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CI

CALERES INC (CAL)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 revenue of $658.5M declined 3.6% YoY but modestly beat Wall Street consensus ($656.5M), while adjusted EPS of $0.35 missed consensus ($0.56); GAAP EPS was $0.20 including a $0.07 discrete tax benefit . Values retrieved from S&P Global.*
  • Gross margin compressed 210 bps YoY to 43.4% on tariffs, inventory markdown reserves, and deeper promotions at Famous; EBIT margin fell to ~2.4% (adjusted operating margin 2.4%) .
  • Management suspended annual guidance given tariff uncertainty; near-term commentary: Famous August comps +1% and Brand Portfolio Q3 gross margin expected down similar to Q2, improving in Q4 as mitigation actions take hold .
  • Strategic catalysts: completed acquisition of Stuart Weitzman post quarter-end (net price ~$108.7M), expanded ABL facility to $700M (accordion to $950M) through 2030, and completed $15M annualized structural SG&A savings .
  • Narrative drivers: EPS miss and suspended guidance are stock-negative, partially offset by revenue resilience, improving Famous trends into back-to-school (Jordan launch), and integration synergies from Stuart Weitzman .

What Went Well and What Went Wrong

What Went Well

  • Lead brands (Sam Edelman, Allen Edmonds, Naturalizer, Vionic) increased sales in total and represented well over 50% of sales and operating earnings; Sam Edelman delivered double-digit international growth and strong domestic sell-through (“one of the most talked about events of the season”) .
  • Famous Footwear August comps +1% with strong e-commerce and successful exclusive Jordan launch for back-to-school (“became a top 10 brand”) .
  • International sales up double digits in Q2; DTC channels in Brand Portfolio grew, supporting mix and future margin trajectory .

What Went Wrong

  • Tariffs and markdown reserves drove gross margin down 210 bps YoY to 43.4%; Brand Portfolio gross margin down 240 bps; Famous gross margin down 130 bps on more promotional days (leaning into BOGO) .
  • Adjusted EPS fell to $0.35 (vs $0.85 prior year), with operating earnings down to $16.0M adjusted (from $42.5M), reflecting deleverage and tariff lag impacts; company suspended annual guidance .
  • Inventory up 4.9% YoY to $693.3M (BP +8.6%; Famous +2%), and borrowings rose to $387.5M pre-positioning for the Stuart Weitzman acquisition .

Financial Results

Consolidated Results vs Prior Periods and Consensus

MetricQ4 2025Q1 2026Q2 2026
Revenue ($USD Millions)$639.2 $614.2 $658.5
GAAP Diluted EPS ($)$0.15 $0.21 $0.20
Adjusted Diluted EPS ($)$0.33 $0.22 $0.35
Gross Margin (%)43.0% 45.4% 43.4%
EBIT Margin (%)2.1% 1.9% 2.4%
YoY Revenue Changen/a-6.8% -3.6%
YoY Gross Margin Change (bps)-80 -150 -210
Q2 2026 vs ConsensusConsensusActual
Revenue$656.48M*$658.52M
Primary EPS$0.56*$0.35
EBITDA$44.85M*$30.73M*

Values retrieved from S&P Global.*

Segment Breakdown

MetricQ4 2025Q1 2026Q2 2026
Famous Footwear Net Sales ($MM)$358.4 $327.7 $399.6
Famous Gross Margin (%)42.5% 45.3% 43.7%
Famous Operating Margin (%)1.7% 1.5% 4.6% (adj 4.7%)
Famous Comparable Sales (%)-2.9% -4.6% -3.4%
Brand Portfolio Net Sales ($MM)$300.3 $295.4 $275.6
BP Gross Margin (%)41.6% 43.8% 40.3%
BP Operating Margin (%)7.7% (adj 9.4%) 5.9% 2.4% (adj 3.1%)
BP Comparable Sales (%)+0.5% -1.2% +3.9%

KPIs

KPIQ4 2025Q1 2026Q2 2026
DTC Share of Sales (%)~73% ~70% ~75%
Inventory ($MM)$565.2 $573.6 $693.3
Borrowings ($MM)$219.5 $258.5 $387.5
Cash & Equivalents ($MM)$29.6 $33.1 $191.5
Debt/EBITDA (TTM)1.1 1.5 2.7
Adjusted EBITDA (TTM, $MM)$216.6 $187.9 $162.7
Company-Operated Stores (Total)960 950 948

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annual Guidance (Sales/EPS)FY 2025Sales down 1% to up 1%; EPS $2.80–$3.20 Suspended due to tariff uncertainty Lowered/Suspended
BP Gross MarginQ3 2025n/aDown similar to Q2; improvement in Q4 as mitigation benefits realized New quarterly color
Famous Comps (August)Q3 2025n/a+1% in August; expect Sept/Oct comps down low-single digits New quarterly color
SG&A Structural SavingsFY 2025$15M annualized; $7.5M back-half benefit Completed; annualized $15M with ~half in FY25 Maintained/Executed
ABL FacilityOngoingn/aExtended to June 2030; capacity raised to $700M; accordion to $950M Increased liquidity
Stuart Weitzman IntegrationH2 2025/2026Close expected summer 2025 Closed Aug 4, 2025; net price ~$108.7M; profitability targeted after transition by January Executed; timeline affirmed

Earnings Call Themes & Trends

TopicQ4 2025 (Prior)Q1 2026 (Prior)Q2 2026 (Current)Trend
Tariffs & MitigationShift sourcing outside China; absorb/share via margins and selective price increases; ~30–40 bps BP margin hit on year Tariff escalations drove markdown reserves and cancellations; paused China production; expect China sourcing ≤10% in H2 Continued gross margin pressure; lag between tariff impacts and mitigation; Q3 BP margin down similar to Q2; improvement in Q4 Pressure in H2, improvement into Q4
Supply Chain/SourcingExpect ~75% of direct sourcing outside China by Q2 2025; lead brands further Accelerated move out of China post April tariffs Ongoing factory concessions and country mix optimization Progressing
Famous PromotionsIncreased BOGO days in Q4 Continued BOGO during key selling periods Annualizing BOGO; expect less headwind; clearance markdowns normalizing Stabilizing
Jordan Launch at FamousTeased major brand additions for BTS Launched in 147 stores mid-May; all-door for BTS All-door for BTS; became top 10 brand; +1% August comps Positive
International GrowthNew partnerships and store expansion Market share gains; growth in international International sales up double digits Strengthening
DTC FocusDTC margin accretive; growing contemporary BP DTC modestly up; conversion improved DTC represented ~75% of sales; BP DTC up Accretive mix
Stuart WeitzmanAgreement announced Integration planning; external partner engaged Closed; purchase accounting underway; aim for profitability post transition by January Integration underway

Management Commentary

  • “We demonstrated the strength and resilience of our company this quarter… lead brands delivered sales growth… international sales increased by double digits… improvement in July at Famous Footwear continued into August.” — Jay Schmidt .
  • “We completed structural cost savings initiatives that will deliver annualized savings of $15 million… completed the acquisition of Stuart Weitzman, adding a new Lead Brand.” — Jay Schmidt .
  • “Consolidated gross margin was 43.4%, down 210 bps… tariff impact about 250 bps, markdown reserves ~120 bps in BP… Famous gross margin down 130 bps due to more days on promotion and deeper offers.” — Jack Calandra .
  • “Given continued uncertainty from tariffs, we are not providing annual guidance… for Famous, August comps +1%… for BP, expect Q3 gross margin down similar to Q2, with improvement in Q4.” — Jack Calandra .

Q&A Highlights

  • Famous Footwear cadence and BTS: Brick-and-mortar saw improved traffic and conversion; web AURs higher; Jordan became top-10 brand quickly; expanding assortments across premium athletic brands .
  • Margin trajectory: Famous promotional headwind to ease as BOGO anniversaries; BP markdown pressure to lessen as inventory aligns; tariff mitigation benefits to improve into Q4 .
  • Stuart Weitzman impact: $120M borrowing to close; net price ~$108M after acquired cash; accretive goal in 2026 after transition; purchase accounting still being finalized .
  • Tariff details: Q2 BP sales impact ~$10M split ~50/50 cancellations vs delayed receipts benefiting Q3; lag in mitigation actions causing BP GM pressure in Q3, improvement in Q4 .

Estimates Context

  • Q2 2026 revenue beat consensus slightly ($658.5M vs $656.5M), but adjusted EPS missed materially ($0.35 vs $0.56); EBITDA missed ($30.7M vs $44.9M). Values retrieved from S&P Global.
  • Prior quarters showed mixed performance vs consensus: Q1 2026 revenue/EBITDA below; Q4 2025 EPS slightly above while revenue below*. Values retrieved from S&P Global.*
  • Implications: Consensus likely to revise down EPS and margin expectations for H2 given suspended annual guidance and explicit BP gross margin pressure in Q3, partially offset by Famous momentum and Weitzman integration upside .

Key Takeaways for Investors

  • The core miss was margin-led: tariffs and inventory reserves compressed BP margins; promotional depth weighed on Famous gross margin; expect gradual margin recovery into Q4 as mitigation takes effect .
  • Revenue resilience and improving Famous trends (Jordan, premium athletic mix, flare format lifts) provide a near-term sales stabilizer into back-to-school/holiday .
  • Balance sheet/liquidity strengthened: cash rose to $191.5M; ABL capacity extended to $700M with accordion to $950M; borrowings increased pre-acquisition, pushing Debt/EBITDA to 2.7x .
  • Strategic mix shift toward DTC and international (75% DTC, double-digit international growth) is margin accretive over time, especially as lead brands outperformed .
  • Stuart Weitzman adds a premium, globally resonant lead brand; near-term integration/purchase accounting noise, but management targets profitability post transition, with identifiable logistics/media efficiencies .
  • Watch Q3: BP gross margin likely down similar to Q2; Famous Sept/Oct comps expected low-single-digit declines; improvement targeted in Q4 as actions burn in .
  • Trading lens: EPS miss and guidance suspension are sell-side negatives; revenue beat and BTS momentum may temper downside; catalysts include Q3/Q4 margin inflection and Weitzman synergy updates .

References:

  • Q2 2026 press release and schedules:
  • Q2 2026 8-K (Item 2.02) and exhibit:
  • Q2 2026 earnings call transcript:
  • Q1 2026 press release and call:
  • Q4 2025 press release and call:
  • Dividend and ABL extension context:
  • Stuart Weitzman acquisition press release:

Values retrieved from S&P Global.*