Last month’s $360 million acquisition of Vionic Group so far has checked all the boxes that Caleres Inc. was targeting with the deal, and now the company will look to its newest asset to boost top- and bottom-line growth.

Caleres revised its guidance after a third quarter earnings miss, yet company leaders are excited over the Oct. 18 acquisition of Vionic.

“We now expect to report fiscal 2018 adjusted earnings per share of between $2.25 and $2.35, and this range includes approximately 5 cents of dilution related to Vionic interest and amortization expense,” said Caleres President and CEO Diane Sullivan. “This acquisition—along with other actions we have taken this year—is part of our strategy to invest for continued success, and our plans remain on track.”

For the quarter, the company reported net earnings were $29.2 million, while diluted earnings per share were 67 cents and included 14 cents for charges related to the acquisitions of Allen Edmonds, Blowfish Malibu and Vionic.

Adjusted net earnings of $34.9 million were up 1.6 percent, while adjusted diluted net earnings per share of 81 cents were up 1.3 percent—though short of Wall Street’s target by 7 cents—including approximately 2 cents of dilution related to Vionic interest and amortization expense.

On Tuesday afternoon’s earnings conference call with analysts, Sullivan went beyond the numbers to outline the benefits of Caleres’ newest addition to its portfolio, which she called an “exciting” acquisition.

“We have been actively looking to expand our brand portfolio, and Vionic was a fantastic opportunity to add a growing brand with strong consumer loyalty,” Sullivan said. “Vionic has already proven to be a disruptive addition for the industry, and it’s been taking share of the growing premium contemporary comfort footwear category. It’s very complementary also to our common brand portfolio and expands our reach beyond the consumers’ our existing brands currently serves. And those consumers who know the brands just love the brand. They call them raising stands and on average, they purchase about twice as any pair each year versus the average footwear consumer.”

Read more: Caleres Announces Acquisition Of Vionic

Vionic posted trailing 12-month sales of approximately $180 million, reflecting a compounded annual growth rate of more than 20 percent over the past six years. The brand derived approximately 25 percent of sales via e-commerce sites over the past 12 months, while international sales contributed approximately 8 percent to total sales.

On Tuesday’s call, Sullivan further explained that the deal was about much more than how the asset would work within the portfolio. As many in the C-suite say about acquisitions, Caleres sought a cultural alignment as much as a financial one, she said.

“Vionic is also a great cultural fit with Caleres, their purpose to bring joy to peoples’ lives starting with their feeders and perfect alignment with our mission to inspire people to feel-good-deed first,” Sullivan said. “And finally and most importantly, we’re thrilled to have the great addition of Chris Galligar, Bruce Campbell and Connie Rishwain to our Caleres family along with the rest of the team with Vionics. These three and certainly many members of their team are seasoned team with a solid industry experience and have proven track record.”

A deeper look at Caleres’ sales shows the immediate impact that Vionic is having. For the third quarter, brand portfolio sales of $327.1 million were up 8.5 percent, including Vionic and up 6.5 percent excluding this acquisition.

Year-to-date 2018 consolidated sales of $2.1 billion were up 1.5 percent versus 2017. Brand portfolio sales of $872.9 million improved 4.1 percent versus the same period a year ago including Vionic. Excluding the acquisition, sales were up 3.4 percent in brand portfolio.

And Caleres’ consolidated inventory position at the end of the third quarter was $698.3 million, including nearly $70 million of inventory related to the company’s Vionic and Blowfish businesses. Excluding these acquisitions, brand portfolio overall inventory was up approximately 15 percent year-over-year.

The move bodes well for Caleres, according to Sam Poser of Susquehanna Financial Group LLLP, who wrote in a note to investors Wednesday: “The recent acquisition of Vionic is an ideal fit for CAL. Vionic has a long growth runway and is expected to be accretive in FY19.”

Photo courtesy Vionic Group