Caleres (NYSE:CAL) reported second-quarter adjusted earnings above its expectations, as growth in its brand portfolio and margin expansion offset weaker sales at Famous Footwear. President and CEO Jay Schmidt described 2026 as a “build back year” focused on restoring earnings power, integrating Stuart Weitzman and establishing a foundation for longer-term profitable growth.
Second-quarter sales rose 5.6% from a year earlier to $695 million. Excluding Stuart Weitzman, sales declined 0.8%. Adjusted diluted earnings per share were $0.47, compared with $0.35 in the prior-year quarter.
Brand Portfolio Drives Growth and Margin Improvement
Caleres’ brand portfolio posted organic sales growth of 8.2% in the quarter and sales growth of 23.6% including Stuart Weitzman. International sales increased more than 50%, including high-teens organic growth, with Schmidt calling international the company’s largest growth opportunity. He said the company’s lead brands remain underpenetrated in overseas markets.
Brand portfolio gross margin increased 880 basis points from a year earlier to 49.1%, aided by channel and product mix, lower markdowns and allowances, tariff-mitigation efforts and lower current tariff rates. Brand portfolio operating margin was 10.5%; excluding Stuart Weitzman, it was 13%, up 990 basis points year over year.
- Sam Edelman: Sales increased by the mid-teens, with broad strength in closed casuals, dress shoes, flats and other franchises. Schmidt said Circana ranked Sam Edelman as the ninth-largest dollar-volume brand in women’s fashion footwear, with the top flat, pump and loafer in the segment through spring. International momentum included China, while the brand’s newly launched men’s line received positive account feedback.
- Allen Edmonds: Net sales rose by the low teens, led by wholesale and supported by dress shoes, loafers and sandals. The Reserve collection more than doubled during the quarter. Sales at the company’s 18 Port Washington studio stores rose 15%, outperforming the rest of the 58-store fleet by more than 800 basis points.
- Naturalizer: Sales rose by the high single digits, while profitability exceeded sales growth. Dress footwear grew by double digits, led by pumps, sling-backs and flats. The company also cited demand for ballet flats, Mary Janes and textured materials.
- Vionic: Sales declined as the company continued to elevate distribution, though earnings increased slightly from a year earlier. Walking-category penetration reached 13%, while walking sales rose more than 50%. Caleres also cited an encouraging early response to Vionic Beach, a more casual and accessible line.
Stuart Weitzman Integration Advances
Schmidt said Stuart Weitzman made meaningful progress during the quarter as Caleres works toward break-even operating earnings for the brand in 2026. The business is now operating on Caleres platforms, its store fleet has been rationalized and its operating model has been simplified.
Direct-to-consumer sales were pressured by lower outlet and clearance activity, but full-price sell-through improved. Wholesale exceeded expectations, digital improved following a re-platforming, and brick-and-mortar comparable sales strengthened as key flagship locations returned to growth. International performance, particularly in China, was ahead of plan under new leadership, Schmidt said.
The brand ended the quarter with 62 stores, including 21 in North America and 41 in Asia. Its product focus includes established icons such as the 50/50 and Nudist, alongside newer franchises including Stuart Power and Vinnie. The company also pointed to fashion demand for stretch and over-the-knee boots as a favorable trend for the brand.
Famous Footwear Faces Athletic Category Pressure
Famous Footwear sales fell 6.3% in the quarter, while comparable sales declined 5.9%. The chain ended the period with 814 locations after opening and closing three stores each. Famous Footwear gross margin declined 100 basis points to 42.7%, reflecting increased promotional and clearance activity in lifestyle athletic footwear.
Management said a later-than-expected back-to-school period, due in part to Labor Day timing and changes in tax-free events, hurt second-quarter performance. However, Famous Footwear comparable sales were flat through Labor Day, and the company said the third-quarter start was modestly better than it had previously expected.
Schmidt said lifestyle athletic footwear was weak, while performance athletic remained strong. The company is reducing exposure to softer lifestyle athletic products while increasing emphasis on performance athletic, fashion footwear and higher-demand brands and products. Jordan, Birkenstock, Skechers, Brooks and Steve Madden were among the growth brands cited for the quarter.
Fashion footwear improved during August and through Labor Day, with fashion comparable sales positive and outperforming athletic by more than 10 percentage points. Caleres said it is expanding its fashion assortment and inventory investment, and plans two non-athletic brand floor takeovers in the second half. Premium product penetration in the company’s Elevate and Edit strategy rose 22% from a year earlier.
The company also increased clearance activity and reduced receipts to address excess and aged inventory. Karpel said Famous Footwear is expected to remain promotional in the second half, with year-over-year margin pressure broadly in line with the second quarter.
Guidance Updated Following First-Half Outperformance
Caleres raised the lower end of its full-year adjusted earnings outlook while maintaining the high end. The company now expects full-year adjusted diluted earnings per share of $1.50 to $1.65, while GAAP diluted EPS is projected at $2.80 to $2.95.
For the full year, Caleres expects consolidated sales to rise by the low-to-mid single digits. Brand portfolio sales are expected to increase by the low double digits, or mid-single digits organically, while Famous Footwear sales and comparable sales are projected to decline by the low-to-mid single digits.
For the third quarter, the company expects consolidated sales growth in the low single digits, with brand portfolio sales up in the mid-to-high single-digit range and Famous Footwear sales and comparable sales down in the low single digits. Caleres expects consolidated gross margin to improve by 150 to 200 basis points in the third quarter.
Karpel said the outlook assumes new tariffs will be enacted during the third quarter that largely replace prior IEEPA tariffs. The company cited continuing tariff uncertainty, expected promotional activity at Famous Footwear and ongoing softness in certain categories as factors incorporated into its forecast.
About Caleres (NYSE:CAL)
Caleres, Inc, formerly known as Brown Shoe Company, is a leading footwear company engaged in the design, sourcing, marketing and selling of a broad portfolio of branded and private-label shoes. The company’s operations span a range of market segments from value-priced to premium and luxury. Caleres operates through two primary segments: a retail segment anchored by the Famous Footwear banner, which includes more than 1,100 stores across North America, and a brand portfolio segment comprising owned and licensed brands such as Allen Edmonds, Naturalizer, Sam Edelman, Dr.
