Caleres, Inc.

Greetings and welcome to Kolar's first quarter 2026 earnings conference call. At this time, all participants are on 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 call is being recorded. I would now like to turn the conference over to your host, Liz Dunn, Senior Vice President, Corporate Development and Strategic communication. Thank you. You may begin.

Thanks, Rob. Good morning, and thank you for joining our first quarter earnings call and webcast. A press release with detailed financial tables as well as a 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 operating results, we will be providing and referring to adjusted operating and earnings results And in some cases, we will be discussing our results, including 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 table in our earnings release and on Polaris.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 CFO. Our call will begin with prepared remarks followed by a Q&A session to address any questions you have. With that, I will now turn the call over to Jay. Jay?

Good morning. Earlier today, Calaris reported first quarter sales and earnings. Earnings per share exceeded our guidance, driven by strong sales and gross margin results in the brand portfolio segment. In the brand portfolio, the quarter demonstrated the power of our strategic growth vectors, with broad growth across channels and geographies supported by our centers of expertise. Lead brands outperformed, but the performance was solid across our brand portfolio, with most brands delivering growth in both revenue and profits. This segment also saw significant gross margin expansion, reflecting strong brand and channel mix, tariff mitigation efforts, lower current tariff rates, continued operational execution, improved product mix, and disciplined inventory control. And once again, the brand portfolio gained market share in the quarter for women's fashion footwear, according to Zirconis. At Famous Footwear, results were more challenging amid a softer consumer and macroeconomic backdrop. However, we continue to see strong e-commerce growth with sales up nearly 10%. We also made progress on our strategy to add more elevated brands and products to strengthen Famous Footwear's relevance and market position. And in the quarter, our flare remodel saw accelerating outperformance versus the fleet, with stores opened less than a year ago outperforming non-flare stores by nine points and total flare stores outperforming by seven points. And during the quarter, according to Sirkana, famous gained market share in shoe chains both overall and in kids. turning now to more detail on the first quarter. Brand portfolio sales on an organic basis increased 5.8% in the quarter and 20.6% when factoring in Stuart Weissman. Lead brands grew 7% organically and represented nearly 60% of organic brand portfolio sales. owned e-commerce continued to see growth and our international business was up. Last year, as we reported, we engaged an outside partner to ensure we were capturing all the synergies as we integrated Stuart Weitzman. At the same time, they analyzed our entire brand portfolio to find ways to increase efficiency and effectiveness. As a result of that work, we created several new centers of expertise. These include international, our biggest growth vector, specialty retail operations, which is an increasing focus with three of our five lead brands operating retail stores. In digital, where we expect to continue to see outsized growth, In marketing operations, where we are successfully using our CDP and improving our media efficiency across all our brands. And planning and costing, where we are focused on improved inventory management to drive stronger growth margins. As we discuss our results today in the brand portfolio, it is important to keep in mind the structural work we've completed to drive these results. Now for the lead brand highlights. First, Sam Edelman delivered double-digit top-line growth both domestically and internationally. Performance was strong across both existing and new doors, complemented by successful shop-and-shop rollouts and other distribution gains. The consumer reaction To the brand, spring fashion was very positive, with standout increases in clothes casual and dress, solid results in sandals, and continued traction from both newness and key iconic styles. In direct-to-consumer, full-price selling at higher average unit retails supported strong margins. The brand gained significant market share in the quarter in women's fashion footwear, coming in at number nine for the quarter, according to Circona. Internationally, growth was driven primarily by our joint venture in China, and the brand is gaining traction around the globe. We are building momentum internationally. in our handbag business with upgraded materials and expanded global distribution. We also continue to be pleased with the progress we're seeing with our Sam Edelman fragrance line. From a brick and mortar perspective, we ended the quarter with 113 Sam Edelman stores, including 54 owned and 59 franchised, with 109 being international. Stuart Weitzman made meaningful progress in the quarter with results that support our continued expectations for breakeven in fiscal 2026 and lay the foundation for our long-term aspirations for the brand. As we mentioned last quarter, we successfully integrated Stuart Weitzman's global business onto Calaris platforms in February with minimal disruptions. We made progress in the first quarter as sales and profit exceeded our internal expectations. And cleaner, more current inventories supported strong gross margins that were accretive to the total brand portfolio gross margin rate. We saw strengthening trends in both direct-to-consumer and wholesale, driven by key franchises and core icon styles, and improving conversion following our e-commerce transition. Internationally, trends in China also improved as product and marketing became more closely aligned with the brand's global positioning. The China business is also seeing early success from an expanded sneaker assortment, powered by Calera's sourcing and product capabilities. And those sneakers are planned for continued growth. In Europe, we are renewing our engagement with key luxury partners, including the opening of a new shop in Printemps during the quarter. Looking ahead, we are excited to celebrate the brand's 40th anniversary this fall with a global campaign and engaging activations. Stuart Weitzman ended the quarter with 71 stores including 23 in North America and 48 in China. Our Allen Edmonds brand delivered nearly 20% first quarter sales growth with broad-based momentum across the business. Brick and mortar stores, owned e-commerce, and wholesale all posted solid gains in the quarter, with healthy demand, particularly in dress loafers. During the quarter, Allen Edmonds gained market share and moved up five points to the number 11 brand in the $200 plus segment for men's fashion footwear in the premium channel, according to Cercana. Our reserve collection, the brand's most elevated product offering, continue to scale meaningfully, attracting high-value customers who shop more frequently, spend more annually, and demonstrate higher loyalty engagement. We also continue to be pleased with the outperformance from our Port Washington studio stores. And shortly after quarter ends, we opened our most recent location on King Street in Charleston, South Carolina. These 18 stores outperformed the broader 58-store fleet by 11 points in the quarter. Naturalizer had a solid quarter with modest growth led by continued strength in owned e-commerce. The brand's collaboration with June Ambrose drove a step up in traffic and sales on naturalizer.com, including strong new customer acquisition and broader brand awareness among younger, higher income, and more diverse consumers. Wholesale performance also improved as localized assortments with key partners drove growth and higher average unit retails. Consistent with broader portfolio trends, sandals and dress shoes led the quarter. with consumers responding especially well to on-trend colors and textures, including raffia, mesh, and woven materials. Looking ahead, the June Ambrose collaboration will continue with additional product drops in August, September, and October. Bionic delivered strong owned e-commerce performance in the first quarter, along with growth at key wholesale partners, helping to offset planned declines in value channels. Premium wholesale accounts supported year-over-year gains with expanded assortment, early sneaker launches, and exclusive styles. Targeted marketing drove solid sell-throughs across athletic, walking, sandals, and casual categories. Consumer response to new products was positive, and the new CityWalk sneaker sold out quickly online. Bionic is leading further into walking as an ownable category, supported by wellness ambassador Gabby Reese and the launch of the Hummingbird style at market this week. It is Bionic's lightest walking sneaker ever. Bionic understands that walking is essential to wellness and has unique biomechanics that are different than in running shoes. Bionic is well positioned to lead in this growing segment. Moving on to famous footwear. In the quarter, total sales decreased 2.5% and comp sales decreased 2.3%. about in line with the low end of our guidance. E-commerce continued to outperform stores, up almost 10% as we leveraged our CDP to deliver more personalized customer outreach. Famous sales results were strongest in February. While we saw improving trends leading into Easter, We believe accelerated inflation puts pressure on consumer traffic and sales, especially as we moved into April. From a divisional perspective, kids performed best, followed by men, while women's and accessories underperformed the total business. Fashion outperformed athletics, with more pronounced softness in women's athletics. while sandals were strong across both adult and kids categories. On the brand side, our elevate and edit strategy continues to resonate with our famous consumers. Sales of elevated products increased nearly 50% in the quarter, and penetration reached almost 20% year over year. We saw growth in the quarter from Jordan, Skechers, Birkenstock, New Balance, Reeve, and Brooks, while several brands in the Calaris portfolio finished among Famous' top 15 best-selling brands. We continue to expand newness and key product launches across the assortment, which we believe positions us well heading into the balance of the year. We showcased our brand elevation strategy with targeted brand activations in the quarter. We were especially pleased with the first Skechers takeover in February. These exclusive, high-impact events drive strong visibility and brand excitement, which we amplified through media in-store and across digital. We've seen similar results with the Burgen stock takeover that began in April and continued into May. Considering the investment so far this spring, these events are delivering meaningful returns, and we have at least five additional brand events planned for the balance of the year. Famous continues to enhance its consumer experience through the Flair format. We ended Q1 with 59 Flair locations, which generated a seven-point sales lift overall and a nine-point sales lift for stores converted in the last year. These results continue to reinforce our confidence in the Flair strategy and underscore Famous' ability to amplify elevated brands and products. As we evaluate the optimal markets for Flair, we are shifting our focus to flare openings in the near term, which generate even higher returns than remodels. We plan to end the year with approximately 65 flare locations. So our first quarter results provided encouraging evidence that our plans are taking hold. Calaris made meaningful progress against our strategic growth objectives, including lead brands, international, direct-to-consumer, our elevate-and-edit strategy, and enhancing consumer experiences through Flare. We've made structural organizational changes to ensure our operational execution supports our efforts. We are playing to our strengths and investing in our highest return growth initiatives. And we are gaining market share in both segments of our business. So Dan will walk you through our expectations for the balance of the year in detail. So we continue to view 2026 as a build back year, characterized by relatively modest organic sales growth and meaningful earnings recovery. In the brand portfolio, our momentum is building. Product strength, brand heat, and marketing investments are set up to drive growth in wholesale, B2C, and international for the balance of the year. At Famous Footwear, While the environment is more challenging, we are encouraged by continued e-commerce growth, the progress we've made with our elevate and edit strategy, and our efforts to enhance the shopping experience through flair. We will continue to expand our penetration of elevated brands and products, and we have exciting brand takeovers planned for the remainder of the year. And as always, we will lean into our strength in kids heading into this important back to school season. As we move into the second quarter, we feel good about our overall performance and our ability to deliver on our guidance for the year. With that, I'll now turn it over to Dan Karpel, who officially assumed the CFO role in May. for a more detailed view of our financial performance and our outlook for the balance of 2026. Dan?