Caleres, Inc. reported earnings on an adjusted basis fell 69.3 percent in the third quarter as Famous Footwear’s same-store sales slipped 1.2 percent and gross margins shrank at both the Famous Footwear and Brand Portfolio segments. Third-quarter results and full-year guidance came in sharply below analyst targets.

Third-Quarter Highlights

  • Reported consolidated sales of $790.1 million, up 6.6 percent versus last year (up 0.4 percent excluding Stuart Weitzman); analysts’ consensus estimate was $768.59 million.
  • Brand Portfolio sales increased 18.8 percent with $45.8 million in contribution from Stuart Weitzman.
  • Brand Portfolio organic sales increased 4.6 percent with Lead Brands, in total, up double digits, growth across all channels of our Brand Portfolio business and market share gain in women’s fashion footwear (+0.5 percent), excluding Stuart Weitzman.
  • Famous Footwear sales declined 2.2 percent, with comparable sales down 1.2 percent.
  • Owned eCommerce sales across Famous Footwear and Brand Portfolio up double digits.
  • GAAP earnings per diluted share of 7 cents, compared to last year’s earnings per diluted share of $1.19. Adjusted earnings per diluted share of 38 cents, compared to last year’s adjusted earnings per diluted share of $1.23. Adjusted earnings per diluted share excluding Stuart Weitzman of 67 cents, below analysts’ consensus target of 85 cents.
  • Completed Stuart Weitzman acquisition in August for a preliminary purchase price of $108.9 million, net of cash acquired.

“Caleres delivered third quarter sales results that were ahead of our internal expectations, highlighted by organic sales growth in our Brand Portfolio segment, strong Lead Brands performance, sequential improvement in trends at Famous Footwear, and accelerated eCommerce momentum in both segments of our business,” said Jay Schmidt, president and chief executive officer. “With the recent addition of Stuart Weitzman, our Brand Portfolio now drives nearly half our sales and more than half our operating earnings. As we expected, we experienced pressure on our earnings from tariffs and near-term acquisition dilution; however, the fundamentals of our business are improving.”

“For the balance of the year, we will be working to transition the Stuart Weitzman business to Caleres’ systems and clean up aged and excess inventory as we hone our strategies for long-term growth and profitability of the brand. In fiscal 2026, we will begin to unlock synergistic cost savings,” said Schmidt. “Through this integration process, we are sharpening our operating structure to better leverage our scale and strengthen our ability to build and grow powerful brands and consumer experiences. We are confident that executing our strategic plans will result in improved financial performance and drive long-term value for our shareholders.”

Third Quarter 2025 Results
(13-weeks ended November 1, 2025, compared to 13-weeks ended November 2, 2024)

  • Net sales were $790.1 million, up 6.6 percent versus third quarter 2024.
    • Famous Footwear segment net sales decreased 2.2 percent versus last year, with comparable sales down 1.2 percent.
    • Brand Portfolio segment net sales increased 18.8 percent versus last year. Excluding Stuart Weitzman, net sales increased 4.6 percent to last year.
    • Direct-to-consumer sales represented approximately 71 percent of total net sales.
  • Gross profit was $329.9 million with gross margin of 41.8 percent, down 230 basis points versus last year.
  • Adjusted gross margin was 42.7 percent, down 140 basis points versus last year.
    • Famous Footwear segment gross margin of 41.6 percent, down 130 basis points versus last year.
    • Brand Portfolio segment gross margin of 40.3 percent, down 350 basis points versus last year. Adjusted gross margin of 42.3 percent, down 150 basis points versus last year.
  • Selling and administrative expenses were $311.3 million, or 39.4 percent of net sales, up 310 basis points versus last year, primarily reflecting $32.2 million in expense related to Stuart Weitzman. Excluding Stuart Weitzman, selling and administrative expenses were up $10 million, reflecting an unfavorable comparison to last year’s incentive compensation release.
  • GAAP net earnings of $2.4 million, or earnings per diluted share of 7 cents versus last year’s GAAP net earnings of $41.4 million or earnings per diluted share of $1.19. Adjusted net earnings of $13.1 million, or adjusted earnings per diluted share of 38 cents, versus last year’s net earnings of $42.6 million, or earnings per diluted share of $1.23. Excluding Stuart Weitzman, adjusted earnings per diluted share were 67 cents.
  • Inventory was $678.2 million at quarter-end, up $92 million versus last year. Excluding Stuart Weitzman inventory of $77 million, inventory was up 2.6 percent versus last year.
  • Borrowings under the asset-based revolving credit facility were $355 million at quarter-end, and liquidity was $312 million.

Fiscal 2025 Outlook
Caleres updated its full-year guidance after suspending it for several quarters due to uncertainty tied to tariffs.

Caleres said it expects continued tariff pressure on gross margin and earnings dilution from Stuart Weitzman. Additionally, it anticipates a full-year tax rate of 27 percent to 28 percent. The company expects a loss per diluted share for the fourth quarter on both a GAAP and adjusted basis. For the full year, Caleres anticipates GAAP loss per diluted share in the range of 13 cents to 18 cents and adjusted earnings per diluted share in the range of 55 cents to 60 cents, including 60 cents to 65 cents a share dilution from Stuart Weitzman.

Analysts were expecting adjusted EPS of 27 cents for the fourth quarter and $1.73 for the year.

Image courtesy Famous Footwear