Caleres, Inc.

Second-quarter sales were $695 million, up 5.6% year over year. Excluding Stuart Weitzman, sales decreased 0.8%; Brand Portfolio organic sales increased 8.2% and were up 23.6% including Stuart Weitzman. Famous Footwear sales were down 6.3% with comparable sales down 5.9%, and adjusted EPS was $0.47 versus $0.35 last year. Consolidated gross margin, excluding the $57.4 million IEEPA tariff refund recovery, was 46.8%, up 340 bps; Brand Portfolio gross margin was 49.1%, up 880 bps; Famous gross margin was 42.7%, down 100 bps. Operating earnings were $22.1 million and operating margin was 3.2%. For Q3, management expects consolidated sales to increase in the low single digits, gross margin to improve 150 to 200 bps, and GAAP EPS of $0.62 to $0.70. For full-year 2026, guidance is consolidated sales up low- to mid-single digits, adjusted EPS of $1.50 to $1.65, consolidated gross margin up 180 to 220 bps, and capital expenditures of about $50 million to $55 million.

Jay Schmidt said 2026 is a build-back year focused on restoring earnings power, strengthening the business foundation, integrating Stuart Weitzman, and positioning Caleres for more durable growth. He emphasized that the brand portfolio is gaining share and seeing broad-based momentum, especially in fashion footwear and international markets, while Famous Footwear is being actively repositioned away from softer lifestyle athletic. His tone was confident but pragmatic: the company is making progress, but management is still working through assortment and inventory resets at Famous.

Dan Karpel highlighted that Q2 included $57.4 million of IEEPA tariff refunds in GAAP results, with $55.6 million reducing cost of sales and $1.8 million in other income. He said consolidated gross margin excluding that recovery was 46.8%, up 340 bps, driven by the Brand Portfolio, while Famous gross margin fell to 42.7% due to industry-wide promotional pressure in lifestyle athletic. He also noted Q2 cash of $50.9 million, borrowings of $288 million, availability under the revolver of $357.3 million, and inventory of $754.2 million, with Brand Portfolio inventory down 5.6% excluding Stuart Weitzman. Guidance implies $16 million to $17 million of interest expense, a 24% to 26% full-year tax rate, and SG&A roughly flat to slightly deleveraging for the year.

Analysts focused on two main issues: how much of Brand Portfolio growth came from North America versus international, and how durable the improvement could be in Famous Footwear’s athletic mix. Management said the order book is consistent with Q3 guidance and that they are not seeing unusual volatility, while also noting international remains less than 10% of total sales and has significant runway. On Famous, they said the athletic-to-fashion mix is being rightsized, premium product is outperforming in Flare stores, and markdown pressure should remain elevated as they clean up inventory. Questions on Stuart Weitzman centered on the path to breakeven; management said integration is progressing well, China is ahead of plan, and the brand is in better shape than earlier in the year.