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Why Shares of Caleres Rocketed Higher Today

By Timothy Green – Aug 27, 2019 at 12:40PM

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Solid results amid tariff uncertainty sent the footwear stock into recovery mode.

What happened

Shares of Caleres (CAL -1.47%) soared on Tuesday after the footwear specialist matched analyst expectations for revenue and beat expectations for earnings with its second-quarter report. The company recorded same-store sales growth at Famous Footwear, and double-digit revenue growth for its brand portfolio. As of 11:50 a.m. EDT, the stock was up about 25.7%.

So what

Caleres reported second-quarter revenue of $752.5 million, up 6.5% year over year and in line with the average analyst estimate. Brand portfolio sales rose 17.9% to $359.6 million, while same-store sales at Famous Footwear were up 1.5%.

Shoes.

Image source: Getty Images.

"Our deep insights, combined with our industry-leading footwear capabilities, allowed us to deliver relevant product, supporting growth in the Brand Portfolio and positive same-store-sales growth at Famous Footwear," said CEO Diane Sullivan in prepared remarks included in the press release.

Non-GAAP (adjusted) earnings per share came in at $0.62, up from $0.59 in the prior-year period and $0.04 higher than analysts were expecting. Gross margin was 40.7%, down from 41.5% in the second quarter of 2018, but that decline was more than offset by higher revenue.

Now what

For the full year, Caleres expects to produce total revenue of approximately $3 billion. The brand portfolio is projected to grow sales by a low- to mid-teens percentage, including the impact of acquisitions, while Famous Footwear is expected to produce flat to low-single-digit same-store sales growth.

Full-year non-GAAP EPS is expected between $2.35 and $2.45, up 9% year over year at the midpoint. This adjusted figure excludes $0.16 per share of expenses tied to brand acquisitions and exits.

Shares of Caleres have tumbled over the past few months, partly due to trade war developments. With a strong second quarter in the books, this small-cap stock has clawed back at least some of those losses.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Caleres, Inc. Stock Quote
Caleres, Inc.
CAL
$24.55 (-1.47%) $0.36

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