids heading into this important back-to-school season.”

For the second quarter of 2026, Caleres expects consolidated net sales to increase mid- to high-single digits versus last year. Brand Portfolio sales are anticipated to increase in the mid-twenty’s percent range, with low-double-digit organic growth. Famous Footwear sales and comparable sales are expected to be down mid-single digits. Gross margin is expected to improve 345 basis points to 375 basis points, reflecting tariff mitigation efforts and lower current tariff rates. Caleres anticipates a second-quarter tax rate of 26 percent to 27 percent. Caleres expects GAAP earnings per diluted share of 32 cents to 38 cents per share.

For full-year 2026, Caleres anticipates total sales to increase by low- to mid-single digits, in line with prior guidance.

  • Brand Portfolio sales are expected to be up low-double digits, and mid-single digits organically. Previously, Brand Portfolio sales were anticipated to increase in the low double-digits, with low- to mid-single-digit organic growth.
  • Famous Footwear sales and comparable sales are now expected to be down low-to-mid-single digits, versus prior guidance calling for sales down low single digits to flat, with comparable sales down 1 percent to up 1 percent.

Consolidated gross margin is expected to improve 220 to 260 basis points, up from previous guidance estimating improvement of 140 to 180 basis points.

Caleres continues to anticipate interest expense of approximately $18 million. The company expects a full-year tax rate of 27 percent to 28 percent (28 percent to 30 percent previously), and capital expenditures of $50 to $55 million ($55 to $60 million previously).

GAAP earnings per diluted share are now forecast in the range of $1.44 to $1.69, and adjusted earnings per diluted share of $1.40 to $1.65. Previously, GAAP EPS was expected to be between $1.31 to $1.61, and non-GAAP EPS in the range of $1.35 and $1.65.

Images courtesy Caleres