Caleres' Century-Old Dividend: A Contrarian Gem in Retail's Rough Seas

In a retail landscape battered by inflation, supply chain disruptions, and shifting consumer habits, few companies can boast the resilience of Caleres (NYSE: CAL). With a dividend streak stretching back over 100 years—a rare feat in any sector—Caleres stands as a testament to operational discipline and shareholder loyalty. For income-focused investors seeking stability amid volatility, this footwear giant presents a compelling contrarian opportunity.

The Dividend Streak: A Century of Certainty

Caleres’ uninterrupted quarterly dividend payments since 1925 are no accident. The company has weathered economic downturns, industry disruptions, and even the rise of e-commerce while maintaining its payout. Most recently, it declared a $0.07-per-share dividend in March 2025, continuing its tradition of reliability. This streak isn’t just a historical footnote; it’s a barometer of financial health.

Yield vs. Peers: Lower on Paper, Safer in Practice

At a 1.69% yield as of May 2025, Caleres may seem unattractive compared to peers like Shoe Carnival (NASDAQ: SCVL) at 3.3% or Buckle (NYSE: BKE) at 3.5%. But appearances deceive. Caleres’ dividend is sustainable—its payout ratio of just 8.5% means earnings could drop sharply before threatening the payout. In contrast, higher-yielding peers often sport payout ratios near or above 100%, leaving them vulnerable to cuts if profits falter.

Balance Sheet Fortitude: Cash Flow Anchors the Payout

Despite recent sales declines (3.4% in 2024), Caleres has prioritized cash flow management. Its conservative capital structure—no debt maturities until 2027—and disciplined inventory strategies ensure liquidity remains robust. Even with earnings per share (EPS) down to $3.09 in 2024 from $4.80 in 2023, the dividend consumes less than a tenth of profits. This cushion provides a margin of safety in uncertain times.

Contrarian Value: Buying When the Tide is Out

The retail sector is in a slump. Consumer discretionary stocks have underperformed as shoppers prioritize essentials over discretionary purchases. Yet Caleres’ dividend reliability defies this trend. By focusing on timeless brands (e.g., Allen Edmonds for luxury footwear, Vionic for orthopedic comfort), it avoids fads and caters to enduring demand.

Investors fleeing retail may overlook Caleres’ intrinsic value. Its price-to-earnings ratio of 8.4x (vs. 15x for the S&P 500) reflects this neglect. Meanwhile, the planned acquisition of Stuart Weitzman—a luxury footwear brand—positions Caleres to capitalize on rebounding demand for premium goods post-recession.

Why Act Now?

• Low Yield = High Safety: The modest yield signals the market underestimates Caleres’ durability. A return to normalized earnings could push the yield higher or trigger dividend growth.
• Sector Discount: The retail sector’s overall pessimism creates a buying opportunity for companies with fortress balance sheets.
• Dividend Aristocrat Potential: With a century of streaks, Caleres could soon join the ranks of elite dividend aristocrats, attracting institutional inflows.

Final Call: Anchor Your Portfolio in Stability

Caleres isn’t a high-yield play—it’s a reliability play. In an era of market turbulence, its dividend is a mooring rope for income investors. The stock’s undervaluation, combined with its cash flow resilience and strategic moves like the Stuart Weitzman acquisition, make it a rare contrarian bet in a struggling sector.

Action Item:
Add Caleres to your portfolio now. With a dividend yield of 1.69% and a P/E ratio at multiyear lows, the risk-reward is skewed toward long-term capital appreciation and income security.

In the retail wreckage, Caleres’ dividend ship sails on. Board now—before the tide turns.