Shares of Caleres Inc. (CAL) are plunging 14.98% in pre-market trading on Thursday following the release of the company's second-quarter 2025 financial results. The footwear retailer reported disappointing earnings that fell short of analyst expectations, while also warning of ongoing gross margin pressure due to tariffs.

Caleres announced adjusted earnings per share of $0.35 for Q2, significantly missing the analyst estimate of $0.56. While the company's sales of $658.52 million slightly beat the expected $656.48 million, it still represented a 3.6% decline compared to the same period last year. The Brand Portfolio segment experienced a 3.5% decrease in sales, partly due to approximately $10 million in tariff impacts. Famous Footwear, another key segment, saw sales drop by 4.9%, with comparable sales down 3.4%.

Adding to investor concerns, Caleres warned of "ongoing gross margin pressure in the Brand Portfolio from tariffs for the balance of the year." The company's gross margin fell 210 basis points year-over-year to 43.4%, affected by tariff-related costs, selective promotions, and a higher provision for inventory markdowns. Furthermore, Caleres announced it would continue to suspend annual guidance, likely contributing to the market's negative reaction. As the company grapples with these challenges, investors appear to be reevaluating their positions, leading to the sharp pre-market decline.