Caleres is banking on its kid’s business at its Famous Footwear banner to deliver a strong back-to-school season.
Jay Schmidt, president and CEO of Caleres, told analysts on the company’s quarterly conference call on Thursday that despite overall consumer softness at Famous Footwear in the first quarter, its kid’s business remained a bright spot. “This important and growing category once again outpaced the rest of our business as families prioritize purchases of kid’s footwear,” Schmidt noted.
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The St. Louis-based footwear company reported that overall sales in the first quarter fell 9.8 percent to $662.7 million compared to the same time last year. At Famous Footwear, net sales declined 9.2 percent, due to soft consumer demand in shoe chains.
“Even with the weakness in shoe chains, we expect Famous to deliver a significantly stronger earnings contribution in the second quarter as consumer activity accelerates due to typical seasonal drivers, including warm weather and back-to-school beginning in mid-July,” Schmidt said.
To that end, Schmidt told analysts that the company has taken a number of steps to ensure that Famous Footwear leverages its strength in kids and delivers for back-to-school, including naming a new kid’s merchant to “closely maximize all opportunities” and a new head of stores to “drive strategy” at point of sale.
“As you will remember, we delivered our best-ever back-to-school in 2022 despite a less than ideal inventory position,” Schmidt said. “This year, we have a better in-stock position from the beginning on key trending brands and styles that we’ve reacted to due to our well-managed inventory position.”
Schmidt added that there “is a lot to be excited about” at Famous Footwear this back-to-school season. The executive noted that the company has planned a high-impact marketing campaign across all consumer touch points, but especially aimed at the millennial family.
Caleres is the latest company to predict that the second half of the year will see an improvement in sales, following a disappointing start to the year.
At Shoe Carnival, CEO Mark Worden said that despite a challenging first quarter, he remained optimistic for the year ahead as he looks towards summer and the important back-to-school season. Worden noted on his company’s quarterly earnings call late last month that the back-to-school selling season and a healthier athletic footwear inventory level positions the business in a good place in the second half of the year.
Other companies like Genesco, Hibbett and VF Corp. also hinted at a better second half of the year.
Caleres’ move to focus on kids’ shoes this back-to-school comes as the category has been named the fastest-growing segment of the footwear market, according to data from Circana (formerly IRI and The NPD Group).
This rise in spending for kids’ footwear comes as more parents are forgoing footwear purchases for themselves. Among households with kids under the age of 18, overall footwear sales revenue declined by 1 percent and unit sales fell 8 percent, year-over-year, Circana said. Conversely, among households without kids, sales revenue grew by 11 percent and unit sales were flat.
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