CAL

Caleres ($CAL) President Buys Big After 60% Plunge as Stuart Weitzman Deal Sparks Turnaround Hope

06/10/2025 19:31

$CAL (Caleres Inc) shares have plummeted over 60% from $35 in June last year to current levels around $14, but President John Schmidt demonstrated strong management confidence by purchasing 7,600 shares at an average price of $13.39 on June 6th. This marks the third insider purchase this year, following Director Kyle Gendreau's 5,000-share buy in January ($19.92) and Director Lori Greeley's 9,000-share purchase in March ($17.75). Caleres, a leading U.S. footwear retailer, operates well-known brands including Famous Footwear, Naturalizer, Sam Edelman, and Allen Edmonds through approximately 800 stores nationwide, serving various price segments. While competing with global giants like Nike and Adidas, the company has maintained a unique position in the mid-tier market. However, traditional footwear retailers have faced significant challenges from the surge in online shopping and changing consumer behaviors in recent years. Notably, this year's insider activity has shifted entirely to purchases, contrasting sharply with Officer Diane Sullivan's substantial sales totaling 43,000 shares (approximately $1.48 million) during June-July 2024. President Schmidt's recent purchase represents his largest transaction during his tenure, signaling strong conviction about current valuation levels. When the company announced its $105 million acquisition of the Stuart Weitzman brand from Tapestry in February 2025, shares rose 4% on positive market reception. Stuart Weitzman, a premium women's footwear brand, has faced headwinds from weakening luxury spending in North America and China but retains significant brand value and growth potential. This acquisition represents a cornerstone of Caleres' strategy to expand into premium market segments. However, recent financial performance remains challenging. For the quarter ended January 31, net earnings per share plunged from 86 cents in the prior year to just 15 cents, while revenue declined 8.3% to $639.2 million. The second quarter ending April 30 also disappointed, with earnings of 22 cents per share falling well short of the 37-cent estimate, continuing the trend of underperformance. The footwear retail industry stands at a critical juncture. While the e-commerce boom has pressured traditional brick-and-mortar operations, it has also created new opportunities through brand differentiation and enhanced customer experiences. Caleres is pursuing a comprehensive market strategy, combining Famous Footwear's mass-market accessibility with Stuart Weitzman's premium positioning. Analyst sentiment remains cautious, with an average 'hold' rating and a 12-month price target of $21, suggesting potential upside of over 50% from current levels. However, the 61.9% downward revision in earnings estimates over the past three months reflects near-term operational challenges. For investors, the key question is whether current depressed valuations represent opportunity or value trap. While consistent insider buying sends positive signals, structural industry changes and broader consumer spending slowdowns present significant headwinds. Near-term catalysts include the completion of the Stuart Weitzman acquisition (scheduled for summer 2025) and third-quarter earnings results. Long-term success will depend on successful digital transformation and the ability to generate synergies from the expanded brand portfolio.

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