On Wednesday, KeyBanc Capital Markets initiated coverage on Caleres Inc. (NYSE: NYSE:CAL), a global footwear company, with a Sector Weight rating. The firm highlighted the company's strategic initiatives and the SPEED program as a competitive advantage that may aid Caleres in capitalizing on current market trends and increasing its market share.
Caleres, which operates through its Famous Footwear segment and a Brand Portfolio that includes wholesale and company-owned brands, has undergone significant restructuring over the past four years. KeyBanc noted this effort as a positive move to build momentum in the business. The analyst believes that the Brand Portfolio, in particular, shows promise as a growth opportunity that could enhance the company's revenue and profitability.
The SPEED program, designed to streamline operations and enhance efficiency, was recognized as a key factor that could position Caleres favorably in the competitive footwear industry. According to KeyBanc, this program may provide Caleres with an edge in responding to shifts in consumer preferences and market dynamics.
However, the report also pointed out potential challenges, particularly within the Famous Footwear segment.
"While we believe the Brand Portfolio is gaining momentum and view it as a meaningful growth opportunity for both top and bottom line, current trends in Famous Footwear could serve as a headwind in the NT as consumers continue to make more selective buying decisions and wait for signs of improvement before growing more confident," said the analyst.
InvestingPro Insights
As Caleres Inc. (NYSE: CAL) garners attention with KeyBanc Capital Markets initiating coverage, investors may find additional insights through InvestingPro metrics and tips. Caleres, with a market capitalization of $1.13 billion, is trading at an attractive earnings multiple with a P/E Ratio of 7.45. This figure aligns closely with the adjusted P/E Ratio for the last twelve months as of Q3 2024, which stands at 7.52, indicating a consistent valuation over time.
An InvestingPro data point of note is the company's revenue for the last twelve months as of Q3 2024, totaling approximately $2.82 billion, despite a slight downturn in revenue growth of -4.55%. However, Caleres has maintained a strong gross profit margin of 43.97%, suggesting that the company is effectively managing its cost of goods sold relative to its sales.
InvestingPro Tips underscore the company's high shareholder yield and the fact that it has sustained dividend payments for an impressive 53 consecutive years, which may appeal to income-focused investors. Additionally, the stock has experienced a notable return over the last three months, with a price total return of 20.25%, and is trading near its 52-week high, at 98.87% of the peak price.
For those considering deeper analysis, there are 8 additional InvestingPro Tips available, which could provide further clarity on Caleres' financial health and market position. Investors can access these tips and more by using the coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.
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