Caleres Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Laura Champine - Loop Capital - Analyst : Thanks for taking my question this morning. Jay, just hearing all the things that you've done to fix the ERP implementation issues, should we consider it an immaterial impact on the back half of the year?

Question: Laura Champine - Loop Capital - Analyst : Got it. And then, on this August rebound -- and I think this would probably be tough to tell, but do you have a sense that that was driven by the macro? Or could it be that your promotions, which were stepping up in that time period are what drove the improved results?

Question: Laura Champine - Loop Capital - Analyst : Got it. Thank you.

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : Yeah. Sorry, I was muted. Yeah. I've got a few questions. On the ERP situation, Jay, it sounds like you said all systems go. I am curious, though, you mentioned that with brand portfolio that you're seeing growth in your receipt plans. Is there any concern about fallout to those plans, maybe just as some of these issues might have negatively impacted some confidence in your business from your wholesale partners?

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : And just on the boot piece, can you remind us how big a part of your business that is in the back half of the year and what kind of performance you're lapping there from a year ago?

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : And then, on your third quarter outlook, I think, Jay, you said that Famous Footwear comp up 8% -- I'm sorry, high-single-digits in August. So what kind of comp assumption for the quarter is embedded in your outlook? What kind of Famous comp is in that sales range that you provided?

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : Okay. And then, how about Famous gross margin for the third quarter? I mean, obviously, it was down pretty substantially in 2Q. Are you also expecting it to be down in 3Q, or do you expect it to be better?

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : And then, one last one for me. Just in terms of the revision to the full year sales guidance, because it sounds like in the quarter, there were three main issues. There was ERP, there was back-to-school, there was seasonal. So for the full year revision, does that basically take into effect kind of the $10 million to $15 million you lost on ERP? But for back-to-school, it's just kind of -- back-to-school is kind of a wash, right? Because what you lost in 2Q, you kind of pick up in 3Q and then it's seasonal. And how much was the impact on seasonal? Can you kind of parse that out?

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : But it's fair to say that back-to-school, in terms of the revised full year guidance, that doesn't really reflect any changes to your thinking around back-to-school because what you lost in 2Q, you pick up in 3Q? Or is your overall view of back-to-school worse than what it was when you last gave the guidance?

Question: Mitch Kummetz - Seaport Global Securities LLC - Analyst : Okay. Thanks. Good luck.

Question: Josh Herrity - Telsey Advisory Group - Analyst : Hey, Jay and Jack.

Question: Josh Herrity - Telsey Advisory Group - Analyst : I just wanted to follow up a little more on a lot of moving pieces here in the quarter. From an inventory perspective, I think you mentioned the carrier delay, the ERP implementation, seasonal weakness. Can you talk a little bit more broadly about demand trends by category? Obviously, athletic stronger, but dress seasonal and what that means for your inventory composition heading into the back half of the year relative to the overall promotional environment and what it could mean for the gross margin in the back half of the year?

Question: Josh Herrity - Telsey Advisory Group - Analyst : Great. Thanks. And then if I could just follow up with the second question on the ERP implementation. That was entirely on the brand portfolio side, is that correct?

Question: Josh Herrity - Telsey Advisory Group - Analyst : And can you remind us where the ERP rollout or system stand for the Famous side or if there's any other system implementations upcoming here?

Question: Josh Herrity - Telsey Advisory Group - Analyst : Thank you.

Question: Chandana Madaka - KeyBanc Capital Markets Inc. - Analyst : Hi, everyone. This is Chandana Madaka on for Ashley. So first, I just kind of wanted to dig in a little bit more. You've already spoken to your trends quarter-to-date by month. But you mentioned back-to-school kind of started off a little bit late. Just wanting to ask why do you think that is? And then, you've talked about how selling picked up in August and some of the dynamics in marketing and promo bringing that up more in line with your expectations, but just wanted to dig in further there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 2:00PM, CAL.N - Q2 2024 Caleres Inc Earnings Call

Question: Chandana Madaka - KeyBanc Capital Markets Inc. - Analyst : Awesome. And then, just as a follow-up, so I saw some door count expansion at Allen Edmonds. Just any early successes that you can speak to or any other door expansion that's planned for the other lead brands? And maybe what are you hearing from wholesale partners?