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Category: Stock Market and Caleres
Date: 27 August 2019 Stock Price: $15.24 We take a look at latest earnings report of footwear manufacturer and Caleres for their 2nd quarter of their 2019 fiscal year.
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About Caleres
Caleres is the home of today’s most coveted footwear brands and represents a diverse portfolio spanning all of life’s styles and experiences. Every shoe tells a story and Caleres has the perfect fit for every one of them. Our collections have been developed and acquired to meet the evolving needs of today’s assorted and growing global audiences, with consumer insights driving every aspect of the innovation, design, and craft that go into our distinctly positioned brands, including Famous Footwear, Sam Edelman, Naturalizer, Allen Edmonds, Vionic, Dr. Scholl’s Shoes, Franco Sarto, and more. The Caleres story is most simply defined by the company’s mission: Inspire people to feel great…feet first.
Their brands include:
Vionic
Via Spiga
Dr Scholls shoes
Allen Edmonds
Blowfish
Circus
Vince
Fergie Footwear
Veronica Beard.
The group has 1200+ branded retail and department stores across the world.
Their brands include:
Vionic
Via Spiga
Dr Scholls shoes
Allen Edmonds
Blowfish
Circus
Vince
Fergie Footwear
Veronica Beard.
The group has 1200+ branded retail and department stores across the world.
Financial overview of Caleres latest results
Numbers highlighted in the earnings report:
Numbers we are interested in: (for the quarter):
- Delivered earnings per diluted share of $0.61, up 10.9%.
- Record second quarter sales of $752.5 million, up 6.5% year-over-year
- Positive same-store-sales of 1.5% at Famous Footwear
- On-track to deliver eighth consecutive year of positive back-to-school same-store-sales
- Continued to evolve portfolio, announcing partnership with Veronica Beard and relaunch of Zodiac
Numbers we are interested in: (for the quarter):
- Net sales $ 752.485 million (up from $ 706.612 million for the same quarter of the previous year)
- Cost of goods sold: $446.541 million (up from $413.511 million for the same quarter of the previous year)
- Gross profit: $305.944 (up from $293.101 for the same quarter of the previous year)
- Net earnings: $25.227 million (up from $23.611 million for the same quarter of the previous year)
- Diluted earnings per common share att ributable to Caleres, Inc. shareholders: $ 0.61 (up from $ 0.55 for the same quarter of the previous year)
- Diluted common shares attributable to Caleres, Inc.: 40.006 million (up from 42.081 million for the same quarter of the previous year)
- The group's share repurchase program reducing the number of shares in issue by about 5% during the last year, which is a good thing as future earnings will be divided among less shares.
- Cash and cash equivalents: $ 42.601 million (down from $ 102.884 million for the same quarter of the previous year)
- Cash and equivalents per share: $1.05 (or 6.8% of the group's share price)
- Receivables, net: $167.727 million (up from $153.421 million for the same quarter of the previous year)
- Inventories, net: $792.064 million (up from $715.705 million for the same quarter of the previous year)
- We do note the strong 11.3% increase in the group's inventories compared to the same quarter of the previous year. The group and investors will need to keep a close eye on this as ballooning inventories could signal that the group is struggling to move their stock.
- We do note the strong 11.3% increase in the group's inventories compared to the same quarter of the previous year. The group and investors will need to keep a close eye on this as ballooning inventories could signal that the group is struggling to move their stock.
- Total equity: $624.678 million (down significantly from $737.194 million for the same quarter of the previous year)
- Net asset value per share:$15.614 a share (down from $17.51 for the same quarter of the previous year)
- Market Capital of Caleres: $610.8 million
Caleres management commentary on the results and earnings guidance
“During the quarter we successfully executed on our strategies to strengthen the emotional connections we have with our consumers. Our deep insights, combined with our industry-leading footwear capabilities, allowed us to deliver relevant product, supporting growth in the Brand Portfolio and positive same-store-sales growth at Famous Footwear,” said Diane Sullivan, CEO, president and chairman of Caleres. “A continued focus on expense discipline improved profitability for the quarter. As a company, we remain focused on creating consistent, profitable and sustainable growth over the long term.”
Caleres (NYSE: CAL) stock price history
The image below shows The Walt Disney Company's share price for the last 5 years. And it has performed pretty well considering 5 years ago its stock was trading at around $90 a share, and currently its trading hands at $133.60 a share. The performance of the Marvel Studio over the last couple of years providing some spark for its share price, while ESPN seems to have been a drag on the group.
Caleres (NYSE: CAL) stock valuation
Based on the group's latest financial results, the fact that earnings and earnings per share reflected growth for the group and the group's shares in issue has decreased due to their share repurchase program (which bodes well for the longer term as future earnings will be divided by less shares. Based on all of the above we value Caleres stock at $26.5 a share. We therefore believe the stock's current price provides a good buying opportunity for long term fundamental investors looking to buy shares at below fair value. Our target price or fair value price for the group takes into account their earnings, their brands as well as their cash generation capacity and their balance sheet.