Shares of Caleres (NYSE: CAL) , the parent of Famous Footwear and other footwear brands, were tumbling today after the company posted disappointing results in its second-quarter earnings report. As of 11:34 a.m. ET, the stock was down 19.1% on the news.
![https://img.particlenews.com/image.php?url=47EZbf_0vU4Rbgd00](https://img.particlenews.com/image.php?type=thumbnail_580x000&url=47EZbf_0vU4Rbgd00)
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Caleres misses the mark
Caleres said revenue in the quarter was down 1.8% to $683.3 million, well below estimates at $723.8 million. Famous Footwear sales rose 1.5%, which included a later-than-expected back-to-school season, with most sales occurring in the third quarter. Brand portfolio sales declined 5.1% due to some weak seasonal demand and challenges with its new enterprise resource planning system implementation.
Despite weaker-than-expected sales, gross margin rose 30 basis points to 45.5%, though selling, general, and administrative expenses were up 2% to $268.3 million. On the bottom line, the company finished with a profit per share of $0.85, down from $0.95 in the quarter a year ago and missing the consensus at $1.22.
CEO Jay Schmidt acknowledged the disappointing results, saying, "Caleres reported second-quarter results that were below expectations. While our brands and products continue to resonate with consumers and we remain confident in our long-term vision, our second-quarter results in both segments fell short of our potential."
Can Caleres bounce back?
Management also lowered its full-year guidance . It now sees sales down by the low single digits, compared to an earlier forecast of flat to up 2%, and cut adjusted earnings per share (EPS) guidance to $4.00-$4.15 from $4.30-$4.60. For the third quarter, it called for sales to be down flat to 2% and adjusted EPS of $1.30-$1.40, short of the consensus at $1.50.
Caleres didn't explicitly blame macro factors in the report, but the disappointing results follow similar numbers from fellow footwear stock DSW-parent Designer Brands yesterday, which also fell on its earnings report.
That could be favorable to Caleres as the stock looks cheap at a forward price-to-earnings ratio of less than 8 after today's decline. If the business can shift back to positive growth, it should recover today's losses.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Designer Brands. The Motley Fool has a disclosure policy .
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