Caleres Gains 5.6% in After-Hours On Quarterly Beat

Shares of Caleres gained 5.6% in after-market trading on Tuesday after 2Q revenue of $501.5 million came ahead of the Street consensus of $450.1 million. The footwear retailer reported 2Q loss of $0.57 per share, which was almost half the $1.12 loss per share expected by analysts. The company reported earnings of $0.62 per share in the year-ago quarter.

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Caleres’ (CAL) said revenues declined 33.4% year-over-year, due to a 20.5% decline in its Famous Footwear segment and a 48.9% decline in its Brand Portfolio segment. Meanwhile, total e-commerce-related sales rose more than 30% in the quarter ending on August 1.

The company stated that it “delivered sequential improvement in several key financial metrics, spurred by the efficient restart of its retail store fleet, ongoing strength in ecommerce sales and prudent management of expenses and working capital.” Its CEO Diane Sullivan also pointed out that “Caleres took significant steps during the quarter to strengthen the business, improve the balance sheet, leverage our capabilities and lay the foundation for a continuing recovery of our business in the year’s second half.” (See CAL stock analysis on TipRanks).

On Aug. 31, Needham analyst Rick Patel anticipated mixed 2Q results. Patel said “We see the potential for 2Q upside at Famous (>54% of sales) based on the strength of active footwear.” However, the analyst had low expectations for CAL’s Brand Portfolio for 2Q and for the second-half “as department stores cut inventory orders at the onset of the pandemic.” Moreover, he views “the potential for a slower start to 3Q as back-to-school shopping is likely to be soft and elongated due to Covid.” He maintained a Hold rating on the stock.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 1 Buy and 2 Holds. The average price target of $9.50 implies upside potential of 8.6% to current levels. Shares are down over 63% year-to-date.