CALERES INC [CAL] Filings

10-Q 1 cal-20240803x10q.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 August 3, 2024

☐	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 30, 2024, 35,201,446 common shares were outstanding.

Table of Contents

INDEX

PART I		Page
Item 1	Financial Statements (Unaudited)	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	37
Item 4	Controls and Procedures	37

PART II		38
Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3	Defaults Upon Senior Securities	39
Item 4	Mine Safety Disclosures	39
Item 5	Other Information	39
Item 6	Exhibits	40
	Signature	41

Table of Contents

PART IFINANCIAL INFORMATION

ITEM 1FINANCIAL STATEMENTS

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	(Unaudited)
($ thousands)	August 3, 2024		July 29, 2023		February 3, 2024
Assets
Current assets:
Cash and cash equivalents	$	51,753	$	47,098	$	21,358
Receivables, net		151,055		136,549		140,400
Inventories, net		661,146		660,690		540,674
Income taxes		5,236		6,461		14,215
Property and equipment, held for sale		16,777		16,777		16,777
Prepaid expenses and other current assets		53,733		47,248		55,485
Total current assets		939,700		914,823		788,909

Prepaid pension costs		77,505		86,189		74,951
Lease right-of-use assets		588,842		505,423		528,029
Property and equipment, net		169,459		157,717		167,583
Deferred income taxes		4,265		26		4,401
Goodwill and intangible assets, net		197,792		209,314		203,310
Other assets		42,422		30,468		37,563
Total assets	$	2,019,985	$	1,903,960	$	1,804,746

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	146,500	$	244,000	$	182,000
Trade accounts payable		396,450		350,020		251,912
Income taxes		14,613		18,896		11,222
Lease obligations		116,619		133,743		112,764
Other accrued expenses		186,241		209,712		185,058
Total current liabilities		860,423		956,371		742,956
Other liabilities:
Noncurrent lease obligations		508,950		429,192		453,097
Income taxes		2,464		2,464		2,464
Deferred income taxes		12,301		19,335		11,536
Other liabilities		22,363		25,017		27,123
Total other liabilities		546,078		476,008		494,220
Equity:
Common stock		351		355		355
Additional paid-in capital		183,922		177,602		184,451
Accumulated other comprehensive loss		(29,473)		(25,530)		(34,504)
Retained earnings		451,262		312,565		410,329
Total Caleres, Inc. shareholders’ equity		606,062		464,992		560,631
Noncontrolling interests		7,422		6,589		6,939
Total equity		613,484		471,581		567,570
Total liabilities and equity	$	2,019,985	$	1,903,960	$	1,804,746

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)	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
Net sales	$	683,317	$	695,533	$	1,342,515	$	1,358,267
Cost of goods sold		372,439		381,360		722,542		741,412
Gross profit		310,878		314,173		619,973		616,855
Selling and administrative expenses		268,349		262,823		534,685		515,918
Restructuring and other special charges, net		—		1,647		—		1,647
Operating earnings		42,529		49,703		85,288		99,290
Interest expense, net		(3,332)		(5,128)		(7,111)		(10,751)
Other income, net		1,177		1,616		2,169		3,108
Earnings before income taxes		40,374		46,191		80,346		91,647
Income tax provision		(10,101)		(11,826)		(19,275)		(22,490)
Net earnings		30,273		34,365		61,071		69,157
Net earnings attributable to noncontrolling interests		315		422		173		487
Net earnings attributable to Caleres, Inc.	$	29,958	$	33,943	$	60,898	$	68,670

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	0.85	$	0.95	$	1.73	$	1.91

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	0.85	$	0.95	$	1.73	$	1.91

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)	August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
Net earnings	$	30,273	$	34,365	$	61,071	$	69,157
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment		3,447		(277)		2,618		(428)
Pension and other postretirement benefits adjustments		1,083		610		2,223		1,320
Other comprehensive income, net of tax		4,530		333		4,841		892
Comprehensive income		34,803		34,698		65,912		70,049
Comprehensive income (loss) attributable to noncontrolling interests		197		25		(17)		159
Comprehensive income attributable to Caleres, Inc.	$	34,606	$	34,673	$	65,929	$	69,890

See notes to condensed consolidated financial statements.

Table of Contents

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	(Unaudited)
	Twenty-Six Weeks Ended
($ thousands)	August 3, 2024		July 29, 2023
Operating Activities
Net earnings	$	61,071	$	69,157
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		19,136		16,899
Amortization of capitalized software		2,654		2,471
Amortization of intangible assets		5,518		6,078
Amortization of debt issuance costs and debt discount		204		204
Share-based compensation expense		7,928		6,871
Loss on disposal of property and equipment		(36)		918
Impairment charges for property, equipment, and lease right-of-use assets		800		414
Adjustment to expected credit losses		(769)		840
Deferred income taxes		901		334
Changes in operating assets and liabilities:
Receivables		(10,018)		(4,588)
Inventories		(121,010)		(80,352)
Prepaid expenses and other current and noncurrent assets		(5,389)		(2,472)
Trade accounts payable		144,687		120,065
Accrued expenses and other liabilities		(5,563)		(28,165)
Income taxes, net		12,380		16,990
Other, net		3,202		(488)
Net cash provided by operating activities		115,696		125,176

Investing Activities
Purchases of property and equipment		(20,886)		(15,044)
Capitalized software		(922)		(1,833)
Net cash used for investing activities		(21,808)		(16,877)

Financing Activities
Borrowings under revolving credit agreement		306,868		252,000
Repayments under revolving credit agreement		(342,368)		(315,500)
Dividends paid		(4,899)		(4,997)
Acquisition of treasury stock		(15,070)		(17,445)
Issuance of common stock under share-based plans, net		(8,457)		(10,010)
Contributions by noncontrolling interests		500		1,000
Net cash used for financing activities		(63,426)		(94,952)
Effect of exchange rate changes on cash and cash equivalents		(67)		51
Increase in cash and cash equivalents		30,395		13,398
Cash and cash equivalents at beginning of period		21,358		33,700
Cash and cash equivalents at end of period	$	51,753	$	47,098

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 MAY 4, 2024	35,135,407	$	351	$	180,314	$	(34,121)	$	423,760	$	570,304	$	6,725	$	577,029
Net earnings									29,958		29,958		315		30,273
Foreign currency translation adjustment							3,565				3,565		(118)		3,447
Pension and other postretirement benefits adjustments, net of tax of $376							1,083				1,083				1,083
Comprehensive income							4,648		29,958		34,606		197		34,803
Contributions by noncontrolling interests											—		500		500
Dividends ($0.07 per share)									(2,456)		(2,456)				(2,456)
Issuance of common stock under share-based plans, net	463		0		(610)						(610)				(610)
Share-based compensation expense					4,218						4,218				4,218
BALANCE AUGUST 3, 2024	35,135,870	$	351	$	183,922	$	(29,473)	$	451,262	$	606,062	$	7,422	$	613,484

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

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 FEBRUARY 3, 2024

35,490,019

355

184,451

(34,504)

410,329

560,631

6,939

567,570

Net earnings

60,898

173

61,071

Foreign currency translation adjustment

2,808

(190)

2,618

Pension and other postretirement benefits adjustments, net of tax of $771

2,223

Comprehensive income

5,031

60,898

65,929

(17)

65,912

Contributions by noncontrolling interests

—

500

Dividends ($0.14 per share)

(4,899)

Acquisition of treasury stock

(416,000)

(4)

(15,066)

(15,070)

Issuance of common stock under share-based plans, net

61,851

(8,457)

Share-based compensation expense

7,928

BALANCE AUGUST 3, 2024

35,135,870

351

183,922

(29,473)

451,262

606,062

7,422

613,484

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

CALERES INC [CAL] Filings
10-Q	[2024-09-12]
10-Q	[2024-06-11]
10-K	[2024-04-02]
10-Q	[2023-12-05]
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]