Shares of Caleres (CAL -0.55%) were gaining today after the footwear retailer delivered a better-than-expected second-quarter earnings report, in spite of challenges from the pandemic.
As a result, the stock was up 10.3% as of 10:57 a.m. EDT.
The parent of Famous Footwear and brands including Allen Edmonds and Dr. Scholl's, said overall revenue fell 33.4% to $501.4 million in the quarter, though that easily beat expectations of $450.1 million. Direct-to-consumer sales, which include stores and e-commerce, represented 80% of total revenue in the quarter, with total sales declining by 20.5% in Famous Footwear and 48.9% at its brand portfolio segment.
Caleres trimmed its selling, general, and administrative expenses by about 25%, or $66 million, and finished the quarter with an adjusted loss per share of $0.57, compared to an adjusted per-share profit of $0.62 in the quarter a year ago. Still, that result was well ahead of analyst estimates at $1.02 per-share loss.
CEO Diane Sullivan said, "Even with the ongoing market impacts of the virus, Caleres took significant steps during the quarter to strengthen the business, improve the balance sheet, leverage our capabilities and lay the foundation for a continuing recovery of our business in the year's second half."
Sullivan said that the second half of the year was expected to be "unpredictable," as retail traffic is still down generally and a lack of office work and formal events are hurting sales of attire like dress shoes.
However, the stock's gains today show that retailers like Caleres can benefit from low expectations. Caleres shares are still down 60% year to date, indicating potential for a recovery, but that's unlikely to happen until the pandemic-related challenges ease up.