CLAYTON — Local shoe company Caleres reported lower earnings on Thursday in its most recent quarter, and cited President Donald Trump’s tariffs as part of the dip.
Company leaders told investors that tariffs knocked $10 million off sales from May through July, due to $5 million in order cancellations and $5 million in delayed shipments.
The Clayton-based company reported sales of $658.5 million, down over 3%, or about $24.8 million, compared to the previous year. That helped push earnings to just $7 million, down more than three-quarters from the $30 million the company earned in the same period last year.
“We are starting to see some price increases from our vendors in Famous (Footwear) and so obviously, we plan to pass on those price increases,†Chief Financial Officer Jack Calandra said. “I think the big question there is, what, if any, impact will that have on consumer demand?â€
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Since stepping into office, Trump has imposed, threatened and delayed tariffs on goods imported from foreign trading partners. The extra levy gets paid by the U.S. company, not the foreign manufacturer, so American consumers are seeing higher price tags on items as companies navigate Trump’s changing policies.
Major retailers like Walmart and Target have already announced price increases tied to tariffs.
Locally, retailers and companies in industries from fireworks to coffee to art supplies have spent thousands of extra dollars in tariffs on products. Many, like locally-based Build-A-Bear, have tried to stockpile inventory.
On Thursday, Caleres CEO and President Jay Schmidt said the company has worked closely with its factory partners to ease the impact from tariffs this past quarter. The company has selectively raised prices on some products, but the recent increase of Southeast Asian tariffs will require “additional mitigation efforts,†he said.
“Sales trends improved, but were still negative in both segments of our business, while gross margins were under continued pressure due to tariff disruption, added inventory reserves and higher clearance promotions at Famous Footwear,†Schmidt told investors in an earnings call.
In its 2024 annual report, Caleres wrote that it sources the majority of its products from China, Vietnam, Cambodia and India.
Calandra, the CFO, said the company is sourcing goods from several countries, negotiating concessions from factories and raising prices to manage the rising costs.
And the impact of the tariffs isn’t over, he said. The company expects to see profitability down in its third quarter, too, he continued, before its strategies can right the ship in the fourth quarter.
Sales of strappy dress shoes, casual sandals, loafers and sneakers were strong this quarter, company leaders said, and, looking ahead, they are optimistic about tall boot sales for the fall and winter.
Caleres also said it continues to focus on integrating luxury footwear brand Stuart Weitzman into the company. It completed the $120 million acquisition of the brand last month.
Caleres shares closed Thursday at $14.24, down 71 cents or about 5%.
