Caleres (NYSE: CAL) reported Q4 EPS of $0.03, $0.13 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $571 million versus the consensus estimate of $555.5 million.

Fourth Quarter 2020 Highlights
(13-weeks ended January 30, 2021 compared to 13-weeks ended February 1, 2020)

• Net sales were $571.0 million, down 18.3 percent from the fourth quarter of fiscal 2019
  • Direct-to-consumer represented 75 percent of total net sales
  • A 6.2 percent sales decline in the Famous Footwear segment
  • A 32.4 percent sales decline in the Brand Portfolio segment
  • Total company owned ecommerce website sales increased approximately 25 percent, with ecommerce penetration rising to approximately 30 percent of net sales
• Gross profit was $225.6 million, while gross margin was 39.5 percent
• SG&A expense of $226.1 million, down $34.7 million compared to the fourth quarter of 2019
• Net loss of $77.0 million, or loss of $2.11 per diluted share, compared to net earnings of $0.4 million, or earnings of $0.01 per diluted share in the fourth quarter of fiscal 2019. Loss of $2.11 per share includes $2.14 for the below items:
  • COVID-19 related impairments and other expenses of $1.03;
  • Intangible asset impairment charges of $0.49;
  • Brand Portfolio expense of $0.37 related to the Naturalizer brand retail exits;
  • Fair value adjustment of $0.18 associated with the mandatory purchase obligation for Blowfish Malibu; and
  • Vionic integration-related costs of $0.07.
• Adjusted net income of $1.3 million, or $0.03 per diluted share compared to adjusted net income of $13.9 million, or $0.34 per diluted share in the fourth quarter of fiscal 2019
• Generated $24.6 million in cash from operations and ended the fourth quarter with $88.3 million of cash on hand
• Reduced credit facility borrowings by $50 million during the fourth quarter to end the year at $250 million, or $25 million below last year’s pre-virus levels
• Reduced inventory levels by approximately 21 percent year-over-year, reflecting ongoing actions taken to align with consumer demand and the ongoing liquidation of Naturalizer store inventory

“I am proud of the Caleres team and the tremendous progress we have made on a wide range of strategic objectives during an unprecedented year that saw the pervasive impact of the pandemic and protracted economic lockdown,” said Diane Sullivan, Chairman and CEO. “Among the highlights, we:

• Streamlined the organization and rightsized our expense base, resulting in $100 million in ongoing annualized expense savings;
• Achieved a 40 percent increase in ecommerce sales via our rapidly growing owned websites;
• Commenced the strategic closure of a portion of our brick-and-mortar portfolio to better align with the accelerated consumer shift toward digital;
• Generated approximately $126 million in cash from operations;
• Strengthened the balance sheet – restoring overall debt to below pre-pandemic levels by fiscal year-end and significantly reducing our working capital position;
• Returned approximately $34 million to shareholders through our long-standing dividend and share repurchase program.

“We continued to execute at a very high level at Famous Footwear, which rebounded quickly following the extended store closures and capped off 2020 with a modest decline in fourth quarter sales and a significant increase in year-over-year earnings. For the Brand Portfolio, we have identified areas of opportunity that are expected to position this segment for improved performance including actions to ensure the optimal alignment of our product assortment and omnichannel capabilities to more closely reflect rapidly evolving consumer behaviors, preferences and priorities.”

“While the pace of recovery is still uncertain, there are signs of stabilization in the marketplace,” said, Sullivan. “We believe we are well-positioned to capitalize as the market rebounds and the world returns to a greater degree of normalcy. As we plan for future success, we will focus on maintaining our strong momentum at Famous Footwear; driving enhanced consumer alignment and improved performance in the Brand Portfolio; taking a careful and disciplined approach to cost control and capital spending; reducing debt levels still further; and returning excess cash to shareholders. In short, Caleres is a more agile and focused organization than it was at the start of 2020, with an even more vigorous commitment to connecting with our consumers and providing them with compelling and fresh product – across growing footwear categories — when, where and how they want to shop. We are confident that we can leverage our talented and dedicated workforce, strong operating platform, powerful portfolio and improved financial position to capitalize on the opportunities we see ahead in order to drive long-term value for our shareholders.”

2021 Outlook
Given the ongoing disruption related to the virus, supply chain dislocations and associated near-term uncertainty in the marketplace, Caleres is not providing fiscal year 2021 guidance at this time. The company will evaluate market conditions as the year progresses and will endeavor to reinstate its more traditional guidance practices in the future.

For earnings history and earnings-related data on Caleres (CAL) click here.