Image Source: Famous Footwear.

What: Shares of Caleres Inc. (NYSE:CAL) were stepping up to the next level today after delivering a strong revenue outlook in its first-quarter earnings report last night. At the close of today's session, the stock finished up 17.1%.

So what: The footwear retailer, which owns or licenses brands including Via Spiga, Dr. Scholls, and Diane Von Furstenberg, actually missed estimates for the past quarter. Its per-share profit of $0.41 was short of expectations at $0.43, while revenue fell 2.9%, to $584.7 million, due to a planned reduction in brand portfolio sales.

CEO Diane Sullivan said, "Despite softness in the overall market, we delivered solid sales at Famous Footwear, and improved gross margin at brand portfolio." The company also reduced inventory in both segments.

Same-store sales were up 1% at Famous Footwear, a sign that the company is bucking the negative trend in apparel. Despite a 9% sales slide in its brand portfolio segment, gross margin improved by 279 basis points as it exited low-margin businesses.  

Now what: Management touted its long-term investments in the earnings release, and stuck with its guidance, despite current retail headwinds. The company sees same-store sales growth in the low-single digits at Famous Footwear, and earnings per share at $2.00-$2.10, in line with estimates. 

A 17% pop seems surprising for a mostly middling earnings report, but Caleres management is executing on its long-term plan, and delivering comparable-sales growth and projected EPS growth for the year. In this tough retail environment, that seems to be enough to be rewarded by the market.

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