Caleres Q1 sales drop 6.8%, announces $15 million cost cuts
Caleres said on Thursday revenues for the first quarter fell 6.8%, on the back of a dip in both its Famous Footwear and Brand Portfolio segment.
The St. Louis-based footwear company reported sales of $614.2 million, below expectations, for the 13-weeks ended May 3. Earnings per diluted share were $0.21, or $0.22 on an adjusted basis—well below the $0.88 reported in the same quarter last year.
Famous Footwear segment net sales decreased 6.3%, with comparable sales down 4.6%; while Brand Portfolio segment net sales declined 6.9%.
Direct-to-consumer channels continue to be a significant portion of the company's sales, accounting for approximately 70% of total net sales.
'While our brands continue to resonate with consumers and both segments of our business gained market share in the period, our first quarter results fell short of expectations,' said Jay Schmidt, president and chief executive officer.
'February sales were particularly weak, and although trends improved in March and April, overall performance was below plan. Furthermore, operating earnings were pressured by lower gross margins, increased reserves, and costs to cancel and move inventory.'
In response, Caleres announced structural cost-cutting measures expected to reduce selling, general and administrative (SG&A) expenses by $15 million annually, including $7.5 million in savings for fiscal 2025. The company also said it expects to significantly reduce sourcing from China, projecting that less than 10% of dollars will be sourced from the country in the second half of 2025.
'The operating environment has become more challenging, and we must redouble our efforts to drive growth and profitability. In the near term, we are focused on controlling what we can control, including optimizing our sourcing strategy,' added Schmidt.
'Longer term, we are confident in our ability to get back on track, execute our strategic plan, invest to fuel our growth initiatives, and drive sustained value for our shareholders.'
Due to ongoing macroeconomic uncertainty, the company has suspended its full-year fiscal 2025 guidance.
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