Caleres Q2 net earnings improve 22.4 percent

Caleres reported second quarter 2015 financial results, with net earnings were 16.8 million dollars, or 0.38 dollar per diluted share, and included 5.3 million dollars of after-tax expense related to the company’s debt extinguishment. Excluding this expense, net earnings were 22.1 million dollars, or 0.50 dollar per diluted share, up 22.4 percent versus second quarter 2014 net earnings of 18.1 million dollars, or 0.41 dollar per diluted share.

Net sales were 637.8 million dollars versus second quarter 2014 net sales of 635.9 million dollars. Gross margin was 41.2 percent, up approximately 40 basis points year-over-year, while operating margin was 5.6 percent.

“Today we reported a solid quarter, as expected, with improved sales, margins and adjusted earnings,” said Diane Sullivan, CEO, President and Chairman of Caleres, adding, “Total sales were up 2 percent, excluding Shoes.com, while gross and operating margin both expanded in the quarter. We also improved bottom-line performance by 22 percent, thanks to continued progress toward our long-term strategic initiatives.”

Overall numbers show improvement

Famous Footwear sales of 395.9 million dollars were up 0.6 percent year-over-year, excluding Shoes.com, which was sold in December of 2014. For the quarter, same-store-sales were up 0.1 percent, with strong growth in canvas outweighing weakness in performance athletic product and sandals. During the quarter, 10 new stores were opened and six stores were closed.

Brand Portfolio sales of 242 million dollars were up 4.4 percent in the second quarter, with performance in the quarter driven by a 14.1 percent improvement in Contemporary Fashion. Healthy Living sales were down 1.5 percent, as increases in wholesale sales were unable to offset weakness on the retail side, where the company operated nine fewer stores year-over-year.

Consolidated gross profit of 262.8 million dollars was up 1.2 percent, while gross margin of 41.2 percent was up approximately 40 basis points year-over-year.

Dividend declared, reiterates 2015 outlook

“In the second quarter, we made steady progress toward achieving our full year earnings guidance, as we continued to drive margin expansion and further strengthened our balance sheet,” said Ken Hannah, Chief Financial Officer of Caleres, adding “This progress has enabled us to accelerate investment in our long-term strategic growth initiatives.”

For the fiscal year 2015, the company expects net sales to be in the range of 2.61 dollars to 2.63 billion dollars, and adjusted earning per diluted share of 1.84 to 1.94 dollars. Famous Footwear same-store sales and Brand Portfolio sales are expected to be up low-single digits.

The company also declared a quarterly dividend of 0.07 dollar per share, payable October 1, 2015, to shareholders of record as of September 17, 2015. This dividend will be the 371st consecutive quarterly dividend paid by the company.