Greetings, and welcome to the Caleres, Inc. fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, the conference is being recorded. I would now like to turn the call over to your host, Liz Dunn, Senior Vice President, Corporate Development and Strategic Communications. Thank you. You may begin.

Thank you, Melissa. Good morning. Thank you for joining our fourth quarter earnings call and webcast. A press release with detailed financial tables as well as our quarterly presentation are available at caleres.com. Please be aware today’s discussion contains forward-looking statements, which are subject to several risks and uncertainties. Actual results may differ materially due to various risk factors, including those disclosed in the company’s Form 10-K and other filings with the U.S. Securities and Exchange Commission. Please refer to today’s press release and our SEC filings for more information on risk factors and other factors which could impact forward-looking statements. Copies of these reports are available online. Discussing our operational results, we will be providing and referring to adjusted operating earnings results and, in some cases, we will be discussing our results excluding the impact of Stuart Weitzman. Additional details on non-GAAP measures as well as others featured in today’s earnings release and presentation are available in the reconciliation tables on our earnings release and on caleres.com. The company undertakes no obligation to update any information discussed on this call at any time. Joining me today are Jay Schmidt, President and CEO, and Dan Carpel, Senior Vice President and Interim CFO and CAO. Our call will begin with prepared remarks followed by a Q&A session to address any questions you have. With that, I will turn the call over to Jay. Jay?

Good morning. Earlier today, Caleres, Inc. reported fourth quarter sales and earnings. Earnings per share exceeded our guidance, with sales modestly above our guidance and gross margin better than expectations. Brand Portfolio sales performance in the quarter was driven by continued strength in owned e-commerce and international performance, underscoring key strategic growth vectors for the company. Lead brands once again outperformed, reinforcing their role as Caleres, Inc.’s primary growth engine, and we once again gained market share. At Famous Footwear, we continue to see encouraging signs that our strategic initiatives are working. Our Flair remodels are consistently outperforming the fleet and remain an important growth lever as we elevate the in-store experience. We leaned further into our strategy to elevate and edit the brand and product assortment, and we are seeing consumers respond to a curated mix of premium and in-demand brands. And for the quarter, we gained market share in shoe chains. We were pleased that Caleres, Inc. ended 2025 with momentum in both segments of our business. 2026 will be a build-back year where we begin to build back our earnings power driven by the strategic growth factors and initiatives that are already in place and working. We will say more on that in a moment, but first, let me provide more detail on fourth quarter performance. Brand Portfolio sales on an organic basis increased 1.5% in the quarter and 20.3% when factoring in Stuart Weitzman. Lead brands in total were up 2% organically and represented nearly 60% of Brand Portfolio sales. Owned e-commerce continued to see outsized growth, and our international business was strong. According to Circana, our Brand Portfolio gained significant market share in both women’s fashion footwear and total footwear during the quarter. Boots, particularly tall shaft, were a standout category, complemented by strength in…

Thank you, Jay, and good morning, everyone. During today’s call, I will provide additional details on fourth quarter results as well as our expectations for 2026. Please note that my comments will be on an adjusted basis, and I will note when they exclude Stuart Weitzman. For the fourth quarter, sales were $695.1 million, up 8.7%. Sales on an organic basis, excluding Stuart Weitzman, decreased 0.1%. Organic sales increased in the Brand Portfolio segment and declined at Famous Footwear. Notably, both segments saw an improvement in the trend versus the first half of the year. Sales for Stuart Weitzman were $56.3 million. Brand Portfolio sales were up 1.5% on an organic basis and up 20.3% including Stuart Weitzman. Lead brands in total, excluding Stuart Weitzman, grew about 2% with growth in both North America and international. Famous sales were down 1.2%, with comparable sales up 0.1%. Comparable sales increased slightly in November and December and declined low single digits in January. Consolidated gross margin was 42.9%, down 10 basis points versus last year, reflecting lower margins in Brand Portfolio and relatively stable margins at Famous Footwear. Stuart Weitzman was modestly accretive to gross margin. Brand Portfolio gross margin, excluding Stuart Weitzman, was down 130 basis points due to tariffs as well as markdown allowances, somewhat offset by favorable channel mix. Brand Portfolio gross margin was 41.6%, down 10 basis points to last year including Stuart Weitzman. Famous gross margin was 42.5%, essentially flat to last year, with a greater proportion of clearance sales to total offset by higher clearance margin. SG&A expenses increased $48.3 million, or 18.3%, to $310.0 million. The increase was primarily driven by expenses of $39.0 million related to Stuart Weitzman. As a percentage of sales, SG&A was 44.6% and deleveraged 370 basis points. Operating loss in…

Thank you. To ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset. Our first question comes from the line of Ashley Owens with KeyBanc Capital Markets. Please proceed with your question.

Hi, thanks, and good morning. So maybe just starting with the quarter. I know there was concern about potential risk to sales volatility in the bottom line, and that did not really play out here. Could you just help us bridge if there was any volatility you recognized and what some of the offsets were? And then, more importantly, is there any go-forward risk with ongoing factoring reps here? How should we think about it as more one-time in nature?

Okay. So first of all, we did provide an estimate mid-January, and that did actually play out. We did not ship Saks for the balance of the month, and we were fully reserved on the bad debt. However, other areas of our business were strong enough to offset the $0.06 that we did play out, and I think that was a key reason for it. It just came in better. Our gross margin impact on tariffs was 40 basis points in the Brand Portfolio in the quarter, which was also better than our expectation.

Okay. Got it. And can you hear me clearly? So, for just as a follow-up then, as we think about gross margin in the embedded recovery story here, can you help us parse out what is already in the exit rate for the year versus what still needs to come through from either mix or a tariff mitigation standpoint in 2026? Thanks.

Yes. So, on the margin, we think about guidance in 2026, you will see relatively flat margins on the Famous business. And as it relates to the Brand Portfolio side, we will see recovery around the tariff side of the business. Also, with mix, we think about Stuart Weitzman as incremental margin accretion because of the margin levels that they play, as well as other mix in our lead brands driving that up.

Got it. That is super helpful. Thank you.

Thank you. Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question.

Hi. Good morning, everyone. I like the term “build-back year” for 2026. And as you think about the build-back year for 2026, on the Brand Portfolio side, how are you thinking about wholesale with Saks—the $0.06 impact I think you may have expected, or up to $0.10 for the year—how are you planning that this year? What are you shipping them or not shipping them? And with the market share gains that you saw in shoe chains at Famous Footwear in the fourth quarter, key drivers of that—new brands being added—how do you think about the addition of new brands and categories that you are adding in them? And then just lastly, the shaping or cadence of the year—anything on margin profile, whether it is lapping of tariffs, that we should expect to see, and does the rising energy prices—how is that an impact? Thank you.

Dana, I will start and then we will fill in along the way. So first of all, we are seeing our key points of our business on the Brand Portfolio continue to support our guidance. We said our order book is in line with that guidance right now. Our owned e-commerce trend line right now looks very good for the Brand Portfolio, and we are seeing international up on it as well. That has been quite good. We are seeing those key drivers coming through with our lead brands, so we continue to see that come through. With Stuart, as you have noticed, we feel like all of the work that was done in the back half of ’26 leads us to a place where they can start to build back their business, and that really goes straight across all of their channels and geography and everywhere. While we are not guiding specifically by brand, we will see good momentum coming through there, which is great. And then finally, on the Saks piece—right now, we do not have anything new to report on that, but we are prepared to go forward at this moment with the wholesale book that we have, and actually, that does support at least our guide for the quarter. We will tell you more when we have more to say, but otherwise, it looks pretty good. And then you also mentioned about Famous Footwear—what drove that market share gain back—and that was, as you had suggested, the lead brands coming through in Famous Footwear was actually the big driver for that. And as we had said earlier, Famous had a nice lift in holiday, really going after that more gift-giving piece. We felt very good about it and saw the brands that I did mention. We had good momentum from Skechers, Birkenstock, Sorel, Timberland, others. And, obviously, the big Jordan piece proved very powerful during holiday, so that was a big win for us too. Again, it just supports our guidance going forward and the momentum we are seeing.

And, Dana, you had asked a little bit about the spread of margin during the quarter. Just to reinforce the guidance, we said consolidated in the first quarter was going to go up 120 to 140, and then for the full year, 140 to 180. And so you will see results throughout each of those quarters as we look at the year.

And then, Dana, one more thing on market share. You mentioned new brands. On the Brand Portfolio side, while Stuart Weitzman did add to our market share, we gained market share in women’s fashion footwear on an organic basis as well.

Thank you. Our next question comes from the line of Mitch Kummetz with Seaport Research. Please proceed with your question.

Yes. Thanks for taking my questions. Jay, in your prepared remarks, you talked a little bit about quarter-to-date performance—Brand Portfolio, e-com, and then also at Famous. And I was wondering if there is any way to parse out the impacts that you might be seeing from tax refunds versus, more recently, higher gas prices and maybe just the overall impact from the war in Iran? And I do have a couple of follow-ups.

Yes. So, just to characterize right now, we did see on our Brand Portfolio strong owned e-commerce comp performance coming through, which supports our guide. The good news is that from all the key brands we have seen it now on all four of our lead brands—Sam Edelman, Allen Edmonds, Naturalizer, and Vionic. We are also starting to see a nice turnaround at Stuart Weitzman on their e-commerce business where that was not something that we saw in the back half of this year. So it looks like a lot of the team’s work there coming through is working. As it goes over to the Famous side—so kind of a little different story—we had a good February, I would say, and that was through some good performance on some of the big brands there that continued, Skechers being one of them, where we did have a brand takeover there, and that worked very well. We also did sell through some clearance there too, which did support the business there. As we walk into March, it is a little bit of a mixed story right now, and we are monitoring it day by day, week by week. In addition to the geopolitical situation, there was some weather impact, and we do have an Easter shift timing. So right now, as I said, what we are looking at supports our current guide, and we will report more when we know it, but we are managing it week to week.

And then between Famous and Brand Portfolio, could you talk a little bit about what you are seeing from a category performance quarter-to-date? And I am also specifically curious what you are seeing in terms of sandals as we are entering the spring/summer season, and any kind of standout drivers there as you see that playing out over the balance of the season? And I have one last question.

Yes. So, on the Famous side, we continue to see a very strong Birkenstock business, and you know it well. It is clogs and sandals—that is where we are—and we are seeing strength in both of them every single week. We are also seeing some good selling on sandals from Crocs, which I think is very good and will overall support that business trend as we look forward. On the Brand Portfolio, we are seeing some good sandal business, particularly in the thong category coming through, on kitten heels, and that has been a key winner. But we are seeing it a little bit more on the fashion side. And even in Vionic, we are seeing very nice sandal strength as of very recently, now that all the inventory is here, with both casual thongs, and we are also seeing casual footbeds work well in that business. It certainly was not supported by weather, Mitch, so we really think it is driven by newness right now, and that does at least give us optimism as we look forward.

And then my last question, just on Stuart Weitzman. You talked about being breakeven for the year. Can you talk a little bit about how you see that playing out by quarter, especially in the first quarter, and what is embedded in the guidance in terms of Stuart?

Yes. I will start, and then Dan can cut in. We have completed most of the cost-savings work. Getting it onto our systems was a big piece of that—moving the head TSA, getting it into our distribution center. As we think about Stuart Weitzman SG&A, we have some big buckets, I would say—distribution and logistics being one, facilities being one. We did complete, in January, a restructuring, so that was a big piece of it. And then, moving to the gross margin side of things, we moved through a significant amount of aged inventory. We talked about that last quarter—it was $25 million in inventory. You can see it on the balance sheet that that is where we are. So that positions us in a much stronger place. If you think about Stuart Weitzman’s business, it is a seasonal business, and so there will be some movement there. But in total, we feel very confident that we have positioned the business to return to breakeven in 2026. Longer term, as we have said, we do not think there is anything we see with the business that would not suggest it can operate at the profit margins we are quite comfortable earning for the rest of our Brand Portfolio. Dan, anything to add?

No. I think, to your point, if you look at our Q3 and Q4, we lay out the with and without with clarity there, and you can see the impact of Stuart Weitzman on that business. And to Jay’s point, a lot of these significant changes have been made. We are on our systems now and, structurally, we are there. So we are certainly not seeing those types of results that we saw in Q3 and Q4 as we walk back to breakeven in the full year ’26.

Alright. Thank you.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Schmidt for any final comments.

Thank you for your continued interest in Caleres, Inc. Before we close, I would like to recognize the dedication of our teams across the company and across the globe who have shown tremendous determination and resilience this year. We are encouraged by the early momentum building in our business through all of our strategic initiatives, and we look forward to an improved, more profitable 2026. Thank you.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.