Caleres’ Brand Portfolio Delivering Positive Momentum
Fueled by strong consumer demand for fashion brands and products, segment revenues at Caleres rose 7.6 percent to $323.2 million in the third quarter ended Oct. 29. Brand Portfolio operating profit increased 96 percent to $22.3 million from $11.38 million as the segment’s gross margin improved 490 basis points to 37.9 percent on higher wholesale prices, a favorable brand mix, and contribution from higher margin sales from the unit’s Direct-To-Consumer business.
Caleres reported a 24 percent increase in new customers to the Brand Portfolio in Q3, fueled by consumer interest in the Naturalizer brand whose sales were up nearly 60 percent year-over-year on gains in dress, casual, and boots. Average unit retail sales (AURs) rose 20 percent, helped by product newness in styling and innovation. Sales on Naturalizer.com increased more than 50 percent year-over-year with the more than half the site’s 19-percent gain in new customers coming from younger consumers, the company said.
Meanwhile, sales from the company’s Sam Edelman brands rose 26 percent on a strong wholesale performance and a more than doubling of its dotcom business.
The company confirmed that the Brand Portfolio business has been focused on full-pricing selling, not on promotions or liquidations, since the start of the third quarter.
As for Caleres’ other business, Famous Footwear, it reported a nearly 2.6 percent decline in Q3 revenues to nearly $482 million on a difficult comparison. The segment operating profit slipped more than 32 percent to $59.3 million. The ‘Top 25’ brands represented 89 percent of period revenues for the 876-door chain that also experienced strength in its non-athletic business. In recent quarters, the retailer has updated its famousfootwear.com website and high-performing and potential stores and launched a new store concept that showcases its best brands and highlights key footwear trends.