DEF 14A: Caleres Reports Strong Operational Performance in 2023, Sets Stage for Future Growth

Caleres delivered a strong operational and financial performance in 2023, exceeding pre-pandemic earnings per share and achieving record operating earnings in its Brand Portfolio.

Summary

• Caleres delivered consolidated net sales of $2.82 billion in 2023.
• The company achieved earnings per diluted share of $4.80, more than double the pre-pandemic record.
• The Brand Portfolio achieved its best-ever annual adjusted operating earnings at $145 million.
• Consolidated operating margins were strong at more than 7 percent.
• Caleres generated approximately $200 million of cash flow from operations.
• The company reduced revolver borrowings by $126 million from fiscal year end 2022.
• Approximately $27 million was returned to shareholders through dividends and share repurchases.
• Net sales of Famous Footwear decreased $95.7 million, or 5.6%, compared to 2022.
• Net sales of the Brand Portfolio segment decreased $51.9 million, or 3.9%, compared to 2022.
• Consolidated operating earnings decreased to $194.5 million in 2023, compared to $214.3 million last year.
• On an adjusted basis, net earnings were $149.3 million, or earnings of $4.18 per diluted share, compared to $167.1 million, or $4.52 per diluted share last year.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the strong operational and financial performance in 2023, exceeding pre-pandemic earnings and achieving record operating earnings in the Brand Portfolio. While there were some declines in net sales and operating earnings compared to the previous year, the overall tone is optimistic, emphasizing future growth and shareholder value.

Positives

• Caleres delivered a strong operational and financial performance in 2023.
• The company solidified its leadership position with the Millennial Family at Famous Footwear and increased market share in shoe chains as well as in Kids.
• Inventory was aligned with demand through disciplined inventory management and enhanced speed-to-market programs.
• The company prioritized investment areas including enhancements to the marketing ecosystem, expansion of international presence, improvement in consumer experience and upgrades to the financial and operational platform.
• Caleres redoubled its commitment to environmental, social and governance (ESG) by unveiling its One Planet Standard and publishing its third corporate social responsibility update.

Negatives

• Consolidated net sales decreased $150.8 million, or 5.1%, to $2,817.3 million in 2023.
• Net sales of Famous Footwear segment decreased $95.7 million, or 5.6%, compared to 2022.
• Net sales of Brand Portfolio segment decreased $51.9 million, or 3.9%, compared to 2022.
• Consolidated operating earnings decreased to $194.5 million in 2023, compared to $214.3 million last year.

Risks

• The document does not explicitly detail current issues and potential future challenges.

Future Outlook

Caleres believes the stage is set for continued growth in 2024, with a focus on creating exceptional product, exceeding consumer expectations, executing on the growth strategy, generating substantial cash flow, and driving significant value for shareholders.

Management Comments

• Caleres delivered another strong year of operational performance.
• 2023 marked a year of significant accomplishment and disciplined financial execution.
• These results underscore the power of our portfolio of brands, the focus and dedication of our talented team, and the magnitude of our structural financial transformation.
• The transformation in earnings power in recent years combined with our powerful brands, best-in-class capabilities, and value-driving structure position us exceptionally well for continued growth in 2024.

Industry Context

The announcement highlights Caleres' performance within the footwear and retail industry, emphasizing its ability to navigate a dynamic market environment and maintain a leadership position with the Millennial family at Famous Footwear.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or competitors.
• The document does not list specific comparible companies, projects, and results.

Stakeholder Impact

• Shareholders are expected to benefit from the company's continued growth and value creation.
• Employees are recognized for their commitment and dedication to the company's success.
• Customers are expected to benefit from the company's focus on creating exceptional product and exceeding expectations.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Shareholders on May 23, 2024.
• Caleres will continue to execute its three-year plan to deliver growth in sales and earnings.

Key Dates

Keywords

Caleres, financial performance, earnings, net sales, Brand Portfolio, Famous Footwear, ESG, executive compensation, directors, shareholders