Caleres 2026 Q1 Earnings Misses Targets as Net Income Drops 80.7%

Caleres (CAL) reported its fiscal 2026 Q1 earnings on Jun 10th, 2025. The company faced challenging financial results, falling short of expectations with total revenue decreasing by 6.8% to $614.22 million compared to the previous year. This decline led to a suspension of guidance for fiscal 2025 due to market uncertainties. Caleres’s earnings per share (EPS) also fell below expectations, highlighting the need for strategic adjustments.

Revenue
Caleres reported a total revenue of $614.22 million for Q1 2026, marking a 6.8% decline from the previous year. Famous Footwear contributed $327.68 million, while the Brand Portfolio added $295.39 million. The segment "Eliminations and Other" accounted for a reduction of $8.85 million, culminating in the consolidated revenue figure.

Earnings/Net Income
Caleres's earnings per share (EPS) plummeted 76.1% to $0.21 in Q1 2026, down from $0.88 in Q1 2025. The company's net income drastically decreased to $5.95 million, representing an 80.7% drop from the prior year's $30.80 million. The EPS performance was notably poor.

Post-Earnings Price Action Review
The strategy of acquiring Caleres stock when revenue exceeds expectations and holding it for 30 days has been a mixed bag, offering moderate returns paired with significant volatility and risk. The compound annual growth rate (CAGR) reached 14.31%, but it lagged behind its benchmark by 5.95 percentage points. Investors faced a maximum drawdown of -64.17%, indicating a challenging risk-return profile. The Sharpe ratio stood at 0.25, underscoring the importance of risk management in navigating such a volatile environment. This highlights the necessity for strategic planning to mitigate risks and optimize returns.

CEO Commentary
“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. He noted that February sales were particularly weak but highlighted improving momentum at retail in March and April. Schmidt emphasized the need to control costs, including a $15 million annual reduction in SG&A through structural expense cuts, which he views as an opportunity to strengthen Caleres. He expressed confidence in the company’s ability to execute its strategic plan and drive sustained value for shareholders.

Guidance
Given the uncertainty in the environment, Caleres is suspending guidance for fiscal 2025. Previously, the company expected fiscal 2025 consolidated net sales to be down 1% to up 1% compared to fiscal 2024, with earnings per diluted share projected at $2.80 to $3.20. Capital expenditures were estimated between $50 million and $55 million.

Additional News
Caleres recently announced plans to acquire Stuart Weitzman for $105 million, with the transaction expected to close in the summer of 2025. This acquisition is part of the company's strategy to diversify its brand portfolio and reduce reliance on China for sourcing, with expectations of 75% of sourcing outside of China by late 2025. Additionally, Caleres returned $74.7 million to shareholders through share repurchases and quarterly dividends during fiscal 2024, demonstrating its commitment to enhancing shareholder value amidst challenging market conditions.