Exhibit 99.1
News
| Contacts: |
| Ken Hannah |
| khannah@caleres.com |
| | Logan Bonacorsi |
| | lbonacorsi@caleres.com |
Caleres Reports Fourth Quarter and Full Year 2019 Results
Provides Annual 2020 Guidance
ST. LOUIS, March 12, 2020 - Caleres (NYSE: CAL, caleres.com), a diverse portfolio of global footwear brands, today reported fourth quarter 2019 financial results.
“Despite a challenging footwear market that resulted in our earnings to be less than expected, Caleres made excellent progress on a range of value-creating strategic objectives during 2019,” said Diane Sullivan, CEO, president and chairman of Caleres. “These accomplishments include:
| • | Strengthening the connections with our consumers with a 23% year-over-year growth in our ecommerce-related direct to consumer business and the successful launch and execution of the Famous Footwear rewards program; |
| • | Broadening the reach and power of our brands by strategically managing the portfolio to include our exclusive partnership with Veronica Beard and the relaunch of the legacy Zodiac brand while at the same time shifting away from DvF and Carlos Santana and repositioning Via Spiga; and |
| • | Aggressively managing the variables within our control with a year-over-year reduction of capital expenditures and inventory levels and the implementation of further cost-containment initiatives that will carry into 2020. |
“Furthermore, we generated $170.8 million of cash flow from operations and put that cash to good use by investing wisely in our businesses, returning approximately $45 million to shareholders through our share repurchase program and long-standing dividend and reducing the borrowing under our credit facility by $60 million.”
Coronavirus
Caleres is actively monitoring the Coronavirus, focusing first and foremost on the health and well-being of its global workforce. The executive management team is meeting regularly to rigorously evaluate the potential impact of the virus on the supply chain and broader consumer sentiment, and is taking prudent steps to protect the business and adjust its short term strategy in response to this dynamic health crisis.
Fourth Quarter 2019 Results Versus Fourth Quarter 2018
| | • | Consolidated sales of $698.9 million were down approximately 3.0% |
| | – | Famous Footwear total sales of $369.5 million, up 1.2%, with same-store-sales up 5.1% |
| | – | Brand Portfolio sales of $346.0 million, down 9.4% |
| | • | Gross profit was $278.8 million, while gross margin was 39.9% and adjusted gross margin was 40.1% |
| | • | SG&A expense of $260.8 million represented 37.3% of sales |
| | • | Operating earnings were $5.7 million and adjusted operating earnings were $19.6 million |
| | • | Net earnings for the quarter were $0.4 million, resulting in an earnings per diluted share of $0.01, including $0.33 for the below items: |
| | – | Cost containment initiatives of $0.27, including the voluntary early retirement program and other restructuring actions |
| | – | Brand Portfolio expense of $0.03 related to brand exit costs |
| | – | Fair value adjustment of $0.03 associated with the mandatory purchase obligation for Blowfish Malibu |
| | • | Adjusted net earnings were $13.94 million, while adjusted diluted net earnings per share were $0.34 and included approximately $0.07 of dilution related to Vionic interest and amortization expense |
Fiscal 2019 Results Versus Fiscal 2018
| | • | Consolidated sales of $2,921.6 million were up 3.1% |
| | – | Brand Portfolio sales of $1,406.5 million, up 7.1%, driven by the company’s 2018 acquisitions |
| | – | Famous Footwear total sales of $1,588.1 million, down 1.2%, with same-store-sales up 2.0% |
| | • | Gross profit was $1,184.4 million, while gross margin was 40.5% and adjusted gross margin was 40.8% |
| | • | SG&A expense of $1,065.8 million represented 36.5% of sales |
| | • | Operating earnings were $103.8 million and adjusted operating earnings were $127.4 million |
| | • | Net earnings for the year were $62.8 million, resulting in an earnings per diluted share of $1.53, including $0.57 for the below items |
| | – | Cost containment initiatives of $0.27, including the voluntary early retirement program and other restructuring actions |
| | – | Vionic acquisition and integration-related costs of $0.14 |
| | – | Brand Portfolio expense of $0.06 related to brand exits |
| | – | Fair value adjustment of $0.10 associated with the mandatory purchase obligation for Blowfish Malibu |
| | • | Adjusted net earnings of $86.4 million were down approximately 9%, while adjusted diluted net earnings per share were down approximately 5% to $2.10 per share, including approximately $0.22 of dilution primarily related to Vionic interest and amortization expense |
Balance Sheet and Cash Flow
| | • | Cash and equivalents were $45.2 million and cash from operations was $170.8 million |
| | • | Outstanding borrowings under the revolving credit facility totaled $275.0 million, down $60 million for the year |
| | • | Inventory of $618.4 million was down 9.5% year-over-year |
| | • | Capital expenditures were $50.2 million, a decline of $16.7 million year-over-year |
| | • | Share repurchases and dividends totaled $45 million in 2019 |
2020 Outlook
“Looking ahead, in the short-term, we do anticipate disruptions related to the Coronavirus and are expecting headwinds between $0.15 and $0.20 per share in the first quarter of 2020. While potential impacts on full year 2020 results are difficult to quantify at this early stage, we will continue to actively assess the situation. We are approaching 2020 with a laser focus on managing the variables within our control and leveraging the capabilities of our operations and the investments we’ve made for the future. We are confident in the strength of our portfolio and firmly believe we have the right team and right strategy in place to manage through this dynamic marketplace,” Sullivan said.
2020 Guidance
| Consolidated net sales | Flat at $2.95 billion |
| Brand Portfolio sales | Flat-to-low single digits |
| Famous Footwear same-store-sales | Up low single digits |
| Earnings per diluted share | $1.95 to $2.15 |
Investor Conference Call
Caleres will host an investor conference call at 4:30 p.m. ET today, Thursday, March 12. The webcast and slides will be available at investor.caleres.com/news/events. A live conference call will be available at (877) 217-9089 for analysts in North America or (706) 679-1723 for international analysts by using the conference ID 5282859. A replay will be available at investor.caleres.com/news/events/archive for a limited period. Investors may also access the replay by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 5282859 through Wednesday, March 18.
Definitions
All references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings attributable to Caleres, Inc. and diluted earnings per common share attributable to Caleres, Inc. shareholders, are presented as net earnings and earnings per diluted share, respectively.
Non-GAAP Financial Measures
In this press release, the company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the company provides historic and estimated future gross profit, operating earnings, EBITDA (earnings before interest, taxes, depreciation, and amortization), net earnings and earnings per diluted share adjusted to exclude certain gains, charges and recoveries, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains certain forward-looking statements and expectations regarding the company’s future performance and the performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions and other factors; (ii) rapidly changing fashion trends and consumer preferences and purchasing patterns; (iii) intense competition within the footwear industry; (iv) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the Company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (v) imposition of tariffs; (vi) the ability to accurately forecast sales and manage inventory levels; (vii) cybersecurity threats or other major disruption to the Company’s information technology systems; (viii) customer concentration and increased consolidation in the retail industry; (ix) transitional challenges with acquisitions; (x) a disruption in the Company’s distribution centers; (xi) foreign currency fluctuations; (xii) changes to tax laws, policies and treaties; (xiii) the ability to recruit and retain senior management and other key associates; (xiv) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xv) the ability to secure/exit leases on favorable terms; (xvi) the ability to maintain relationships with current suppliers; (xvii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights; and (xviii) the recent coronavirus outbreak and its adverse impact on our supply chain operations and our business, sales and results of operations around the world. The company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption Risk Factors in Item 1A of the company’s Annual Report on Form 10-K for the year ended February 2, 2019, which information is incorporated by reference herein and updated by the company’s Quarterly Reports on Form 10-Q. The company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.
# # #
About Caleres
Caleres is a diverse portfolio of global footwear brands. Our products are available virtually everywhere - in the more than 1,175 retail stores we operate, in hundreds of major department and specialty stores, on our branded e-commerce sites, and on many additional third-party retail websites. Famous Footwear offers great casual and athletic brands for the entire family with convenient, curated, affordable collections. Sam Edelman keeps expressive women in step with the latest trends in a playful, whimsical way. Naturalizer shoes are beautiful from the inside out, with elegant simplicity and legendary fit re-imagined for today’s consumer. Allen Edmonds combines old world craft with new world technology to create luxe footwear for the discerning man who wants sophisticated, modern classics. Rounding out our family of brands are Vionic, Vince, Franco Sarto, Dr. Scholl’s Shoes, LifeStride, Blowfish Malibu, Bzees, Circus by Sam Edelman, Fergie and Ryka. Combined, these brands make Caleres a company with both a legacy and a mission. Our legacy is our more than 140 years of craftsmanship and our passion for fit, while our mission is to continue to inspire people to feel great… feet first. Visit caleres.com to learn more about us.
SCHEDULE 1 |
|
CALERES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) |
| | | (Unaudited) | |
| | | Thirteen Weeks Ended | | | Fifty-Two Weeks Ended | |
(Thousands, except per share data) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
Net sales | | $ | 698,948 | | | $ | 720,263 | | | $ | 2,921,562 | | | $ | 2,834,846 | |
Cost of goods sold | | | 420,138 | | | | 442,551 | | | | 1,737,202 | | | | 1,678,502 | |
Gross profit | | | 278,810 | | | | 277,712 | | | | 1,184,360 | | | | 1,156,344 | |
Selling and administrative expenses | | | 260,788 | | | | 267,210 | | | | 1,065,760 | | | | 1,041,765 | |
| Impairment of goodwill and intangible assets | | | — | | | | 98,044 | | | | — | | | | 98,044 | |
Restructuring and other special charges, net | | | 12,353 | | | | 6,895 | | | | 14,787 | | | | 16,134 | |
Operating earnings (loss) | | | 5,669 | | | | (94,437 | ) | | | 103,813 | | | | 401 | |
Interest expense, net | | | (7,835 | ) | | | (6,782 | ) | | | (33,123 | ) | | | (18,277 | ) |
| Loss on early extinguishment of debt | | | — | | | | (186 | ) | | | — | | | | (186 | ) |
Other income, net | | | 1 | | | | 3,054 | | | | 7,903 | | | | 12,308 | |
(Loss) earnings before income taxes | | | (2,165 | ) | | | (98,351 | ) | | | 78,593 | | | | (5,754 | ) |
Income tax benefit (provision) | | | 2,174 | | | | 22,924 | | | | (16,511 | ) | | | 273 | |
Net earnings (loss) | | | 9 | | | | (75,427 | ) | | | 62,082 | | | | (5,481 | ) |
Net (loss) earnings attributable to noncontrolling interests | | | (399 | ) | | | 25 | | | | (737 | ) | | | (40 | ) |
Net earnings (loss) attributable to Caleres, Inc. | | $ | 408 | | | $ | (75,452 | ) | | $ | 62,819 | | | $ | (5,441 | ) |
| | | | | | | | | | | | | | | | | |
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders | | $ | 0.01 | | | $ | (1.83 | ) | | $ | 1.53 | | | $ | (0.13 | ) |
| | | | | | | | | | | | | | | | | |
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders | | $ | 0.01 | | | $ | (1.83 | ) | | $ | 1.53 | | | $ | (0.13 | ) |
SCHEDULE 2 |
|
CALERES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
| | | (Unaudited) | |
| | | February 1, 2020 | | | February 2, 2019 | |
(Thousands) | | | | | | | | |
ASSETS | | | | | | | | |
Cash and cash equivalents | | $ | 45,218 | | | $ | 30,200 | |
Receivables, net | | | 162,181 | | | | 191,722 | |
Inventories, net | | | 618,406 | | | | 683,171 | |
Prepaid expenses and other current assets | | | 56,494 | | | | 71,354 | |
Total current assets | | | 882,299 | | | | 976,447 | |
| | | | | | | | | |
Lease right-of-use assets | | | 695,594 | | | | — | |
Property and equipment, net | | | 224,846 | | | | 230,784 | |
Goodwill and intangible assets, net | | | 539,579 | | | | 549,897 | |
Other assets | | | 89,389 | | | | 81,440 | |
Total assets | | $ | 2,431,707 | | | $ | 1,838,568 | |
| | | | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | |
Borrowings under revolving credit agreement | | $ | 275,000 | | | $ | 335,000 | |
Trade accounts payable | | | 267,018 | | | | 316,298 | |
Lease obligations | | | 127,869 | | | | — | |
Other accrued expenses | | | 181,063 | | | | 202,038 | |
Total current liabilities | | | 850,950 | | | | 853,336 | |
| | | | | | | | | |
Noncurrent lease obligations | | | 629,032 | | | | — | |
Long-term debt | | | 198,391 | | | | 197,932 | |
Deferred rent | | | — | | | | 54,850 | |
Other liabilities | | | 104,204 | | | | 97,015 | |
Total other liabilities | | | 931,627 | | | | 349,797 | |
| | | | | | | | | |
Total Caleres, Inc. shareholders’ equity | | | 645,950 | | | | 634,053 | |
Noncontrolling interests | | | 3,180 | | | | 1,382 | |
Total equity | | | 649,130 | | | | 635,435 | |
Total liabilities and equity | | $ | 2,431,707 | | | $ | 1,838,568 | |
SCHEDULE 3 |
|
CALERES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| | | (Unaudited) | |
| | | Fifty-Two Weeks Ended | |
(Thousands) | | February 1, 2020 | | | February 2, 2019 | |
OPERATING ACTIVITIES: | | | | | | | | |
Net cash provided by operating activities | | $ | 170,786 | | | $ | 129,589 | |
| | | | | | | | | |
INVESTING ACTIVITIES: | | | | | | | | |
Purchases of property and equipment | | | (44,533 | ) | | | (62,483 | ) |
Disposals of property and equipment | | | 636 | | | | — | |
Capitalized software | | | (5,619 | ) | | | (4,416 | ) |
Acquisition of Blowfish Malibu, net of cash received | | | — | | | | (16,792 | ) |
Acquisition of Vionic, net of cash received | | | — | | | | (352,666 | ) |
Net cash used for investing activities | | | (49,516 | ) | | | (436,357 | ) |
| | | | | | | | | |
FINANCING ACTIVITIES: | | | | | | | | |
Borrowings under revolving credit agreement | | | 288,500 | | | | 360,000 | |
Repayments under revolving credit agreement | | | (348,500 | ) | | | (25,000 | ) |
Dividends paid | | | (11,422 | ) | | | (11,983 | ) |
| Debt issuance costs | | | — | | | | (1,298 | ) |
Acquisition of treasury stock | | | (33,424 | ) | | | (43,771 | ) |
Issuance of common stock under share-based plans, net | | | (2,644 | ) | | | (4,372 | ) |
Contributions by noncontrolling interests | | | 2,500 | | | | — | |
Other | | | (1,342 | ) | | | (406 | ) |
Net cash (used for) provided by financing activities | | | (106,332 | ) | | | 273,170 | |
Effect of exchange rate changes on cash and cash equivalents | | | 80 | | | | (249 | ) |
Increase (decrease) in cash and cash equivalents | | | 15,018 | | | | (33,847 | ) |
Cash and cash equivalents at beginning of period | | | 30,200 | | | | 64,047 | |
Cash and cash equivalents at end of period | | $ | 45,218 | | | $ | 30,200 | |
SCHEDULE 4 |
|
CALERES, INC. |
RECONCILIATION OF NET EARNINGS AND DILUTED EARNINGS PER SHARE (GAAP BASIS) TO ADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS) |
| | | (Unaudited) | |
| | | Thirteen Weeks Ended | |
| | | February 1, 2020 | | | February 2, 2019 | |
(Thousands, except per share data) | | Pre-Tax Impact of Charges/Other Items | | | Net Earnings Attributable to Caleres, Inc. | | | Diluted Earnings Per Share | | | Pre-Tax Impact of Charges/Other Items | | | Net (Loss) Earnings Attributable to Caleres, Inc. | | | Diluted (Loss) Earnings Per Share | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
GAAP earnings | | | | | | $ | 408 | | | $ | 0.01 | | | | | | | $ | (75,452 | ) | | $ | (1.83 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charges/other items: | | | | | | | | | | | | | | | | | | | | | | | | |
| Expense containment initiatives | | $ | 15,033 | | | | 11,189 | | | | 0.27 | | | $ | — | | | | — | | | | — | |
| Fair value adjustment to Blowfish purchase obligation | | | 1,545 | | | | 1,147 | | | | 0.03 | | | | — | | | | — | | | | — | |
| Brand Portfolio - business exits | | | 1,615 | | | | 1,198 | | | | 0.03 | | | | 2,395 | | | | 1,779 | | | | 0.04 | |
| Impairment of goodwill and intangible assets | | | — | | | | — | | | | — | | | | 98,044 | | | | 83,044 | | | | 2.01 | |
Vionic acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 8,346 | | | | 5,756 | | | | 0.14 | |
Integration and reorganization of men's brands | | | — | | | | — | | | | — | | | | 1,014 | | | | 754 | | | | 0.02 | |
| Logistics transition | | | — | | | | — | | | | — | | | | 4,488 | | | | 3,326 | | | | 0.08 | |
Blowfish Malibu acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 244 | | | | 238 | | | | 0.01 | |
| Retail operations restructuring | | | — | | | | — | | | | — | | | | 392 | | | | 287 | | | | 0.01 | |
Loss on early extinguishment of debt | | | — | | | | — | | | | — | | | | 186 | | | | 138 | | | | 0.00 | |
| Income tax reform | | | — | | | | — | | | | — | | | | — | | | | (3,891 | ) | | | (0.10 | ) |
Total charges/other items | | $ | 18,193 | | | $ | 13,534 | | | $ | 0.33 | | | $ | 115,109 | | | $ | 91,431 | | | $ | 2.21 | |
Adjusted earnings | | | | | | $ | 13,942 | | | $ | 0.34 | | | | | | | $ | 15,979 | | | $ | 0.38 | |
| | | (Unaudited) | |
| | | Fifty-Two Weeks Ended | |
| | | February 1, 2020 | | | February 2, 2019 | |
(Thousands, except per share data) | | Pre-Tax Impact of Charges/Other Items | | | Net Earnings Attributable to Caleres, Inc. | | | Diluted Earnings Per Share | | | Pre-Tax Impact of Charges/Other Items | | | Net (Loss) Earnings Attributable to Caleres, Inc. | | | Diluted (Loss) Earnings Per Share | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
GAAP earnings | | | | | | $ | 62,819 | | | $ | 1.53 | | | | | | | $ | (5,441 | ) | | $ | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charges/other items: | | | | | | | | | | | | | | | | | | | | | | | | |
| Expense containment initiatives | | $ | 15,033 | | | | 11,189 | | | | 0.27 | | | $ | — | | | | — | | | | — | |
Vionic acquisition and integration-related costs | | | 7,696 | | | | 5,714 | | | | 0.14 | | | | 13,368 | | | | 9,926 | | | | 0.23 | |
| Fair value adjustment to Blowfish purchase obligation | | | 5,428 | | | | 4,031 | | | | 0.10 | | | | — | | | | — | | | | — | |
Brand Portfolio - business exits | | | 3,520 | | | | 2,613 | | | | 0.06 | | | | 2,395 | | | | 1,779 | | | | 0.04 | |
| Impairment of goodwill and intangible assets | | | — | | | | — | | | | — | | | | 98,044 | | | | 83,044 | | | | 1.93 | |
Integration and reorganization of men's brands | | | — | | | | — | | | | — | | | | 5,841 | | | | 4,328 | | | | 0.10 | |
| Logistics transition | | | — | | | | — | | | | — | | | | 4,488 | | | | 3,326 | | | | 0.08 | |
Blowfish Malibu acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 2,022 | | | | 1,557 | | | | 0.04 | |
| Retail operations restructuring | | | — | | | | — | | | | — | | | | 392 | | | | 287 | | | | 0.01 | |
Loss on early extinguishment of debt | | | — | | | | — | | | | — | | | | 186 | | | | 138 | | | | 0.00 | |
| Income tax reform | | | — | | | | — | | | | — | | | | — | | | | (3,891 | ) | | | (0.09 | ) |
Total charges/other items | | $ | 31,677 | | | $ | 23,547 | | | $ | 0.57 | | | $ | 126,736 | | | $ | 100,494 | | | $ | 2.34 | |
Adjusted earnings | | | | | | $ | 86,366 | | | $ | 2.10 | | | | | | | $ | 95,053 | | | $ | 2.21 | |
SCHEDULE 5 |
| | | | | | | | |
CALERES, INC. |
SUMMARY FINANCIAL RESULTS BY SEGMENT |
| | | | | | | | |
SUMMARY FINANCIAL RESULTS | | | | | |
| | | (Unaudited) | |
| | | Thirteen Weeks Ended | |
| | | Famous Footwear | | | Brand Portfolio | | | Eliminations and Other | | | Consolidated | |
(Thousands) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
Net sales | | $ | 369,468 | | | $ | 365,160 | | | $ | 345,972 | | | $ | 382,001 | | | $ | (16,492 | ) | | $ | (26,898 | ) | | $ | 698,948 | | | $ | 720,263 | |
Gross profit | | | 157,140 | | | | 156,028 | | | | 121,095 | | | | 123,212 | | | | 575 | | | | (1,528 | ) | | | 278,810 | | | | 277,712 | |
Adjusted gross profit | | | 157,140 | | | | 156,028 | | | | 122,710 | | | | 133,197 | | | | 575 | | | | (1,528 | ) | | | 280,425 | | | | 287,697 | |
Gross profit rate | | | 42.5 | % | | | 42.7 | % | | | 35.0 | % | | | 32.3 | % | | | (3.5 | )% | | | 5.7 | % | | | 39.9 | % | | | 38.6 | % |
Adjusted gross profit rate | | | 42.5 | % | | | 42.7 | % | | | 35.5 | % | | | 34.9 | % | | | (3.5 | )% | | | 5.7 | % | | | 40.1 | % | | | 39.9 | % |
Operating earnings (loss) | | | 6,860 | | | | 5,757 | | | | 11,928 | | | | (93,450 | ) | | | (13,119 | ) | | | (6,744 | ) | | | 5,669 | | | | (94,437 | ) |
Adjusted operating earnings (loss) | | | 10,343 | | | | 6,149 | | | | 18,621 | | | | 20,678 | | | | (9,327 | ) | | | (6,341 | ) | | | 19,637 | | | | 20,486 | |
Operating earnings % | | | 1.9 | % | | | 1.6 | % | | | 3.4 | % | | | (24.5 | )% | | | 79.5 | % | | | 25.1 | % | | | 0.8 | % | | | (13.1 | )% |
Adjusted operating earnings % | | | 2.8 | % | | | 1.7 | % | | | 5.4 | % | | | 5.4 | % | | | 56.6 | % | | | 23.6 | % | | | 2.8 | % | | | 2.8 | % |
Same-store sales % (on a 13-week basis) | | | 5.1 | % | | | 1.1 | % | | | (0.6 | )% | | | 0.2 | % | | | — | % | | | — | % | | | — | % | | | — | % |
Number of stores | | | 949 | | | | 992 | | | | 228 | | | | 229 | | | | — | | | | — | | | | 1,177 | | | | 1,221 | |
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) | | | | | |
| | | (Unaudited) | |
| | | Thirteen Weeks Ended | |
| | | Famous Footwear | | | Brand Portfolio | | | Eliminations and Other | | | Consolidated | |
(Thousands) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
Gross profit | | $ | 157,140 | | | $ | 156,028 | | | $ | 121,095 | | | $ | 123,212 | | | $ | 575 | | | $ | (1,528 | ) | | $ | 278,810 | | | $ | 277,712 | |
Charges/Other Items: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Blowfish Malibu acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 244 | | | | — | | | | — | | | | — | | | | 244 | |
Vionic acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 7,973 | | | | — | | | | — | | | | — | | | | 7,973 | |
| Brand Portfolio - business exits | | | — | | | | — | | | | 1,615 | | | | 1,768 | | | | — | | | | — | | | | 1,615 | | | | 1,768 | |
Total charges/other items | | | — | | | | — | | | | 1,615 | | | | 9,985 | | | | — | | | | — | | | | 1,615 | | | | 9,985 | |
Adjusted gross profit | | $ | 157,140 | | | $ | 156,028 | | | $ | 122,710 | | | $ | 133,197 | | | $ | 575 | | | $ | (1,528 | ) | | $ | 280,425 | | | $ | 287,697 | |
Operating earnings (loss) | | $ | 6,860 | | | $ | 5,757 | | | $ | 11,928 | | | $ | (93,450 | ) | | $ | (13,119 | ) | | $ | (6,744 | ) | | $ | 5,669 | | | $ | (94,437 | ) |
Charges/Other Items: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Expense containment initiatives | | | 3,483 | | | | — | | | | 5,078 | | | | — | | | | 3,792 | | | | — | | | | 12,353 | | | | — | |
| Brand Portfolio - business exits | | | — | | | | — | | | | 1,615 | | | | 2,395 | | | | — | | | | — | | | | 1,615 | | | | 2,395 | |
| Impairment of goodwill and intangible assets | | | — | | | | — | | | | — | | | | 98,044 | | | | — | | | | — | | | | — | | | | 98,044 | |
Integration and reorganization of men's brands | | | — | | | | — | | | | — | | | | 984 | | | | — | | | | 30 | | | | — | | | | 1,014 | |
| Logistics transition | | | — | | | | — | | | | — | | | | 4,488 | | | | — | | | | — | | | | — | | | | 4,488 | |
Blowfish Malibu acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 244 | | | | — | | | | — | | | | — | | | | 244 | |
Vionic acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 7,973 | | | | — | | | | 373 | | | | — | | | | 8,346 | |
| Retail operations restructuring | | | — | | | | 392 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 392 | |
Total charges/other items | | | 3,483 | | | | 392 | | | | 6,693 | | | | 114,128 | | | | 3,792 | | | | 403 | | | | 13,968 | | | | 114,923 | |
Adjusted operating earnings (loss) | | $ | 10,343 | | | $ | 6,149 | | | $ | 18,621 | | | $ | 20,678 | | | $ | (9,327 | ) | | $ | (6,341 | ) | | $ | 19,637 | | | $ | 20,486 | |
SCHEDULE 5 |
|
CALERES, INC. |
SUMMARY FINANCIAL RESULTS BY SEGMENT |
SUMMARY FINANCIAL RESULTS | | | | | |
| | | (Unaudited) | |
| | | Fifty-Two Weeks Ended | |
| | | Famous Footwear | | | Brand Portfolio | | | Eliminations and Other | | | Consolidated | |
(Thousands) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
Net sales | | $ | 1,588,057 | | | $ | 1,606,808 | | | $ | 1,406,460 | | | $ | 1,313,551 | | | $ | (72,955 | ) | | $ | (85,513 | ) | | $ | 2,921,562 | | | $ | 2,834,846 | |
Gross profit | | | 675,401 | | | | 690,830 | | | | 506,556 | | | | 466,919 | | | | 2,403 | | | | (1,405 | ) | | | 1,184,360 | | | | 1,156,344 | |
Adjusted gross profit | | | 675,401 | | | | 690,830 | | | | 515,337 | | | | 479,291 | | | | 2,403 | | | | (1,405 | ) | | | 1,193,141 | | | | 1,168,716 | |
Gross profit rate | | | 42.5 | % | | | 43.0 | % | | | 36.0 | % | | | 35.5 | % | | | (3.3 | )% | | | 1.6 | % | | | 40.5 | % | | | 40.8 | % |
Adjusted gross profit rate | | | 42.5 | % | | | 43.0 | % | | | 36.6 | % | | | 36.5 | % | | | (3.3 | )% | | | 1.6 | % | | | 40.8 | % | | | 41.2 | % |
Operating earnings (loss) | | | 76,896 | | | | 85,268 | | | | 58,153 | | | | (40,799 | ) | | | (31,236 | ) | | | (44,068 | ) | | | 103,813 | | | | 401 | |
Adjusted operating earnings (loss) | | | 80,379 | | | | 85,660 | | | | 72,640 | | | | 80,152 | | | | (25,637 | ) | | | (38,861 | ) | | | 127,382 | | | | 126,951 | |
Operating earnings % | | | 4.8 | % | | | 5.3 | % | | | 4.1 | % | | | (3.1 | )% | | | 42.8 | % | | | 51.5 | % | | | 3.6 | % | | | 0.0 | % |
Adjusted operating earnings % | | | 5.1 | % | | | 5.3 | % | | | 5.2 | % | | | 6.1 | % | | | 35.1 | % | | | 45.4 | % | | | 4.4 | % | | | 4.5 | % |
Same-store sales % (on a 52-week basis) | | | 2.0 | % | | | 1.5 | % | | | (5.8 | )% | | | (0.1 | )% | | | — | % | | | — | % | | | — | % | | | — | % |
Number of stores | | | 949 | | | | 992 | | | | 228 | | | | 229 | | | | — | | | | — | | | | 1,177 | | | | 1,221 | |
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) | | | | | |
| | | (Unaudited) | |
| | | Fifty-Two Weeks Ended | |
| | | Famous Footwear | | | Brand Portfolio | | | Eliminations and Other | | | Consolidated | |
(Thousands) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
Gross profit | | $ | 675,401 | | | $ | 690,830 | | | $ | 506,556 | | | $ | 466,919 | | | $ | 2,403 | | | $ | (1,405 | ) | | $ | 1,184,360 | | | $ | 1,156,344 | |
Charges/Other Items: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vionic acquisition and integration-related costs | | | — | | | | — | | | | 5,812 | | | | 8,886 | | | | — | | | | — | | | | 5,812 | | | | 8,886 | |
Brand Portfolio - business exits | | | — | | | | — | | | | 2,969 | | | | 1,769 | | | | — | | | | — | | | | 2,969 | | | | 1,769 | |
Blowfish Malibu acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 1,717 | | | | — | | | | — | | | | — | | | | 1,717 | |
Total charges/other items | | | — | | | | — | | | | 8,781 | | | | 12,372 | | | | — | | | | — | | | | 8,781 | | | | 12,372 | |
Adjusted gross profit | | $ | 675,401 | | | $ | 690,830 | | | $ | 515,337 | | | $ | 479,291 | | | $ | 2,403 | | | $ | (1,405 | ) | | $ | 1,193,141 | | | $ | 1,168,716 | |
Operating earnings (loss) | | $ | 76,896 | | | $ | 85,268 | | | $ | 58,153 | | | $ | (40,799 | ) | | $ | (31,236 | ) | | $ | (44,068 | ) | | $ | 103,813 | | | $ | 401 | |
Charges/Other Items: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Expense containment initiatives | | | 3,483 | | | | — | | | | 5,078 | | | | — | | | | 3,792 | | | | — | | | | 12,353 | | | | — | |
Vionic acquisition and integration-related costs | | | — | | | | — | | | | 5,889 | | | | 8,886 | | | | 1,807 | | | | 4,482 | | | | 7,696 | | | | 13,368 | |
Brand Portfolio - business exits | | | — | | | | — | | | | 3,520 | | | | 2,395 | | | | — | | | | — | | | | 3,520 | | | | 2,395 | |
| Impairment of goodwill and intangible assets | | | — | | | | — | | | | — | | | | 98,044 | | | | — | | | | — | | | | — | | | | 98,044 | |
Integration and reorganization of men's brands | | | — | | | | — | | | | — | | | | 5,421 | | | | — | | | | 420 | | | | — | | | | 5,841 | |
| Logistics transition | | | — | | | | — | | | | — | | | | 4,488 | | | | — | | | | — | | | | — | | | | 4,488 | |
Blowfish Malibu acquisition and integration-related costs | | | — | | | | — | | | | — | | | | 1,717 | | | | — | | | | 305 | | | | — | | | | 2,022 | |
| Retail operations restructuring | | | — | | | | 392 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 392 | |
Total charges/other items | | | 3,483 | | | | 392 | | | | 14,487 | | | | 120,951 | | | | 5,599 | | | | 5,207 | | | | 23,569 | | | | 126,550 | |
Adjusted operating earnings (loss) | | $ | 80,379 | | | $ | 85,660 | | | $ | 72,640 | | | $ | 80,152 | | | $ | (25,637 | ) | | $ | (38,861 | ) | | $ | 127,382 | | | $ | 126,951 | |
SCHEDULE 6 |
|
CALERES, INC. |
BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION |
| | | (Unaudited) | |
| | | Thirteen Weeks Ended | | | Fifty-Two Weeks Ended | |
(Thousands, except per share data) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
| | | | | | | | | | | | | | | | | |
Net earnings (loss) attributable to Caleres, Inc.: | | | | | | | | | | | | | | | | |
Net earnings (loss) | | $ | 9 | | | $ | (75,427 | ) | | $ | 62,082 | | | $ | (5,481 | ) |
Net loss (earnings) attributable to noncontrolling interests | | | 399 | | | | (25 | ) | | | 737 | | | | 40 | |
Net earnings (loss) attributable to Caleres, Inc. | | | 408 | | | | (75,452 | ) | | | 62,819 | | | | (5,441 | ) |
Net earnings allocated to participating securities | | | (45 | ) | | | — | | | | (1,988 | ) | | | — | |
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities | | $ | 363 | | | $ | (75,452 | ) | | $ | 60,831 | | | $ | (5,441 | ) |
| | | | | | | | | | | | | | | | | |
Basic and diluted common shares attributable to Caleres, Inc.: | | | | | | | | | | | | | | | | |
Basic common shares | | | 39,235 | | | | 41,150 | | | | 39,796 | | | | 41,756 | |
Dilutive effect of share-based awards | | | 55 | | | | — | | | | 57 | | | | — | |
Diluted common shares attributable to Caleres, Inc. | | | 39,290 | | | | 41,150 | | | | 39,853 | | | | 41,756 | |
| | | | | | | | | | | | | | | | | |
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders | | $ | 0.01 | | | $ | (1.83 | ) | | $ | 1.53 | | | $ | (0.13 | ) |
| | | | | | | | | | | | | | | | | |
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders | | $ | 0.01 | | | $ | (1.83 | ) | | $ | 1.53 | | | $ | (0.13 | ) |
SCHEDULE 7 |
|
CALERES, INC. |
BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION |
| | | (Unaudited) | |
| | | Thirteen Weeks Ended | | | Fifty-Two Weeks Ended | |
(Thousands, except per share data) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
| | | | | | | | | | | | | | | | | |
Adjusted net earnings attributable to Caleres, Inc.: | | | | | | | | | | | | | | | | |
Adjusted net earnings | | $ | 13,543 | | | $ | 16,004 | | | $ | 85,629 | | | $ | 95,013 | |
Net loss (earnings) attributable to noncontrolling interests | | | 399 | | | | (25 | ) | | | 737 | | | | 40 | |
Adjusted net earnings attributable to Caleres, Inc. | | | 13,942 | | | | 15,979 | | | | 86,366 | | | | 95,053 | |
Net earnings allocated to participating securities | | | (404 | ) | | | (462 | ) | | | (2,766 | ) | | | (2,678 | ) |
Adjusted net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities | | $ | 13,538 | | | $ | 15,517 | | | $ | 83,600 | | | $ | 92,375 | |
| | | | | | | | | | | | | | | | | |
Basic and diluted common shares attributable to Caleres, Inc.: | | | | | | | | | | | | | | | | |
Basic common shares | | | 39,235 | | | | 41,150 | | | | 39,796 | | | | 41,756 | |
Dilutive effect of share-based awards | | | 55 | | | | 127 | | | | 57 | | | | 118 | |
Diluted common shares attributable to Caleres, Inc. | | | 39,290 | | | | 41,277 | | | | 39,853 | | | | 41,874 | |
| | | | | | | | | | | | | | | | | |
Basic adjusted earnings per common share attributable to Caleres, Inc. shareholders | | $ | 0.35 | | | $ | 0.38 | | | $ | 2.10 | | | $ | 2.21 | |
| | | | | | | | | | | | | | | | | |
Diluted adjusted earnings per common share attributable to Caleres, Inc. shareholders | | $ | 0.34 | | | $ | 0.38 | | | $ | 2.10 | | | $ | 2.21 | |
SCHEDULE 8 |
|
CALERES, INC. |
CALCULATION OF EBITDA AND ADJUSTED EBITDA (NON-GAAP METRICS) |
| | | (Unaudited) | |
| | | Fifty-Two Weeks Ended | |
| | | Famous Footwear | | | Brand Portfolio | | | Eliminations and Other | | | Consolidated | |
(Thousands) | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | | | February 1, 2020 | | | February 2, 2019 | |
EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net earnings (loss) attributable to Caleres, Inc. | | $ | 51,043 | | | $ | 58,783 | | | $ | 35,907 | | | $ | (43,477 | ) | | $ | (24,131 | ) | | $ | (20,747 | ) | | $ | 62,819 | | | $ | (5,441 | ) |
Income tax provision (benefit) | | | 17,391 | | | | 17,728 | | | | 4,855 | | | | (9,558 | ) | | | (5,735 | ) | | | (8,443 | ) | | | 16,511 | | | | (273 | ) |
Interest expense, net | | | 8,462 | | | | 8,758 | | | | 20,501 | | | | 10,769 | | | | 4,160 | | | | (1,250 | ) | | | 33,123 | | | | 18,277 | |
Depreciation and amortization (1) | | | 26,707 | | | | 28,816 | | | | 29,875 | | | | 20,768 | | | | 8,980 | | | | 13,113 | | | | 65,562 | | | | 62,697 | |
EBITDA | | $ | 103,603 | | | $ | 114,085 | | | $ | 91,138 | | | $ | (21,498 | ) | | $ | (16,726 | ) | | $ | (17,327 | ) | | $ | 178,015 | | | $ | 75,260 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA margin | | | 6.5 | % | | | 7.1 | % | | | 6.5 | % | | | -1.6 | % | | | 22.9 | % | | | 20.3 | % | | | 6.1 | % | | | 2.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted net earnings attributable to Caleres, Inc. (2) | | $ | 53,630 | | | $ | 57,538 | | | $ | 46,689 | | | $ | 56,829 | | | $ | (13,953 | ) | | $ | (19,314 | ) | | $ | 86,366 | | | $ | 95,053 | |
Income tax provision | | | 18,287 | | | | 19,364 | | | | 8,560 | | | | 11,087 | | | | (2,206 | ) | | | (4,482 | ) | | | 24,641 | | | | 25,969 | |
Interest expense, net | | | 8,462 | | | | 8,758 | | | | 20,501 | | | | 10,769 | | | | (1,268 | ) | | | (1,250 | ) | | | 27,695 | | | | 18,277 | |
Depreciation and amortization (1) | | | 26,707 | | | | 28,816 | | | | 29,875 | | | | 20,768 | | | | 8,980 | | | | 13,113 | | | | 65,562 | | | | 62,697 | |
Adjusted EBITDA | | $ | 107,086 | | | $ | 114,476 | | | $ | 105,625 | | | $ | 99,453 | | | $ | (8,447 | ) | | $ | (11,933 | ) | | $ | 204,264 | | | $ | 201,996 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA margin | | | 6.7 | % | | | 7.1 | % | | | 7.5 | % | | | 7.6 | % | | | 11.6 | % | | | 14.0 | % | | | 7.0 | % | | | 7.1 | % |
| | |
(1) Includes depreciation and amortization of capitalized software and intangible assets | |
(2) Refer to Schedule 4 for the consolidated reconciliation of net earnings attributable to Caleres, Inc. to adjusted net earnings attributable to Caleres, Inc. | |
12
