Caleres Misses Q2 Sales Following Later Than Expected Back-to-School Sales Bump, Cuts Yearly Guidance
While some footwear companies touted that their back-to-school selling seasons were a success, Caleres did not see the same result, with business coming later than expected in the second quarter.
According to Jay Schmidt , president and chief executive officer of Caleres, the delay in sales for back-to-school shifted late into Q2 and into the start of Q3 due to changing consumer shopping habits.
“We have seen the consumer at Famous has been very ‘wear now’ oriented,” Schmidt told analysts on the company’s second quarter earnings call. “And so, I’m not surprised that back-to-school opened up a little late in terms of when they really needed to buy. [It’s about] consumer demand and people really prioritizing their spend in different ways and spending really when they needed it.”
The CEO added that in addition to these last-minute shoppers buying closer to the season, another reason for the delay in sales happened with a shift in promotional strategy for the season.
“In mid-July, we launched new marketing messages and shifted our marketing mix to channels that were driving the most traffic,” Schmidt said. “We also shifted our promotional strategy to BOGO from buy more, save more after conducting a test that showed BOGO was margin dollar-accretive. In August, we experienced a high-single-digit positive comp store sales gain. As a result, through August, Famous Footwear comp sales are now about flat for the full year to date.”
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But even though Caleres’ back-to-school business “came late,” the CEO reported that sales have come in strongly and is pleased with where the season ended up.
In terms of what’s selling, Schmidt added that the company continues to see strong growth for new products and momentum in fashion sneakers. In fact, sneakers and sport represented 28 percent of retail selling for the quarter, up 6 points versus the prior year, he noted. Seasonal product continued to underperform with sandals down high-single-digits versus last year.
“The athletic trend continued to build and turned positive with strength in Nike and Adidas, amongst others,” Schmidt said. “Furthermore, we are seeing strength in men’s and women’s alongside continued outperformance in kids.”
This comes as the St. Louis-based footwear company reported that net sales in the second quarter of 2024 were $683.3 million, down 1.8 percent from $695.5 million in the same time last year.
Looking ahead, Caleres expects net sales for the full fiscal year to be down low-single-digits percent versus previous guidance of flat to up 2 percent.
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