Caleres expects slipping sales in Q4
St. Louis, Missouri-based footwear group Caleres, Inc. announced its preliminary fourth-quarter sales on Friday, revealing a 3% decrease in revenues dragged down by a disappointing performance from the company’s brand portfolio over the holiday season.
For the fourth quarter of 2019, Caleres currently estimates that it will report total consolidated sales of approximately $700 million, down from $720.3 million in the prior-year period.
Quarterly sales at the company’s Famous Footwear retail chain are predicted to be around $370 million, representing a 5.1% increase compared to the same period in the previous year.
However, Caleres’ brand portfolio, which includes the likes of Sam Edelman, Naturalizer, Dr. Scholl’s Shoes and Allen Edmonds, among others, is expected to see its sales fall 9% to $346 million.
“During the fourth quarter, we saw continued shifts in the underlying fashion footwear market,” commented Caleres CEO, president and chairman Diane Sullivan in a release. “Our brands performed well in the direct to consumer channels, including Famous Footwear […]. However, holiday sales at a number of our retail partners were disappointing and our selling in the value channel has been difficult.”
According to the company, it is reacting to these changing market dynamics by reallocating resources to the parts of its business that are experiencing growth and by driving new brands and products.
The group further revealed that it undertook a voluntary early retirement program and a range of other restructuring actions in Q4, initiatives which it expects to result in annualized savings of between $8 million and $10 million.
As the coronavirus outbreak continues in China, Caleres also announced that it is closely monitoring the effects the health crisis is having on its business. The company’s brand portfolio segment sources around 60% of its footwear from China, where the epidemic has led to factory closures and other supply chain disruptions.
Caleres plans to report its complete fourth-quarter and full-year financial results, along with initial guidance for fiscal 2020 and an assessment of the impact of the coronavirus outbreak on its operations and finances, on Thursday, March 12, 2020.
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