Caleres (CAL) swung to a net loss for the quarter ended Jan. 28, 2017. The company has made a net loss of $6.62 million, or $ 0.16 a share in the quarter, against a net profit of $11.41 million, or $0.26 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $14.27 million, or $0.33 a share compared with $11.41 million or $0.26 a share, a year ago. Revenue during the quarter grew 5.06 percent to $639.49 million from $608.67 million in the previous year period. Gross margin for the quarter expanded 4 basis points over the previous year period to 40.79 percent. Operating margin for the quarter stood at negative 0.86 percent as compared to a positive 2.76 percent for the previous year period.
Operating loss for the quarter was $5.47 million, compared with an operating income of $16.82 million in the previous year period.
"Despite a promotional and challenging retail environment in the fourth quarter, we maintained our consistent approach of managing the areas under our control while continuing to rapidly respond to changing consumer shopping behaviors," said Diane Sullivan, CEO, president and chairman of Caleres. "We also took proactive steps to continue the diversification of our portfolio with the acquisition of Allen Edmonds in December, which allowed us to rapidly increase our exposure in men’s footwear."
For financial year 2017, Caleres projects revenue to be in the range of $2,700 million to $2,800 million. The company forecasts diluted earnings per share to be in the range of $2.10 to $2.20 on adjusted basis.
Operating cash flow improves
Caleres has generated cash of $183.62 million from operating activities during the year, up 23.11 percent or $34.47 million, when compared with the last year. The company has spent $319.49 million cash to meet investing activities during the year as against cash outgo of $73.78 million in the last year.
Cash flow from financing activities was $72.82 million for the year as against cash outgo of $23.47 million in the last year period.
Cash and cash equivalents stood at $55.33 million as on Jan. 28, 2017, down 53.17 percent or $62.82 million from $118.15 million on Jan. 30, 2016.
Working capital drops significantly
Caleres has witnessed a decline in the working capital over the last year. It stood at $316.15 million as at Jan. 28, 2017, down 34.78 percent or $168.62 million from $484.77 million on Jan. 30, 2016. Current ratio was at 1.60 as on Jan. 28, 2017, down from 2.24 on Jan. 30, 2016.
Cash conversion cycle (CCC) has decreased to 49 days for the quarter from 50 days for the last year period. Days sales outstanding were almost stable at 11 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 70 days for the quarter compared with 69 days for the previous year period. At the same time, days payable outstanding went up to 32 days for the quarter from 30 for the same period last year.
Debt increases substantially
Caleres has witnessed an increase in total debt over the last one year. It stood at $307 million as on Jan. 28, 2017, up 56.20 percent or $110.46 million from $196.54 million on Jan. 30, 2016. Short-term debt stood at $110 million as on Jan. 28, 2017. Total debt was 20.81 percent of total assets as on Jan. 28, 2017, compared with 15.08 percent on Jan. 30, 2016. Debt to equity ratio was at 0.50 as on Jan. 28, 2017, up from 0.33 as on Jan. 30, 2016.
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