Caleres Inc Q4 2023 Earnings Call Transcript

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

Question: Laura Champine - Loop Capital Markets - Analyst : Thanks for taking my question. I wanted a little bit more about what's behind your expectation that the footwear industry will decline this year. And maybe if we could start with where you think last year likely fell out as an industry knowing that it's fragmented and then what's behind the expectation that we'll have another rough year this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2024 / 2:00PM, CAL.N - Q4 2023 Caleres Inc Earnings Call

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

Question: Dana Telsey - Telsey Advisory Group - Analyst : Hi. Good morning, everyone. As you think about the cadence of the year, first quarter, second quarter, how are you thinking about Brand Portfolio and Famous? And did you notice any deterioration or stabilization through the core Famous Footwear consumer in the fourth quarter? And what are you seeing in order trends for Brand Portfolio from the wholesale channel? Thank you.

Question: Dana Telsey - Telsey Advisory Group - Analyst : Got it. And then, if you unpack SG&A, Jack, anything that we should be thinking about as we go through the year, any quarterly ups or downs in terms of the SG&A impact? And then, Jay, as you think about your own brands in the Famous Footwear store, where are you along that path, and what could that add to the margin opportunity there? Thank you.

Question: Dana Telsey - Telsey Advisory Group - Analyst : Thank you.

Question: Mitch Kummetz - Seaport Research - Analyst : Yes, thanks for taking my questions. I've got a few. I want to start -- just on the guide, I want to clarify a couple of things, because I think you guys said that you expect to take share in both Famous and Brand Portfolio. And you're -- as far as kind of a market outlook, you're basing that on Circana down 1%. So Jack, you're saying on Famous same-store sales maybe down a little to up a little, is that correct?

Question: Mitch Kummetz - Seaport Research - Analyst : And so on Brand Portfolio, what kind of sales growth are you looking for there for the year?

Question: Mitch Kummetz - Seaport Research - Analyst : And then, Jack, I think you said that, at Famous, you expect promotions to be aligned with last year. I think you made a comment of flat gross margin, was that a Famous comment or is the op margin guidance you gave assume flat gross margin on a consolidated basis for the year?

Question: Mitch Kummetz - Seaport Research - Analyst : And then, Jay, you mentioned that March was better than February. I would guess it's more of a Famous comment. Is that -- do you think that's to do with weather or do you think there's some change in consumer shopping behavior or strengthening of the consumer? Is there anything you can attribute that to? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2024 / 2:00PM, CAL.N - Q4 2023 Caleres Inc Earnings Call

Question: Mitch Kummetz - Seaport Research - Analyst : And then, last question for you, Jay. There's a lot of talk in the back half of last year of the consumer with shopping events, be it back to school or holiday, and then kind of disappearing in between. Do you think that continues this year? And how do you see the impact of events in the first half? Is there much going on from an event standpoint before we get back to school? Like, to what extent do you think like Easter or Memorial Day, Mother's-Father's Day, things like that, could drive the business?

Question: Mitch Kummetz - Seaport Research - Analyst : Okay. Thanks, guys.

Question: Abbie Zvejnieks - Piper Sandler - Analyst : Great. Thanks for taking my question. Jay, you talked a little bit about the consumer being more selective, buying the product that they want, and promotions not moving other inventory as much. One, are you seeing that same dynamic in both Men's and Women's versus Kids? And then two, are you changing your merchandising efforts at Famous Footwear in any capacity in order to meet some more of that key style demand?

Question: Abbie Zvejnieks - Piper Sandler - Analyst : Got it. That's helpful. And just one more on -- specifically on the Brand Portfolio. Restocking has been a big topic of conversation with brands with exposure to the wholesale channel. So just in terms of Brand Portfolio's wholesale exposure, have you seen any of that like "restocking" yet or is that something we should look for as a tailwind, maybe 2025?

Question: Abbie Zvejnieks - Piper Sandler - Analyst : Got it. And sorry, just one more on dropship. Can you just talk about that business and how you're utilizing it? Has that changed at all as the retailers have gotten into a better inventory position? Just anything there?

Question: Abbie Zvejnieks - Piper Sandler - Analyst : Okay, great. Thank you guys so much.

Question: Ashley Owens - KeyBanc Capital Markets - Analyst : Great, thank you. So, just on Famous, you mentioned Kids grew in the quarter. Could you just provide some color on the performance between athletic, casual, and dress? Just maybe where they start and stands today? And then secondly, just given the customer preference for newness right now, as you're thinking about the cadence of product launches throughout the year within the Brand Portfolio, how does it compare to years prior? And then, would you say that you're coming to market with more products, or would you say it's better products that are kind of going to be helping driving [up growth] this year? Thanks.

Question: Ashley Owens - KeyBanc Capital Markets - Analyst : Great. Thanks so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 19, 2024 / 2:00PM, CAL.N - Q4 2023 Caleres Inc Earnings Call