Caleres Q3 profit plunges on margin pressure

Caleres closed the $120.2m acquisition of Stuart Weitzman from Tapestry successful August this year.

For the 13 weeks ended 1 November 2025, the footwear marque delivered nett income of $790.1m, an summation of 6.6% from $740.9m successful the aforesaid play a twelvemonth ago.

The maturation was driven by 18.8% maturation successful the Brand Portfolio segment, which offset a 2.2% diminution astatine Famous Footwear.

Direct-to-consumer income accounted for astir 71% of full nett income successful the reported quarter.

Caleres president and CEO Jay Schmidt said: “Caleres delivered 3rd 4th income results that were up of our interior expectations, highlighted by integrated income maturation successful our Brand Portfolio segment, beardown Lead Brands performance, sequential betterment successful trends astatine Famous Footwear, and accelerated eCommerce momentum successful some segments of our business.”

In the 3rd quarter, the company’s gross nett accrued to $329.9m, from $326.9m successful the anterior twelvemonth quarter, but gross borderline fell 230 ground points (bps) to 41.8%.

Gross borderline for Famous Footwear and Brand Portfolio segments dropped 130bps and 350bps, respectively, implicit the quarter.

Selling and administrative (SG&A) expenses climbed to $311.3m, representing 39.4% of nett sales, up 310bps from past year. Most of this was attributed to expenses tied to Stuart Weitzman, which added $32.2m successful costs during the quarter.

SG&A expenses aft the exclusion of Stuart Weitzman were inactive up $10m, reflecting an unfavourable examination to the anterior year, erstwhile inducement compensation was released.

The combined effect of little margins and higher operating expenses drove a crisp diminution successful earnings.

Generally Accepted Accounting Principles (GAAP) nett net fell to $2.4m, which translates to $0.07 per diluted share, compared with $41.4m, oregon $1.19 per diluted share, successful the prior-year period.

Caleres’ inventory astatine quarter-end stood astatine $678.2m, an summation of $92m compared to past year. Stuart Weitzman accounted for $77m of that total.

Looking up to the remainder of fiscal 2025, the institution expects ongoing tariff headwinds to measurement connected gross borderline and confirmed that Stuart Weitzman volition stay a important root of net dilution.

Caleres anticipates GAAP nonaccomplishment per diluted stock betwixt $0.13 and $0.18, and adjusted net per diluted stock betwixt $0.55 and $0.60, which incorporates an estimated $0.60 to $0.65 of dilution from Stuart Weitzman.

“For the equilibrium of the year, we volition beryllium moving to modulation the Stuart Weitzman concern to Caleres systems and cleanable up aged and excess inventory arsenic we hone our strategies for semipermanent maturation and profitability of the brand. In fiscal 2026, we volition statesman to unlock synergistic outgo savings,” Schmidt added.