CALERES INC [CAL] Filings

10-Q 1 cal-20230729x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 29, 2023

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to _____________

Commission file number: 1-2191


CALERES, INC.
(Exact name of registrant as specified in its charter)

New York	43-0197190
(State or other jurisdiction	(IRS Employer Identification Number)
of incorporation or organization)

8300 Maryland Avenue	63105
St. Louis, Missouri	(Zip Code)
(Address of principal executive offices)

(314) 854-4000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - par value of $0.01 per share	CAL	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of August 25, 2023, 35,539,343 common shares were outstanding.

Table of Contents

INDEX

PART I		Page
Item 1	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Earnings	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Shareholders’ Equity	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4	Controls and Procedures	36

PART II		37
Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	39
	Signature	40

Table of Contents

PART IFINANCIAL INFORMATION

ITEM 1FINANCIAL STATEMENTS

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	(Unaudited)
($ thousands)	July 29, 2023		July 30, 2022		January 28, 2023
Assets
Current assets:
Cash and cash equivalents	$	47,098	$	45,955	$	33,700
Receivables, net		136,549		127,580		132,802
Inventories, net		660,690		770,652		580,215
Income taxes		6,461		12,129		17,527
Property and equipment, held for sale		16,777		16,777		16,777
Prepaid expenses and other current assets		47,248		45,698		50,434
Total current assets		914,823		1,018,791		831,455

Prepaid pension costs		86,189		104,214		83,396
Lease right-of-use assets		505,423		516,486		518,196
Property and equipment, net		157,717		137,007		160,883
Goodwill and intangible assets, net		209,314		221,447		215,392
Other assets		30,494		27,263		27,150
Total assets	$	1,903,960	$	2,025,208	$	1,836,472

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	244,000	$	348,500	$	307,500
Trade accounts payable		350,020		399,265		229,908
Income taxes		18,896		20,139		7,650
Lease obligations		133,743		131,601		136,051
Other accrued expenses		209,712		240,295		230,087
Total current liabilities		956,371		1,139,800		911,196

Other liabilities:
Noncurrent lease obligations		429,192		451,657		444,074
Income taxes		2,464		7,786		7,786
Deferred income taxes		19,335		14,939		19,001
Other liabilities		25,017		26,149		28,302
Total other liabilities		476,008		500,531		499,163

Equity:
Common stock		355		364		357
Additional paid-in capital		177,602		173,246		180,747
Accumulated other comprehensive loss		(25,530)		(7,280)		(26,750)
Retained earnings		312,565		212,803		266,329
Total Caleres, Inc. shareholders’ equity		464,992		379,133		420,683
Noncontrolling interests		6,589		5,744		5,430
Total equity		471,581		384,877		426,113
Total liabilities and equity	$	1,903,960	$	2,025,208	$	1,836,472

See notes to condensed consolidated financial statements.

Table of Contents

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS


	(Unaudited)
	Thirteen Weeks Ended				Twenty-Six Weeks Ended
($ thousands, except per share amounts)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net sales	$	695,533	$	738,330	$	1,358,267	$	1,473,445
Cost of goods sold		381,360		401,515		741,412		809,636
Gross profit		314,173		336,815		616,855		663,809
Selling and administrative expenses		262,823		268,395		515,918		529,194
Restructuring and other special charges, net		1,647		—		1,647		—
Operating earnings		49,703		68,420		99,290		134,615
Interest expense, net		(5,128)		(2,584)		(10,751)		(4,883)
Other income, net		1,616		3,217		3,108		6,639
Earnings before income taxes		46,191		69,053		91,647		136,371
Income tax provision		(11,826)		(17,500)		(22,490)		(34,833)
Net earnings		34,365		51,553		69,157		101,538
Net earnings (loss) attributable to noncontrolling interests		422		375		487		(149)
Net earnings attributable to Caleres, Inc.	$	33,943	$	51,178	$	68,670	$	101,687

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	0.95	$	1.40	$	1.91	$	2.74

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	0.95	$	1.38	$	1.91	$	2.70

See notes to condensed consolidated financial statements.

Table of Contents

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	(Unaudited)
	Thirteen Weeks Ended				Twenty-Six Weeks Ended
($ thousands)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net earnings	$	34,365	$	51,553	$	69,157	$	101,538
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment		(277)		42		(428)		(121)
Pension and other postretirement benefits adjustments		610		583		1,320		1,023
Other comprehensive income, net of tax		333		625		892		902
Comprehensive income		34,698		52,178		70,049		102,440
Comprehensive income (loss) attributable to noncontrolling interests		25		(48)		159		(573)
Comprehensive income attributable to Caleres, Inc.	$	34,673	$	52,226	$	69,890	$	103,013

See notes to condensed consolidated financial statements.

Table of Contents

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	(Unaudited)
	Twenty-Six Weeks Ended
($ thousands)	July 29, 2023		July 30, 2022
Operating Activities
Net earnings	$	69,157	$	101,538
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		16,899		15,882
Amortization of capitalized software		2,471		2,420
Amortization of intangible assets		6,078		6,052
Amortization of debt issuance costs and debt discount		204		204
Share-based compensation expense		6,871		8,236
Loss on disposal of property and equipment		918		1,023
Impairment charges for property, equipment, and lease right-of-use assets		414		1,979
Adjustment to expected credit losses		840		(1,004)
Deferred income taxes		334		208
Changes in operating assets and liabilities:
Receivables		(4,588)		(4,340)
Inventories		(80,352)		(173,484)
Prepaid expenses and other current and noncurrent assets		(2,472)		204
Trade accounts payable		120,065		67,805
Accrued expenses and other liabilities		(28,165)		(22,619)
Income taxes, net		16,990		23,783
Other, net		(488)		(636)
Net cash provided by operating activities		125,176		27,251

Investing Activities
Purchases of property and equipment		(15,044)		(16,820)
Capitalized software		(1,833)		(3,906)
Net cash used for investing activities		(16,877)		(20,726)

Financing Activities
Borrowings under revolving credit agreement		252,000		437,500
Repayments under revolving credit agreement		(315,500)		(379,000)
Dividends paid		(4,997)		(5,200)
Acquisition of treasury stock		(17,445)		(41,672)
Issuance of common stock under share-based plans, net		(10,010)		(3,814)
Contributions by noncontrolling interests		1,000		1,500
Net cash (used for) provided by financing activities		(94,952)		9,314
Effect of exchange rate changes on cash and cash equivalents		51		1
Increase in cash and cash equivalents		13,398		15,840
Cash and cash equivalents at beginning of period		33,700		30,115
Cash and cash equivalents at end of period	$	47,098	$	45,955

See notes to condensed consolidated financial statements.

Table of Contents

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


						Accumulated				Total
						Other				Caleres, Inc.
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		Noncontrolling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE APRIL 29, 2023	36,274,599	$	363	$	173,640	$	(26,260)	$	298,574	$	446,317	$	5,564	$	451,881
Net earnings									33,943		33,943		422		34,365
Foreign currency translation adjustment							120				120		(397)		(277)
Pension and other postretirement benefits adjustments, net of tax of $211							610				610				610
Comprehensive income							730		33,943		34,673		25		34,698
Contributions by noncontrolling interests											—		1,000		1,000
Dividends ($0.07 per share)									(2,515)		(2,515)				(2,515)
Acquisition of treasury stock	(763,000)		(8)						(17,437)		(17,445)				(17,445)
Issuance of common stock under share-based plans, net	28,494		0		(4)						(4)				(4)
Share-based compensation expense					3,966						3,966				3,966
BALANCE JULY 29, 2023	35,540,093	$	355	$	177,602	$	(25,530)	$	312,565	$	464,992	$	6,589	$	471,581

BALANCE APRIL 30, 2022	37,446,329	$	374	$	169,025	$	(8,328)	$	191,165	$	352,236	$	5,792	$	358,028
Net earnings									51,178		51,178		375		51,553
Foreign currency translation adjustment							465				465		(423)		42
Pension and other postretirement benefits adjustments, net of tax of $190							583				583				583
Comprehensive income (loss)							1,048		51,178		52,226		(48)		52,178
Dividends ($0.07 per share)									(2,552)		(2,552)				(2,552)
Acquisition of treasury stock	(1,083,496)		(11)						(26,988)		(26,999)				(26,999)
Issuance of common stock under share-based plans, net	87,947		1		(216)						(215)				(215)
Share-based compensation expense					4,437						4,437				4,437
BALANCE JULY 30, 2022	36,450,780	$	364	$	173,246	$	(7,280)	$	212,803	$	379,133	$	5,744	$	384,877

Accumulated

Other

Total Caleres, Inc.

(Unaudited)

Common Stock

Additional

Comprehensive

Retained

Shareholders’

Noncontrolling

($ thousands, except number of shares and per share amounts)

Dollars

Paid-In Capital

Loss

Earnings

Equity

Interests

Total Equity

BALANCE JANUARY 28, 2023

35,715,752

357

180,747

(26,750)

266,329

420,683

5,430

426,113

Net earnings

68,670

487

69,157

Foreign currency translation adjustment

(100)

(328)

(428)

Pension and other postretirement benefits adjustments, net of tax of $456

1,320

Comprehensive income

1,220

68,670

69,890

159

70,049

Contributions by noncontrolling interests

—

1,000

Dividends ($0.14 per share)

(4,997)

Acquisition of treasury stock

(763,000)

(8)

(17,437)

(17,445)

Issuance of common stock under share-based plans, net

587,341

(10,016)

(10,010)

Share-based compensation expense

6,871

BALANCE JULY 29, 2023

35,540,093

355

177,602

(25,530)

312,565

464,992

6,589

471,581

BALANCE JANUARY 29, 2022

37,635,145

376

168,830

(8,606)

CALERES INC [CAL] Filings
10-Q	[2023-09-05]
10-Q	[2023-06-06]
10-K	[2023-03-28]
10-Q	[2022-12-06]
10-Q	[2022-09-06]
10-Q	[2022-06-07]
10-K	[2022-03-28]
10-Q	[2021-12-07]
10-Q	[2021-09-07]
10-Q	[2021-06-09]
10-K	[2021-03-30]
10-Q	[2020-12-09]
10-Q	[2020-09-09]
10-Q	[2020-06-10]
10-K	[2020-03-31]
10-Q	[2019-12-11]
10-Q	[2019-09-11]
10-Q	[2019-06-13]
10-K	[2019-04-03]
10-Q	[2018-12-12]
10-Q	[2018-09-12]
10-Q	[2018-06-13]
10-K	[2018-04-04]
10-Q	[2017-12-06]
10-Q	[2017-09-06]
10-Q	[2017-06-07]
10-K	[2017-03-28]
10-Q	[2016-12-07]
10-Q	[2016-09-07]
10-Q	[2016-06-08]
10-K	[2016-03-29]
10-Q	[2015-12-09]
10-Q	[2015-09-09]
10-Q	[2015-06-10]
10-K	[2015-04-01]
10-Q	[2014-12-09]
10-Q	[2014-09-10]
10-Q	[2014-06-11]
10-K	[2014-04-01]
10-Q	[2013-12-11]
10-Q	[2013-09-11]
10-Q	[2013-06-12]
10-K	[2013-04-02]
10-Q	[2012-11-30]
10-Q	[2012-09-05]
10-Q	[2012-06-05]
10-K	[2012-03-27]