Shares of Caleres (CAL, Financial) fell 18.6% in the morning session following the company's second-quarter earnings report. Revenue missed expectations, and EPS fell short of Wall Street's estimates.
Sales were negatively impacted by delayed back-to-school season contributions, which affected Famous Footwear performance. Brand portfolio sales declined 5.1% due to operational reporting issues linked to SAP ERP implementation and weak seasonal demand. Guidance was also lower than expected, leading analysts to reduce their projections.
At the current price of $30.32, Caleres (CAL, Financial) is experiencing significant market volatility with a price drop of 18.6%. The company has a market capitalization of $1.07 billion and a price-to-earnings (P/E) ratio of 6.42. The GF Value for Caleres is estimated at $27.38, indicating that the stock is modestly overvalued at its current trading price.
Despite the slump, Caleres maintains a favorable Piotroski F-Score of 8, indicating good financial health. Additionally, the Beneish M-Score of -2.49 suggests it is unlikely to be a manipulator. The Altman Z-Score of 2.81, however, places the company in the grey area, indicating some financial stress.
Caleres' operating margin stands at 6.89%, with a net margin of 5.96%. The company's return on equity (ROE) is robust at 32.79%, which is relatively high compared to industry standards. The free cash flow (FCF) yield is 13.64%, providing some cushion during turbulent market conditions.
On the downside, the company faces significant warning signs, including a slowed revenue growth rate over the past 12 months, insider selling, and a low tax rate, which might not be sustainable. Four insider selling transactions amounting to 48,480 shares have been reported in the past three months.
Given these indicators, investors should exercise caution. While the company shows strong financial health, operational issues and external market conditions could continue to impact its performance.
