2016 Annual Report

2016 ANNUAL REPORT DEAR SHAREHOLDERS, Throughout 2016, we maintained our consistent approach of managing the areas under our control while continuing to rapidly respond to changing consumer shopping behaviors, even as the pace of change accelerated, a digital first mindset became even more prevalent, and the demand for product tightened in our industry. On a consolidated basis, we reported net sales of $2,579.4 million. In total, ecommerce made up 12% of consolidated sales and was up 56% year-over-year. For Famous Footwear, total sales of $1,590.1 million were up 1.1%, while same-store-sales were up 0.6%. At famous.com, net sales increased more than 50% to represent 5.9% of total Famous Footwear sales. Brand Portfolio net sales of $989.3 million were down 1.5%, reflecting a significant shift away from the lower-margin, mass-merchandise channel throughout 2016. Total ecommerce sales for Brand Portfolio – including our branded ecommerce sites, dropship ecommerce sales and pure-play ecommerce sites – were up 57% over 2015 and comprised 22% ACQUIRED ALLEN EDMONDS of total Brand Portfolio sales. $ for 255 MILLION While we’re pleased with our ecommerce growth, it represents just one of the four key areas where we have focused our time, energy and — STRONG BRAND investments over the past few years. Each of these initiatives helped — PROVEN BUSINESS MODEL us to drive results in 2016, and we expect to keep seeing benefits from — WELL-POSITIONED FOR GROWTH these efforts over the long-term. 2016 CALERES ANNUAL REPORT 1 1] We continued with the DIVERSIFICATION 4] Returning to ecommerce, where we of our portfolio of brands, with the acquisition targeted investments in DIGITAL and of Allen Edmonds in December. This addition talent. For our Brand Portfolio, we aligned to our Brand Portfolio has allowed us to rapidly our resources against our strategic increase our exposure in men’s footwear and initiatives and, as a result, created a new will provide our existing men’s brands the digital team. We also allocated resources benefit of their knowledge and expertise. to focus on speed to market, and this effort Conversely, we expect Allen Edmonds to gain is expected to help us drive consistency from our brand development, materials sourcing, across all of our brands and lead to more product development and design capabilities. accurate buys, higher order fulfillment, and fewer inventory markdowns. Allen Edmonds is a strong brand, operating with a proven business model, and we feel it is well- On the Famous Footwear side, we added positioned for growth. For 2016, retail doors made a senior vice president of ecommerce in up 45 percent of brand sales, while ecommerce was early 2017. This role will help us to continue approximately 35 percent and wholesale represented to provide a consistent experience and to roughly 20 percent. We truly think we’ve acquired capitalize on our expanding digital presence one of the great gems in men’s footwear. and growing ecommerce sales. At the same 2] The next key area of investment was around speed. time, we made the decision to fortify our For our Brand Portfolio, this centered on our SPEED leadership team and added the new position TO MARKET initiative, and we have focused on of chief merchandising officer, bringing even improving our overall supply chain in three ways. more strength to an already capable team. — Rapid replenishment : lets us respond to in-season Even with all of these investments in our business, sell-through rates for existing products we maintained our flexible balance sheet and our cash flow strength in 2016. We ended the year with — Trend modification : allows us to address new trends cash from operations up 23.1% over 2015. We also quickly in-season, by introducing a new material, reduced the borrowings against our revolving color or pattern on an existing construction credit facility to $110 million, using cash on hand — Trend injection : enables us to bring new ideas to pay down a significant portion following our swiftly to market to test in small quantities. $255 million acquisition of Allen Edmonds. 3] On the Famous Footwear side, our speed initiative As you can see, we made terrific progress on is focused around our SPEED TO CONSUMER many of our strategic initiatives in 2016, which and includes the expansion and modernization enabled us to continue to complete effectively. of our Lebanon distribution center. I’m pleased to We are confident about the long-term outlook say this work is complete and the center is fully for our diversified portfolio, as we believe the operational, with performance ahead of plan. foundational work we have completed over the past few years has made us more agile and capable Through this initiative, we have enhanced our of reacting to the more rapid pace of change. operational efficiencies and our shipping flexibility. The work we’ve completed has also enabled us No matter what changes are in store for retail to expand our logistics infrastructure capacity in 2017, we will – as always – remain forward and prepared us to support looking and proactively ongoing growth in ecommerce manage outcomes to deliver sales. Most importantly, this overall shareholder value. investment allows us to meet the omni-channel demands of today – and tomorrow – and to provide faster order processing and faster Diane M. Sullivan delivery to consumers. CEO, President and Chairman of the Board 2 2016 CALERES ANNUAL REPORT Continued to Improved Targeted Expanded DIVERSIFY Brand Portfolio Famous Footwear overall portfolio of brands SPEED to market SPEED to consumer DIGITAL focus 2016 CALERES ANNUAL REPORT 3 financial 2016 TRENDS AND HIGHLIGHTS NET SALES dollars in millions 2016 $2,579 62% 38% 2015 $2,577 61% 39% 2014 $2,572 62% 38% FAMOUS FOOTWEAR BRAND PORTFOLIO BRAND PORTFOLIO NET SALES dollars in millions 2016 $989 47% 53% 2015 $1,005 44% 56% 2014 $982 42% 58% CONTEMPORARY FASION HEALTHY LIVING NET CASH FROM OPERATING ACTIVITIES dollars in millions 2016 $184 2015 $149 2014 $119 2016 STOCK PERFORMANCE $32.82 $26.54 MAY JULY JUNE APRIL MARCH AUGUST OCTOBER JANUARY FEBRUARY DECEMBER NOVEMBER SEPTEMBER 4 2016 CALERES ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) Q ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 28, 2017 OR h TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________ Commission file number 1-2191 CALERES, INC. (Exact name of registrant as specified in its charter) New York 43-0197190 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 8300 Maryland Avenue 63105 St. Louis, Missouri (Zip Code) (Address of principal executive offices) (314) 854-4000 (Registrant’s telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock — par value $0.01 per share New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Q No h Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yesh No Q Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes Q No h Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes Q No h Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Q Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act: Large accelerated filer Q Accelerated filer h Non-accelerated filer h Smaller reporting company h Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes h No Q The aggregate market value of the stock held by non-affiliates of the registrant as of July 29, 2016, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $1,082.6 million. As of February 24, 2017, 42,958,719 common shares were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the 2017 Annual Meeting of Shareholders are incorporated by reference into Part III. 2016 CALERES FORM 10-K 5 INTRODUCTION This Annual Report on Form 10-K is a document that U.S.

Load more