Caleres, Inc. ( CAL ) shares are trading lower after the company reported first-quarter FY25 results.

Revenues fell 6.8% year over year (Y/Y) to $614.2 million, missing the analyst consensus of $622.05 million.

Famous Footwear sales fell 6.3% Y/Y, with comparable store sales down 4.6% Y/Y. Brand Portfolio sales decreased 6.9% Y/Y in the quarter.

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The company’s gross margin rate contracted 150 basis points year over year to 45.4% and adjusted EBITDA fell to $28.7 million from $57.4 million a year ago quarter.

The adjusted EPS of 22 cents missed the consensus of 36 cents.

Jay Schmidt, president and CEO, said, “While our brands continue to resonate with consumers and both segments of our business gained market share in the period, our first quarter results fell short of expectations.”

“February sales were particularly weak, and although trends improved in March and April, overall performance was below plan. Furthermore, operating earnings were pressured by lower gross margins, increased reserves, and costs to cancel and move inventory.”

“In the near term, we are focused on controlling what we can control, including optimizing our sourcing strategy. Additionally, we expect to decrease SG&A by $15 million on an annualized basis through structural expense cuts,” he added.

In the quarter, Caleres ( CAL ) returned 300,000 shares to shareholders at an average price of $16.81 per share.

Borrowings under the revolving credit facility totaled $258.5 million at the end of the period, up $67.5 million from the first quarter of 2024.

Caleres ( CAL ) said it currently expects dollars sourced from China to be 10% or less by the second half of 2025.

Given the uncertainty in the environment, the company suspended guidance for the fiscal 2025 outlook.

During the fourth-quarter FY24 earnings call, the company guided FY25 net sales to decline by 1% to up 1%, with an EPS of $2.80 – $3.20.

Price Action: CAL shares are trading lower by 14.5% to $14.01 at last check Thursday.

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