8-K: Caleres Q4 Adjusted EPS Beats Guidance, FY26 Outlook

Caleres, Inc. reported fourth quarter adjusted EPS exceeding guidance, driven by Brand Portfolio growth and Stuart Weitzman integration completion, while providing a mixed outlook for fiscal 2026.

Summary

• Fourth quarter 2025 net sales were $695.1 million, an increase of 8.7% compared to the prior year.
• Brand Portfolio sales increased 20.3%, with organic sales up 1.5%, while Famous Footwear sales declined 1.2% with comparable sales up 0.1%.
• GAAP loss per diluted share for Q4 2025 was $0.70, and adjusted loss per diluted share was $0.36, which exceeded guidance.
• The Stuart Weitzman integration onto Caleres platforms was completed on time and on budget with minimal business disruption.
• Fiscal Year 2025 net sales were $2.8 billion, up 1.3% versus fiscal 2024.
• GAAP net loss for fiscal 2025 was $6.7 million, or $0.21 per diluted share, compared to GAAP net earnings of $107.3 million, or $3.09 per diluted share, in fiscal 2024.
• Adjusted net earnings for fiscal 2025 were $20.5 million, or $0.61 per diluted share, down from $114.6 million, or $3.30 per diluted share, in fiscal 2024.
• For the first quarter of 2026, consolidated net sales are expected to be up mid to high-single digits, with adjusted earnings per diluted share of $0.25 to $0.30.
• For fiscal 2026, consolidated net sales are expected to be up low to mid-single digits, with adjusted earnings per diluted share of $1.35 to $1.65.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, with Q4 adjusted earnings beating expectations and strategic initiatives like Stuart Weitzman integration completed successfully, but tempered by overall GAAP losses and a cautious outlook for 2026.

Positives

• Fourth quarter adjusted loss per diluted share of $0.36 exceeded guidance.
• Sales were modestly above expectations and gross margin was better than anticipated in both segments for Q4 2025.
• Brand Portfolio sales increased 20.3% in Q4 2025, with organic sales up 1.5%.
• Gained market share in Women's Fashion Footwear (+0.85%) and Total Footwear (+0.34%).
• Owned eCommerce sales across Famous Footwear and Brand Portfolio remained up double digits.
• The Stuart Weitzman integration was completed on time and on budget with minimal business disruption.
• Famous Footwear's FLAIR remodels continue to outperform the fleet, and the curated assortment is resonating with consumers, leading to market share gains in shoe chains.
• Profit improvement in fiscal 2026 is expected to be driven by tariff mitigation efforts taking hold and the plan to bring Stuart Weitzman to breakeven profitability.

Negatives

• Fourth quarter GAAP loss per diluted share was $0.70, compared to GAAP net earnings of $0.15 in the prior year.
• Fourth quarter adjusted loss per diluted share was $0.36, compared to adjusted net earnings of $0.33 in the prior year.
• Famous Footwear net sales decreased 1.2% in Q4 2025.
• Q4 2025 GAAP gross margin was 41.8%, down 230 basis points versus last year, and adjusted gross margin was 42.9%, down 10 basis points.
• Selling and administrative expenses deleveraged 370 basis points in Q4 2025, primarily reflecting $39 million in expenses related to Stuart Weitzman.
• Fiscal Year 2025 GAAP net loss was $6.7 million ($0.21 per diluted share), a significant decline from GAAP net earnings of $107.3 million ($3.09 per diluted share) in FY24.
• Fiscal Year 2025 adjusted net earnings were $20.5 million ($0.61 per diluted share), down from $114.6 million ($3.30 per diluted share) in FY24.
• Famous Footwear segment net sales decreased 3.6% in FY25, with comparable sales down 2.3%.
• Inventory at year-end was $610.5 million, up $45.2 million versus last year, with about $57 million from Stuart Weitzman.
• Borrowings under the asset-based revolving credit facility increased to $296.5 million from $219.5 million in the prior year.

Risks

• Changes in United States and international trade policies, including tariffs and trade restrictions.
• Changing consumer demands, which may be influenced by general economic conditions and other factors.
• Inflationary pressures and supply chain disruptions.
• Rapidly changing consumer preferences, purchasing patterns, and fashion trends.
• Supplier concentration, customer concentration, and increased consolidation in the retail industry.
• Intense competition within the footwear industry.
• Foreign currency fluctuations.
• Political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the company relies heavily on third-party manufacturing facilities.
• Cybersecurity threats or other major disruption to information technology systems, including those related to the ERP upgrade.
• Transitional challenges with acquisitions and divestitures.
• The ability to accurately forecast sales and manage inventory levels.
• A disruption in the company's distribution centers.
• The ability to recruit and retain senior management and other key associates.
• The ability to secure/exit leases on favorable terms.
• The ability to maintain relationships with current suppliers.
• Changes to tax laws, policies, and treaties.
• Commitments and shareholder expectations related to responsible business initiatives.
• Compliance with applicable laws and standards with respect to labor, trade, and product safety issues.
• The ability to attract, retain, and maintain good relationships with licensors and protect intellectual property rights.

Future Outlook

Caleres expects first quarter 2026 consolidated net sales to increase mid to high-single digits, with GAAP earnings per diluted share of $0.21 to $0.26 and adjusted earnings per diluted share of $0.25 to $0.30. For fiscal 2026, the company anticipates consolidated net sales to be up low to mid-single digits, with GAAP earnings per diluted share of $1.31 to $1.61 and adjusted earnings per diluted share of $1.35 to $1.65. Profit improvement in 2026 is expected to be driven primarily by tariff mitigation efforts taking hold and the plan to bring Stuart Weitzman to breakeven profitability.

Management Comments

• "Caleres fourth quarter exceeded our earnings guidance with sales modestly above expectations and gross margin better than anticipated in both segments." Jay Schmidt, President and Chief Executive Officer.
• "Performance was driven by continued strength in owned eCommerce and international growth, reinforcing our strategic growth vectors." Jay Schmidt.
• "Our Lead Brands once again outperformed, and we gained market share in both womens fashion footwear and total footwear." Jay Schmidt.
• "At Famous Footwear, FLAIR remodels continue to outperform the fleet, and our more curated and elevated assortment is resonating with consumers as Famous gained market share in shoe chains." Jay Schmidt.
• "As we look ahead, 2026 is shaping up as a build-back year with modest organic sales growth and meaningful earnings recovery." Jay Schmidt.
• "While we have many reasons for optimism, we are also aware that the current geopolitical backdrop presents a level of risk and uncertainty." Jay Schmidt.
• "Profit improvement in 2026 will be driven primarily by our tariff mitigation efforts taking hold and our plan to bring Stuart Weitzman to breakeven profitability." Jay Schmidt.
• "We are confident that executing our strategic plans will result in improved financial performance and drive long-term value for our shareholders." Jay Schmidt.

Industry Context

StockSavvy.ai notes that Caleres' performance reflects broader trends in the footwear industry, where strong brand portfolios and effective e-commerce strategies are crucial for growth. The market share gains in women's fashion footwear and total footwear, alongside the outperformance of FLAIR remodels at Famous Footwear, indicate successful adaptation to evolving consumer preferences. The emphasis on tariff mitigation and bringing Stuart Weitzman to breakeven profitability highlights the ongoing challenges and strategic focus within the global retail supply chain.

Stakeholder Impact

• Shareholders: Potential for improved financial performance and long-term value driven by strategic plans, but current GAAP losses and increased borrowings may be a concern.
• Customers: Benefit from curated and elevated assortments at Famous Footwear and continued growth in Brand Portfolio offerings.
• Employees: Stuart Weitzman integration completed with minimal business disruption, suggesting stability for employees involved.
• Suppliers: Continued reliance on third-party manufacturing facilities, particularly in China, subject to geopolitical and trade policy risks.
• Creditors: Increased borrowings under the revolving credit facility indicate higher leverage.

Next Steps

• Continue tariff mitigation efforts in fiscal 2026.
• Bring Stuart Weitzman to breakeven profitability in fiscal 2026.
• Host an investor conference call on March 19, 2026, at 10:00 a.m. ET.

Key Dates

Recommendation

While Caleres exceeded Q4 adjusted EPS guidance and completed a key integration, the overall GAAP losses for both the quarter and fiscal year, coupled with a modest growth outlook for 2026 and ongoing geopolitical risks, suggest a "hold" position. The company is in a "build-back year" with anticipated earnings recovery, but significant improvements are still projected rather than realized. Investors should monitor the execution of tariff mitigation and Stuart Weitzman's path to profitability.

Keywords

Caleres, CAL, footwear, shoes, Famous Footwear, Brand Portfolio, Stuart Weitzman, Sam Edelman, Allen Edmonds, Naturalizer, Vionic, Q4 earnings, fiscal 2025, fiscal 2026 guidance, retail, eCommerce, fashion, tariffs, market share