On Friday, an analyst from KeyBanc maintained a Sector Weight rating on shares of Caleres (NYSE: NYSE:CAL), a global footwear company. The firm's decision followed Caleres' announcement of second quarter results that fell short of expectations, a downward revision of their full-year guidance, and the disclosure of planned restructuring actions.
Caleres experienced a slower beginning to the Back-to-School (BTS) season at its Famous Footwear segment. However, the company observed an increase in revenue in August, which aligned more closely with their projections, thanks to strategic marketing efforts and an earlier Buy One, Get One (BOGO) promotion.
Brand Portfolio sales were impacted negatively due to challenges encountered during the planned SAP ERP (Enterprise Resource Planning) system implementation. These issues have since been resolved, and the company anticipates that this will not significantly affect the second half of the year.
Despite the overall softer sales, Caleres reported a decline in seasonal sandal sales, with a high-single-digit percentage decrease year-over-year. On the brighter side, sneakers and sports-related footwear represented approximately 28% of retail selling, marking a 6-point increase compared to the previous year.
KeyBanc highlighted Caleres' ongoing efforts to achieve its key strategic initiatives and noted the long-term opportunities that remain within the Brand Portfolio and international markets. Despite the setbacks faced in the second quarter, the company's actions to address the issues and the positive trends in certain product categories suggest a continued focus on growth and operational improvement.
Caleres, with its portfolio of footwear brands, remains in the midst of navigating market challenges while striving to capitalize on growth opportunities as they arise. The company's restructuring efforts and adjustments to its operational strategies are aimed at bolstering its position in the competitive footwear industry.
In other recent news, Caleres, a global footwear company, has been the subject of recent analyst adjustments and earnings reports. Loop Capital revised its price target for Caleres, reducing it to $30.00 from the previous $45.00, maintaining a hold rating on the stock. This adjustment comes after Caleres reported lower-than-expected sales and earnings for the third fiscal quarter.
Loop Capital's analyst cited the company's recent performance and future market challenges as reasons for the reduced price target. The firm also adjusted its earnings per share (EPS) estimate for fiscal year 2025 by $1.18, a significant departure from the consensus outlook.
In the company's second quarter 2024 earnings call, Caleres reported a 1.8% year-over-year decline in sales, totaling $683 million, and earnings per share of $0.85. Operational issues, particularly an ERP system upgrade, were significant contributors to an estimated $10 million to $15 million in lost sales.
Despite these challenges, Caleres has announced restructuring plans to enhance profitability and expressed confidence in its growth strategies. These are recent developments in the company's operations and financial performance.
InvestingPro Insights
Amidst the challenges faced by Caleres (NYSE: CAL), including a softer second quarter and SAP ERP implementation issues, recent data from InvestingPro suggests potential areas of interest for investors. The company's stock appears to be in oversold territory according to the RSI, which could signal a buying opportunity for those looking at technical indicators.
Moreover, Caleres is trading at a low P/E ratio of 6.81, relative to near-term earnings growth, and also boasts a low adjusted P/E ratio for the last twelve months as of Q2 2023 at 7.0, highlighting its potential undervaluation in the market.
Furthermore, the company has a track record of maintaining dividend payments, with a history of 54 consecutive years of dividends, a testament to its financial resilience. This is complemented by a dividend yield of 0.93%, offering a modest income stream for long-term investors.
Despite recent price declines, with a 1-week total return of -22.11% and a 1-month total return of -17.49%, analysts predict the company will be profitable this year, and it has indeed been profitable over the last twelve months.
For investors considering Caleres as a potential addition to their portfolio, these InvestingPro Tips and data points could provide a more nuanced understanding of the company's current position and future prospects. Moreover, there are additional tips available on InvestingPro's platform for those seeking deeper insights into Caleres' performance and valuation.
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