American footwear company Caleres has reported a stronger third quarter (Q3) for fiscal 2025 (FY25), with consolidated revenue rising 6.6 per cent year-over-year (YoY) to $790.1 million, and Brand Portfolio sales up 18.8 per cent, including a $45.8 million contribution from Stuart Weitzman. Excluding the acquisition, organic Brand Portfolio revenue increased 4.6 per cent.

Lead Brands delivered double-digit growth and helped the company gain 0.5 per cent market share in women’s fashion footwear. E-commerce performance remained a bright spot, with owned digital sales across Famous Footwear and Brand Portfolio rising at a double-digit pace. Famous Footwear, however, saw softer performance, with sales falling 2.2 per cent and comparable sales down 1.2 per cent.

Caleres has recorded a solid Q3 FY25 with revenue up 6.6 per cent to $790.1 million, driven by 18.8 per cent Brand Portfolio growth and strong e-commerce momentum.
Famous Footwear softened, while margins and earnings fell due to tariffs and acquisition dilution.
CEO said results exceeded expectations and integration of Stuart Weitzman will support long-term growth despite near-term pressure.

Despite top-line growth, profitability was pressured by tariffs, acquisition-related dilution, and inventory actions. GAAP earnings per diluted share fell sharply to $0.07 from $1.19 a year earlier. Adjusted earnings per diluted share were $0.38, compared with $1.23 in the prior-year quarter. Excluding Stuart Weitzman, adjusted diluted earnings per share stood at $0.67, Caleres said in a press release.

The gross margin declined 230 basis points to 41.8 per cent, while adjusted gross margin slipped 140 basis points to 42.7 per cent. Selling and administrative expenses rose to $311.3 million, driven by $32.2 million in Stuart Weitzman-related costs and higher incentive-related comparisons. Quarter-end inventory increased to $678.2 million, though excluding the acquisition effect, inventory rose just 2.6 per cent.

Caleres ended the quarter with $355 million in borrowings under its revolving credit facility and liquidity of $312 million.

“Caleres delivered third quarter sales results that were ahead of our internal expectations, highlighted by organic sales growth in our Brand Portfolio segment, strong Lead Brands performance, sequential improvement in trends at Famous Footwear, and accelerated e-commerce momentum in both segments of our business,” said Jay Schmidt, president and CEO at Caleres.

“With the recent addition of Stuart Weitzman, our Brand Portfolio now drives nearly half our sales and more than half our operating earnings. As we expected, we experienced pressure on our earnings from tariffs and near-term acquisition dilution, however, the fundamentals of our business are improving,” added Schmidt.

Looking ahead, Caleres expects continued margin pressure from tariffs and earnings dilution from Stuart Weitzman. The company anticipates a fourth-quarter loss on both a GAAP and adjusted basis and now guides to a full-year GAAP loss per diluted share of between $0.13 and $0.18. Adjusted earnings per diluted share are expected to be in the range of $0.55 to $0.60, including $0.60 to $0.65 of dilution from Stuart Weitzman. Excluding the acquisition, full year adjusted earnings per diluted share would range between $1.15 and $1.25.

“For the balance of the year, we will be working to transition the Stuart Weitzman business to Caleres systems and clean up aged and excess inventory as we hone our strategies for long-term growth and profitability of the brand. In fiscal 2026, we will begin to unlock synergistic cost savings,” said Schmidt.

Fibre2Fashion News Desk (SG)