Caleres, Inc.

Greetings and welcome to the ClaraSync fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn it over to your host, Liz Dunn, Senior Vice President, Corporate Development and Strategic Communications. Thank you. You may begin.

Thank you, Melissa. Good morning. Thank you for joining our fourth quarter earnings call and webcast. A press release with detailed financial tables as well as our quarterly slide presentation are available at calaris.com. Please be aware today's discussion contains forward-looking statements, which are subject to several risks and uncertainties. Actual results may differ materially due to various risk factors, including those disclosed in the company's Form 10-K and other filings with the U.S. Securities and Exchange Commission. Please refer to today's press release and our SEC filings for more information on risk factors and other factors which could impact forward-looking statements. Copies of these reports are available online. In discussing our operational results, we will be providing and referring to adjusted operating earnings results, and in some cases, we will be discussing our results excluding the impact of Stuart Weitzman. Additional details on non-GAAP measures, as well as others featured in today's earnings release and presentation, are available in the reconciliation tables on our earnings release and on Calaris.com. The company undertakes no obligation to update any information discussed on this call at any time. Joining me today are Jay Schmidt, President and CEO, and Dan Karpel, Senior Vice President and Interim CFO and CAO. Our call will begin with prepared remarks followed by a Q&A session to address any questions you have. With that, I'll turn the call over to Jay. Jay?

Good morning. Earlier today, Calaris reported fourth quarter sales and earnings. Earnings per share exceeded our guidance with sales modestly above our guidance and gross margin better than expectations. Brand portfolio sales performance in the quarter was driven by continued strength in owned e-commerce and international performance, underscoring key strategic growth factors for the company. Lead brands once again outperformed, reinforcing their role as Calaris' primary growth engine, and we once again gained market share. At Famous Footwear, we continue to see encouraging signs that our strategic initiatives are working. Our flare remodels are consistently outperforming the fleet and remain an important growth lever as we elevate the in-store experience. We leaned further into our strategy to elevate and edit the brand and product assortment, and we're seeing consumers respond to a curated mix of premium and demanded brands. And for the quarter, we gained market share in shoe chains. We were pleased that Calaris ended 2025 with some momentum in both segments of our business. 2026 will be a build back year where we begin to build back our earnings power driven by the strategic growth factors and initiatives that are already in place and working. We'll say more on that in a moment, but first let me provide more detail on fourth quarter performance. Brand portfolio sales on an organic basis increased 1.5% in the quarter and 20.3% when factoring in Stuart Weitzman. Lead brands in total were up 2% organically and represented nearly 60% of the brand portfolio sales. Owned e-commerce continued to see outsized growth and our international business was strong. According to Cercana, our brand portfolio gained significant market share in both women's fashion footwear and total footwear during the quarter. Boots, particularly tall shaft, were a standout category, complemented by strength in flats and loafers, solid performance in dress, and continued momentum in sneakers. Sam Edelman delivered another very strong quarter with sales growth that exceeded expectations and outperformed the broader premium market. Performance was broad-based across categories, anchored by exceptional results in dress, casuals, and boots, where the brand saw success in both proven icons and new styles. Wholesale sales exceeded plan, reflecting strong demand across core product franchises. Owned e-commerce saw double-digit growth and higher full-price selling in the quarter, closing out a record-setting year. Sam Edelman's licensing initiatives added incremental growth and visibility highlighted by a successful fragrance launch with rapid sell-through and expanded national distribution. We continue seeing positive results from our Sam Edelman stores, which now tally 111 doors, 56 owned, and 55 franchised, with 107 of them international. Stuart Weitzman delivered solid fourth quarter progress as we continue strengthening the foundation of Calaris' newest lead brand. We successfully integrated Stuart Weitzman onto Calaris platforms as we completed the quarter, both on time and on budget. During this transition process, we implemented a new organization structure, moved teams into new headquarters in New York and Shanghai, completed the relocation of our U.S. and Canadian warehouses, and liquidated a significant volume of aged inventory globally. Operationally, fourth quarter sales were driven by core boots and booties alongside new dress and social styles. As we clear out aged inventory, we are successfully reducing discounting and flowing newness to support improved specialty retail and e-commerce performance. At quarter end, Stewart operated 73 retail locations worldwide, including 50 in China and 23 in North America, with the latter spanning full price, outlet, and shop-and-shop formats. We remain committed and confident in our plan to bring the brand to break even in 2026. Allen Edmonds delivered a very strong fourth quarter with broad-based growth across all channels and continued momentum with the consumer. Performance was led by strength in brick and mortar stores, owned e-commerce, and wholesale, with particularly strong demand for dress, loafers, sneakers, and boots. Wholesale momentum, driven by key national partners, strong store-level productivity, and expanded distribution continued. The Reserve Collection, the most elevated product in the Allen Edmonds brand, continued to scale meaningfully attracting a highly valuable customer who shops more frequently, spends more annually, and shows higher loyalty engagement. This special collection is available at the majority of our 58 Allen Edmonds stores, including our 18 Port Washington studio stores, which continue to outperform, reflecting the power of an elevated store experience and recent enhancements to the format. Naturalizer made meaningful progress in the fourth quarter with improving e-commerce sales momentum and new and retained customer growth. Owned e-commerce performance was a standout, supported by strength across on-trend product categories, including boots, dress, sport, and sandals, with particular success in tall boots. Marketing efforts were increasingly focused and effective with refined targeting, strong influencer content, and compelling storytelling driving higher quality traffic, higher conversion, and higher average order value. These efforts translated into customer growth across both new and returning shoppers with strong engagement from younger and core generations. And shortly after quarter end, we launched our newest collaboration with tastemaker and style icon June Ambrose. June's collaboration is building awareness for the Naturalizer brand with new consumers, and June's Styletics collection sells at significantly higher retails, mostly through naturalizer.com. Bionic closed the fourth quarter with strength in e-commerce and international channels, compelling new product launches, and growing interest in sport and performance walking. Bionic's wearable well-being positioning has high emotional resonance with consumers. We're pleased with the growing momentum in sport lifestyle and performance walking categories, underscored by Bionic's first sport collaboration with wellness advocate Gabby Reese. which we launched in January and supported with a robust marketing campaign. International bestsellers in the quarter closely mirrored those in the US, illustrating consistent global demand for the brand's key styles. Brand awareness is growing for Vionic, particularly with younger and more affluent consumers. Moving on to famous footwear. In the quarter, total sales decreased 1.2% and comp sales increased 0.1%, in line with our expectations. E-commerce outperformed stores, but average unit retails were up in both channels. We continued to see the famous consumer respond strongly during peak shopping periods. with more positive comes during the holiday period, followed by more modest results in January. E-commerce sales accelerated and were up double digits for the third straight quarter. The launch of Jordan earlier in the year contributed steady momentum throughout the holiday season, remaining a top 10 brand and reinforcing Famous' ability to launch leading brands and deliver powerful results. Famous continues to enhance its consumer experience through the Flair format. We ended fourth quarter with 57 Flair locations, which generated a 4.5-point sales lift overall and a 6-point sales lift for stores converted in the last year. The success of Flair continues to underscore Famous' ability to amplify elevated brands and products. We plan to build on that momentum with additional Flair openings in 2026, ending with a range of 65 to 75 locations by year end. From a divisional perspective, men's performed best in the quarter Kids performed in line with the total, and women's unperformed slightly. However, fashion boots were a standout category in total. Top growth brands for the quarter were Skechers, Jordan, Birkenstock, Timberland, Sorrel, Brooks, and Columbia. While our Calaris brands outperformed at famous footwear with sales of mid-teens, and saw a higher margin rate on lower inventory. We continue to make progress on our elevate and edit strategy at Famous without performance from premium brands. In 2026, we plan to accelerate this strategy by expanding higher demand brands and products while exiting underperforming labels. We're also expanding immersive brand takeovers that have been driving outsized growth at key points across the seasons, with multiple takeovers planned for core brands throughout 2026. In summary, Kolaris made progress on our strategic growth objectives in the second half of 2025, including lead brands, international, direct-to-consumer, and enhance customer experience, and edit and elevate. Joining us today on the call is Dan Karpel. Dan returned to Calaris as Chief Accounting Officer in 2025 and has assumed the additional role of Interim CFO. He is well-versed in our company and I'm pleased to welcome him to the call. Dan will walk you through our guidance in detail, but I wanted to provide some color on what we are expecting for the year. As we look forward, 2026 is shaping up as a build back year. Characterized by relatively modest organic sales growth, but meaningful earnings recovery. We have several encouraging green shoots leading us to a place of optimism. Our market share continues to build. Our international business is up. And our own e-commerce business is up quarter to date across the brand portfolio. Famous footwear is seeing slightly downcom store sales with e-commerce up high single digits quarter to date. our tariff mitigation strategies have taken hold, and we successfully completed our Stuart Weitzman Systems Integration, which sets the stage for improved profitability in the brand. We also made progress across our Centers of Excellence, which we have shifted internally to calling Centers of Expertise. We are finding the greatest success by deliberately leveraging Calaris' core capabilities at scale. This includes expanding our international platform, accelerating owned e-commerce, and establishing more disciplined planning and costing capabilities. In addition, now that three of our five lead brands have brick and mortar stores, we have launched a specialty retail operations team to elevate performance and the consumer experience. We've also established a marketing operations center of expertise to enhance our data, analytics, and media buying. These centers of expertise are helping us move faster and operate more consistently and efficiently. An international, specialty retail and e-commerce are where we are seeing some of our earliest improvements with Stuart Weitzman. We see a meaningful opportunity to build on this foundation, not just as it relates to Stuart, but for our whole company as we move through 2026 with more to come. So while the market remains volatile, Based on what we know today, we are providing guidance with a realistic view of the risks and the opportunities ahead of us, including geopolitical risk and tariff changes. Our sales growth is coming from our proven growth vectors and annualized benefit from our recent acquisition. And our earnings bridge is clear. So with that, I will now hand it over to Dan for a more detailed view of Calaris' financial performance and our outlook for 2026. Dan?