CAL - Earnings call transcript Q4 2017

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Operator

Good afternoon. My name is Sarah and I will be your conference operator today. At this time, I'd like to welcome everyone to the Fourth Quarter 2017 Caleres Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions]. pleasure today’s my Ms. now is to speaker, introduce It Peggy Reilly Tharp. Ms. floor the is Tharp, yours. Reilly

Peggy Reilly Tharp

factors Good results other Reilly and to Thank of I'm other discussed time. press risk company XXXX factors disclosed online. afternoon. you. filings our more Peggy webcast. and for joining fourth SEC but available A factors, and could earnings to reports for Exchange contains due of in and impact US are call Investor are subject limited of which with the Tharp, Caleres, to refer I'd various XX-K slides and this and filings caleres.com. risks The tables statements, uncertainties. Securities information available any you at materially for like in Form on call detailed including, to, thank Copies Please factors update a forward-looking with which forward-looking release Commission. number these our quarter not statements. release the may information press be the any are risk financial both aware, Please to and Relations obligation Actual undertakes today's President company's no differ Vice and discussion at to today's

would Joining I Financial now Chairman; Diane Sullivan. like Officer; call the call turn to Famous Sullivan, Chief Diane And today to and Ken and President, Hannah, are CEO, President Footwear. Rick over Ausick, the

Diane Sullivan

an to year afternoon, measure. everyone, about by good and so just for us Peggy thanks outstanding talk Thanks, much joining what was and today any

delivered consumer a team's of quarter. we perseverance a very in the is our midst And to an well-documented these to year, results excellent fantastic addition had changing great In and landscape. agility, we what thanks also

XX a quarter. in year up we improved was Just few SG&A up the Adjusted points well-managed were for earnings overall and fourth the was in and the X.X% basis were Footwear highlights. XX% our X% up X.X% our and to points spend to over XXXX middle the quarter. in the XX were for year. up gross year nearly particularly $X.XX, in share and margin quarter. for basis for XXXX, last of to guided XXXX the Sales the you give expense the per sales throughout we Famous X%, March Adjusted last range well up year and comp maintained coming in leveraged quarter. of at the up were

health cash-flow of Sam they more than shoes near to as $XXX this $XXX year, long-term million a and borrowings million drive Our the Edmonds pairs and XX Edelman of speed well last sales portfolio brands. acquisition maintain and completely as our XXXX track. our XXXX - our four that were and diversification made late included record-setting the year as our progress for Last areas These of our longer very sure Allen and to they company outcomes, market, consumer initiatives we in our our shipped And term on help brand focus. in our mark focus us areas. year, our we flexible to month portfolio to inventory had key we maintained great of crossed paid speed with January. million shipping balance balance critical remains sheet to the digital, position much making the around down both by and consumer, believe acquired on that sheet, Allen and areas and also we Edmonds in focused in the X.X% will last respect we reduced strengths,

some take of and thought amplify just accomplishments others. to a expand it would important and on And focus we for our XXXX. these highlight the and some be expectations XXXX, I for to importantly, our For areas the of few maintain to minutes plan scope

of to and demand and respond helped all, internal us our in against XXXX newness program speed-to-market freshness for delivered throughout consumer targets our First the year.

speed proactive in These styles, efforts enabled testing we and colors, other XX% with to trends the programs address designs. us also then and marketplace focus to believe enhancements. and styles react the like to materials, accounted expand to sport-inspired our of consumer XXXX, marketplace to as in demand in us Our source for and on across the allowed additional in needed payers approximately different be new

have speed on Our to and in even are to continue and the XXXX, productive supply allow expected visibility work chain for around floor. simplifying drive inventory the will entire and our greater more streamlining us efforts into

Famous in our launched speed-to-consumer offset Famous some will time also more we portfolio, demand brand we a in consumer, This processing strides to XXXX, Famous.com product will consumer basis, some speed-to-consumer In portfolio in to increased become or quarter and to hands is approximately it For our takes doorstep, shifting smaller fulfillment. our consumers' XX% significant up able need at related to margin order consumers' result shipments patterns for strategically Buy our Online, margin XXXX, made three In business. and be get in fulfillment react Footwear. in processing accelerate helped on points our result, Footwear, basis also initiatives program surprisingly, expense. to need helped we quantities in drive to the distribution the to their on focused in-house orders the around time be more impacting efficient loose-pair of brand we of fourth were side of which as Store additional to further for we The And into to our and XXXX, are around efforts gross within on frequent with our days. focused the To year. hands shopping brand this wholesale and XX a going Pickup be quarter pressure portfolio. in not accelerating second shift

of future. to midst still the this have we changing landscape, trying look no always However, we're in consumer the stay and plans to to

retail and portfolio the us at that in to 'XX flexibility work for So shift to completed we adapt modernization Lebanon provide similar expansion our the center, will to distribution our our this in-house fulfillment to brand changing e-commerce needs XXXX. XX% up a in in Footwear represented total sales we sales. partners sales of perspective, XX% digital Famous and from Famous’ consumers. and of were third, And e-commerce-related saw our gains

now as For to in this last total also at our a XX% and up e-commerce-related XX% of for end continue expand direct [ph] us we our XX% brand to and in in sales consolidated assist and over efforts enable brand conjunction sales, XXXX. opportunity portfolio, in these In we will sales will were platform sales. these rapidly here content every consumers. accounted of Not for retaining in XX% acquiring consumer total, of to fastest-growing at e-commerce us is 'XX e-commerce-related the and they expectations online moving up in were the area transactions platform We're the our proficiency. to surprisingly, e-commerce comprise more XXXX, implemented Together, of system new with evolving management This Caleres. XXXX year. work react

brand changes to to us What and portfolio took will dynamically. two now last website on us much will weeks content make days more close manage Famous Our those two to be sites. take year our able teams

that the brand. into pay of this capital of begin In of investing This of be our year, also St. online in Finally, these efforts manufacturing to are leverage to to we through consumer we'll expect exciting enhance consumer-direct areas experience, about in consumer-facing to attention here at our we on advantage each plan experience Caleres. growth diversification the and to brands attention our brand's transitioning Edmonds, our last in-store total, 'XX. our and retention company Allen of activities acquisition so Edmonds, Louis also the infrastructure and the maximum year, addition critical we we diversification improving Allen focused we and as portfolio speed, the At the to digital, talked focus our on our continued to to critical both and and extensive remain of acquisition XXXX. take

earnings our call around continue from And the to give the you the strength here deliver to I'd to of as over expect foundational successors turn like benefit Ken $X.XX also XXXX, the we to with financial diversified that, to We share some have to we that of XXXX to at $X.XX in detail leverage now brands adjusted portfolio performance. per of Caleres.

Ken Hannah

Diane's Thank the last throughout original you, by about Diane, our again, and echoing performance good delivered remarks guidance strong we in against put begin expectations XXXX. Once afternoon, everyone. forth like I'd March. earnings-per-share to our year maintained our and

earnings quarter, up diluted in year. $X.XX reported basis fourth per at year For adjusted basis, $X.XX on on an over came and share XX.X% the a

the to components. reported difference While only adjusted the there you a and $X.XX walk was through numbers, I'd like in

Famous with in consumer restructuring First approximately in from eliminated of down of quarter where eight of number tax. fourth Footwear reduced operations, resulted or $X.XX four pre-tax after of shifting trends. primarily some the we effort completed regions districts XX the field all, proactive $XXX,XXX, in to a charge align This to and XXXX, shopping we

benefit our profit. Tax a revalued fourth on Secondly, and and items accounted our diluted due we liabilities tax to $X.XX quarter the Jobs earnings, unrepatriated deferred-tax in assets and per to Act, and the Cuts these resulted for When cash, earnings share. combined,

due corporate week without as any XXrd additional earnings expenses to wholesale additional did per $XX.X benefit related reminder, sales not it in million to XXXX, and drive is Finally, the This delivered while sales. a of share. the

adjusted earnings reported came per were X.X%. fourth the $XXX.X Consolidated X% aforementioned in the Including charges $X.XX fourth of previously and to and and reorganization at quarter related year, diluted the men's of up brands, recorded the the share share million up For for quarter integration of $X.XX full was over $X.XX. items sales XXXX. company's the per earnings acquisition,

XXXX. over to For million XXrd were X% of up of fourth revenue and $XXX.X the of the $X,XXX.X week. Footwear, XXXX At up consolidated related million Famous were million X% sales versus sales quarter included year, full $XX.X

fourth were up on X.X% For same-store basis. the XX-week a quarter, sales

X%, full sales $X,XXX.X Famous up the X.X% of Footwear year, of were basis. while XX-week total on million, sales comp were a up For

quarter million of sales XXrd our week. including XX.X% of the the were retail attributable prior sales up $XXX.X versus For portfolio, to brand year, $X.X million fourth

a of quarter six approximately As quarter contribution year's fourth fourth included weeks from weeks included of while XXXX Edmonds, this the revenue. of Allen XX reminder,

brand approximately in X% the Excluding both were the from up sales quarter. fourth periods, Allen portfolio Edmonds sales

over year. up in year For sales crossed mark, $X,XXX XXXX, brand the million, $X portfolio coming XX% billion at

$XXX.X reported to came at the XX.X% we basis on gross a in over improved fourth margin Gross As up profit, quarter, XXXX quarter in the fourth XX.X%. of points turn basis. of XX million which

of As quarter a and profit acquisition of portfolio. million associated the costs XXXX the Edmonds our with Allen restructuring brand of gross reminder, fourth $X.X included

points amount, increased gross quarter Excluding margin year that XX fourth over basis XXXX year.

gross margin up For and XX a and over basis respectively. profit and adjusted was up million the reported in of also on year improvement XX an Consolidated with XX% on was full $X,XXX.X gross basis basis, on year, XXXX, adjusted reported year a points and up basis. XX.X% a both consolidated year-over-year

was XX a continuation For trend third a first Famous the gross the quarter fourth the from quarter, basis margin points from in Footwear, year. and of of the half up a reversal

of over quarter Footwear was XXX XX.X% basis up as basis. was margin basis margin XXXX, on For gross and slightly up XX portfolio gross up Brand adjusted fourth reported Famous XXXX. points an points,

portfolio points. quarter over margin fourth and Edmonds delivered Allen XX Footwear. the XXX the quarter, a primarily SG&A brand more basis in the XX.X% with of X.X% sales, fourth up at of both down basis of margin of of increases, addition SG&A XX.X% gross XXXX, due adjusted year, a quarter at to expense For addition basis XXXX points on for we expense portfolio leveraged metrics of the gross year reported quarter. these week full-year up was versus and XX.X%, expense Famous coming a and of fourth team the fourth in Despite brand prior-year XXrd the full than

of full expense was XX.X%, addition up reflecting the For the SG&A mainly year, Edmonds. Allen

of amortization million our acquisition the the primarily and in of the due of distribution depreciation XXXX, up in Lebanon to was fourth same X.X% Allen quarter $XX.X Our and center. our expansion versus period Edmonds

was versus for expense quarter year, prior flat of the $XX.X million and fourth the depreciation quarter million, up fourth full versus last which was $X.X year. year. the Net For was the of interest amortization XX.X%

For our Edmonds. of the XXXX million was full up facility $XX.X December most year, Allen credit of from XXXX expense against $XX.X finance and for the net we to re-borrowed million, revolving acquisition interest as

XXXX. four XX.X% XX%, for Our rate and same higher fiscal XX.X% rate adjusted while XX% our Of was slightly averaged a the and timeframe come we approximately XX% down average in the approximately at adjusted XXXX tax our an on to past tax reported basis. for note, basis, rate expect XX%, was to tax rate GAAP has between on over to that years

retail our expenditures as reflecting the the down we of $XX.X year Lebanon center, Our XXXX, year, during over opened completion were fewer capital million distribution for and XX.X% stores year.

and and We turning Edmonds. borrowings December our the of our the facility, Allen sheet. equivalents Now were paid million, balance of to cash remaining finance down the revolving $XX XXXX to with ended which year against credit up XX.X%, used acquisition

Our of the consolidated was end inventory position year million. the at $XXX.X

portfolio, brand inventory over Famous year, Edmonds. doors. X,XXX we X% year was doors Allen down year more ended Famous our At XX than with and X.X% over Footwear For Footwear, XXXX year year. ended We XX with closing inventory down after opening the excluding

leaving XXX at our closed brand and For opened XX we us with XX, doors portfolio, in XXXX stores year-end.

same-store Consolidated with net sales our sales low fiscal segment Famous brand provide of single portfolio XXXX we was digits, Q&A, and Footwear in $X.X release. low today's up presented at approximately which up guidance, like Before billion, earnings single sales digits. the net for I'd initial begin to

lower approximately expected Our due tax to our $XX basis million approximately is benefit a we XX% and as Cuts is that the XX $X.XX, Act. cost to and remaining XX%, percentage share XX% on a rate to down rate, from XXXX, due Allen our tax effective Tax XX% our and a of to gross excluding per to diluted of five XX of earnings average effective between expected approximately points, to and to GAAP XX% four-year five margin non-GAAP share and $X.XX And basis points. up approximately an the to approximately SG&A of our transition between XX% of discussed a on Edmonds over $X.XX expense per be Interest and expect up and of historical $X.XX sales including Diane leverage $X.XX Jobs earlier. basis expense

have XXXX been had in would reduced over earnings apples-to-apples share the per $X.XX. earnings for been to equate our the effect $X.XX related Cuts on Based higher, of would believe adjusted XX% this and diluted if Tax guidance, or in basis. Act XXXX, an X% per XXXX Additionally, to we share a approximately all on increase rate to year tax year Jobs our

and a as these be guidance this caleres.com. can earnings number the openings usual, Finally, available store details includes, slides found of at closings, and on

turn XXXX. and XXXX impact brand a that over and had consistent, was Footwear for portfolio And As for great with which sales sales once year a that, again, reminder, year Overall, expect $XX.X operator we like to last Caleres. earnings. included to deliver by $X.X profitable week, million call XXXX by back a sustainable XXrd our to million And the increased immaterial growth I'd on Famous the Q&A. an in

Operator

question instructions] first Marotta [Operator Your of King Associates. Steve the & comes line with C.L. from

Steve Marotta

some earnings of year the with of the activities. a tax year. great quick and a great seeing evening, new back we're Good initial Congratulations on that of SG&A into quarter associated plowing everybody. the demand-creation reporting A A questions. lot and couple coming for plan are and companies consumer guidance offering benefits

you're looks the about Given Could uses decision-making in showing current with it like on tax calculus went you're not of that benefit the associated the that little you that. the talk on funds doing your line, the into SG&A bit that basically year? a leverage

Ken Hannah

Steve. This is Sure, Yes. Ken.

invest to we be earnings we've to past, in in the think different. to the expect continued XXXX in we've delivered, that not do And business. order deliver I our any

and $X tied an the was and that million. when $X expense million really think looks through to I SG&A like coming acquisition, it it's on that at incremental to incremental an looked we our basis, customer acquisitions was incremental

Steve Marotta

just CapEx that? go and over a for 'XX, From estimate standpoint could Okay. you D&A a

Ken Hannah

Yes. $XX The that be the million. will is approximately CapEx expectation

Steve Marotta

And D&A?

Ken Hannah

'XX. D&A pretty The with be should consistent

Steve Marotta

that's from costs Okay, And any you quarter? second quarter SG&A that is enough. fair half would particular cadence first sloshed EPS half? to expect versus there Are an be to standpoint any in from in there

Ken Hannah

That's a good question.

much mentioned, consistent the year how our and provided of we coming time couple talking addition spent in-sourcing that we noted to when lot unlike think the I guidance are most earnings a quarter. with quarters last year there calendarized, million had Allen Edmonds are of going part, more was expense of The XXXX is we the be for about quarter couple distribution some only wholesale with that of to we Diane our and of in the associated dollars. expense that, the is, be warehouse, first to a in

Steve Marotta

category as how Okay. you portfolio, as through see you And you. about standpoint, out a you And to branded a can lastly, and specifically would - sneakers for sneakers well. Footwear product well as up the obviously little bit as well as as then from spring that product. little maybe talk continue Famous me. bit look do a fashion it and about And wrap the fall in Thank just talk

Diane Sullivan

that's A Okay, early pretty and side. - I looks Famous lightweight. product. would foot-bed are very anything good. strong, Steve. can now actually even you Hybrid to say. be duty share on continues sport then first, of strong. of Rick the to in seeing the It's things spring, couple And about there very look I actually only quite kind and be brand Diane. would wraps as We're seeing side product great in sneakers not concepts the expect, but sandals Jute talk out are I'll sport-related good great. reads is trainers. we're Any But on also they're where on right

the would boots, where say them landscape are we pretty that now. I be and is fall on a on And year. it volume of of the relatively across right be continues last to of And mean great. key items that to are we when the actually I at they're consumer. way respect lot quite sport turn lot what a seem No interesting they're retail direction areas same the really think about - been mean, with interesting to right driving there - seems be a really that to think to planning athletic people good kind too. had be to And sneaker, for. selling number But across one's Famous flat true finished taking. now, are seems you and look were thinking I hoped at boots the as thing So board I our about they to - the there's and you has of

terms in that, coming importance right? Just up Rick, in I different think brands of are

Rick Ausick

Yes.

what again, - we refresh, think I pretty for we've consistent with a while. Finding said. Diane at as been this

country have moment and in do. weather we to really - in need and first cold in the we I we getting represented, We snow second much think how strong have less good sure of are can been the is a quarter continue. So third. things see strategy brands getting little to feel is has our think think good about in refresh are make are some are not we position how Steve. that, a more, But inventory we'll some the with pretty inventory positions still outside the they'll today, of time the refresh and showing making And into lesser with have appropriate quarter. color, winner, again, we a advantage be businesses parts so that. those positioned sure our where that on things Probably everybody at to I a returns and that'll take Northeast this pretty of for other material,

Steve Marotta

Very helpful. Thank you.

Operator

question line Your comes Macquarie. from Vasilescu the from of Laurent next

Laurent Vasilescu

about wanted on afternoon results. and Edmonds. Good congrats ask you. I Thank Allen to great

this $XX generated how EBIT I think I on it know the indication full generated quarter, any to to quarter, line? quarter. brand the then was in much fourth And the for how the it curious last year much about for contributed million.

Ken Hannah

Yes. I mean the get brand. to going by brand into not we're specifics around

and in and in I share. of think talked quarter overall the the it of earnings and in was up XX earlier had ramped was as excess we quarter - ended low our XXs first year, the accretive it kind to in fourth to the per

Laurent Vasilescu

were - turning November running And the provide Okay, performed for XX. think mid-single clarity as Footwear, for the much think on comps Can to I I fourth helpful. digits November quarter? Famous November very by of how comps month you

Ken Hannah

pretty They're We're the consistent Laurent. that board. in all pretty mid-single-digit actually, Sure. across much range

being the that that - - a So and with being tenths. much being was weren't second, December November within It biggest, [indiscernible] wasn’t slow lowest of spread. January there couple difference. the They the pretty percentage evenly all

Laurent Vasilescu

margin. to historical That's guided the great a Can then hear. margin to rates for up you the the puts It's to little five trends. about gross And on in The bit growth talk turning than gross guide? lower full-year bps. the XX and takes this guidance

Ken Hannah

when we're last that we think I mean XXX years, or three I the four basis looked almost over Well, points. up

frame, XXXX think as continue kind improvements we to so there. going And the look time into to of see we we're

think of just bit we're a conservative little more our expectations. terms I in

Laurent Vasilescu

you. Got

Okay, thank you very luck. much. Best of

Operator

comes question Krasik of the Scott next line from Your with Research. Buckingham

Scott Krasik

Hey everyone, congratulations.

after to comment, wondering, in about a back characterize would just you going retailers lean sort I'm How or a had you specific Christmas shipping Just a they your of couple that? of excited brands? of January. month your is are reflection record are Diane, that

Diane Sullivan

I of think a things. of combination it's a couple

a I couple by they're very think of our brands. excited

us items that projects, I coming around performance. on speed-to-market that strong back really been think the in doing are we've again work our has

to were drive we able So nicely. really that really

of So combination a Scott. I number things, a it's think of

though, a The for was sure. job. great So it did teams phenomenal a month

Scott Krasik

branded Your the is for of side guidance business digits. the low single

hindrance the mid-single quarter. just to the year? you What You or half And let's grow growing of in X% of the in first half the did you'll second the this would think year the be do digits faster year? fourth say

Diane Sullivan

Well, were all Excel Edmonds the and for year basically flat in. full

quarter. fourth showed we pop a the nice So in

to see to trend. that I So us drive want continue

quarter out thought or whole - a the we're and how as we'll the digits as made we so lot low perform digits And of made go. single sense mid-single see gate, I coming the and of seasons

like hearing in orders not they prudent upfront. Those really initial to come little from chase it's because I'm most chase but to So sure do think you're - a goods. I retailers, bit

task. it's increases, to simple not it's those get - So a X%

guide. So way make we very thoughtful we we're want in to sure that the

Scott Krasik

fulfillment Sure. side, facility? using branded a And then on XPL were the the just in-house so you

Diane Sullivan

Yes.

Scott Krasik

What happened there?

Diane Sullivan

to better it It logistics service was for the Nothing. a folks customer just - last - more the decided Yes. middle do next and saw had it It it bring was prudent that company the the that We at say I much if already - couple to would was the sense. we we And frankly team ability year finished be it the in would are made here so made be the completed it we to lot we time decision going years. to in-house. and we be how the of term out at was really us - and we in of projected that. And the of terrific work of did we and cost at long we Lebanon. shareholder at was whole looked to that felt able things our time for it a have

Scott Krasik

Good. And then - sorry.

Ken Hannah

color I’ll a just there. bit of add little

as the make at Tejon is we in we I entire that center. looked wholesale really distribution network, the to wanting and sure think productivity our that we I think capture completed were could what gains Lebanon and

the consumer, had well it to have and to think really goods piece performed it we like of I and becomes getting needed so our more was And a complete more just control over we felt really third-party strategic that. actually as

confidence quarter first for out to locations, year consumer. before costs that just done part some is the moving the in this the it's transitioning will lot in goods. And of have fourth of half of a of site begun forward we in do both had as but and we've duplicate as we are selected and the there right and shipping So believe thing something have be the a

Scott Krasik

great. what's little that's to not. test then weather Rick, you'd more just like to and working lastly. sort And No, alluded what's exactly of you a

now? So as Easter sort some feel think you of as some you go How do weeks here, you've ahead missed of you into big expect you sales? of you? Do do

Rick Ausick

tricky. It’s always Yes.

a feel two that But like Oh, the quite big in event, you days with here everything on it back. wasn't never the normal. lights three like obviously are customer out. it still everything's think XX and It multiplier You was of get later, comes event sense one. the storms I has effect next one days, in one back to these

the comes next one. Here

of good So items think - we don't pretty yet. we conditions, and our kind our to we know we going drive had normalized I that very the the that is are things stuff are believe think a have we are business performing well. Where - just I the business,

we a out that Philly, York, those commission time. XX little New more obviously at of have the all important and of the need for country So market, an are just to part That's bit top be any Boston markets us. of to

making at looking not for quarter. we're again, first excuses So

those things. I We're kind in think it'll all and come. just trying get to the spring time break of

it feels life place are airport places seen few my my that those too like, ever and to going visits, in in more last I've help Arizona will people in at in us least than leaving because think I warm cold the years. So my

So of a lot too. that I think happening there's

Scott Krasik

good Good thanks. Rick. Well, luck, and right. All luck

Operator

the from of Wedbush. question with Chris next line Svezia comes Your

Chris Svezia

Good business, the you're what growth taking on of seeing drivers. guess more sort branded land, Congrats. going of lay to side some as for walk and XXXX portfolio you I I first, my of about can thanks afternoon go questions. through the just some think And - you with of specifically, want the through Naturalizer, cetera. of walk what's give from Edmonds, maybe or digit, lack brands Sam the the Then on between thereof perspective the single just et low us maybe? the Edelman, just

Diane Sullivan

brand speaking, if a overall terrific and than gaining data about that by well business, some X% look of NPD. is our portfolio month moved - of of in quarter NPD. almost month. fourth Naturalizer those really you stores a I XX number share, are the give that and are nice others. top about mean five well people where now Edmonds, generally comp business. this you our year. Naturalizer, But assets by going we continue given, we in I really you the the growth the Those at Chris, winning on our I of an Omni-channel feel Sam, first year. Edelman roughly look There's brands you we the show again can the retail Sam that three mean side, at landscape, year, it in market an lead should portfolio The Allen sort up we in bit all, have They have Yes, see have are clearly do businesses. bit always comped big all me points. They're on let believe think next sure. this three sense XX quarter to to think quarter more brands. is. and done little a those businesses Naturalizer little we of market But of

the concept time and new some the development together, So year. we're going with work we've we feel doing come this of that that be the - coming, on all been feeling Naturalizer we like it's are testing we're starting to that but actually even at looking that's been all frankly to planning actually

value that that have good. and So got doing brand fighter Edmonds, to those been out And really we that price Allen relationship well. out three there, big brands, very great has LifeStride extremely - there Naturalizer, Sam, continues

great. all are those So

by think also powered of number really that We brands there's category. a are sport the

showing those dynamic Vince again or Bzees or whether or Scholl's Rykä, very are very, all it's like So trends. of

are. good very where feel about we those So

yet. in bit Spiga, completely earnings we're Via to little that headwind material power relatively a all, it's the it's a hasn't but company. really with have that And the repositioning overall of such business still away gone Walmart it not for of scheme small our We

positioned of you've in now you is really our pretty a all we've feel good. it But know got it that brands it and have way. looking very we And generally, right lived the good momentum So seen because too.

We our hard day really to have We've in this in going particular and game sure work it hard every earn make gain our zero-sum a teams market more. is that segment got to to share down. single work even actually to

overall, - direction. good the So we feel but about quite

Chris Svezia

portfolio all just branded comp, X% the And - for is you. that that Naturalizer Thank just Diane, or the is stores?

Diane Sullivan

comp. quarter fourth Naturalizer was That the

Chris Svezia

right. think or know in supply about Rapid but XX% making - you I at replenishment, initiatives perhaps that based color and that the And step how XXXX? some you What profile, of margin look about how or back to All buys on be when the you're Okay. supposed is any segment inventory the margin the profile replenishment? of of the and portfolio, do investments, EBIT chain branded purchases.

Diane Sullivan

we sales, all well to see well margin Yes. retail actually just not how because sell-through it's benefit. really to real able normally this we're I just being to in - we're terms the the have. it's and - you how that quantify would gives have we're - you the and be It's can drive givebacks the us dilution Well now assistance of again, being starting would able to try - of that the - think

along isn't sure the got to though ultimately equal do matter where be we the and - have think improve, want getting make So we to just as we about will to going are where gross - only of impact with more of to it's that to We you the margins do more now going and not now retail improve, EBIT Chris, it. smart no more velocity and do that. not It where that, it. that to going point be our we're we’ve margins

right right got and categories. brands You’ve the to pick the

teams the of on get the think we refine to we're we're thought where So place now that and going best to in return really the trying kind that investment. against around really direct process things our are our

learning So really the return to more even and how less 'XX, even get of it's quantify on it. in about of this about a impact It's about how really it's more - much.

Chris Svezia

mean, increasing But from it's it's XX%? fair say to I Okay.

Diane Sullivan

force trying what's right thing - number. look land, point And We're a know Yes, opposed I to to who teams. our that, don't like. that it'll now I trying want force the we as Where think we what mean right the about to knows? I total do increase. to it'll that calibrate you’re at I should think we're to number. what's want with

Chris Svezia

you. And Okay. for question a Ken,

relates hurts it XXrd the Just probably QX, the week QX, QX, the How Famous about any we impact QX. a business? to and the little maybe calendar, It's as think impacts?

color modeling any thinking sales should in about we a comp around perspective? number the from that Just number? in It’s Just be it's a or how that.

Ken Hannah

color. in little give specific And Yes, there's let a Rick bit the I'll sales some number.

coming you've think QX. into got Easter I

shifts got into You've QX. some from QX

you of the a year. let But the I'll thing the in Rick impact color an so And of see you XXrd-week this little more half first of give kind he's since … lived

Rick Ausick

shifts the and - actually. big many One third look if quarter. too between second are The the you at shifts, times

impacted million around is quarter top $XX line second a on positive. So

the the $XX And is thing, million quarter same is million, about direction. fourth million $XX quarter about obviously direction. other other Third $XX the

First $XX effect the just what week matter those million are comes a And and out. goes about in of is quarter positive. what of week net

Chris. it's nothing So than that, more

Chris Svezia

guess, is your And thing. last call? this conference I Okay. Rick, last

Rick Ausick

know. never You

Diane Sullivan

No, not maybe Maybe, not. necessarily.

Rick Ausick

Let’s let first see you is. quarter I'll know. how

Chris Svezia

best All you and right. we’ll Thanks. All the soon. talk to

Operator

of comes next Susquehanna. question Poser from Sam Your with the line

Sam Poser

my question. Well, thank you for taking

is for give clarify, to Living the Healthy you Just what the Contemporary breakdown sales by us can and Fashion quarter? fourth

Ken Hannah

numbers I the Edmonds really it's we No. as there, not relevant. since I got in mean - Allen

I think excluding break it like really Contemporary anymore. up, Living. just think of But kind I we ended And Healthy Edmonds even up and Fashion, don't we Allen out it the that in up was slightly.

Sam Poser

moves meaningful, that to then in $XX just because of that how for - I leverage be And and then from Okay. of going shift? flow - get that's the QX us QX, to see that of lose - sort you're what in Ken, EPS impact mean to that give more going the going you going to you're million the you sales could quarters earnings incremental you're to the

Ken Hannah

Yes.

Famous the it think, offsetting at almost contribution. And at look think impacts the we I I two equally it's in segments, then brand that and as mean we're I XX-XX portfolio.

incremental And as bringing we've first then expense million incremental got couple making the in associated mentioned Famous. of dollars we're some that so And we half, in with customer a some have at brand acquisition. investments in we've QX got benefit of And do earlier, we in the portfolio the in-house. warehouse

you all an half pretty but up it actually the standpoint, the the ends for consistent it net first So expense warehouse. when with from incremental in being out, earnings

Sam Poser

I right. got All you.

million then to then in to the - million of the you're first $X half Q portfolio brand what, sort shift going - Famous year SG&A $X the to in adding but a things leverage have of in you're and in basically, And of flow? then So Footwear?

Ken Hannah

benefits forward That's right. the Famous at those first brand offsetting shift the the And portfolio was half, what see Footwear. in you'll back then a half investments in in associated segment with then the

a a half. just looked couple take of we isn't quarter it of of and guidance investment of to for million in dollars different quarter when if it, look you you midpoint first that at quarter, kind of the So the across it, kind all a but

Sam Poser

had talk you. to other when Sam be doing well platform so Franco that operating of was were Because little we And you the appears and a about brands seem is us there bit - and even a of pace sort doing like to - to visited to relative are at a Got - those Can very two on. it brands a then Naturalizer how with out basically doing? very sort be Sarto of on well. faster noticeable you

Diane Sullivan

there and a last a terrific also because all Sam, Naturalizer, in again extremely that of well. Edmonds, great and - lot I growth, are this couple they're they're Allen they've brands performed by really, year a also that growth sport all ways Well, trend. powered in mentioned Yes. of the

be upside mix the And impact, a is business, Rykä business into that nicely. a Franco Via where is really great that brand growing repositioning known as very this, I like there. performer. we they're XXXX. So it's looking about Vince it's have are so not also on total, growing Scholl's, talk others. More to immaterial go pressure Spiga, category why not opportunity because the in is Sam, sport nicely. Bzees continues a is we good but we to and huge which all of the

- any didn't category. of the have because it sport it's We really have

So it categories, converted fashion as hadn't really was fundamentally just they quickly. mostly

to that do started we as to with consumer. more product, So is frankly resonating the begin get that,

were to right that now. right to try sure we're less be heavily because shoe-focused I we sort We're more seems So get dependent make that on and seasonal on to trying which boots. focused the guess, seasonal-category very not path, of working to

outstanding very wholesale the in an total So all distribution, have the have that the brands, really manner. ones And have portfolio in, retail, most are of are excited big really Omni-channel, the the importantly about sizable, is brands. performing

Sam Poser

you very much and Thank continued success.

Operator

Research. Buckingham line a question of have You from the Krasik Scott with

Scott Krasik

Thanks.

as million $XX the account follow-up. the $XX correct? Rick, Is take negative in that million you that well. shift have XXrd lap for almost the to week into a XQ, Just quick doesn't

Rick Ausick

Sure. Yes. does. Yes, it

Scott Krasik

guys. Thanks, right. All Okay.

Operator

we time time, Sullivan Ms. questions. Diane closing over call this of to the remarks. for any I At are out will turn for

Diane Sullivan

for Thank you this very us much afternoon. joining

Take with the for again We to are and excited the about care. in if forward May, potential speaking company looking not Thanks. you sooner.

Operator

This conclude conference does call. today's

disconnect. You may now

Caleres (CAL) 15 Mar 182017 Q4 Earnings call transcript