Caleres’ third quarter results were met with a negative reaction from the market, largely due to a significant shortfall in non-GAAP earnings per share despite stronger-than-expected revenue. Management identified ongoing margin pressures stemming from elevated tariffs and additional costs linked to the integration of Stuart Weitzman, which diluted profitability. CEO Jay Schmidt acknowledged these issues, noting, “We are taking decisive action in the back half of 2025 to bring Stuart Weitzman along with the rest of our portfolio into 2026 as clean, productive, and efficient as possible.”
Is now the time to buy CAL? Find out in our full research report (it’s free for active Edge members).
Caleres (CAL) Q3 CY2025 Highlights:
- Revenue: $790.1 million vs analyst estimates of $768.6 million (6.6% year-on-year growth, 2.8% beat)
- Adjusted EPS: $0.38 vs analyst expectations of $0.85 (55.5% miss)
- Adjusted EBITDA: $34.45 million vs analyst estimates of $61.2 million (4.4% margin, 43.7% miss)
- Adjusted EPS guidance for the full year is $0.58 at the midpoint, missing analyst estimates by 65.2%
- Operating Margin: 3.3%, down from 8% in the same quarter last year
- Market Capitalization: $462.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Caleres’s Q3 Earnings Call
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Dana Telsey (Telsey Advisory Group) asked about the timeline and main drivers for Stuart Weitzman’s margin improvement. CEO Jay Schmidt pointed to gross margin recovery post-inventory cleanup and SG&A reductions as key, targeting breakeven in 2026.
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Ashley Owens (KeyBanc Capital Markets) questioned the extent and strategy for liquidating excess Stuart Weitzman inventory. Schmidt explained that progress is well underway, with most aged inventory expected to be cleared through targeted promotions by early 2026.
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Ashley Owens (KeyBanc Capital Markets) also asked about normalized earnings power post-integration. Schmidt replied that profitability hinges on tariff relief, SG&A rationalization, and international expansion, with more detail to come in future guidance.
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Mitch Kummetz (Seaport Research) probed the prospects for organic growth in 2026. Schmidt confirmed that organic growth, especially in lead brands, is an explicit target, but did not commit to specific figures.
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Kummetz (Seaport Research) inquired about Stuart Weitzman’s long-term margin potential relative to the broader brand portfolio. Schmidt indicated that matching the portfolio average is the goal, contingent on successful integration and operational improvements.
Catalysts in Upcoming Quarters
In the quarters ahead, our analysts will closely monitor (1) progress on Stuart Weitzman’s inventory liquidation and the pace of cost synergies, (2) stabilization of gross margins as tariff mitigation and SG&A reductions take effect, and (3) continued strength in premium brands and international markets. Execution on these priorities will determine Caleres’ ability to restore profitability and achieve its integration goals.
Caleres currently trades at $13.65, in line with $13.52 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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