Caleres, Inc. (NYSE:CAL) Q3 2018 Earnings Conference Call - Final Transcript

Nov 20, 2018 • 04:30 pm ET

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Caleres, Inc. (NYSE:CAL) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Erica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2018 Caleres Earnings Conference Call. (Operator Instructions) Ms. Peggy Reilly Tharp, you may begin your conference.

Executive
Peggy Reilly Tharp

Thank you, Erica. Good afternoon. I'm Peggy Reilly Tharp, Vice President, Investor Relations for Caleres, and I'd like to thank you for joining our third 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, Chief Financial Officer. And I would now like to turn the call over to Diane Sullivan.

Executive
Diane Sullivan

Thanks, Peggy, and good afternoon, everyone, and thanks for joining us. We have a lot to talk about. So I'll begin with the quarterly overview of our strategy and results, and then finish our conversation with the Vionic acquisition.

Let's start with a few highlights from the third quarter, where we delivered our seventh consecutive year of positive back-to-school comp sales at Famous Footwear. We also reported Brand Portfolio sales improvement of 8.5% as we continued to grow our top brands and to take consumer share in the market.

We also added Vionic, a growing brand with strong customer loyalty and a great cultural fit to our Brand Portfolio, and we leveraged our balance sheet as we invested for continued success.

So let's review of our performance at Famous Footwear first. For the third quarter, same-store sales were up 2.8%, driven by lifestyle athletics styles and sandals. E-commerce-related sales increased 25% in the quarter and represented 13% of total sales.

In terms of product trends, we didn't see much of a change in the quarter. Women's remained strong with comp sales up mid-single digits. Women's sandals and boots comped up low double digits, while women's lifestyle-athletic performed even better with comp sales up around 20%.

For sandals, footbeds and sport styles remained strong, while boots were terrific across-the-board with booties, tall shaft and shearling all up. We're certainly seeing this trend continue into the fourth quarter, and we have taken advantage of the situation. We've brought in additional bestsellers and now expect boots sales to be up mid-single digits for the season.

Total adult athletic comped up low single digits as a high single-digit comp for lifestyle-athletic was offset by performance athletic styles. As in the second quarter, retro styles outperformed, while more traditional athletic product remained soft.

You know it's very important for our kids business to improve in the third quarter, and it did with comp sales up low single digits. I'm pleased we're already seeing improvement in this area, and I expect the teams to make even more headway.

And lastly, at Famous during the quarter, the overall environment continued to be more promotional, and we responded as appropriate to drive business and attract more consumers. Our actions included some aggressive tests of new promotions, and these