Executive Summary

Q4 delivered sales of $639.2M (-8.3% y/y; -4.0% excluding 53rd week) and adjusted EPS of $0.33 (GAAP $0.15). EPS beat S&P Global consensus ($0.26*) while revenue was slightly below ($646.0M*), reflecting softness at Famous Footwear and boots category pressure even as lead brands and sneakers outperformed .
FY25 outlook is conservative: sales down 1% to up 1%, operating margin 5.1%–5.6%, tax ~23%, GAAP EPS $2.80–$3.20; Q1 FY25 sales -5% to -6% and GAAP EPS $0.35–$0.40. Tariff headwinds modeled with roughly equal sharing between factories and CAL and a 30–40 bps gross margin hit at Brand Portfolio .
Strategic execution continued: lead brands gained share; sourcing pivot toward ~75% outside China by H2’25 (even higher for lead brands); Stuart Weitzman acquisition (excluded from guide) targeted to close summer 2025, funded via revolver .
Key near-term stock catalysts: EPS beat vs consensus despite a guarded FY25 guide; tariff mitigation and faster sourcing diversification; optionality from Stuart Weitzman integration post-close. Balance sheet ended with $219.5M borrowings and 1.1x debt/EBITDA; inventory +4.5% y/y .

What Went Well and What Went Wrong

What Went Well

Lead brands and sneakers outperformed; management: “We gained market share in women’s fashion footwear, our Lead Brands outperformed, and we grew our sneaker penetration.”
Accelerated sourcing diversification and tariff mitigation: “By the end of Q2 2025, we now expect about 75% of our direct product sourcing to be outside of China…higher than the goal we communicated last quarter.”
Famous cleared excess seasonal inventory; newest Flare stores outperformed rest of chain by ~10 points in Q4; 25 additional upgrades planned for 2025 .

What Went Wrong

Famous Footwear softness and boots weakness: Famous sales -9.6% y/y, comps -2.9%; boots declined high-single digits; total fashion declined mid-high single digits .
Margin pressure and expense deleverage: Q4 gross margin 43.0% (-80 bps y/y); SG&A 40.9% of sales (+180 bps) on lower sales base and deleverage .
Cautious consumer/value segment and wholesale partners; management expects continued headwinds early 2025; guidance embeds gross margin pressure in Q1 and SG&A deleverage on lower sales .

Financial Results

Consolidated results vs prior quarters and y/y

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$683.3	$740.9	$639.2
Gross Margin %	45.5%	44.1%	43.0%
GAAP Diluted EPS	$0.85	$1.19	$0.15
Adjusted Diluted EPS	$0.85	$1.23	$0.33

Notes: Q4 period is 13 weeks ended Feb 1, 2025 vs 14 weeks in prior year; net sales excluding 53rd week were down ~4% .

Actuals vs S&P Global consensus (quarterly)

Metric	Q3 2024 (Actual vs Est.)	Q4 2024 (Actual vs Est.)
Revenue ($M)	$740.9 vs $751.4*	$639.2 vs $646.0*
EPS (Primary/Adjusted)	$1.23 vs $1.36*	$0.33 vs $0.26*

Values marked with * are from S&P Global consensus; Values retrieved from S&P Global.

Segment performance – Q4 2024

Segment (Q4)	Net Sales ($M)	Gross Margin %	Operating Earnings ($M)	Operating Margin %	Adjusted Operating Earnings ($M)	Adjusted Margin %	Comps %
Famous Footwear	$358.4	42.5%	$6.3	1.7%	$6.7	1.9%	-2.9%
Brand Portfolio	$300.3	41.6%	$23.0	7.7%	$28.3	9.4%	+0.5%
Eliminations/Other	$(19.4)	—	$(21.4)	n/m	$(21.5)	n/m	—
Consolidated	$639.2	43.0%	$7.9	1.2%	$13.4	2.1%	—

KPIs and operating metrics

KPI	Q2 2024	Q3 2024	Q4 2024
Direct-to-Consumer Mix	~75%	~72%	~73%
Famous Footwear Comps	-2.9%	+2.5%	-2.9%
Brand Portfolio Comps	+4.4%	-2.7%	+0.5%
Inventory ($M)	$661.1	$585.9	$565.2
Revolver Borrowings ($M)	$146.5	$238.5	$219.5
Debt/EBITDA (TTM)	0.6x	1.0x	1.1x

Non-GAAP adjustments (Q4 2024)

GAAP to Adjusted EPS bridge: Naturalizer retail exit ($0.09), restructuring ($0.03), pension settlement ($0.06) → total +$0.18; GAAP $0.15 to Adjusted $0.33 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales (y/y)	FY 2025	—	Down 1% to Up 1%	Initial
Operating Margin	FY 2025	—	5.1% to 5.6%	Initial
Tax Rate	FY 2025	—	~23%	Initial
GAAP EPS	FY 2025	—	$2.80 to $3.20	Initial
Capex	FY 2025	—	$50–$55M	Initial
Net Sales (y/y)	Q1 2025	—	Down 5% to 6%	Initial
GAAP EPS	Q1 2025	—	$0.35 to $0.40	Initial

Context – FY 2024 guidance progression (for trend):

Post-Q3 (Dec 5, 2024): Sales down 2.5%–3.0%; GAAP EPS $3.35–$3.45; Adjusted EPS $3.45–$3.55 .
Update (Jan 13, 2025): Sales down 3.0%–3.5%; GAAP EPS $3.10–$3.20; Adjusted EPS $3.20–$3.30 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Tariffs & Sourcing	Plan to pivot sourcing; >50% of Brand Portfolio dollars already ex-China; target ~70% ex-China by H2’25	Expect ~75% direct sourcing ex-China by end of Q2’25; equal cost-sharing with factories and CAL; 30–40 bps BP gross margin impact; selective retail price increases	Accelerated sourcing away from China; quantified tariff margin impact
Category/Boots vs Sneakers	Q2/Q3: boots softness; fashion sneakers strength; kids and athletic strong at Famous	Boots still weak; sneakers strong; Adidas/New Balance growth; women’s fashion down; kids in-line	Persistent boots pressure; sneakers momentum sustained
Contemporary/Lead Brands	Vince/Veronica Beard strength; lead brands outperformed	Lead brands (Sam Edelman, Allen Edmonds, Naturalizer, Vionic) outperformed; expansion in contemporary; license launch Favorite Daughter; Stuart Weitzman acquisition planned	Mix shift to higher-price contemporary; brand portfolio focus
Wholesale/Partners	Late athletic receipts in Q3; China softness; cautious family footwear	Retail partners more cautious on receipts/inventory in 2025; sequential improvement expected through year	Wholesale caution persists; CAL planning conservatively
Technology/AI	SAP ERP go-live referenced in Q1/Q2; restructuring/Opex investments	AI pricing tool at Famous scaling to optimize promotions; further roll-out	Commercialization of pricing AI to support gross margin

Management Commentary

CEO Jay Schmidt: “Our fourth quarter earnings were at the high end of our most recent guidance. We gained market share in women’s fashion footwear, our Lead Brands outperformed, and we grew our sneaker penetration… While 2024 overall was disappointing… we made meaningful progress in advancing our strategic priorities.”
On sourcing and tariffs: “By the end of the second quarter in 2025, we now expect about 75% of our direct product sourcing to be outside of China… For the remaining portion… we are well positioned to manage additional tariffs through a combination of factory negotiations, selective price increases, and modest gross margin pressure.”
CFO Jack Calandra on tariff impact: “We have assumed that equal shares of the tariff increases will be absorbed by our factory partners and by the company… On the gross margin impact to Brand Portfolio on the year… about 30 to 40 basis points.”
On 2025 phasing: “We do expect sequential quarterly improvement throughout the year… Famous improvement from new product introductions and leadership changes… Brand Portfolio benefits from lapping SAP issues (~$15M), international growth, Favorite Daughter launch, and Allen Edmonds wholesale door growth.”

Q&A Highlights

Phasing and cadence: Sequential quarterly improvement expected in 2025; Famous assisted by new product and leadership; Brand Portfolio aided by anniversaries of discrete headwinds (SAP), international growth, and new initiatives .
Q1 dynamics: EPS guide reflects gross margin pressure (tariffs/markdowns) and SG&A deleverage on lower sales; Q1 op margin will be the lowest of the year .
Tariff mechanics: Low single-digit selective price increases; company absorbing part of tariffs and expecting 30–40 bps BP gross margin impact; retail pricing calibrated to avoid demand destruction .
Famous execution: Flare stores continue to outperform; 25 additional upgrades and one new store planned; merchandising leadership bolstered with a new CMO hire .
Wholesale & consumer tone: Retail partners remain cautious on inventory; value-oriented consumer under pressure; March month-to-date improved vs weak February .

Estimates Context

Q4 (13 weeks): Revenue $639.2M vs $646.0M* consensus; EPS (Primary/Adjusted) $0.33 vs $0.26* (beat). Q3: Revenue $740.9M vs $751.4M*; EPS $1.23 vs $1.36* (miss) .
With a conservative FY25 outlook and explicit tariff impact, Street models likely recalibrate toward the midpoint of guidance near-term while tracking potential upside from sequential improvement and category normalization later in 2025 .