Caleres, Inc. (NYSE:CAL) Q1 2019 Earnings Conference Call - Final Transcript

Jun 03, 2019 • 04:30 pm ET

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Caleres, Inc. (NYSE:CAL) Q1 2019 Earnings Conference Call - Final Transcript

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Operator
Operator

Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the 1Q '19 Caleres Earnings 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)

I will now turn the call over to Peggy Reilly Tharp. You may begin your conference.

Executive
Peggy Reilly Tharp

Good afternoon. I'm Peggy Reilly Tharp, Vice President, Investor Relations for Caleres and I'd like to thank you for joining our first quarter 2019 earnings call and webcast. A press release with detailed financial tables and slides are both available at caleres.com.

Please be aware, today's discussion contains forward-looking statements, which are subject to a number of risks and uncertainties. Actual results may differ materially due to various risk factors, including but not limited to factors disclosed in the Company's Form 10-K and other filings with the US Securities and Exchange Commission. Please refer to today's press release and our SEC filings for more information on risk factors and other factors, which could impact forward-looking statements. Copies of these reports are available online. The Company undertakes no obligation to update any information discussed on this call at any time.

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 and thanks for joining our first quarter call and for your continued support of Caleres. As we're fairly deep into the earnings cycle, I know a lot of what we're going to discuss today will sound familiar to investors in the footwear and retail spaces. So let's get right to the point.

As you read in our release, while we still expect to see year-over-year gains in 2019, we are realistic about the impact of slow start to spring had on our business and our ability to regain those lost sales. As a result, rather than maintaining the midpoint of our adjusted EPS guidance at a 13% growth rate, we are prudently bringing the midpoint for earnings growth down to 9%. We believe this new rate more accurately reflects industry challenges to date and the gradual improvement we expect to see over the balance of the year.

Now, with that in mind, I'd like to start with a metric no other footwear company can match. Once again in the first quarter, our Brand Portfolio owned 6 of the top 25 women's footwear brands and grew sales ahead of market rate, while gaining share. In total, Brand Portfolio sales were up more than 20% in the first quarter and that includes both the addition of Vionic and Blowfish sales and the planned reduction in Allen Edmonds sales. Over the past several years, we have made strategic investments in a number of areas and these have enabled us to continue to adapt and grow our Brand Portfolio. Specifically as