Caleres 11K Annual report of employee stock purchases

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 11-K

(Mark One)

☒

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-2191

Full title of the plan and the address of the plan, if different from that of the issuer named below:

CALERES, INC.

401(k) SAVINGS PLAN

Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

CALERES, INC.

8300 Maryland Avenue

St. Louis, Missouri 63105

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Caleres, Inc. 401(k) Savings Plan

Financial Statements and Schedules

Years Ended December 31, 2021 and 2020

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Report of Independent Registered Public Accounting Firm		1


Financial Statements

Statements of Net Assets Available for Benefits		2
Statements of Changes in Net Assets Available for Benefits		3
Notes to Financial Statements		4

Schedule H, Line 4a - Schedule of Delinquent Participant Contributions		10
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)		11

Index to Exhibits		12

Signature		13

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Plan Administrator and Plan Participants

Caleres, Inc. 401(k) Savings Plan

Opinion on the financial statements

We have audited the accompanying statements of net assets available for benefits of Caleres, Inc. 401(k) Savings Plan (the “Plan”) as of December 31, 2021 and 2020, the related statements of changes in net assets available for benefits for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental information

The schedules of delinquent participant contributions for the year ended December 31, 2021 and of assets (held at end of year) as of December 31, 2021 (“supplemental information”) has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ GRANT THORNTON LLP

We have served as the Plan’s auditor since 2020.

St. Louis, Missouri

June 28, 2022

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Caleres, Inc. 401(k) Savings Plan

Statements of Net Assets Available for Benefits



	December 31, 2021		December 31, 2020
Assets:
Non-interest bearing cash	$	22,531	$	—
Investments - at fair value (Note 3):		262,314,642		233,463,152

Receivables:
Employer contributions		4,637		4,202
Employee contributions		11,121		4,082
Notes receivable from participants		3,042,766		3,884,028
Total receivables		3,058,524		3,892,312

Total assets		265,395,697		237,355,464

Liabilities:
Excess contributions payable		160,874		255,973
Total liabilities		160,874		255,973

Net assets available for benefits	$	265,234,823	$	237,099,491

See accompanying notes to financial statements.

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Caleres, Inc. 401(k) Savings Plan

Statements of Changes in Net Assets Available for Benefits



	Year Ended
	December 31, 2021		December 31, 2020
Additions:

Contributions:
Employer contributions	$	5,498,403	$	4,095,757
Employee contributions		9,509,394		8,498,076
Rollovers		802,309		282,300
Total contributions		15,810,106		12,876,133

Interest income on notes receivable from participants		222,829		199,012

Investment income:
Interest and dividends		3,306,483		2,852,085
Net realized and unrealized gain on investments		37,651,882		18,168,757
Net investment income		40,958,365		21,020,842

Total additions		56,991,300		34,095,987

Deductions:
Benefits paid to participants		28,833,663		41,257,807
Administrative and other expenses		22,305		27,303
Total deductions		28,855,968		41,285,110

Net increase (decrease)		28,135,332		(7,189,123)

Transfers due to Plan amendments (Note 1)		—		5,574,243

Net assets available for benefits at beginning of year		237,099,491		238,714,371

Net assets available for benefits at end of year	$	265,234,823	$	237,099,491

See accompanying notes to financial statements.

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Caleres, Inc. 401(k) Savings Plan

Notes to Financial Statements

December 31, 2021 and 2020

1. Description of the Plan

The following description of the Caleres, Inc. 401(k) Savings Plan (the "Plan") provides only general information about the Plan’s provisions. Caleres, Inc. (the "Company") is the plan sponsor. Participants should refer to the Plan agreement for a complete description of the Plan’s provisions.

General

The Plan is a contributory 401(k) savings plan that covers eligible salaried employees of the Company. Salaried employees are eligible to participate in the Plan beginning the first day of the first payroll period following the later of the date the employee attains age 21 and their first date of employment.

Plan Administration

The Administration Committee, comprised of the Company’s Chief Financial Officer and certain employees of the Company, oversees the administration of the Plan in accordance with the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Investment Committee is responsible for the selection of the trustee, investment managers and investment funds, determines the Plan's investment valuation policies and monitors the performance of the Plan’s investments. As of May 2021, Principal Trust Company (the "Trustee") became the trustee and Principal Life Insurance Company became the recordkeeper of the Plan. Prior to May 2021, the Plan's trustee and recordkeeper was Wells Fargo Bank, N.A. ("Wells Fargo").

Contributions

Participants are allowed to contribute from two percent to 30% of eligible compensation annually, as defined by the Plan. Participants may also contribute amounts representing distributions from other qualified defined contribution plans. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. Participants may allocate their eligible contributions and account balances among any of the investment fund choices offered by the Plan, other than the Caleres, Inc. Stock Fund, which is comprised of Caleres, Inc. common stock and the Allspring Government Money Market Fund.

For eligible salaried employees, the Company makes a core contribution of 1.5% of eligible compensation, regardless of whether the salaried employees contribute to the Plan. The Company also makes a matching contribution of 50% on the first six percent of participant contributions. In addition, the Company has the discretion to contribute up to an additional two percent profit-sharing benefit based on the Company’s performance. The matching and profit-sharing contributions are allocated, at the participant’s discretion, among any of the investment fund choices offered by the Plan.

Participant Accounts

Each participant’s account is credited with the participant’s contribution, the Company’s matching contribution and profit-sharing contribution, if applicable, and an allocation of plan earnings or losses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

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Caleres, Inc. 401(k) Savings Plan

Notes to Financial Statements (continued)

December 31, 2021 and 2020

Vesting

Participants are immediately vested in their contributions and related earnings or losses. Vesting in the employer’s matching contribution and profit-sharing contribution portions of their accounts and related earnings occurs if: (1) the participants' employment is terminated on account of their death, (2) the participants' employment is terminated on account of their disability, (3) the participants complete at least three years of service with the Company, (4) the participants' employment is terminated after they attain age 65, or (5) the Company completely discontinues contributions or the Plan is terminated while they are an employee.

Forfeitures

Forfeitures of non-vested employer core, matching and profit-sharing contributions plus actual earnings are used to reduce future employer contributions. As of December 31, 2021 and 2020, forfeited non-vested accounts totaled $698,765 and $44,763, respectively. During the years ended December 31, 2021 and 2020, forfeitures of $3,311 and $462,426, respectively, were used to reduce employer contributions.

Notes Receivable from Participants

Participants may borrow from their fund accounts, excluding employer core, matching and profit-sharing contributions, a minimum of $1,000 up to a maximum of (1) $50,000, adjusted for loan activity in the prior 12 months, or (2) 50% of their account balance, whichever is less. Participants may have up to three loans outstanding at any time. Loan terms generally range from six months to five years; however, the participant may repay eligible residential loans over 15 years. The loans are secured by the balance in the participant’s account, bear interest at the prime rate on the first business day of the month in which the funds are borrowed plus one percent and are fixed for the term of the loan. The Trustee charges a monthly fee per loan to the participant’s account in each month that a loan is outstanding. Principal and interest are paid ratably through payroll deductions. Participants may repay the entire amount of the loan in one lump sum at any time.

Plan Transfers

On October, 1, 2020, the Plan was amended to merge the Vionic Group LLC Defined Contribution Plan into the Plan and assets totaling $5,574,243 were transferred into the Plan. Vionic Group LLC was acquired by the Company on October 18, 2018.

Payment of Benefits

Hardship

Participants may withdraw their contributions while still an employee only if they suffer a substantial financial hardship, as defined by the Plan, that cannot otherwise be relieved. The minimum hardship withdrawal a participant may receive is $1,000.

Age 59 1/2 Withdrawals

Participants who have attained the age of at least 59 1/2 may elect to withdraw the vested amounts from their accounts.

Termination of Service

Upon termination of service due to death, disability or retirement, a participant or beneficiary generally receives a lump sum amount equal to the value of all amounts credited to the participant’s accounts. For termination of service due to other reasons, participants may receive the value of the vested interest in their accounts as a lump sum distribution. Certain participants who were covered by a prior plan agreement will receive a distribution in the form of an actuarial survivor annuity unless the participant elects to receive a lump sum payment of his or her vested interest in the account.

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Caleres, Inc. 401(k) Savings Plan

Notes to Financial Statements (continued)

December 31, 2021 and 2020

Retirement

Participants must begin to receive their benefits from the Plan no later than April 1 following the calendar year in which they reach age 72 or the date they terminate employment, whichever occurs later. Participants who are five percent or greater shareholders of the Company must begin to receive their benefits from the Plan no later than April 1 following the calendar year in which they reach age 72.

Plan Termination

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.

Plan Expenses

Certain expenses of maintaining the Plan are paid by the Plan, while other expenses are paid by the Company. Expenses that are paid by the Company are excluded from these financial statements. Fees related to the administration of notes receivable from participants are charged directly to the participant’s account. Investment-related expenses are included in net realized and unrealized gain on investments.

COVID-19

During 2020, the United States and global economies were adversely affected by the coronavirus (“COVID-19”) pandemic, which caused significant fluctuations in financial markets and thus the operations of the Plan. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act includes several retirement plan provisions that offer relief for participants. The Plan implemented certain of these provisions, including expanded distribution and withdrawal options, favorable tax treatment on coronavirus-related distributions, suspension and extension of certain qualified loan repayments for payments due through December 31, 2020 and an increase to the loan limit to the lesser of $100,000 or 100% of the participant's vested account balance.

2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

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Caleres, Inc. 401(k) Savings Plan

Notes to Financial Statements (continued)

December 31, 2021 and 2020

Impact of New Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies disclosure requirements on fair value measurements, including removing the requirement to disclose the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy. The Plan adopted ASU 2018-13 during 2020, which did not have a material impact on the Plan's financial statement disclosures.

Notes Receivable from Participants

Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. No allowance for credit losses has been recorded as of December 31, 2021 or 2020.

Related fees are recorded as administrative expenses and are expensed when they are incurred. If a participant ceases to make loan repayments and the plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded.

Excess Contributions Payable

The Plan is required to return contributions received during the Plan year in excess of amounts allowed by the Internal Revenue Service (“IRS”). These excess contributions are recorded as a liability. The Plan distributed the 2021 and 2020 excess contributions to the applicable participants prior to March 15, 2022 and 2021, respectively.

3. Fair Value Measurements

Fair value measurement disclosure requirements specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (“observable inputs”) or reflect the Plan’s assumptions of market participant valuation (“unobservable inputs”). In accordance with these requirements, the hierarchy is categorized into three levels based on the reliability of the inputs as follows:


Level 1 -	Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 -	Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

Level 3 -	Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

In determining fair value, the Plan uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value. Classification of the financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Plan measures fair value as an exit price, the price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date.

The following is a description of the valuation methodologies used for assets measured at fair value. There are currently no redemption restrictions on these investments.

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Caleres, Inc. 401(k) Savings Plan

Notes to Financial Statements (continued)

December 31, 2021 and 2020

Money Market Funds

Money market funds include the Vanguard Federal Money Market Fund and the Allspring Government Money Market Fund. The money market funds are classified within Level 1 of the fair value hierarchy because the fair values are based on unadjusted quoted market prices in an active market with sufficient volume and frequency.

Mutual Funds

Mutual funds include equity funds, fixed income funds and target date funds. The Plan’s mutual funds are classified within Level 1 of the fair value hierarchy because the fair values are based on unadjusted quoted market prices in active markets with sufficient volume and frequency.

Caleres, Inc. Common Stock

Caleres, Inc. common stock is classified within Level 1 of the fair value hierarchy because the fair value is based on unadjusted quoted market prices in active markets with sufficient volume and frequency.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. The gains and losses on investments bought, sold and held are presented as net realized and unrealized gain on investments in the statements of changes in net assets available for benefits.

The fair values of the Plan's investments by asset class are as follows:

Fair Value Measurements

December 31, 2021

Total

Level 1

Level 2

Level 3

Investments:

Money market funds

18,817,020

—

Mutual funds

220,389,857

—

Caleres, Inc. common stock

23,107,765

—

Total investments

262,314,642

—


			Fair Value Measurements
December 31, 2020	Total		Level 1		Level 2		Level 3
Investments:
Money market funds	$	19,150,711	$	19,150,711	$	—	$	—
Mutual funds		196,250,494		196,250,494		—		—
Caleres, Inc. common stock		18,061,947		18,061,947		—		—
Total investments	$	233,463,152	$	233,463,152	$	—	$	—

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Caleres, Inc. 401(k) Savings Plan

Notes to Financial Statements (continued)

December 31, 2021 and 2020

4. Federal Income Taxes

The Plan has received a determination letter from the IRS dated February 21, 2017 stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. Although the Plan has been amended since receiving the determination letter, the plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code. Therefore, the plan administrator believes the Plan is qualified, and the related trust is tax-exempt.

U.S. GAAP requires plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2021 and 2020, there were no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions. However, there are currently no audits for any tax periods in progress.

5. Related Party and Party-In-Interest Transactions

The Plan invests in the Caleres, Inc. Stock Fund, which is comprised of Caleres, Inc. common stock and the Allspring Government Money Market Fund. The Caleres, Inc. common stock, Allspring Government Money Market Fund and the notes receivable from participants qualify as party-in-interest transactions. During the years ended December 31, 2021 and 2020, the Plan recognized $8,225,050 and ($10,069,463), respectively, in net realized and unrealized gains (losses) on investments and $310,150 and $350,697, respectively, in dividends on Caleres, Inc. common stock.

6. Delinquent Participant Contributions

As reported on the supplemental schedule of delinquent contributions (Schedule H, Line 4a), the Plan remitted certain participant contributions to the trustee during 2021 outside the time period required by the Department of Labor Regulation 2510.3-102. Subsequent to December 31, 2021, the Plan remitted lost earnings, including interest, related to these delinquent contributions.

7. Subsequent Events

The Plan’s management has evaluated subsequent events through June 28, 2022 and there were no subsequent events requiring adjustments to the financial statements. In March 2022, the Company made discretionary profit-sharing contributions to Plan participants totaling $2,928,950 based upon the Company’s performance for its fiscal year ending January 29, 2022.

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Caleres, Inc. 401(k) Savings Plan

Schedule H, Line 4a — Schedule of Delinquent Participant Contributions

EIN: 43-0197190 Plan Number: 006

Year Ended December 31, 2021

Participant Contributions

Total that Constitute Nonexempt

Transferred Late to Plan

Prohibited Transactions

Contributions

Total Fully

Check here if Late Participant

Contributions

Pending

Corrected Under

Loan Repayments are included

Contributions

Corrected

Correction in

VCP and PTD

☒

Not Corrected

Outside VFCP

VFCP

2002-51

2021

20,240

—

20,240

—

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Caleres, Inc. 401(k) Savings Plan

Schedule H, Line 4i — Schedule of Assets (Held at End of Year)

EIN: 43-0197190 Plan Number: 006

December 31, 2021


		(c) Description of
		Investment
		Including Maturity
		Date, Rate of
		Interest, Collateral,
		Par or Maturity
(a)	(b) Identity of Issue, Borrower, Lessor or Similar Party	Value	(d) Cost⁽¹⁾	(e) Current Value
*	Allspring Government Money Market Fund	1,201,525		$	1,201,525
	American Funds EuroPacific Growth Fund Class R6	184,067			11,914,645
*	Caleres, Inc. common stock	1,018,253			23,107,765
	DFA Emerging Markets Value Fund Class I	73,046			2,265,167
	Dodge & Cox Income Fund	788,352			11,084,231
	Dodge & Cox Stock Fund	103,951			25,495,128
	Principal Diversified Real Asset Fund Institutional Class	57,092			754,769
	T. Rowe Price Growth Stock Fund	265,072			28,187,769
	Vanguard Extended Market Index Fund	22,284			3,090,722
	Vanguard Federal Money Market Fund	17,615,495			17,615,495
	Vanguard FTSE All-World ex-US Index Fund	37,077			1,413,732
	Vanguard Institutional Index Fund	91,740			37,227,052
	Vanguard Target Retirement Income Fund	54,516			788,295
	Vanguard Target Retirement 2015	66,741			975,079
	Vanguard Target Retirement 2020	121,070			3,755,577
	Vanguard Target Retirement 2025	567,653			11,546,062
	Vanguard Target Retirement 2030	248,417			9,544,187
	Vanguard Target Retirement 2035	427,627			10,194,626
	Vanguard Target Retirement 2040	217,522			9,142,470
	Vanguard Target Retirement 2045	338,224			9,598,806
	Vanguard Target Retirement 2050	243,977			11,442,529
	Vanguard Target Retirement 2055	168,782			8,813,781
	Vanguard Target Retirement 2060	43,364			2,083,207
	Vanguard Target Retirement 2065	16,044			504,113
	Vanguard Total Bond Market Index Fund	349,586			3,911,863
	William Blair Small Cap Growth Class I	443,924			16,656,047
	Total investments (held at end of year)				262,314,642

*	Various participants	Notes receivable from participants ⁽²⁾			3,042,766

				$	265,357,408


		* Exempt party-in-interest to the Plan
		(1) Investments are participant-directed. Therefore, cost information is not required.
		(2) Notes receivable from participants have interest rates of 4.25% - 6.50% and maturities through 2034.

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INDEX TO EXHIBITS


Exhibit No.		Description
23.1		Consent of Independent Registered Public Accounting Firm

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Caleres, Inc. 401(k) Savings Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.



		CALERES, INC. 401(k) SAVINGS PLAN


Date: June 28, 2022		/s/ Kenneth H. Hannah
		Kenneth H. Hannah
		Senior Vice President and
		Chief Financial Officer of
		Caleres, Inc. and
		Member of the Administration Committee
		Under the Caleres, Inc.
		401(k) Savings Plan
		On Behalf of the Plan

Caleres (CAL) 11-KAnnual report of employee stock purchases