What Happened?

Shares of footwear company Caleres (NYSE:CAL) fell 19.5% in the morning session after the company reported weak third-quarter financial results. Its revenue and EPS missed Wall Street's estimates. The company called out softer seasonal demand in some product categories. Also, there were weaknesses in some end markets, including China, and the company expects some of the weak sales trends to continue. As a result, it lowered its full-year EPS guidance. Overall, this quarter could have been better.

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What The Market Is Telling Us

Caleres’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Caleres and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 21.1% on the news that the company reported weak second-quarter earnings results. Its revenue unfortunately missed, and its EPS fell short of Wall Street's estimates. Unpacking the drivers for the underwhelming sales result, the company called out delayed contributions from the back-to-school season, which impacted Famous Footwear sales. In addition, brand portfolio sales fell 5.1% due to operational reporting challenges in connection with its SAP ERP implementation and weak seasonal demand. Moving on, guidance was also underwhelming, which means that Wall Street analysts will be reducing their projections. Overall, this quarter could have been better.

Caleres is down 14.2% since the beginning of the year, and at $26.49 per share, it is trading 39.8% below its 52-week high of $43.97 from August 2024. Investors who bought $1,000 worth of Caleres’s shares 5 years ago would now be looking at an investment worth $1,234.

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