Caleres lowers FY revenue outlook, announces cost-cutting drive

US footwear group Caleres has lowered its full-year revenue outlook and announced new cost-cutting measures after reporting a drop in sales and profit in the first quarter.

The company reported a 9.8 percent drop in net sales to 662.7 million dollars in the three months to April 29, with Famous Footwear segment sales down 9.2 percent, and Brand Portfolio segment sales down 11 percent.

Caleres now expects full-year consolidated net sales to be in the range of down 3 percent to 5 percent, compared to its previous guidance of flat to up 2 percent.

The company’s net profit narrowed to 34.7 million dollars from 50.5 million dollars the prior year.

‘Challenging operating environment’

Jay Schmidt, president and chief executive officer, told investors: “The Caleres team delivered a solid financial performance at the upper end of our earnings per share guidance driven by record quarterly profit from the Brand Portfolio and despite a challenging operating environment at Famous Footwear.”

Caleres reiterated its full-year diluted adjusted earnings per share outlook to be in the range of 4.10 dollars and 4.30 dollars.

The group also announced “strategic expense reduction initiatives”, including “eliminating open corporate positions, reducing non-merchandise procurement costs, realizing additional Brand Portfolio synergies, and lowering depreciation expense”.

The steps are expected to result in 20 million dollars of in-year savings, Caleres said.

It also anticipates better-than-expected freight costs, which is expected to result in an additional 10 million dollars in savings.

Schmidt said: “As we progress through 2023, we are focused on tightly managing our expenses, investing in value-enhancing opportunities, and maximizing our capabilities to position the organization for growth.”