Caleres Q4 2024: Navigating Contradictions in Sales Growth, Margins, and SAP Challenges

These are the key contradictions discussed in Caleres' latest 2024Q4 earnings call, specifically including: Sales Expectations, Gross Margin Pressures, Inventory Levels and Promotional Strategy, SAP Upgrade Impact, and Gross Margin Expectations:



Sales Performance and Market Share:
- Caleres reported fourth-quarter sales down approximately 4% from the previous year, excluding the impact of the 53rd week.
- The decline was due to weak boot sales, softer wholesale demand, and cautious consumer spending, but the company gained market share in women's fashion footwear.

Lead Brands' Growth and Strategic Initiatives:
- Lead Brands, including Sam Edelman, Allen Edmonds, Naturalizer, and Vionic, outperformed and grew sneaker penetration.
- The growth was supported by strategic investments and cost reductions in areas of focus, while the company aligned its supply chain to mitigate tariff impacts.

Famous Footwear and Inventory Management:
- Famous Footwear experienced a 2.9% decline in comparable store sales, with 3.1% growth in web sales.
- The company effectively managed inventory, ending the year with more current inventory and better positioned for improved trends in 2025.

Tariff Management and Cost Optimization:
- Caleres expects approximately 75% of its direct product sourcing to be outside of China by the second quarter of 2025.
- The company is managing additional tariffs through factory negotiations, selective price increases, and modest gross margin pressure, which has been incorporated into forward guidance.