Caleres 2026 Q3 Earnings Sharp Net Income Drop of 96.5%

Caleres (CAL) reported fiscal 2026 Q3 earnings on Dec 9, 2025, with revenue rising 6.6% to $790.05 million but net income plummeting 96.5% to $1.43 million. The company guided to full-year 2025 EPS of $0.55–$0.60, below prior expectations, citing integration costs and margin pressures from the Stuart Weitzman acquisition.

Revenue

Caleres achieved a 6.6% year-over-year revenue increase to $790.05 million in Q3 2026, driven by strong performance in its Brand Portfolio and owned eCommerce channels. The Brand Portfolio segment, including contributions from Stuart Weitzman, saw a 18.8% revenue rise, while Famous Footwear sales declined 2.2%. Organic sales growth in the Brand Portfolio segment reached 4.6%, supported by double-digit gains in owned eCommerce and market share expansion in women’s fashion footwear.

Earnings/Net Income

Caleres’ earnings per share (EPS) fell sharply to $0.07 in Q3 2026, a 94.2% decline from $1.20 in the prior-year period. Net income dropped to $1.43 million, a 96.5% decrease from $41.12 million. Adjusted net earnings, excluding Stuart Weitzman, were $22.89 million, or $0.67 per share, reflecting the dilutive impact of the acquisition. The significant EPS and net income contraction underscores the financial strain from integration challenges and tariff pressures.

Post-Earnings Price Action Review

The strategy of buying Caleres shares after a revenue increase quarter-over-quarter on the earnings release date and holding for 30 days resulted in underperformance. It delivered a CAGR of -20.77% and an excess return of -117.64%, far below the benchmark return of 67.70%. The approach faced a high maximum drawdown of 0.00% and a Sharpe ratio of -0.40, signaling high risk and negative returns relative to the market. These metrics highlight the stock’s volatility and the challenges of timing its performance post-earnings.

CEO Commentary

John Schmidt, CEO, emphasized organic growth in the Brand Portfolio and double-digit eCommerce gains but acknowledged near-term margin pressures from tariffs and Stuart Weitzman integration. He outlined strategic priorities, including cost savings, international expansion, and direct-to-consumer growth, while cautioning about inventory challenges at Stuart Weitzman.

Guidance

Caleres projected Q4 2025 organic Brand Portfolio sales of flat to +1%, $55–60 million in Stuart Weitzman sales, and low single-digit declines for Famous Footwear. Full-year 2025 EPS guidance was set at $0.55–$0.60, with Q4 EPS of $0.35–$0.40. The company expects margin improvements in 2026 from tariff mitigation and structural cost savings.

Additional News

Caleres’ recent acquisition of Stuart Weitzman, finalized in August 2025 for $108.9 million, has introduced integration complexities and dilutive effects, with the brand expected to reach breakeven by 2026. CEO John Schmidt highlighted the acquisition’s strategic value despite short-term challenges. Meanwhile, the stock has surged 15.40% month-to-date, outperforming its 52-week decline of 51.13%. Analysts remain cautious, with Caleres’ Zacks Rank at #3 (Hold), reflecting mixed estimate revisions and a challenging industry outlook.