This article first appeared on GuruFocus.
Revenue: Second quarter sales were $695 million, up 5.6% year-over-year. Excluding Stuart Weitzman, sales decreased 0.8%.
Brand Portfolio Sales: Sales were up 8.2% on an organic basis and up 23.6% when including Stuart Weitzman.
Famous Footwear Sales: Sales were down 6.3%, with comparable sales down 5.9%.
Gross Margin: Consolidated gross margin was 46.8%, up 340 basis points year-over-year.
Brand Portfolio Gross Margin: 49.1%, up 880 basis points year-over-year.
Famous Footwear Gross Margin: 42.7%, down 100 basis points year-over-year.
SG&A Expenses: Increased $33.7 million to $303.4 million, primarily driven by Stuart Weitzman expenses.
Operating Earnings: $22.1 million, with an operating margin of 3.2%.
Brand Portfolio Operating Margin: 10.5%, up 740 basis points year-over-year. Excluding Stuart Weitzman, operating margin was 13%.
Famous Footwear Operating Margin: 1.4%.
Earnings Per Share: Second quarter earnings per diluted share were $0.47, compared with $0.35 last year.
Inventory: Quarter-end inventory was $754.2 million, up $61 million year-over-year, with $69 million attributable to Stuart Weitzman.
Store Locations: Ended the quarter with 814 store locations, opening three and closing three stores.
Full-Year Guidance: Expects consolidated sales up low to mid-single-digits, with adjusted earnings per diluted share of $1.50 to $1.65.
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Release Date: September 09, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Caleres Inc (NYSE:CAL) reported second-quarter adjusted earnings above expectations, with consolidated gross margin up 340 basis points to 46.8%.
Brand portfolio sales grew 8.2% organically, with lead brands like Sam Edelman (mid-teens growth) and Allen Edmonds (low-10s growth) delivering strong results.
International sales surged over 50% in the quarter, with high-teens organic growth, highlighting a significant growth vector.
Stuart Weitzman is on track to achieve breakeven operating earnings in 2026, with improved full-price sell-through and international performance, particularly in China.
Fashion footwear momentum is strong, with gains in ballet flats, pumps, and loafers, and the company is gaining market share in women's fashion footwear.
The company raised the lower end of its full-year adjusted EPS guidance to $1.50-$1.65, reflecting first-half outperformance.
Famous Footwear sales declined 6.3% in the quarter, with comparable sales down 5.9%, pressured by a later back-to-school season and a shift away from lifestyle athletic products.
Famous Footwear gross margin decreased 100 basis points to 42.7% due to increased promotional and clearance activity in lifestyle athletic.
The company expects continued softness in certain Famous Footwear categories and related promotional activity through the back half of the year.
Inventory levels remain elevated, with total inventory up $61 million year-over-year, including $69 million attributable to Stuart Weitzman.
The company faces an uncertain tariff environment, with guidance assuming new tariffs will be enacted in Q3, potentially impacting costs.
Vionic sales were lower in the quarter, reflecting ongoing efforts to elevate distribution, though earnings were slightly up.
Q: Can you help us isolate the North America performance and quantify the organic growth rate domestically? As you look into the back half and for Spring '27, what are you seeing in the domestic wholesale order book? Are retailers leaning into fashion footwear based on current sell-through?A: Jay Schmidt (CEO): International is currently less than 10% of our total, so it has a lot of runway for growth. We saw growth throughout wholesale, particularly in the vast majority of our brands. While we don't give a lot of color on the order book because it hasn't been as reliable with the business being so dynamic, the order book is consistent with our guidance for the third quarter. We're not seeing any volatility; people are running their businesses on the brand side pretty strongly, which supports our guidance.
Q: With the athletic lifestyle softness at Famous Footwear, is there any way to put parameters around the magnitude of that decline? Did it continue as the quarter progressed or were there signs of stabilization around back to school? On the gross margin for Famous, could you help us think about the cadence of promotional pressure between Q3 and Q4?A: Jay Schmidt (CEO): Everything got better as we looked into August and quarter-to-date; our athletic total improved. We're looking at a right-sizing of our business as we move into half two. That 10% delta between athletic and fashion continued from the first week of August through the most recent Labor Day results. Back-to-school spikes to over 60% of our business, but it right-sizes to a more normal balance in the back half, with athletic in the mid-50s and non-athletic in the mid-40s. Daniel Karpel (CFO): The team did a nice job managing receipts and taking decisive action to meet the market on pricing. We had year-over-year margins down about 100 basis points. We'll continue to be promotional in the back half, so you would expect some margin pressure year-over-year relatively in line with the second quarter.
Q: Over the last few years, non-athletic has been driven by key items. Given what you're seeing from the fashion side right now, do you think the consumer is now shopping more for key silhouettes versus key items? If so, is that beneficial to your brand portfolio business?A: Jay Schmidt (CEO): It's a little bit of both. We're still seeing very strong demand on those big items, like Birkenstock. But as you get into other fashion businesses, the items are still there, they're just not as huge as before. It becomes a little more bifurcated. In our brand portfolio for Q2, we saw similar strength at Famous where the whole flat business has been very strong. It is more about the silhouette and the classification and who does it best.
Q: What are you finding most challenging in lifestyle athletic? Is it court, lifestyle running, or legacy silhouettes? Are you seeing positives in lifestyle athletic in terms of newness, and can you lean more into that going forward?A: Jay Schmidt (CEO): The second portion you talked about is trending. We saw a real nice rebound of Adidas during the quarter, particularly in the lifestyle piece that was much more fashionable, with good results on the Samba. There is still a lot of strength in performance, which speaks to innovation, with great performance from Jordan and Brooks. On lifestyle, they're still very big items, so I don't want to mislead anyone. It's just right-sizing; consumers are choosing to buy other products in addition to that. We're continuing to register newness in the athletic category to find those next big items.
Q: You referenced boots in your prepared remarks. What are you seeing trend-wise, and what does that potentially mean as we get further into the fall holiday season?A: Jay Schmidt (CEO): We're experiencing some nice early business, though it's very small. We saw nice interest on dress boots in the Nordstrom anniversary sale, which started us off in Q2. In August, we're having a nice pickup on that category in addition to some work festival-type boots. The boot business owed some business in Q3 because we did not have flow of receipts based on everything that happened with tariffs. We're excited with what we see so far, but we're going to keep an eye on it all the way through.
Q: Can you talk about the progress of Stuart Weitzman and the back half of the year? How do you see that integration progressing towards breakeven? On the athletic versus fashion side for Famous Footwear, is there a difference in performance from Flair stores versus non-Flair stores? Is it more brand-specific or category-specific? Mainly, is Nike the issue?A: Jay Schmidt (CEO): The progress at Stuart Weitzman is going well. We are fully integrated on all platforms and very happy with our fall product as it comes into stores. We put a global brand assortment in place, so you won't see something different in China versus US stores. We're excited about the strength in dress shoes, and Stuart Weitzman is well positioned to address that trend. The boot piece really picks up on the stretch trend. Receipts are flowing well. On Flair stores, we haven't seen as much difference between athletic and non-athletic, but we are seeing more premium brands and products outperform in those stores. We just ended back-to-school, and now our receipts and emphasis turn to fashion at Famous Footwear, so we'll have a good measurement on that as we go through Q3.
Q: As you think about the back half, full price versus promotion with the new items out there, do you sense any change or how do you see the pricing environment?A: Jay Schmidt (CEO): In general, we're still going to be aggressive on keeping inventories clean on products that are not working. We'll probably continue to have some lifestyle athletic that will keep flowing, so we'll have to keep markdown pressure on that. On the flip side, our fashion assortments are more focused on newness, and we'll probably see less promotional activity there. We want to keep everything going well at Famous so we can continue to flow newness and drive our consumer in all categories.
Q: Can you provide more detail on the second quarter financial results, including the impact of tariff refunds and the performance of the brand portfolio versus Famous Footwear?A: Daniel Karpel (CFO): We received $57.4 million in IEEPA tariff refunds during the quarter, with $55.6 million reflected as a reduction in cost of sales and $
For the complete transcript of the earnings call, please refer to the full earnings call transcript.