Caleres revealed a strong finish to fiscal year 2022 after a better-than-expected performance in the holiday season.
The parent company to Famous Footwear, Allen Edmonds, Sam Edelman and more brands reported that fourth quarter net sales were $696.4 million, up 2.5% from the same quarter in 2021. Adjusted net earnings were $23.4 million, with adjusted earnings per diluted share of $0.65.
Results for the full year were in line with the company’s preliminarily reported results from February. Net sales were $2.97 billion, up 6.9% from 2021 and beating previous growth expectations of between 4% to 6%. Adjusted net earnings were $167.1 million, with adjusted earnings per diluted share of $4.52, which represented the high end of prior guidance.
Caleres president and CEO Jay Schmidt attributed better-than-expected results to strength in the company’s brand portfolio as well as a strong performance from Famous Footwear. In 2022, sales in the brand portfolio segment sales grew 22.4%, and sales in Famous Footwear dropped 2.5%. Comparable sales were down 1.8%. (Famous sales were up 0.1% in Q4).
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Caleres president and CEO Jay Schmidt noted in a call with analysts that sales at Famous Footwear were slow at the start of Q4 but picked up in mid-December and exceeded expectations in the last six weeks of the quarter due to a strong demand for “key athletic brands.”
Part of this success came from the company’s ability to meet demand in this category after spending most of 2022 chasing athletic footwear inventory.
“Some of these key styles, particularly in some of these categories that are more fashion within athletic like this retro kind of style, court shoes, et cetera, as well as some of the other key brands that we’re trending, we really got back into the key items,” Schmidt said, echoing a recent trend of consumers opting for more versatile, fashion forward sneakers as opposed to strictly perfomance shoes. “So I think that led us to those last six weeks of fourth quarter being very, very strong.”
Moving forward, the company plans to have a more balanced assortment of fashion and athletic shoes in the Famous Footwear channel.
“We are seeing meaningful progress on the fashion side of the business,” Schmidt said. “We know that when she buys for her family and for herself, she is spending more, connecting more and returning more often.”
In fiscal year 2023, Caleres expects headwinds from inflation, high interest rates and an uncertain macro-environment to impact results. The company expects net sales to be between flat and up 2%, compared to 2022. Earnings per diluted share is expected to be in the range of $4.10 and $4.30.
In Q1, consolidated net sales are expected to be down between 4% and 6%, due to timing of wholesale shipments meant to restock the brand portfolio in Q1. Diluted earnings per share are expected to be between $0.92 and $0.97.
The positive performance comes as other retailers report sluggish sales and earnings misses for the most recent holiday quarter. Genesco, which owns Journeys, Johnston & Murphy and Schuh, last week adopted a cautious outlook for fiscal year 2024 after reporting weak results for the holiday season. Nordstrom Inc. was impacted by steeper markdowns and macro-economic headwinds and reported fourth quarter declines on the both the top and bottom lines earlier this month.
