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Caleres Sees Speed as Differentiator


Bolstered by its ‘Speed’ strategy programs, which can bring footwear product to market in three months or less to align with consumer demand and key trends, Caleres’ Brand Portfolio delivered record Q3 adjusted operating earnings of $39 million, a record adjusted operating margin of 12.2 percent, and 580 basis point improvement in gross margin to 43.7 percent due to lower freight costs, higher initial margins, and disciplined inventory management. Brand Portfolio sales declined 0.8 percent to approximately $321 million but were sequentially stronger than in Q2 when they were down by 7 percent. Speed programs represented 28 percent of the segment’s footwear production during the period, up from 12 percent in the year-ago period.

Key consumer trends in Q3 included heightened consumer interest in non-seasonal footwear categories such as casual flats, moccasins, ballet flats, and fashion sneakers, whose sales increased 30 percent year-over-year and helped to offset weak market demand for boots.

Caleres is especially encouraged by the performance of the portfolio’s lead brands in Allen Edmonds, Vionic, Dr. Scholl’s, and Franco Sarto. Allen Edmonds experienced broad-based improvement in Q3, its 11th consecutive growth period, with gains across the major categories of casual, dress, and sport. Meanwhile, international and retail helped Vionic generate a low single digit sales increase during the period were loafers and flats were the key drivers. The Franco Sarto and Lifestride brands increased their respective sales and operating profits through the maximization of key styles in demand by brand customers, the company said.