Caleres earnings drop in spite of strong sales
An impressive 20.3% increase in the sales of Caleres’ brand portfolio drove a solid revenue boost at the St. Louis, Missouri-based footwear company in Q1 2019, but was not enough to prevent a sharp decline in earnings.
The company’s consolidated sales for the first quarter ended May 4, 2019 came to $677.8 million, up 7.2%. from the $632.1 million reported in the prior-year period.
$341.1 million of this total was accounted for by Caleres’ strong brand portfolio, which includes Sam Edelman, Naturalizer, Allen Edmonds, Vionic and Dr. School’s Shoes, among others. The company’s Famous Footwear retail chain, on the other hand, saw a slow-down in its sales, reporting $352.2 million in revenues, a total which reflected a 1.0% decrease in same-store sales.
“At Famous Footwear, while the quarter ended on an encouraging note – with positive same-store-sales for both March and April – the slow start in February was tough to overcome,” explained Caleres CEO, President and Chairman Diana Sullivan in a release. “Going forward, we expect to see softness at Famous Footwear through at least the second quarter, as we continue to prepare for back-to-school by aggressively clearing underperforming inventory.”
Despite Caleres’ overall sales improvements, net earnings for the three-month period were $9.1 million ($0.22 per diluted share), down from $17.2 million ($0.40 per diluted share) in Q1 2018.
Perhaps the biggest negative impact on the company’s bottom line came from the cost of goods sold in the quarter, which increased from $357.2 million to $397.9 million.
In 2019, Caleres now expects to report annual consolidated net sales of around $3.0 billion, with brand portfolio sales expected to increase in the low to mid-teens, while same-store sales at Famous Footwear are predicted to remain flat or increase in the low-single digits.
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