Caleres, Inc. (NYSE:CAL) Q3 2019 Earnings Conference Call - Final Transcript

Nov 25, 2019 • 04:30 pm ET


Caleres, Inc. (NYSE:CAL) Q3 2019 Earnings Conference Call - Final Transcript


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Diane Sullivan

our consumer insights division which identified a demand from our target customer, not met from our current brand offerings.

We're also proud to report that the Dr. Scholl Herzog Sneaker, a versatile and eco-conscious sports shoe to count the first prize ever and footwear honor at the accessories council, Designer Excellence Award. This shoe brings to life the brand's mission to make shoes in a new more eco-conscious way featuring things like repurposed scrap leather, plant-based foam insoles, top-cloth made from recycled bottles and natural soles, made from a blend of rice husks and rubber. And by this time next year, Dr. Scholl's will feature eco-conscious materials in all of it shoes. And as it relates to accelerating the innovation of capabilities and operations, we also further expanded our consumer fulfilment capabilities by completing the final automation of our in-house distribution facility in the third quarter. I'm very pleased to report that the facility has performed as planned, since the cut over.

Now turning to the details of the third quarter. At Famous Footwear, we had an excellent back to school, allowing us to generate our eighth consecutive year of positive back to school, same-store sales growth. This was the biggest 10 selling weeks in the history of Famous and contributed to a 2.5% increase in same-store sales for the quarter. We experienced, strengthen our athletic, boots and sandal categories and saw increases in all channels across all of our back-to-school timing zones.

Our kids business was particularly strong in the quarter and our decision to elevate our assortment of trend-right premium in demand brands and styles with key programs delivered what our consumer was looking for. We also benefited in the quarter from continued improvements from our key athletic vendor. We are seeing our customers respond to our enhanced offering as they recognize that Famous offers the best brands in styles at a great value. In addition to delivering compelling product, we are pleased with the results that we've been seeing in our revamped loyalty program, famously rewards. And that's driving increased engagement among existing members and continued growth in our new and reactivated membership base.

Existing rewards members are shopping more frequently across all channels and spending more per shopping occasion. And of course, we're going to continue to learn and evolve -- as we move to the next phase of this program and make sure that we're continuing to connect with consumers. Looking forward for Famous, we are well positioned for holiday from both the product mix and a total inventory standpoint, and are very confident about our assortment. We have a promotional plan and a marketing strategy in place including a return to TV that we feel will deliver our sales and margin plan.

Now turning to the Brand Portfolio, where our sales were short of our internal plans as we experienced a later start to fall, along with a moderation of our core products and associated replenishment programs. In total, we were again able to