Caleres, Inc. (NYSE:CAL) Q4 2017 Earnings Conference Call Transcript

Mar 13, 2018 • 04:30 pm ET

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Caleres, Inc. (NYSE:CAL) Q4 2017 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. (Operator Instructions) Your first question comes from the line of Steve Marotta with C.L. King & Associates.

Analyst
Steven Marotta

Good evening, everybody. Congratulations on a great quarter and a great year.

Executive
Kenneth H. Hannah

Thank you.

Analyst
Steven Marotta

Couple of quick questions. A lot of consumer companies that we're seeing reporting earnings and offering initial guidance for the coming year are ploughing back. Some of the benefits associated with the new tax plan into SG&A and demand creation activities given the leverage that you're showing on the SG&A line. It looks like that you're not doing that. Could you talk a little bit about the calculus that went into your decision making on basically uses of funds associated with the tax benefit in the current year?

Executive
Kenneth H. Hannah

Yeah. Sure, Steve. This is Ken. I think in the past, in order to deliver the earnings that we've delivered, we've continued to invest in our business. And we do not expect 2018 to be any different. I think when we looked at it on an incremental basis, the incremental expense that was coming through our SG&A was really tied to acquisitions and customer acquisition, and that looks like it's an incremental $4 million to $5 million.

Analyst
Steven Marotta

Okay. From a CapEx and a D&A estimate standpoint for '18, could you just go over that?

Executive
Kenneth H. Hannah

Yeah, The expectation is that the CapEx will be approximately $50 million.

Analyst
Steven Marotta

And D&A?

Executive
Kenneth H. Hannah

The D&A should be pretty consistent with '17.

Analyst
Steven Marotta

Okay, that's fair enough. And is there any cadence from an EPS standpoint in first half versus second half? Are there any SG&A costs in particular that you would expect to be sloshed from quarter to quarter?

Executive
Kenneth H. Hannah

That's a good question. I think for the most part, unlike last year when we had the addition of Allen Edmonds coming in and we spent a lot of time talking about how that was going to be calendarized, our 2018 earnings are much more consistent with the guidance that we provided quarter to quarter. The only expense to be noted is Diane mentioned, we are in-sourcing our wholesale distribution warehouse and there is some expense in the first couple of quarters of the year associated with that a couple of million dollars.

Analyst
Steven Marotta

Okay. And lastly, can you talk a little bit about product and how you see the -- specifically from a category standpoint, obviously sneakers as well as fashion sneakers continue to do well. And as you look out through spring and then fall as in the Famous Footwear as well as branded portfolio, maybe just talk a little bit about product? And that would wrap it up for me. Thank you.

Executive
Diane Sullivan

Okay, Steve. It's Diane. A couple of things on product. We're seeing actually early reads on spring, looks pretty -- quite good I would say. I'll talk about the brand side first and then Rick and I can share the duty on the Famous side. But as you would expect, we're seeing anything that's sport related continues to be very strong, not only