Caleres Inc. (NYSE:CAL) Earnings Report Highlights

• Caleres Inc. reported Q2 2024 earnings with revenue of approximately $683.3 million, missing the expected $723.8 million.
• The company experienced a significant drop in earnings per share (EPS) to 85 cents, more than 30% below the consensus estimate.
• Financial metrics reveal a P/E ratio of approximately 6.31 and a P/S ratio of around 0.38, suggesting the stock might be undervalued.

On Thursday, September 12, 2024, Caleres Inc. (NYSE:CAL), a prominent footwear company known for owning brands like Famous Footwear and Allen Edmonds, reported its earnings before the market opened. The company's revenue for the quarter was approximately $683.3 million, which did not meet the expected $723.8 million. This shortfall in revenue reflects the challenges Caleres faced during the quarter, including weak demand and operational issues.

During its Q2 2024 Earnings Conference Call, Caleres' executives, including CEO Jay Schmidt, discussed the factors contributing to the company's disappointing financial performance. Notably, the company experienced a 1.8% year-over-year decrease in revenue and a significant drop in earnings per share (EPS) to 85 cents, which was more than 30% below the consensus estimate of analysts. This decline in performance was attributed to a delayed back-to-school sales period and challenges with a new enterprise resource planning system, among other issues.

Despite a modest 1.5% increase in unit sales at Famous Footwear, the company's overall sales were negatively impacted by a 2.9% decline in comparable-store sales and a 5.1% drop in sales within its Brand Portfolio segment. These figures highlight the struggles Caleres faced in attracting customers and managing its operations efficiently during the quarter.

In response to these challenges, Caleres has adjusted its full-year outlook downwards, indicating a cautious stance on its future performance. The company's executives, including CEO Jay Schmidt, have acknowledged the impact of weak seasonal demand and operational difficulties on Caleres' financial health. This adjustment in guidance reflects the company's realistic assessment of the obstacles it faces and its efforts to navigate through them.

Financial metrics such as the price-to-earnings (P/E) ratio of approximately 6.31 and the price-to-sales (P/S) ratio of around 0.38 suggest that Caleres' stock might be undervalued, presenting a potentially attractive opportunity for investors. However, the company's moderate level of debt, as indicated by a debt-to-equity (D/E) ratio of roughly 0.84, and its reasonable ability to meet short-term obligations, with a current ratio of about 1.09, are important factors for investors to consider when evaluating Caleres' financial stability and growth prospects.