Caleres Inc. ( CAL ) shares fell after the company posted second-quarter 2025 revenue of $658.5 million, down 3.6% from a year earlier but above estimates of $656.5 million.

Adjusted earnings were 35 cents per share, missing the 56-cent estimate. Net income was $6.7 million, or 20 cents per share, compared with $30.0 million, or 85 cents per share, a year earlier. Both figures included a 7-cent tax benefit.

Gross profit was $285.8 million, with margin falling 210 basis points to 43.4%. Selling, general, and administrative expenses were $269.7 million, or 41% of sales, up from 39.3% a year ago.

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Famous Footwear’s revenue fell 4.9% to $399.6 million, with comparable sales down 3.4%. Segment gross margin dropped 130 basis points to 43.7%. Brand Portfolio revenue declined 3.5% to $275.6 million, with a $10 million tariff impact. Margin fell 240 basis points to 40.3%. Direct-to-consumer sales made up 75% of revenue.

Inventory ended the quarter at $693.3 million, up 4.9% from a year ago. Borrowings under the credit facility rose to $387.5 million, up $241 million, to fund the Stuart Weitzman acquisition completed after quarter-end.

Cash stood at $191.5 million, up from $51.8 million. Operating cash flow for the first half was $41.6 million, down from $115.7 million last year.

Caleres ( CAL ) amended its revolving credit facility during the quarter, extending maturity to 2030 and raising capacity by $200 million to $700 million, with an option up to $950 million. The company also completed cost savings initiatives expected to deliver $15 million annually.

“While we did experience headwinds due to market uncertainty, we demonstrated the strength and resilience of our company this quarter,” said President and CEO Jay Schmidt. “Sales trends improved sequentially in both segments of our business and we saw market share gains in women’s fashion footwear and in shoe chains. We experienced strength in Lead Brands, our Brand Portfolio direct-to-consumer channels, and international.”

The company suspended annual guidance and expects ongoing margin pressure from tariffs in the Brand Portfolio segment. It forecast third-quarter gross margins in line with the second quarter, with improvement in the fourth quarter as mitigation strategies take effect.

In August, Famous Footwear’s comparable sales rose 1%, and Brand Portfolio’s sales, excluding Stuart Weitzman, grew to the low single digits.

Price Action: CAL shares were trading lower by 16.39% to $12.50 premarket at last check Thursday.

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