Caleres, Inc. (NYSE:CAL) Q2 2018 Earnings Conference Call - Final Transcript

Sep 04, 2018 • 04:30 pm ET

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Caleres, Inc. (NYSE:CAL) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Catherine and I will be your conference operator today. At this time, I'd like to welcome everyone to the 2Q '18 Caleres Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. Ms. Peggy Reilly Tharp, you may begin your conference.

Executive
Peggy Reilly Tharp

Thank you, Catherine. Good afternoon. I'm Peggy Reilly Tharp, VP of IR for Caleres, and I'd like to thank you for joining our second quarter 2018 earnings call and webcast. A press release with detailed financial tables and slides are both available at caleres.com. (Forward-Looking Cautionary Statements).

Joining the call today are Diane Sullivan, CEO, President, and Chairman; and Ken Hannah, CFO. And I would now like to turn the call over to Diane.

Executive
Diane Sullivan

Thanks, Peggy, and good afternoon everyone, and thanks for joining us today to talk about our results. We are going to follow a similar format like we do most quarters, while I will give you a review of the overall business and strategy, and then Ken will follow-up with more details around the financials and talk a little bit about guidance. And then, we will finish with Q&A.

So let me start by sharing a few highlights. For the second quarter, we delivered adjusted earnings per share of $0.59, up 23% in line with expectations and consistent with our guidance for 2018. We reported record second quarter sales on a consolidated basis for both Famous Footwear and the Brand Portfolio, in addition to record second quarter operating earnings at Famous.

We remained on track to deliver our seventh consecutive year of positive back-to-school comp sales and we continue to grow the top brands in our Brand Portfolio and take consumer share in the market. We also maintained our strong balance sheet, cash flow, and return on invested capital. And as always, we have continued to execute our strategy and invest in the business.

So let's review our performance at Famous, where record second quarter sales of $430 million were up 6.1% and driven by lifestyle athletic styles and sandals. Same-store sales at Famous were up 2.6% in the quarter and we saw improvements in traffic, conversions, and pairs per transaction.

E-commerce related sales improved in the quarter as well and represented 10% of total sales, up about 15% of the solid base. Without a doubt, women's was the highlight of the quarter with comp sales at mid-single digits. Women's sandals also comped at mid-single digits with strong consumer interest in footbed styles that we have all heard very much about.

The Women's lifestyle athletic category performed even better with comp sales up more than 20%. When we look at total -- the total adult athletic segment, that comped at mid-single digits with lifestyle athletic again up more than 10%. In fact, retro styles were so strong this quarter that we couldn't keep pace with consumer demand.

Where we did see softness was