Shares of Caleres, Inc. (CAL), which operates a portfolio of consumer-centric footwear brands, have jumped 51.8% over the past year.
Driven by robust demand and record sales at Famous Footwear business, CAL recently reported better-than-expected third-quarter performance on both its top-line and bottom-line fronts.
Revenue increased 21.1% year-over-year to $784.2 million beating analysts’ expectations by $30.5 million. Earnings per share at $1.59 exceeded estimates by $0.45, while its Brand Portfolio segment rose 12.3%.
Further, the gross margin of the company expanded by 308 basis points to 42.8% as compared to the year-ago period. With these developments in mind, let’s have a look at what’s changed in Caleres’ key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Caleres’ top risk category is Ability to Sell, contributing 32% to the total 25 risks identified. Compared to a sector average of 17%, Caleres’ Ability to Sell risk factor is at 32%.
In its recent quarterly report, the company has changed one key risk factor under the Production risk category.
Caleres highlighted that it mainly relies on international sourcing through third-party manufacturing for its footwear products. This exposes the company to a number of uncertainties stemming from trade relations, work stoppages, shipping delays, foreign currency gyrations, military conflicts, and different costs (e.g. custom duties, quotas, tariffs, anti-dumping duties).
In 2021, the company witnessed delays in receiving inventory and higher freight costs owing to port congestion, supply chain disruptions, and inflationary challenges. Consequently, the in-transit inventory of the company has risen significantly during this period.
While Caleres is working to mitigate these cost pressures and recover costs via price increases, there can be no assurance that it will be successful in doing so. If the company is unable to provide products efficiently, cost-effectively, and to the expected standards, then its sales may suffer.
Tracking Insiders
Keeping a tab on transactions by corporate insiders can provide timely insights for retail investors. According to TipRanks data on Insider Activity, insiders have sold Caleres shares worth $380.1 thousand in the last three months.
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