Caleres (NYSE:CAL) reported higher first-quarter sales and earnings, with management pointing to strength in its brand portfolio and the addition of Stuart Weitzman as key contributors, while Famous Footwear continued to face pressure from a softer consumer environment.
President and CEO Jay Schmidt said earnings per share exceeded the company’s guidance, driven by “strong sales and gross margin results” in the brand portfolio segment. The company said first-quarter sales rose 8.5% to $667 million. Excluding Stuart Weitzman, organic sales increased 1.4%.
Brand Portfolio Leads Growth
Brand Portfolio sales increased 20.6% including Stuart Weitzman and 5.8% on an organic basis. Lead brands, excluding Stuart Weitzman, grew about 7% and represented nearly 60% of organic Brand Portfolio sales, according to management.
Schmidt said the segment benefited from growth across channels and geographies, improved product mix, lower current tariff rates, tariff mitigation efforts and disciplined inventory control. He also said the segment gained market share in women’s fashion footwear during the quarter, citing Circana data.
Brand Portfolio gross margin was 49%, up 520 basis points from last year. Operating margin in the segment was 11.1%, also up 520 basis points. Excluding Stuart Weitzman, Brand Portfolio operating margin was 13.1%, up 720 basis points.
Among individual brands, Schmidt said Sam Edelman delivered double-digit top-line growth both domestically and internationally, helped by strength in casual and dress footwear, sandals and direct-to-consumer full-price selling. Allen Edmonds posted nearly 20% sales growth, with gains across stores, e-commerce and wholesale. Naturalizer recorded modest growth led by owned e-commerce, while Vionic saw strong e-commerce performance and growth at key wholesale partners.
Stuart Weitzman Integration Progresses
Caleres said Stuart Weitzman generated $43.9 million in first-quarter sales. Schmidt said the brand’s sales and profit exceeded internal expectations and supported the company’s continued expectation for Stuart Weitzman to break even in fiscal 2026.
The company completed the integration of Stuart Weitzman’s global business onto Caleres platforms in February. Schmidt said cleaner and more current inventory supported gross margins that were accretive to the total Brand Portfolio gross margin rate.
Management also highlighted improving trends in direct-to-consumer and wholesale, as well as improving trends in China. Schmidt said China is seeing early success from an expanded sneaker assortment, supported by Caleres’ sourcing and product capabilities. Stuart Weitzman ended the quarter with 71 stores, including 23 in North America and 48 in China.
Famous Footwear Remains Under Pressure
Famous Footwear sales fell 2.5% in the quarter, while comparable sales declined 2.3%. Schmidt said results were challenged by a softer consumer and macroeconomic backdrop, though e-commerce sales increased nearly 10%.
Famous Footwear’s gross margin declined 150 basis points to 43.8%, reflecting a greater proportion of clearance sales, higher markdowns and higher shipping costs from a larger mix of web sales. Operating margin for the segment was negative 0.1%.
Schmidt said February was the strongest month for Famous Footwear sales, but pressure increased in April as inflation weighed on consumer traffic and sales. Kids performed best by division, followed by men’s, while women’s and accessories underperformed. Fashion outperformed athletic, with particular softness in women’s athletic.
The company said its “elevate and edit” strategy continued to gain traction. Sales of elevated products increased nearly 50% in the quarter, and penetration reached almost 20%. Schmidt cited growth from Jordan, Skechers, Birkenstock, New Balance, Reef and Brooks, and said several Caleres portfolio brands were among Famous Footwear’s top 15 best-selling brands.
Caleres also continued rolling out its Flair store format. The company ended the quarter with 59 Flair locations, which generated a seven-point sales lift overall and a nine-point lift for stores converted within the last year. Management said it plans to end the year with about 65 Flair locations.
Guidance Maintained Amid Tariff Uncertainty
CFO Dan Karpel said the company continues to face uncertainty around tariffs and inflation. Caleres’ guidance assumes new tariffs will be enacted in July 2026 that largely replace prior IEPA tariffs. Karpel said the company estimates it is eligible to receive about $57.8 million plus interest in refunds tied to invalidated IEPA tariffs, but those recoveries are not included in guidance.
For the second quarter, Caleres expects consolidated sales to increase in the mid- to high-single-digit range. Brand Portfolio sales are expected to rise in the mid-20% range, including low-double-digit organic growth. Famous Footwear sales and comparable sales are expected to decline mid-single digits.
For fiscal 2026, the company expects consolidated sales to increase low to mid-single digits. Brand Portfolio sales are expected to rise low double digits, or mid-single digits organically. Famous Footwear sales and comparable sales are expected to decline low to mid-single digits.
Caleres expects full-year GAAP earnings per diluted share of $1.44 to $1.69 and adjusted earnings per diluted share of $1.40 to $1.65. Capital expenditures are expected to be approximately $50 million to $55 million, subject to macroeconomic conditions and business performance.
During the question-and-answer portion of the call, management said the unchanged full-year sales outlook reflects stronger Brand Portfolio momentum offset by a more cautious view of Famous Footwear. Schmidt said the company expects better performance during peak periods such as back-to-school and holiday, while softness has been more evident in non-event periods.
About Caleres (NYSE:CAL)
Caleres, Inc, formerly known as Brown Shoe Company, is a leading footwear company engaged in the design, sourcing, marketing and selling of a broad portfolio of branded and private-label shoes. The company’s operations span a range of market segments from value-priced to premium and luxury. Caleres operates through two primary segments: a retail segment anchored by the Famous Footwear banner, which includes more than 1,100 stores across North America, and a brand portfolio segment comprising owned and licensed brands such as Allen Edmonds, Naturalizer, Sam Edelman, Dr.
