PART IFINANCIAL INFORMATION



~~ITEM 1~~	~~FINANCIAL STATEMENTS~~

ITEM 1FINANCIAL STATEMENTS

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

CALERES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ thousands) October 28, 2017
October 29, 2016
January 28, 2017
Assets
Current assets:
Cash and cash equivalents $ 31,379

$ 173,435

$ 55,332
Receivables, net 132,942

139,475

153,121
Inventories, net 598,365

524,823

585,764
Prepaid expenses and other current assets 40,982

31,716

49,528
Total current assets 803,668
869,449
843,745

Other assets 68,316

114,851

68,574
Goodwill 127,081
13,954
127,098
Intangible assets, net 213,101
114,187
216,660
Property and equipment 535,149
497,486
531,104
Allowance for depreciation (320,167 ) (305,732 ) (311,908 )
Property and equipment, net 214,982

191,754

219,196
Total assets $ 1,427,148
$ 1,304,195
$ 1,475,273

Liabilities and Equity

Current liabilities:

Borrowings under revolving credit agreement $ 20,000
$ —
$ 110,000
Trade accounts payable 223,832

212,088

266,370
Other accrued expenses 173,487

141,886

151,225
Total current liabilities 417,319
353,974
527,595

Other liabilities:

Long-term debt 197,348

196,888

197,003
Deferred rent 50,814

48,696

51,124
Other liabilities 86,580

57,574

85,065
Total other liabilities 334,742
303,158
333,192

Equity:

Common stock 430
429
430
Additional paid-in capital 127,454
120,775
121,537
Accumulated other comprehensive loss (28,122 ) (6,310 ) (30,434 )
Retained earnings 573,883
531,216
521,584
Total Caleres, Inc. shareholders’ equity 673,645

646,110

613,117
Noncontrolling interests 1,442

953

1,369
Total equity 675,087
647,063
614,486
Total liabilities and equity $ 1,427,148
$ 1,304,195
$ 1,475,273



	(Unaudited)
($ thousands)	April 30, 2022		May 1, 2021		January 29, 2022
Assets
Current assets:
Cash and cash equivalents	$	33,717	$	98,244	$	30,115
Receivables, net		181,551		132,698		122,236
Inventories, net		643,527		445,299		596,807
Income taxes		11,815		35,850		33,073
Property and equipment, held for sale		16,777		0		5,455
Prepaid expenses and other current assets		46,254		45,027		48,790
Total current assets		933,641		757,118		836,476

Prepaid pension costs		101,609		91,397		99,139
Lease right-of-use assets		503,393		526,011		503,430
Property and equipment, net		137,600		165,118		150,238
Goodwill and intangible assets, net		224,475		236,924		227,503
Other assets		27,580		26,255		27,140
Total assets	$	1,928,298	$	1,802,823	$	1,843,926

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	305,000	$	200,000	$	290,000
Mandatory purchase obligation - Blowfish Malibu		0		45,523		0
Trade accounts payable		386,821		293,309		331,470
Income taxes		39,418		11,359		22,622
Lease obligations		118,692		133,327		128,495
Other accrued expenses		219,956		182,419		253,026
Total current liabilities		1,069,887		865,937		1,025,613

Other liabilities:
Noncurrent lease obligations		452,742		490,355		452,909
Long-term debt		0		198,966		0
Income taxes		7,786		2,464		2,464
Deferred income taxes		14,811		10,256		14,731
Other liabilities		25,044		28,189		24,822
Total other liabilities		500,383		730,230		494,926

Equity:
Common stock		374		383		376
Additional paid-in capital		169,025		159,381		168,830
Accumulated other comprehensive loss		(8,328)		(8,936)		(8,606)
Retained earnings		191,165		52,041		157,970
Total Caleres, Inc. shareholders’ equity		352,236		202,869		318,570
Noncontrolling interests		5,792		3,787		4,817
Total equity		358,028		206,656		323,387
Total liabilities and equity	$	1,928,298	$	1,802,823	$	1,843,926

See notes tocondensedconsolidated financial statements.

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS



	Thirteen Weeks Ended
($ thousands, except per share amounts)	April 30, 2022		May 1, 2021
Net sales	$	735,116	$	638,636
Cost of goods sold		408,122		363,749
Gross profit		326,994		274,887
Selling and administrative expenses		260,799		243,535
Restructuring and other special charges, net		0		13,482
Operating earnings		66,195		17,870
Interest expense, net		(2,299)		(11,792)
Other income, net		3,422		3,828
Earnings before income taxes		67,318		9,906
Income tax provision		(17,333)		(3,521)
Net earnings		49,985		6,385
Net (loss) earnings attributable to noncontrolling interests		(524)		238
Net earnings attributable to Caleres, Inc.	$	50,509	$	6,147

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.34	$	0.16

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	0.16

See notes tocondensedconsolidated financial statements.

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	(Unaudited)
	Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021
Operating Activities
Net earnings	$	49,985	$	6,385
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		8,064		8,945
Amortization of capitalized software		1,265		1,518
Amortization of intangible assets		3,028		3,147
Amortization of debt issuance costs and debt discount		102		343
Fair value adjustments to Blowfish mandatory purchase obligation		0		6,389
Share-based compensation expense		3,799		2,439
Loss on disposal of property and equipment		933		811
Impairment charges for property, equipment, and lease right-of-use assets		1,777		1,888
Provision/adjustment for expected credit losses		(617)		(152)
Deferred income taxes		80		2,012
Changes in operating assets and liabilities:
Receivables		(58,698)		(5,553)
Inventories		(46,775)		43,062
Prepaid expenses and other current and noncurrent assets		1,044		(10)
Trade accounts payable		55,372		12,665
Accrued expenses and other liabilities		(43,126)		(14,730)
Income taxes, net		43,376		1,791
Other, net		77		(572)
Net cash provided by operating activities		19,686		70,378

Investing Activities
Purchases of property and equipment		(9,305)		(2,659)
Capitalized software		(2,345)		(1,218)
Net cash used for investing activities		(11,650)		(3,877)

Financing Activities
Borrowings under revolving credit agreement		205,000		110,500
Repayments under revolving credit agreement		(190,000)		(160,500)
Dividends paid		(2,648)		(2,663)
Acquisition of treasury stock		(14,673)		0
Issuance of common stock under share-based plans, net		(3,599)		(3,501)
Contributions by noncontrolling interests		1,500		0
Other		0		(450)
Net cash used for financing activities		(4,420)		(56,614)
Effect of exchange rate changes on cash and cash equivalents		(14)		62
Increase in cash and cash equivalents		3,602		9,949
Cash and cash equivalents at beginning of period		30,115		88,295
Cash and cash equivalents at end of period	$	33,717	$	98,244

See notes tocondensedconsolidated financial statements.

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


						Accumulated
						Other				Total Caleres, Inc.		Non-
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		controlling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE AS OF JANUARY 29, 2022	37,635,145	$	376	$	168,830	$	(8,606)	$	157,970	$	318,570	$	4,817	$	323,387
Net earnings (loss)									50,509		50,509		(524)		49,985
Foreign currency translation adjustment							(162)				(162)		(1)		(163)
Pension and other postretirement benefits adjustments, net of tax of $141							440				440		—		440
Comprehensive income (loss)							278		50,509		50,787		(525)		50,262
Contributions by noncontrolling interests											—		1,500		1,500
Dividends ($0.07 per share)									(2,648)		(2,648)				(2,648)
Acquisition of treasury stock	(701,324)		(7)						(14,666)		(14,673)				(14,673)
Issuance of common stock under share-based plans, net	512,508		5		(3,604)						(3,599)				(3,599)
Share-based compensation expense					3,799						3,799				3,799
BALANCE APRIL 30, 2022	37,446,329	$	374	$	169,025	$	(8,328)	$	191,165	$	352,236	$	5,792	$	358,028

BALANCE JANUARY 30, 2021	37,966,204	$	380	$	160,446	$	(9,136)	$	48,557	$	200,247	$	3,607	$	203,854
Net earnings									6,147		6,147		238		6,385
Foreign currency translation adjustment							(166)				(166)		(58)		(224)
Pension and other postretirement benefits adjustments, net of tax of $97							366				366				366
Comprehensive income							200		6,147		6,347		180		6,527
Dividends ($0.07 per share)									(2,663)		(2,663)				(2,663)
Issuance of common stock under share-based plans, net	327,268		3		(3,504)						(3,501)				(3,501)
Share-based compensation expense					2,439						2,439				2,439
BALANCE MAY 1, 2021	38,293,472	$	383	$	159,381	$	(8,936)	$	52,041	$	202,869	$	3,787	$	206,656

See notes to condensed consolidated financial statements.

Table of Contents

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security ("CARES") Act was enacted. The CARES Act includes a provision that allows the Company to defer the employer portion of social security payroll tax payments that would have been paid between the enactment date and December 31, 2020, with 50% payable by December 31, 2021 and 50% payable by December 31, 2022. During 2020, the Company deferred approximately $9.4 million of employer social security payroll taxes. As of April 30, 2022, employer social security payroll taxes totaling $5.0 million, which are payable by December 31, 2022, are presented in other accrued expenses on the condensed consolidated balance sheet. As of May 1, 2021, approximately $4.7 million of deferred employer social security payroll taxes was recorded in other accrued expenses and $4.7 million was recorded in other liabilities on the condensed consolidated balance sheet.

Property and Equipment, Held for Sale

In April 2021, the Company announced that it would begin marketing for sale its 9-acre corporate headquarters campus (the “Campus”) located in Clayton, Missouri. In January 2022, the Company classified a portion of the Campus as property and equipment, held for sale on the consolidated balance sheet as of January 29, 2022. During the first quarter of 2022, the Company continued its negotiations and an agreement for the sale of the Campus was signed on April 27, 2022, subject to certain closing conditions. The sale of the Campus is expected to close and qualify as a completed sale during the second quarter of 2022. Accordingly, the Campus has been classified as property and equipment, held for sale on the condensed consolidated balance sheet as of April 30, 2022 and is reflected within the Eliminations and Other category. The Company evaluated the Campus asset group for impairment indicators and determined that no indicators were present. The Company intends to execute a lease agreement for a portion of a new office building to be built on a parcel of the headquarters campus, as well as a lease agreement for the existing headquarters building during the period of construction. These lease agreements are expected to be finalized during the second quarter of 2022.



~~Note 2~~	Note 2 Impact of New ~~Accounting Pronouncements~~

~~In May 2014, the Financial~~ Accounting ~~Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606),~~ ~~and subsequently issued ASU 2015-14 to defer the effective date. Several ASUs to clarify the implementation guidance in ASU 2014-09 have also been issued~~. Topic 606 provides a five-step analysis of transactions to determine when and how revenue is recognized, based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company plans to adopt the ASUs in the first quarter of 2018 using the modified retrospective method.

Pronouncements

The Company has ~~completed its assessment of the policy changes required for each of the revenue streams~~evaluated all recently issued, but not yet effective, accounting pronouncements and is finalizing its assessment of the financial statement impacts of the ASUs, as well as drafting the financial statement disclosures. The area most significantly impacted by the ASUs will be the value assigned to loyalty points issued under the Company's loyalty program for the Famous Footwear segment. The new standards will require a deferral of revenue associated with loyalty points using a relative stand-alone selling price method rather than the incremental cost approach the Company uses under the current standard. The standards allow entities to elect various practical expedients. The Company expects to elect the practical expedient to disregard the effect of the time value of money in a significant financing component when its payment terms are less than one year. The Company will also elect the practical expedient to exclude sales and similar taxes collected from consumers from the measurement of the transaction price for its retail sales. Although adoption of the ASUs will result in a significant initial adjustment to deferred revenue related to loyalty points and require certain changes in presentation to the Company's consolidated balance sheets, it isdoes not ~~anticipated to significantly impact the Company's condensed consolidated statements of earnings on an ongoing basis.~~

~~In July 2015, the FASB issued ASU 2015-11,~~ ~~Simplifying the Measurement of Inventory (Topic 330),~~ which requires entities to measure inventory at "the lower of cost and net realizable value", simplifying the current guidance under which entities must measure inventory at the lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory measured using the last-in, first-out (LIFO) method. The Company adopted the ASU during the first quarter of 2017, which did not have a material impact on the condensed consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842),~~ which requires lessees to recognize most leases on the balance sheet. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 using a modified retrospective approach, with early adoption permitted. The Company's implementation team is developing and executing the plan to adopt the ASU. The Company has upgraded its accounting systems to comply with the requirements of the new standard and the Company is in the process of evaluating the impact of the standard on its leases and processes. The Company anticipates electing the package of practical expedients permitted within the ASU, as well as the hindsight practical expedient. Due to the large number of retail operating leases to which the Company is a party, the Company anticipates that the impact to its condensed consolidated financial statements upon adoption in the first quarter of 2019 will be material. However, the adoption of the ASU is not expected to trigger non-compliance with any covenant or other restrictions under the provisions ofexpect any of the ~~Company’s debt obligations.~~

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting (Topic 718)~~, which simplifies accounting for certain aspects of share-based payments to employees, including income taxes, forfeitures and statutory income tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted the ASU during the first quarter of 2017, which had the following impact to the condensed consolidated financial statements:

The Company recognized excess tax benefits of $1.2 million related to share-based plans during the thirty-nine weeks ended October 28, 2017, which are required to be recognized in the statements of earnings on a prospective basis. Prior to the adoption of the ASU, the excess tax benefit related to share-based plans was recorded in additional paid-in-capital.

The Company elected to adopt the provision of the ASU to account for forfeitures as they occur. This election was applied on a modified retrospective basis, resulting in a net increase to Caleres, Inc. shareholders' equity of $0.4 million.

The ASU requires cash flows from excess tax benefits related to share-based payments to be reported as operating activities in the condensed consolidated statements of cash flows. The Company elected to adopt this provision on a prospective basis and as a result, the excess tax benefit related to share-based plans for the thirty-nine weeks ended October 29, 2016 is presented as a financing activity, while the benefit for the thirty-nine weeks ended October 28, 2017 is presented as an operating activity.

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Intra-Entity Transfers of Assets Other Than Inventory,~~ which requires the recognition of the income tax effects of intercompany sales and intra-entity transfers of assets, other than inventory, when the transfer occurs. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The ASU will be adopted during the first quarter of 2018 using a modified retrospective approach. While the Company is finalizing its assessment of the impact of this ASU on its condensed consolidated financial statements, the adoption of the ASU is expected to result in a cumulative adjustment to deferred taxes and retained earnings related to intra-entity transfers of intangible assets that occurred prior to adoption.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment,~~ which simplifies the accounting for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill. Under the ASU, goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. The ASU is effective prospectively for annual and interim impairment tests beginning after December 15, 2019, with early adoption permitted. The Company adopted the ASU during the third quarter of 2017, which had no impact on the condensed consolidated financial statements, as the Company performs its goodwill impairment test during the fourth quarter.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ ~~The ASU amends ASC 715,~~ ~~Compensation — Retirement Benefits~~, to require employers that present a measure of operating income in their statements of earnings to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in non-operating expenses. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Upon adoption of the ASU during the first quarter of 2018, the Company will separately present the components of net periodic benefit cost or income, excluding the service cost component, in non-operating expenses on a retrospective basis. Net periodic benefit income, excluding the service cost component, was $2.5 million and $7.6 million for the thirteen and thirty-nine weeks ended October 28, 2017, respectively.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation — Stock Compensation (Topic 718), Scope of Modification Accounting.~~ The ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. Entities will apply modification accounting if the value, vesting conditions or classification of the award changes. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption

~~permitted. The guidance will be applied prospectively to awards modified after the Company adopts the ASU in the first quarter of 2018.~~

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815), Targeted Improvements to Accountingfor Hedging Activities~~, which amends the hedge accounting model in ASC 815 to better portray the economic results of an entity's risk management activities in its financial statements and simplifies the application of hedge accounting in certain situations. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt the ASU in the first quarter of 2018. The ASU is not expectedpronouncements to have a material impact on the ~~Company's consolidated financial statements.~~



~~Note 3~~	~~Acquisition~~

On December 13, 2016, the Company entered into a Stock Purchase Agreement (the "Purchase Agreement") with Apollo Investors, LLC (the "Seller") and Apollo Buyer Holding Company, Inc. (the "Holding Company"), pursuant to which the Company acquired all outstanding capital stock of Allen Edmonds ("Allen Edmonds"). The aggregate purchase price for the Allen Edmonds stock was $259.9 million, net of cash received of $0.7 million. The purchase was funded with cash and funds available under the Company's revolving credit agreement. The operating results of Allen Edmonds have been included in the Company’s condensed consolidated financial statements ~~within~~or disclosures.

Table of Contents

Note 3 Revenues

Disaggregation of Revenues

The following table disaggregates revenue by segment and major source for the ~~Brand Portfolio segment since December 13, 2016.~~periods ended April 30, 2022 and May 1, 2021:

Thirteen Weeks Ended April 30, 2022

Eliminations and

($ thousands)

Famous Footwear

Brand Portfolio

Other

Total

Retail stores

331,988

14,217

346,205

Landed wholesale - e-commerce - drop ship ⁽¹⁾

31,773

(998)

30,775

E-commerce - Company websites ⁽¹⁾

51,938

50,702

102,640

Total direct-to-consumer sales

383,926

96,692

(998)

479,620

Wholesale - e-commerce ⁽¹⁾

60,716

Landed wholesale

175,327

(14,128)

161,199

First-cost wholesale

30,076

Licensing and royalty

422

2,906

3,328

Other ⁽²⁾

154

177

Net sales

384,502

365,740

(15,126)

735,116


	Thirteen Weeks Ended May 1, 2021
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total

Retail stores	$	334,745	$	15,008	$	0	$	349,753
Landed wholesale - e-commerce - drop ship ⁽¹⁾		0		20,814		(394)		20,420
E-commerce - Company websites ⁽¹⁾		63,122		42,738		0		105,860
Total direct-to-consumer sales		397,867		78,560		(394)		476,033
Wholesale - e-commerce ⁽¹⁾		0		37,480		0		37,480
Landed wholesale		0		115,347		(9,379)		105,968
First-cost wholesale		0		16,718		0		16,718
Licensing and royalty		0		2,164		0		2,164
Other ⁽²⁾		237		36		0		273
Net sales	$	398,104	$	250,305	$	(9,773)	$	638,636

(1)	Collectively referred to as "e-commerce" in the narrative below

(2)	Includes breakage revenue from unredeemed gift cards

Retail stores

Traditionally, the majority of the Company’s revenue is generated from retail sales where control is transferred and revenue is recognized at the point of sale. Retail sales are recorded net of estimated returns and exclude sales tax. The ~~assets~~Company records a returns reserve and ~~liabilities~~a corresponding return asset for expected returns of ~~Allen Edmonds were recorded at their estimated fair values~~merchandise.

Retail sales to members of the Company’s loyalty programs, including the Famously You Rewards program, include 2 performance obligations: the sale of merchandise and the ~~excess~~delivery of points that may be redeemed for future purchases. The transaction price is allocated to the ~~purchase~~separate performance obligations based on the relative stand-alone selling price. The stand-alone selling price ~~over~~for the ~~fair~~points is estimated using the retail value of the ~~assets acquired~~merchandise earned, adjusted for estimated breakage based upon historical redemption patterns. The revenue associated with the initial merchandise purchased is recognized immediately and ~~liabilities assumed, including identified intangible assets, was recorded~~the value assigned to the points is deferred until the points are redeemed, forfeited or expired.

Table of Contents

E-commerce

The Company also generates revenue from sales on websites maintained by the Company that are shipped from the Company’s distribution centers or retail stores directly to the consumer, picked up directly by the consumer from the Company’s stores and e-commerce sales from the Company’s wholesale customers’ websites that are fulfilled on a drop-ship or first-cost basis (collectively referred to as ~~goodwill~~"e-commerce"). The Company transfers control and recognizes revenue for merchandise sold that is shipped directly to an individual consumer upon delivery to the consumer.

Landed wholesale

Landed sales are wholesale sales in which the merchandise is shipped directly to the customer from the Company’s warehouses. Many customers purchasing footwear on a landed basis arrange their own transportation of merchandise and, with limited exceptions, control is transferred at the time of shipment.

First-cost wholesale

First-cost sales are wholesale sales in which the Company purchases merchandise from an international factory that manufactures the product and subsequently sells to a customer at an overseas port. Revenue is recognized at the time the merchandise is delivered to the customer’s designated freight forwarder and control is transferred to the customer.

Licensing and royalty

The Company has license agreements with third parties allowing them to sell the Company’s branded product, or other merchandise that uses the Company’s owned or licensed brand names. These license agreements provide the licensee access to the Company’s symbolic intellectual property, and revenue is therefore recognized over the license term. For royalty contracts that do not have guaranteed minimums, the Company recognizes revenue as the licensee’s sales occur. For royalty contracts that have guaranteed minimums, revenue for the guaranteed minimum is recognized on a straight-line basis during the ~~fourth quarter of 2016.~~

term, until such time that the cumulative royalties exceed the total minimum guarantee. Up-front payments are recognized over the contractual term to which the guaranteed minimum relates.

The ~~Company’s purchase price allocation contains uncertainties because it required management~~Company also licenses its Famous Footwear trade name and logo to ~~make assumptions and~~a third-party financial institution to ~~apply judgment~~offer Famous Footwear-branded credit cards to estimate the fair value of the acquired assets and liabilities. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions.its consumers. The ~~judgments the~~ Company used in estimating the fair values assigned to each class of the acquired assets and assumed liabilities could materially affect the results of its operations. Management estimated the fair value of the assets and liabilitiesreceives royalties based upon ~~quoted market prices,~~cardholder spending, which is recognized as licensing revenue at the ~~carrying~~time when the credit card is used.

Contract Balances

Revenue is recorded at the transaction price, net of estimates for variable consideration for which reserves are established, including returns, allowances and discounts. Variable consideration is estimated using the expected value method and given the large number of contracts with similar characteristics, the ~~acquired assets~~portfolio approach is applied to determine the variable consideration for each revenue stream. Reserves for projected returns are based on historical patterns and ~~widely accepted valuation techniques, including discounted cash flows. Unanticipated events or circumstances may occur, which could affect~~current expectations.

Information about significant contract balances from contracts with customers is as follows:


($ thousands)	April 30, 2022		May 1, 2021		January 29, 2022
Customer allowances and discounts	$	22,896	$	19,260	$	20,328
Loyalty programs liability		18,152		16,177		18,814
Returns reserve		16,376		14,469		12,468
Gift card liability		6,130		5,423		6,804

Changes in contract balances with customers generally reflect differences in relative sales volume for the ~~accuracy~~periods presented. In addition, during the thirteen weeks ended April 30, 2022, the loyalty programs liability increased $7.6 million due to points and material rights earned on purchases and decreased $8.2 million due to expirations and redemptions. During the thirteen weeks ended May 1, 2021, the loyalty programs liability increased $9.3 million due to points and material rights earned on purchases and decreased $7.1 million due to expirations and redemptions.

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The following table summarizes the activity in the Company’s ~~fair value estimates, including assumptions regarding industry economic factors and business strategies. As of October 28, 2017,~~allowance for expected credit losses during the ~~purchase price allocation is complete.~~

~~During the thirty-nine~~thirteen weeks ended October 28, 2017, the Company recognized $4.9 million in cost of goods sold ($3.0 million on an after-tax basis, or $0.07 per diluted share) related to the amortization of the inventory fair value adjustment required for purchase accounting. The inventory fair value adjustment was fully amortized as of July 29, 2017. As further discussed in April 30, 2022 and May 1, 2021:


	Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021
Balance, beginning of period	$	9,601	$	14,928
Provision/adjustment for expected credit losses		(617)		(152)
Uncollectible accounts written off, net of recoveries		(526)		(3,404)
Balance, end of period	$	8,458	$	11,372

Note ~~5 to the condensed consolidated financial statements, the Company also incurred integration costs during the thirty-nine weeks ended October 28, 2017.~~



~~Note 4~~	~~Earnings Per Share~~

4 Earnings Per Share

The Company uses the two-class method to compute basic and diluted earnings per common share attributable to Caleres, Inc. shareholders. In periods of net loss, no effect is given to the Company’s participating securities since they do not contractually participate in the losses of the Company. The following table sets forth the computation of basic and diluted earnings per common share attributable to Caleres, Inc. shareholders for the periods ended ~~October 28, 2017~~April 30, 2022 and ~~October 29, 2016:~~

Thirteen Weeks Ended Thirty-Nine Weeks Ended
($ thousands, except per share amounts) October 28, 2017
October 29, 2016
October 28, 2017
October 29, 2016
NUMERATOR

Net earnings $ 34,373
$ 34,726
$ 66,931
$ 72,282
Net loss (earnings) attributable to noncontrolling interests 14
4
(47 ) (2 )
Net earnings allocated to participating securities (949 ) (910 ) (1,841 ) (1,933 )
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities $ 33,438
$ 33,820
$ 65,043
$ 70,347

DENOMINATOR

Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders 41,788
41,802
41,801
42,093
Dilutive effect of share-based awards 182
137
173
144
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders 41,970
41,939
41,974
42,237

Basic earnings per common share attributable to Caleres, Inc. shareholders $ 0.80
$ 0.81
$ 1.56
$ 1.67

Diluted earnings per common share attributable to Caleres, Inc. shareholders $ 0.80
$ 0.81
$ 1.55
$ 1.67

May 1, 2021:


	Thirteen Weeks Ended
($ thousands, except per share amounts)	April 30, 2022		May 1, 2021

NUMERATOR
Net earnings	$	49,985	$	6,385
Net loss (earnings) attributable to noncontrolling interests		524		(238)
Net earnings attributable to Caleres, Inc.	$	50,509	$	6,147
Net earnings allocated to participating securities		(2,017)		(210)
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities	$	48,492	$	5,937

DENOMINATOR
Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders		36,209		36,707
Dilutive effect of share-based awards		467		158
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders		36,676		36,865

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.34	$	0.16

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	0.16

Options to purchase 16,667 shares of common stock for both the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017~~April 30, 2022 and ~~63,915 shares of common stock for the thirteen and thirty-nine weeks ended October 29, 2016~~May 1, 2021 were not included in the denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders because the effect would be anti-dilutive.

During the thirteen ~~and thirty-nine~~ weeks ended ~~October 28, 2017,~~April 30, 2022, the Company repurchased ~~zero and 225,000~~701,324 shares ~~respectively,~~ under the 2019 publicly announced share repurchase program, which permits repurchases of up to ~~2.5~~5.0 million shares. The Company ~~repurchased zero and 900,000~~did 0t repurchase any shares under share repurchase programs during the thirteen ~~and thirty-nine~~ weeks ended ~~October 29, 2016, respectively. As~~May 1, 2021. Refer to further discussion in Item 2, Unregistered Sales of ~~October 28, 2017,~~Equity Securities and Use of Proceeds. Subsequent to quarter-end, the Company has repurchased aapproximately 905,000 shares at an aggregate price of $22.0 million, bringing our fiscal year-to-date total to approximately 1,606,000 shares at an aggregate price of ~~1.3 million shares under this program.~~$36.7 million.

May 1, 2021:


	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
Thirteen Weeks Ended April 30, 2022
Net sales	$	384,502	$	365,740	$	(15,126)	$	735,116
Intersegment sales ⁽¹⁾		—		15,126		—		15,126
Operating earnings (loss)		49,688		41,349		(24,842)		66,195
Segment assets		790,778		987,397		150,123		1,928,298

Thirteen Weeks Ended May 1, 2021
Net sales	$	398,104	$	250,305	$	(9,773)	$	638,636
Intersegment sales⁽¹⁾		—		9,773		—		9,773
Operating earnings (loss)		47,873		(2,821)		(27,182)		17,870
Segment assets		758,823		794,430		249,570		1,802,823

(1)	Included in net sales in the Brand Portfolio segment and eliminated in the Eliminations and Other category.

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The Company’s intangible assets as of April 30, 2022, May 1, 2021 and January 29, 2022 were as follows:


($ thousands)	April 30, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	114,528	$	10,200	$	174,760
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		10,836		4,005		29,359
		$	451,088	$	125,364	$	106,205	$	219,519


	May 1, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	104,459	$	10,200	$	184,829
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		8,456		4,005		31,739
		$	451,088	$	112,915	$	106,205	$	231,968

	January 29, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	112,061	$	10,200	$	177,227
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		10,275		4,005		29,920
		$	451,088	$	122,336	$	106,205	$	222,547

Amortization expense related to intangible assets was $3.0 million and $3.1 million for the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively. The Company estimates that amortization expense related to intangible assets will be approximately $12.1 million in 2022, $11.9 million in 2023 and $11.0 million in each of the fiscal years 2024, 2025 and 2026.

Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate it might be impaired, using either the qualitative assessment or a quantitative fair value-based test. The Company recorded 0 goodwill impairment charges during the thirteen weeks ended April 30, 2022 or May 1, 2021.

Indefinite-lived intangible assets are tested for impairment as of the first day of the fourth quarter of each fiscal year unless events or circumstances indicate an interim test is required. The Company recorded 0 impairment charges for indefinite-lived intangible assets during the thirteen weeks ended April 30, 2022 or May 1, 2021.

Note 9 Leases

The Company leases all of its retail locations, a manufacturing facility, and certain office locations, distribution centers and equipment. At contract inception, leases are evaluated and classified as either operating or finance leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The majority of the Company’s leases do not provide an implicit rate and therefore, the Company uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred.

The Company regularly analyzes the results of all of its stores and assesses the viability of underperforming stores to determine whether events or circumstances exist that indicate the stores should be closed or whether the carrying amount of their long-lived assets may not be recoverable. After allowing for an appropriate start-up period and consideration of any unusual nonrecurring events, property and equipment at stores and the lease right-of-use assets indicated as impaired are written down to fair value as calculated using a discounted cash flow

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method. The fair value of the lease right-of-use assets is determined utilizing projected cash flows for each store location, discounted using a risk-adjusted discount rate, subject to a market floor based on current market lease rates. The Company recorded asset impairment charges of $1.8 million and $1.9 million during the thirteen weeks ended April 30, 2022 and May 1, 2021, respectively. The impairment charges are primarily related to software and underperforming retail stores. Refer to Note 14 to the condensed consolidated financial statements for further discussion on these impairment charges.

As a result of the temporary store closures during the first half of 2020 associated with the pandemic, certain leases were amended to provide rent abatements and/or deferral of lease payments. Deferred payments continue to be reflected in lease obligations on the condensed consolidated balance sheets. Under relief provided by the FASB, entities could make a policy election to account for COVID-19-related lease concessions as if the enforceable rights existed under the original contract, accounting for them as variable rent rather than lease modifications. The Company made a policy election to account for rent abatements as variable rent. Accordingly, during the thirteen weeks ended May 1, 2021, the Company recorded $1.3 million in lease concessions as a reduction of rent expense within selling and administrative expenses in the condensed consolidated statements of earnings. Rent concessions for leases that were extended were recognized as a lease modification.

During the thirteen weeks ended April 30, 2022, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $37.0 million on the condensed consolidated balance sheets. As of April 30, 2022, the Company has entered into lease commitments for 4 retail locations for which the leases have not yet commenced. The Company anticipates that 2 leases will begin in the current fiscal year and 2 leases will begin in the next fiscal year. Upon commencement, right-of-use assets and lease liabilities of approximately $2.0 million will be recorded in the current fiscal year and $2.0 million will be recorded in the next fiscal year on the condensed consolidated balance sheets. In addition, as further ~~described~~discussed in Note 31 to the condensed consolidated financial statements, the Company ~~acquired Allen Edmonds~~intends to execute a lease agreement during the second quarter of 2022 for a portion of a new office building to be built on ~~December 13, 2016. The allocation~~a parcel of the ~~purchase price resulted in incremental intangible assets~~headquarters campus, as well as a lease agreement for the existing headquarters building during the period of ~~$102.9 million, consisting~~construction.

The components of ~~trademarks and customer relationships of $97.5 million and $5.4 million, respectively, and incremental goodwill of $113.1 million.~~

~~The Company's intangible assets as of October 28, 2017, October 29, 2016 and January 28, 2017 were as follows:~~

($ thousands) October 28, 2017
Estimated Useful Lives Original Cost
Accumulated Amortization
Net Carrying Value
Trademarks 15-40 years $ 165,288
$ 75,372
$ 89,916
Trademarks Indefinite 118,100
⁽¹⁾
—
118,100
Customer relationships 15 years 5,400
⁽¹⁾
315
5,085
$ 288,788
$ 75,687
$ 213,101

October 29, 2016
Estimated Useful Lives Original Cost
Accumulated Amortization
Net Carrying Value
Trademarks 15-40 years $ 165,068
$ 71,681
$ 93,387
Trademarks Indefinite 20,800
—
20,800
$ 185,868
$ 71,681
$ 114,187

January 28, 2017
Estimated Useful Lives Original Cost
Accumulated Amortization
Net Carrying Value
Trademarks 15-40 years $ 165,288
$ 72,604
$ 92,684
Trademarks Indefinite 117,900
⁽¹⁾
—
117,900
Customer relationships 15 years 6,100
⁽¹⁾
24
6,076
$ 289,288
$ 72,628
$ 216,660
(1) The Allen Edmonds trademark and customer relationships intangible assets were acquired in the Allen Edmonds acquisition, as further discussed in Note 3 to the condensed consolidated financial statements. Immaterial adjustments attributable to the purchase price allocation were recorded during the thirty-nine weeks ended October 28, 2017, resulting in an adjustment to the original cost.

~~Amortization~~lease expense ~~related to intangible assets was $1.0 million and $0.9 million~~ for the thirteen weeks ended April 30, 2022 and May 1, 2021 were as follows:


	Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021
Operating lease expense	$	38,064	$	40,577
Variable lease expense		9,016		11,490
Short-term lease expense		1,195		565
Sublease income		(59)		(29)
Total lease expense	$	48,216	$	52,603

Supplemental cash flow information related to leases is as follows:

(1)

Cash paid for lease liabilities for the thirteen weeks ended May 1, 2021 includes payment of certain lease payments deferred in 2020, as described above, as well as lease termination costs associated with the Naturalizer retail store closings, as further discussed in Note 5 to the condensed consolidated financial statements.

Note 10 Financing Arrangements

Credit Agreement

The Company maintains a revolving credit facility for working capital needs. The Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC, Allen Edmonds LLC, Vionic Group LLC and Vionic International LLC are each co-borrowers and guarantors. On April 8, 2022, Blowfish, LLC was joined to the Credit Agreement as a co-borrower and guarantor.

Table of ~~common stock, respectively, related to these share-based plans.~~Contents

Restricted Stock

The following table summarizes restricted stock activity for the periods ended ~~October 28, 2017~~April 30, 2022 and ~~October 29, 2016:~~

Thirteen Weeks Ended Thirteen Weeks Ended
October 28, 2017 October 29, 2016
Weighted- Average Grant Date Fair Value Weighted- Average Grant Date Fair Value
Total Number of Restricted Shares Total Number of Restricted Shares

July 29, 2017 1,194,326
$ 28.03
July 30, 2016 1,139,299
$ 25.42
Granted 25,000
27.13
Granted 6,500
25.18
Forfeited (19,050 ) 31.86
Forfeited (29,500 ) 24.87
Vested (800 ) 22.90
Vested —
—
October 28, 2017 1,199,476
$ 27.95
October 29, 2016 1,116,299
$ 25.43

Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
October 28, 2017 October 29, 2016
Weighted- Average Grant Date Fair Value Weighted- Average Grant Date Fair Value
Total Number of Restricted Shares Total Number of Restricted Shares

January 28, 2017 1,128,049
$ 25.85
January 30, 2016 1,262,449
$ 19.55
Granted 381,312
26.92
Granted 357,100
26.54
Forfeited (49,050 ) 29.35
Forfeited (78,000 ) 23.67
Vested (260,835 ) 17.09
Vested (425,250 ) 9.22
October 28, 2017 1,199,476
$ 27.95
October 29, 2016 1,116,299
$ 25.43

~~All~~May 1, 2021:

Thirteen Weeks Ended

Thirteen Weeks Ended

April 30, 2022

May 1, 2021

Weighted-

Weighted-

Total Number

Average

Total Number

Average

of Restricted

Grant Date

of Restricted

Grant Date

Shares

Fair Value

Fair Value

January 29, 2022

1,390,397

14.24

January 30, 2021

1,397,227

16.74

Granted

671,200

21.00

Granted

562,506

18.63

Forfeited

(50,966)

12.63

Forfeited

(46,500)

16.08

Vested

(387,854)

12.48

Vested

(484,389)

26.96

April 30, 2022

1,622,777

17.51

May 1, 2021

1,428,844

14.04

The Company granted 671,200 restricted shares during the thirteen weeks ended April 30, 2022, which have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years. Of the 562,506 restricted shares granted during the thirteen weeks ended ~~October 28, 2017~~May 1, 2021, 542,506 shares have a ~~cliff-vesting~~graded-vesting term of ~~four years. Of the 381,312 restricted shares granted during the thirty-nine weeks ended October 28, 2017, 4,492~~three years, with 50% vesting after two years and 50% after three years and 20,000 shares have a cliff-vesting term of one year, 12,000 shares have a graded-vesting term of four years and 364,820 shares have a cliff-vesting term of four years. All of the restricted shares granted during the thirteen and thirty-nine weeks ended October 29, 2016 have a cliff-vesting term of fourtwo years. Share-based compensation ~~expense for cliff-vesting grants is recognized on a straight-line basis over the respective vesting periods and~~ expense for graded-vesting grants is recognized ratably over the respective vesting ~~period.~~

periods.

Performance ~~Share~~ Awards

During the thirteen weeks ended ~~October 28, 2017 and October 29, 2016, the Company granted no performance share awards. During the thirty-nine weeks ended October 28, 2017 and October 29, 2016,~~April 30, 2022, the Company granted performance share awards for a targeted ~~169,500 and 159,000~~87,750 shares, ~~respectively,~~ with a weighted-average grant date fair value of ~~$26.90 and $26.64, respectively.~~$20.99 in connection with the 2020 performance award. During the thirteen weeks ended May 1, 2021, the Company granted performance share awards for a targeted 175,500 shares, with a weighted-average grant date fair value of $18.63. Vesting of performance-based awards is generally dependent upon the financial performance of the Company and the attainment of certain financial goals during the three-year period following the grant. At the end of the vesting period, the employee will

have earned an amount of shares or units between 0% and 200% of the targeted award, depending on the achievement of the specified financial goals for the service period. Compensation expense is recognized based on the fair value of the award and the anticipated number of shares or units to be awarded for each tranche in accordance with the vesting schedule of the units over the three-year service period.

During the ~~first quarter of 2017,~~thirteen weeks ended April 30, 2022, the ~~Company's remaining performance share~~Company granted long-term incentive awards ~~granted in units vested and were settled~~payable in cash ~~at fair value. Refer to Note 13 to~~for the 2022-2024 performance period, with a target value of $8.3 million and a maximum value of $16.6 million. During the thirteen weeks ended May 1, 2021, the Company granted long-term incentive awards payable in cash for the 2021-2023 performance period, with a target value of $6.5 million and a maximum value of $13.0 million. These awards, which vest after a three-year period, are dependent upon the attainment of certain financial goals of the Company for each of the three years and individual achievement of strategic initiatives over the cumulative period of the award. The estimated values of the awards, which are reflected within other liabilities on the condensed consolidated ~~financial statements for further discussion regarding~~balance sheets, are being expensed ratably over the three-year performance ~~share units.~~

~~Stock Options~~

~~The following table summarizes stock option activity for the periods ended October 28, 2017 and October 29, 2016:~~

Thirteen Weeks Ended Thirteen Weeks Ended
October 28, 2017 October 29, 2016
Weighted- Average Grant Date Fair Value Weighted- Average Grant Date Fair Value
Total Number of Stock Options Total Number of Stock Options

July 29, 2017 92,042
$ 6.42
July 30, 2016 222,790
$ 8.98
Granted —
—
Granted —
—
Exercised (6,000 ) 6.41
Exercised —
—
Forfeited —
—
Forfeited (2,250 ) 15.94
Expired (1,000 ) 8.33
Expired (15,000 ) 9.82
October 28, 2017 85,042
$ 6.39
October 29, 2016 205,540
$ 8.85

Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
October 28, 2017 October 29, 2016
Weighted- Average Grant Date Fair Value Weighted- Average Grant Date Fair Value
Total Number of Stock Options Total Number of Stock Options

January 28, 2017 150,540
$ 9.36
January 30, 2016 301,295
$ 8.95
Granted —
—
Granted —
—
Exercised (17,250 ) 5.97
Exercised (56,381 ) 7.41
Forfeited —
—
Forfeited (9,749 ) 15.94
Expired (48,248 ) 15.79
Expired (29,625 ) 10.27
October 28, 2017 85,042
$ 6.39
October 29, 2016 205,540
$ 8.85

period.

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of ~~cash-equivalent~~ restricted stock units ("RSUs"). payable in cash or common stock at no cost to the non-employee director. The RSUs are subject to a vesting requirement (usually one year) and earn dividend equivalents at the same rate as dividends on the ~~Company's~~Company’s common stock. The dividend equivalents, which vest immediately, are automatically re-invested in additional RSUs. Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs. The RSUs payable in cash are remeasured at the end of each period. Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted. Gains and losses resulting from changes in the fair value of the RSUs payable in cash subsequent to the vesting period and through the settlement date are recognized in the Company’s condensed consolidated statements of earnings. The Company granted ~~838~~1,907 and ~~1,086 RSUs to non-employee directors~~1,712 for dividend equivalents during the thirteen weeks ended ~~October 28, 2017~~April 30, 2022 and ~~October 29, 2016,~~May 1, 2021, respectively, with weighted-average grant date fair values of ~~$30.68~~$20.64 and ~~$24.98,~~$20.91, respectively. ~~The Company granted 47,550~~

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Note 13 Retirement and 55,250 RSUs, including 2,630 and 3,050 RSUs for dividend equivalents, during the thirty-nine weeks ended October 28, 2017 and October 29, 2016, respectively, with weighted-average grant date fair values of $27.86 and $21.78, respectively.



~~Note~~11	~~Retirement and Other Benefit Plans~~

Other Benefit Plans

The following table sets forth the components of net periodic benefit income for the Company, including the domestic and Canadian plans:

Pension Benefits Other Postretirement Benefits
Thirteen Weeks Ended Thirteen Weeks Ended
($ thousands) October 28, 2017
October 29, 2016
October 28, 2017
October 29, 2016
Service cost $ 2,426
$ 2,084
$ —
$ —
Interest cost 3,736
3,835
17
15
Expected return on assets (6,896 ) (7,237 ) —
—
Amortization of:

Actuarial loss (gain) 1,090
38
(36 ) (55 )
Prior service income (439 ) (461 ) —
—
Curtailment cost 36
—
—
—
Total net periodic benefit income $ (47 ) $ (1,741 ) $ (19 ) $ (40 )

Pension Benefits Other Postretirement Benefits
Thirty-nine Weeks Ended Thirty-nine Weeks Ended
($ thousands) October 28, 2017
October 29, 2016
October 28, 2017
October 29, 2016
Service cost $ 7,276
$ 6,251
$ —
$ —
Interest cost 11,210
11,506
51
45
Expected return on assets (20,689 ) (21,712 ) —
—
Amortization of:
Actuarial loss (gain) 3,238
115
(109 ) (165 )
Prior service income (1,335 ) (1,382 ) —
—
Settlement cost —
250
—
—
Curtailment cost 36
—
—
—
Total net periodic benefit income $ (264 ) $ (4,972 ) $ (58 ) $ (120 )



~~Note 12~~	~~Risk Management and Derivatives~~

~~In the normal course~~


	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021		April 30, 2022		May 1, 2021
Service cost	$	1,762	$	1,942	$	0	$	0
Interest cost		2,971		2,813		10		10
Expected return on assets		(6,984)		(7,114)		0		0
Amortization of:
Actuarial loss (gain)		681		615		(25)		(27)
Prior service income		(75)		(125)		0		0
Total net periodic benefit income	$	(1,645)	$	(1,869)	$	(15)	$	(17)

The non-service cost components of ~~business, the Company’s financial results~~net periodic benefit income are ~~impacted by currency rate movements~~included in ~~foreign currency denominated assets, liabilities and cash flows as it makes a portion of its purchases and sales~~other income, net in local currencies. The Company has established policies and business practices that are intended to mitigate a portion of the effect of these exposures. The Company uses derivative financial instruments, primarily forward contracts, to manage its currency exposures. These derivative financial instruments are viewed as risk management tools and are not used for trading or speculative purposes. Derivatives entered into by the Company are designated as cash flow hedges of forecasted foreign currency transactions.

Derivative financial instruments expose the Company to credit and market risk. The market risk associated with these instruments resulting from currency exchange movements is expected to offset the market risk of the underlying transactions being hedged. The Company does not believe there is a significant risk of loss in the event of non-performance by the counterparties associated with these instruments because these transactions are executed with major international financial institutions and have varying maturities through November 2018. Credit risk is managed through the continuous monitoring of exposures to such counterparties.

The Company’s hedging strategy uses forward contracts as cash flow hedging instruments, which are recorded in the Company's condensed consolidated balance sheets at fair value. The effective portion of gains and losses resulting from changes in the fair value of these hedge instruments are deferred in accumulated other comprehensive loss and reclassified to earnings in the period that the hedged transaction is recognized in earnings.

Hedge ineffectiveness is evaluated using the hypothetical derivative method. The amount of hedge ineffectiveness for the thirteen and thirty-nine weeks ended October 28, 2017 and October 29, 2016 was not material.

As of October 28, 2017, October 29, 2016 and January 28, 2017, the Company had forward contracts maturing at various dates through November 2018, October 2017 and February 2018, respectively. The contract amounts in the following table represent the net notional amount of all purchase and sale contracts of a foreign currency.

(U.S. $ equivalent in thousands) October 28, 2017
October 29, 2016
January 28, 2017
Financial Instruments
U.S. dollars (purchased by the Company’s Canadian division with Canadian dollars) $ 18,242
$ 17,229
$ 18,826
Euro 18,815
10,854
13,297
Chinese yuan 12,613
13,038
7,723
New Taiwanese dollars 580
538
526
United Arab Emirates dirham
—
1,143
823
Japanese yen —
1,145
769
Other currencies —
206
124
Total financial instruments $ 50,250
$ 44,153
$ 42,088

The classification and fair values of derivative instruments designated as hedging instruments included within the condensed consolidated balance sheets as of October 28, 2017, October 29, 2016 and January 28, 2017 are as follows:

Asset Derivatives Liability Derivatives
($ thousands) Balance Sheet Location Fair Value
Balance Sheet Location Fair Value
Foreign Exchange Forward Contracts

October 28, 2017 Prepaid expenses and other current assets $ 760
Other accrued expenses $ 564
October 29, 2016 Prepaid expenses and other current assets 362
Other accrued expenses 570
January 28, 2017 Prepaid expenses and other current assets 234
Other accrued expenses 874

~~For the periods ended October 28, 2017 and October 29, 2016, the effect of derivative instruments in cash flow hedging relationships on~~ the condensed consolidated statements of ~~earnings was as follows:~~

Thirteen Weeks Ended Thirteen Weeks Ended
($ thousands) October 28, 2017 October 29, 2016
Foreign Exchange Forward Contracts:
Income Statement Classification (Losses) Gains - Realized
(Loss) Gain Recognized in OCL on Derivatives
Gain Reclassified from Accumulated OCL into Earnings
Gain (Loss) Recognized in OCL on Derivatives
Loss Reclassified from Accumulated OCL into Earnings

Net sales $ (4 ) $ 6
$ 16
$ (55 )
Cost of goods sold (42 ) 3
(181 ) (8 )
Selling and administrative expenses 364
109
(97 ) (15 )
Interest expense 6
—
5
(1 )

Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
($ thousands) October 28, 2017 October 29, 2016
Foreign Exchange Forward Contracts:
Income Statement Classification (Losses) Gains - Realized
(Loss) Gain Recognized in OCL on Derivatives
Gain (Loss) Reclassified from Accumulated OCL into Earnings
Loss Recognized in OCL on Derivatives
(Loss) Gain Reclassified from Accumulated OCL into Earnings

Net sales $ (44 ) $ 30
$ (173 ) $ (127 )
Cost of goods sold 695
164
(766 ) 109
Selling and administrative expenses 480
42
(121 ) (373 )
Interest expense (4 ) (1 ) (19 ) (1 )

~~All gains~~earnings. Service cost is included in selling and losses currently included within accumulated other comprehensive loss associated with the Company’s foreign exchange forward contracts are expected to be reclassified into net earnings within the next 12 months. Additional information related to the Company’s derivative financial instruments are disclosed within administrative expenses.

Note ~~13 to the condensed consolidated financial statements.~~



~~Note 13~~	~~Fair Value Measurements~~

14 Fair Value Measurements

Fair Value Hierarchy

Fair value measurement disclosure requirements specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (“observable inputs”) or reflect the Company’s own assumptions of market participant valuation (“unobservable inputs”). In accordance with the fair value guidance, the inputs to valuation techniques used to measure fair value are categorized into three levels based on the reliability of the inputs as follows:

~~Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;~~

Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

~~Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.~~

●	Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

●	Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

●	Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

In determining fair value, the Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent ~~possible as well as~~possible. The Company also considers counterparty credit risk in its assessment of fair value. Classification of the financial or non-financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Measurement of Fair Value

The Company measures fair value as an exit price, the price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date, using the procedures described below for all financial and non-financial assets and liabilities measured at fair value.

Money Market Funds

The Company ~~has~~periodically invests in cash equivalents consisting of short-term money market funds backed by U.S. Treasury ~~securities. The primary objective of these investing activities is~~securities to preserve the Company’s capital for the purpose of funding ~~operations and it~~operations. It does not enter into money market funds for trading or speculative purposes. The fair value is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1).

Non-Qualified Deferred Compensation Plan Assets and Liabilities

The Company maintains a non-qualified deferred compensation plan (the “Deferred Compensation Plan”) for the benefit of certain management employees. The investment funds offered to the participants generally correspond to the funds offered in the Company’s 401(k) plan, and the account balance fluctuates with the investment returns on those funds. The Deferred Compensation Plan permits the deferral of up to 50% of base salary and 100% of compensation received under the Company’s annual incentive plan. The deferrals are held

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in a separate trust, which has been established by the Company to administer the Deferred Compensation Plan. The assets of the trust are subject to the claims of the Company’s creditors in the event that the Company becomes insolvent. Consequently, the trust qualifies as a grantor trust for income tax purposes (i.e., a “Rabbi Trust”). The liabilities of the Deferred Compensation Plan are presented in other accrued expenses and the assets held by the trust are classified ~~as trading securities~~ within prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Changes in deferred compensation plan assets and liabilities are charged to selling and administrative expenses. The fair value is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1).

Deferred Compensation Plan for Non-Employee Directors

Non-employee directors are eligible to participate in a deferred compensation plan with deferred amounts valued as if invested in the Company’s common stock through the use of phantom stock units (“PSUs”). Under the plan, each participating director’s account is credited with the number of PSUs equal to the number of shares of the Company’s common stock that the participant could purchase or receive with the amount of the deferred compensation, based upon the average of the high and low prices of the Company’s common stock on the last trading day of the fiscal quarter when the cash compensation was earned. Dividend equivalents are paid on PSUs at the same rate as dividends on the Company’s common stock and are re-invested in additional PSUs at the next fiscal quarter-end. The liabilities of the plan are based on the fair value of the outstanding PSUs and are presented in other accrued expenses (current portion) or other liabilities in the accompanying condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of the PSUs are presented in selling and administrative expenses in the Company’s condensed consolidated statements of earnings. The fair value of each PSU is based on an unadjusted quoted market price for the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1).

Restricted Stock Units for Non-Employee Directors

Under the Company’s incentive compensation plans, cash-equivalent restricted stock units (“RSUs”) of the Company ~~may be~~were previously granted at no cost to non-employee directors. ~~The~~These cash-equivalent RSUs are subject to a vesting requirement (usually one year), earn dividend-equivalent units, and are settled in cash on the date the director terminates service or such earlier date as a director may elect, subject to restrictions, based on the then current fair value of the Company’s common stock. The fair value of each cash-equivalent RSU is based on an unadjusted quoted market price for the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1). Additional information related to RSUs for non-employee directors is disclosed in Note ~~10 to the condensed consolidated financial statements.~~

~~Performance Share Units~~

Under the Company’s incentive compensation plans, common stock or cash may be awarded at the end of the performance period at no cost to certain officers and key employees if certain financial goals are met. Under the plan, employees are granted performance share awards at a target number of shares or units, which generally vest over a three-year service period. At the end of the vesting period, the employee will have earned an amount of shares or units between 0% and 200% of the targeted award, depending on the achievement of specified financial goals for the service period. The fair value of each performance share unit is based on an unadjusted quoted market price of the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1). During the first quarter of 2017, the Company's remaining performance share awards granted in units vested and were settled in cash at fair value. Additional information related to the Company's performance share awards is disclosed in Note 10 to the condensed consolidated financial statements.

~~Derivative Financial Instruments~~

The Company uses derivative financial instruments, primarily foreign exchange contracts, to reduce its exposure to market risks from changes in foreign exchange rates. These foreign exchange contracts are measured at fair value using quoted forward foreign exchange prices from counterparties corroborated by market-based pricing (Level 2). Additional information related to the Company’s derivative financial instruments is disclosed in Note 12 to the condensed consolidated financial statements.

~~Secured Convertible Note~~

Mandatory Purchase Obligation

The Company~~received~~ recorded a ~~secured convertible note as partial consideration for~~mandatory purchase obligation of the ~~2014 disposition~~remaining interest in conjunction with the acquisition of ~~Shoes.com, and the convertible note was measured at~~Blowfish Malibu in July 2018. The fair value ~~using unobservable inputs~~of the mandatory purchase obligation was based on the earnings formula specified in the purchase agreement (Level 3). Fair value adjustments on the mandatory purchase obligation were recorded as interest expense. During the ~~fourth quarter~~thirteen weeks ended May 1, 2021, the Company recorded fair value adjustments of ~~2016,~~$6.4 million. The mandatory purchase obligation of $54.6 million was paid on November 4, 2021 and therefore, there were no corresponding fair value adjustments during the ~~convertible note was fully impaired.~~thirteen weeks ended April 30, 2022. Refer to further discussion of the mandatory purchase obligation in Note 5 to the condensed consolidated financial statements.

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The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at ~~October 28, 2017, October 29, 2016~~April 30, 2022, May 1, 2021 and January ~~28, 2017. The Company did not have any transfers between Level 1, Level 2 or Level 3 during~~29, 2022. During the ~~thirty-nine~~thirteen weeks ended ~~October 28, 2017~~April 30, 2022 and May 1, 2021, there were 0 transfers into or ~~October 29, 2016.~~

Fair Value Measurements
($ thousands) Total
Level 1
Level 2
Level 3
Asset (Liability)

October 28, 2017:
Cash equivalents – money market funds $ 14,967
$ 14,967
$ —
$ —
Non-qualified deferred compensation plan assets 6,000
6,000
—
—
Non-qualified deferred compensation plan liabilities (6,000 ) (6,000 ) —
—
Deferred compensation plan liabilities for non-employee directors (2,350 ) (2,350 ) —
—
Restricted stock units for non-employee directors (10,118 ) (10,118 ) —
—
Derivative financial instruments, net 196
—
196
—
October 29, 2016:
Cash equivalents – money market funds $ 152,700
$ 152,700
$ —
$ —
Non-qualified deferred compensation plan assets 4,747
4,747
—
—
Non-qualified deferred compensation plan liabilities (4,747 ) (4,747 ) —
—
Deferred compensation plan liabilities for non-employee directors (1,596 ) (1,596 ) —
—
Restricted stock units for non-employee directors (8,726 ) (8,726 ) —
—
Performance share units (2,446 ) (2,446 ) —
—
Derivative financial instruments, net (208 ) —
(208 ) —
Secured convertible note 7,227
—
—
7,227
January 28, 2017:
Cash equivalents – money market funds $ 27,530
$ 27,530
$ —
$ —
Non-qualified deferred compensation plan assets 5,051
5,051
—
—
Non-qualified deferred compensation plan liabilities (5,051 ) (5,051 ) —
—
Deferred compensation plan liabilities for non-employee directors (1,909 ) (1,909 ) —
—
Restricted stock units for non-employee directors (9,390 ) (9,390 ) —
—
Performance share units (3,352 ) (3,352 ) —
—
Derivative financial instruments, net (640 ) —
(640 ) —

out of Level 3.


	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
April 30, 2022:
Non-qualified deferred compensation plan assets	$	7,567	$	7,567	$	0	$	0
Non-qualified deferred compensation plan liabilities		(7,567)		(7,567)		0		0
Deferred compensation plan liabilities for non-employee directors		(1,765)		(1,765)		0		0
Restricted stock units for non-employee directors		(2,559)		(2,559)		0		0
May 1, 2021:
Cash equivalents – money market funds	$	57,000	$	57,000	$	0	$	0
Non-qualified deferred compensation plan assets		8,169		8,169		0		0
Non-qualified deferred compensation plan liabilities		(8,169)		(8,169)		0		0
Deferred compensation plan liabilities for non-employee directors		(1,185)		(1,185)		0		0
Restricted stock units for non-employee directors		(2,571)		(2,571)		0		0
Mandatory purchase obligation - Blowfish Malibu		(45,523)		0		0		(45,523)
January 29, 2022:
Non-qualified deferred compensation plan assets		7,463		7,463		0		0
Non-qualified deferred compensation plan liabilities		(7,463)		(7,463)		0		0
Deferred compensation plan liabilities for non-employee directors		(1,770)		(1,770)		0		0
Restricted stock units for non-employee directors		(2,568)		(2,568)		0		0

Impairment Charges

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important that could trigger an impairment review include underperformance relative to ~~expected~~ historical or projected future operating results, a significant change in the manner of the use of the asset, or a negative industry or economic trend. When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the aforementioned factors, impairment is measured based on a projected discounted cash flow method. Certain factors, such as estimated store sales and expenses, used for this nonrecurring fair value measurement are considered Level 3 inputs as defined by FASB ASC Topic 820, Fair Value Measurement. Long-lived assets held and used with a carrying amount of ~~$115.8~~$503.6 million and ~~$100.4~~$571.5 million at ~~October 28, 2017~~April 30, 2022 and ~~October 29, 2016,~~May 1, 2021, respectively, were assessed for indicators of ~~impairment and written down to their fair value.~~impairment. This assessment resulted in the following impairment charges, primarily for software and operating lease right-of-use assets, leasehold improvements and furniture and fixtures in the ~~Company's~~Company’s retail ~~stores, which were included in selling and administrative expenses for the respective periods.~~

Thirteen Weeks Ended Thirty-Nine Weeks Ended
($ thousands) October 28, 2017
October 29, 2016
October 28, 2017
October 29, 2016
Impairment Charges
Famous Footwear $ 150
$ 128
$ 450
$ 262
Brand Portfolio 726
248
2,545
651
Total impairment charges $ 876
$ 376
$ 2,995
$ 913

stores.


	Thirteen Weeks Ended
($ thousands)	April 30, 2022		May 1, 2021
Long-Lived Asset Impairment Charges
Famous Footwear	$	370	$	400
Brand Portfolio		1,407		1,488
Total long-lived asset impairment charges	$	1,777	$	1,888

Fair Value of the Company’s Other Financial Instruments

The fair values of cash and cash equivalents (excluding money market funds discussed above), receivables and trade accounts payable approximate their carrying values due to the short-term nature of these instruments.

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The carrying amounts and fair values of the ~~Company's~~Company’s other financial instruments subject to fair value disclosures are as follows:


	April 30, 2022				May 1, 2021				January 29, 2022
	Carrying				Carrying				Carrying
($ thousands)	Value ⁽¹⁾		Fair Value		Value ⁽¹⁾		Fair Value		Value ⁽¹⁾		Fair Value
Borrowings under revolving credit agreement	$	305,000	$	305,000	$	200,000	$	200,000	$	290,000	$	290,000
Long-term debt		—		—		200,000		200,500		—		—
Total debt	$	305,000	$	305,000	$	400,000	$	400,500	$	290,000	$	290,000

(1)	Excludes unamortized debt issuance costs and debt discount

October 28, 2017 October 29, 2016 January 28, 2017
Carrying
Fair
Carrying
Fair
Carrying
Fair
($ thousands) Value
Value
Value
Value
Value
Value
Borrowings under revolving credit agreement $ 20,000
$ 20,000
$ —
$ —
$ 110,000
$ 110,000
Long-term debt 197,348
209,000
196,888
209,000
197,003
209,000
Total debt $ 217,348

$ 229,000

$ 196,888

$ 209,000

$ 307,003

$ 319,000

The fair value of the borrowings under ~~the~~ revolving credit agreement approximates its carrying value due to its short-term nature (Level 1). The fair value of the Company’s long-term debt was based upon quoted prices in an inactive market as of ~~the end of the respective periods~~May 1, 2021 (Level 2).



~~Note 14~~	~~Income Taxes~~

Note 15 Income Taxes

The Company’s consolidated effective tax rate can vary considerably from period to period, depending on a number of factors. The Company’s consolidated effective tax rates were ~~29.6%~~25.7% and ~~33.6%~~35.5% for the thirteen weeks ended ~~October 28, 2017~~April 30, 2022 and ~~October 29, 2016,~~May 1, 2021, respectively. During the thirteen weeks ended October 28, 2017, the Company recognized discrete tax benefits of $0.9 million, reflecting greater deductibility of certain 2016 expenses than originally estimated. During the thirteen weeks ended October 29, 2016, the Company recognized a discrete tax benefit of $0.3 million, reflecting the settlement of a federal tax audit issue. If these discrete tax benefits had not been recognized during the thirteen weeks ended October 28, 2017 and October 29, 2016, the Company'sThe higher effective tax ~~rates would have been 31.5% and 34.1%, respectively. Excluding the discrete tax items, the Company's tax~~ rate ~~is lower~~ for ~~the thirteen weeks ended October 28, 2017, reflecting a higher mix of international earnings in the Company's lowest tax rate jurisdictions.~~

For the thirty-nine weeks ended October 28, 2017 and October 29, 2016, the Company's consolidated effective tax rates were 30.6% and 32.3%, respectively. Discrete tax benefits of $2.0 million were recognized during the thirty-nine weeks ended October 28, 2017, including a discrete tax benefit of $1.2 million related to share-based compensation as a result of the adoption of ASU 2016-09 during the first quarter of ~~2017,~~2021 primarily reflects the non-deductibility of losses at the Company’s Canadian division, which ~~requires prospective recognition of excess tax benefits and deficiencies in the statement of earnings. Discrete tax benefits of $1.1 million~~ were ~~recognized during the thirty-nine weeks ended October 29, 2016, reflecting the settlement of a federal tax audit issue. If these~~driven by exit-related costs associated with Naturalizer retail stores. This impact was partially offset by discrete tax benefits ~~had not been recognized during~~totaling $1.2 million in the ~~thirty-nine weeks ended October 28, 2017 and October 29, 2016, the Company's effective tax rates would~~first quarter of 2021.

As of April 30, 2022, 0 deferred taxes have been ~~32.7% and 33.4%, respectively. Excluding~~provided on the ~~discrete~~accumulated unremitted earnings of the Company’s foreign subsidiaries that are not subject to United States income tax, ~~items,~~beyond the ~~Company's tax rate is lower~~amounts recorded for the ~~thirty-nine weeks ended October 28, 2017, reflecting a higher mix~~one-time transition tax for the mandatory deemed repatriation of cumulative foreign earnings, as required by the Tax Cuts and Jobs Act. The Company periodically evaluates its international investment opportunities and plans, as well as its international working capital needs, to determine the level of investment required and, accordingly, determines the level of international earnings ~~in the Company's lowest tax rate jurisdictions.~~



~~Note 15~~	~~Related Party Transactions~~

~~C. banner International Holdings Limited~~

~~The Company has a joint venture agreement with a subsidiary of C. banner International Holdings Limited (“CBI”) to market Naturalizer footwear in China. The Company~~that is ~~a 51% owner~~considered indefinitely reinvested. Based upon that evaluation, earnings of the ~~joint venture (“B&H Footwear”), with CBI owning the other 49%. The license enabling the joint venture~~Company’s international subsidiaries that are not otherwise subject to ~~market the footwear expired~~United States taxation are considered to be indefinitely reinvested, and accordingly, deferred taxes have not been provided. If changes occur in ~~August 2017~~future investment opportunities and ~~the parties are~~plans, those changes will be reflected when known and may result in ~~the process of dissolving their joint venture arrangements. B&H Footwear sold Naturalizer footwear to a retail affiliate of CBI~~providing residual United States deferred taxes on ~~a wholesale basis, which in turn sold the Naturalizer products through department store shops~~unremitted international earnings.

Note 16 Commitments and free-standing stores in China. The Company, through its consolidated subsidiary, B&H Footwear, sold Naturalizer footwear on a wholesale basis to CBI totaling $1.3 million and $5.1 million for the thirteen and thirty-nine weeks ended October 29, 2016, respectively, with no corresponding sales during 2017.



~~Note 16~~	~~Commitments and Contingencies~~

Contingencies

Environmental Remediation

Prior operations included numerous manufacturing and other facilities for which the Company may have responsibility under various environmental laws for the remediation of conditions that may be identified in the future. The Company is involved in environmental remediation and ongoing compliance activities at several sites and has been notified that it is or may be a potentially responsible party at several other sites.

Redfield

The Company is remediating, under the oversight of Colorado authorities, the groundwater and indoor air at its owned facility in Colorado (the “Redfield site” or, when referring to remediation activities at or under the facility, the “on-site remediation”) and residential neighborhoods adjacent to and near the property (the “off-site remediation”) that have been affected by solvents previously used at the facility. The on-site remediation calls for the operation of a pump and treat system (which prevents migration of contaminated groundwater off the property) as the final remedy for the site, subject to monitoring and periodic review of the on-site conditions and other remedial technologies that may be developed in the future. In ~~May~~ 2016, the Company submitted a revised plan to address on-site conditions, including direct treatment of source areas, and received approval from the oversight authorities to begin implementing the revised plan.

As the treatment of the on-site source areas progresses, the Company expects to convert the pump and treat system to a passive treatment barrier system. Off-site groundwater concentrations have been reducing over time since installation of the pump and treat system in 2000 and injection of clean water beginning in 2003. However, localized areas of contaminated bedrock just beyond the property line continue to impact off-site groundwater. The modified work plan for addressing this condition includes converting the off-site bioremediation system into a monitoring well network and employing different remediation methods in these recalcitrant areas. In accordance with the work plan, a pilot test was conducted of certain groundwater remediation methods and the results of that test were used to develop more detailed plans

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for remedial activities in the off-site areas, which were approved by the authorities and are being implemented in a phased manner. The results of groundwater monitoring are being used to evaluate the effectiveness of these activities. ~~In 2014, the Company submitted a proposed expanded remedy work plan that was accepted by the oversight authorities during 2015.~~ The Company continues to implement the expanded remedy work plan that was approved by the oversight authorities in 2015. Based on the progress of the direct remedial action of on-site conditions, the Company submitted a request to the oversight authorities for permission to convert the perimeter pump and treat active remediation system to a passive one. In 2019, a final response was received from the oversight authorities, which is allowing the Company to proceed with implementation of the revised plan on a portion of the treatment system. The Company continues to pursue approval from the oversight authorities for the full conversion of the perimeter pump and treat active remediation system to a passive one. The Company also continues to work with the oversight authorities on the off-site work plan.

The cumulative expenditures for both on-site and off-site remediation through ~~October 28, 2017~~April 30, 2022 were ~~$29.7~~$32.6 million. The Company has recovered a portion of these expenditures from insurers and other third parties. The reserve for the anticipated future remediation activities at ~~October 28, 2017~~April 30, 2022 is ~~$9.6~~$9.8 million, of which ~~$8.7~~$8.8 million is recorded within other liabilities and ~~$0.9~~$1.0 million is recorded within other accrued expenses. Of the total ~~$9.6~~$9.8 million reserve, ~~$4.6 million is for on-site remediation and~~ $5.0 million is for off-site remediation and $4.8 million is for on-site remediation. The liability for the on-site remediation was discounted at 4.8%. On an undiscounted basis, the on-site remediation liability would be ~~$14.1~~$13.4 million as of ~~October 28, 2017.~~April 30, 2022. The Company expects to spend approximately $0.6 million in 2022, $0.1 million in each of the following fouryears ~~$0.2 million in the fifth year~~ and ~~$13.5~~$12.4 million in the aggregate thereafter related to the on-site remediation.

Other

Various federal and state authorities have identified the Company as a potentially responsible party for remediation at certain other sites. However, the Company does not currently believe that its liability for such sites, if any, would be material.

The Company continues to evaluate its ~~estimated costs~~remediation plans in conjunction with its environmental consultants and records its best estimate of ~~such~~remediation liabilities. However, future actions and the associated costs are subject to oversight and approval of various governmental authorities. Accordingly, the ultimate costs may vary, and it is possible costs may exceed the recorded amounts.

Litigation

The Company is involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such ordinary course of business proceedings and litigation currently pending is not expected to have a material adverse effect on the Company’s results of operations or financial position. Legal costs associated with litigation are ~~generally~~ expensed as incurred.

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~~Note 17~~	~~Financial Information for the Company and its Subsidiaries~~

~~The Company issued senior notes, which are fully~~

ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

We achieved record-setting financial results in the first quarter of 2022, maintaining our momentum from 2021, with strong sales and ~~unconditionally~~operating earnings contribution from both our Famous Footwear and ~~jointly~~Brand Portfolio segments. We utilized our robust cash generation to augment our inventory levels to better align with the strong consumer demand and severally guaranteed by all of its existing and future subsidiaries that are guarantors under our revolving credit facility ("Credit Agreement"). The following tables present the condensed consolidating financial information for each of Caleres, Inc. (“Parent”), the Guarantors, and subsidiaries of the Parent that are not Guarantors (the “Non-Guarantors”), together with consolidating eliminations, as of andposition us for the ~~periods indicated. Guarantors are 100% owned by~~upcoming season.We have also taken the ~~Parent. On December 13, 2016, Allen Edmonds was joined~~opportunity to ~~the Credit Agreement as a guarantor. After giving effect~~repurchase over 700,000 shares of common stock, and expect to ~~the joinder, the Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC and Allen Edmonds are each co-borrowers and guarantors under the Credit Agreement.~~

The condensed consolidating financial statements have been prepared using the equity method of accounting in accordance with the requirements for presentation of such information. Management believes that the information, presented in lieu of complete financial statements for each of the Guarantors, provides meaningful informationcontinue to ~~allow investors to determine the nature of the assets held by, and operations and cash flows of, each of the consolidated groups.~~

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
OCTOBER 28, 2017
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Assets

Current assets

Cash and cash equivalents $ 8,155
$ 7,947
$ 15,277
$ —
$ 31,379
Receivables, net 116,974
3,987
11,981
—
132,942
Inventories, net 127,142
441,683
29,540
—
598,365
Prepaid expenses and other current assets 20,642
17,872
7,263
(4,795 ) 40,982
Intercompany receivable – current 1,597
123
20,677
(22,397 ) —
Total current assets 274,510
471,612
84,738
(27,192 ) 803,668
Other assets 50,565
16,877
874
—
68,316
Goodwill and intangible assets, net 111,665
40,937
187,580
—
340,182
Property and equipment, net 32,684
169,604
12,694
—
214,982
Investment in subsidiaries 1,288,128
—
(23,180 ) (1,264,948 ) —
Intercompany receivable – noncurrent 744,127
527,670
677,419
(1,949,216 ) —
Total assets $ 2,501,679
$ 1,226,700
$ 940,125
$ (3,241,356 ) $ 1,427,148

Liabilities and Equity

Current liabilities

Borrowings under revolving credit agreement $ 20,000
$ —
$ —
$ —
$ 20,000
Trade accounts payable 65,604
139,219
19,009
—
223,832
Other accrued expenses 64,525
95,817
17,940
(4,795 ) 173,487
Intercompany payable – current 12,833
—
9,564
(22,397 ) —
Total current liabilities 162,962
235,036
46,513
(27,192 ) 417,319
Other liabilities

Long-term debt 197,348
—
—
—
197,348
Other liabilities 93,029
39,150
5,215
—
137,394
Intercompany payable – noncurrent 1,374,695
121,683
452,838
(1,949,216 ) —
Total other liabilities 1,665,072
160,833
458,053
(1,949,216 ) 334,742
Equity

Caleres, Inc. shareholders’ equity 673,645
830,831
434,117
(1,264,948 ) 673,645
Noncontrolling interests —
—
1,442
—
1,442
Total equity 673,645
830,831
435,559
(1,264,948 ) 675,087
Total liabilities and equity $ 2,501,679
$ 1,226,700
$ 940,125
$ (3,241,356 ) $ 1,427,148

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED OCTOBER 28, 2017
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Net sales $ 226,019
$ 541,007
$ 47,765
$ (40,135 ) $ 774,656
Cost of goods sold 152,714
313,646
23,351
(31,940 ) 457,771
Gross profit 73,305
227,361
24,414
(8,195 ) 316,885
Selling and administrative expenses 59,335
197,481
15,394
(8,195 ) 264,015
Operating earnings 13,970
29,880
9,020
—
52,870
Interest expense (4,140 ) (1 ) —
—
(4,141 )
Interest income 47
—
48
—
95
Intercompany interest income (expense) 1,981
(2,003 ) 22
—
—
Earnings before income taxes 11,858
27,876
9,090
—
48,824
Income tax provision (3,963 ) (9,479 ) (1,009 ) —
(14,451 )
Equity in earnings (loss) of subsidiaries, net of tax 26,492
—
(457 ) (26,035 ) —
Net earnings 34,387
18,397
7,624
(26,035 ) 34,373
Less: Net loss attributable to noncontrolling interests —
—
(14 ) —
(14 )
Net earnings attributable to Caleres, Inc. $ 34,387
$ 18,397
$ 7,638
$ (26,035 ) $ 34,387

Comprehensive income $ 34,305
$ 18,397
$ 7,457
$ (25,857 ) $ 34,302
Less: Comprehensive loss attributable to noncontrolling interests —
—
(3 ) —
(3 )
Comprehensive income attributable to Caleres, Inc. $ 34,305
$ 18,397
$ 7,460
$ (25,857 ) $ 34,305

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 28, 2017
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Net sales $ 614,764
$ 1,451,191
$ 148,985
$ (131,821 ) $ 2,083,119
Cost of goods sold 423,224
815,980
74,424
(105,763 ) 1,207,865
Gross profit 191,540
635,211
74,561
(26,058 ) 875,254
Selling and administrative expenses 172,122
570,272
45,254
(26,058 ) 761,590
Restructuring and other special charges, net 3,769
37
167
—
3,973
Operating earnings 15,649
64,902
29,140
—
109,691
Interest expense (13,809 ) (13 ) —
—
(13,822 )
Interest income 220
—
372
—
592
Intercompany interest income (expense) 6,085
(6,516 ) 431
—
—
Earnings before income taxes 8,145
58,373
29,943
—
96,461
Income tax provision (2,124 ) (21,407 ) (5,999 ) —
(29,530 )
Equity in earnings (loss) of subsidiaries, net of tax 60,863
—
(1,234 ) (59,629 ) —
Net earnings 66,884
36,966
22,710
(59,629 ) 66,931
Less: Net earnings attributable to noncontrolling interests —
—
47
—
47
Net earnings attributable to Caleres, Inc. $ 66,884
$ 36,966
$ 22,663
$ (59,629 ) $ 66,884

Comprehensive income $ 69,170
$ 36,966
$ 23,212
$ (60,105 ) $ 69,243
Less: Comprehensive income attributable to noncontrolling interests —
—
73
—
73
Comprehensive income attributable to Caleres, Inc. $ 69,170
$ 36,966
$ 23,139
$ (60,105 ) $ 69,170

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 28, 2017
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Net cash (used for) provided by operating activities $ (13,179 ) $ 97,443
$ 37,997
$ —
$ 122,261

Investing activities

Purchases of property and equipment (5,340 ) (25,377 ) (3,647 ) —
(34,364 )
Capitalized software (4,079 ) (452 ) —
—
(4,531 )
Intercompany investing (20,058 ) 197,763
(177,705 ) —
—
Net cash (used for) provided by investing activities (29,477 ) 171,934
(181,352 ) —
(38,895 )

Financing activities

Borrowings under revolving credit agreement 450,000
—
—
—
450,000
Repayments under revolving credit agreement (540,000 ) —
—
—
(540,000 )
Dividends paid (9,033 ) —
—
—
(9,033 )
Acquisition of treasury stock (5,993 ) —
—
—
(5,993 )
Issuance of common stock under share-based plans, net (2,477 ) —
—
—
(2,477 )
Intercompany financing 134,315
(270,459 ) 136,144
—
—
Net cash provided by (used for) financing activities 26,812
(270,459 ) 136,144
—
(107,503 )
Effect of exchange rate changes on cash and cash equivalents —
—
184
—
184
Decrease in cash and cash equivalents (15,844 ) (1,082 ) (7,027 ) —
(23,953 )
Cash and cash equivalents at beginning of period 23,999
9,029
22,304
—
55,332
Cash and cash equivalents at end of period $ 8,155
$ 7,947
$ 15,277
$ —
$ 31,379

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
OCTOBER 29, 2016
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Assets

Current assets

Cash and cash equivalents $ 50,463
$ 5,897
$ 117,075
$ —
$ 173,435
Receivables, net 123,345
856
15,274
—
139,475
Inventories, net 114,180
387,688
22,955
—
524,823
Prepaid expenses and other current assets 12,766
13,649
5,301
—
31,716
Intercompany receivable – current 823
327
15,766
(16,916 ) —
Total current assets 301,577
408,417
176,371
(16,916 ) 869,449
Other assets 92,895
14,106
7,850
—
114,851
Goodwill and intangible assets, net 113,889
2,800
11,452
—
128,141
Property and equipment, net 30,902
149,680
11,172
—
191,754
Investment in subsidiaries 1,076,592
—
(21,068 ) (1,055,524 ) —
Intercompany receivable – noncurrent 485,403
384,452
573,308
(1,443,163 ) —
Total assets $ 2,101,258
$ 959,455
$ 759,085
$ (2,515,603 ) $ 1,304,195

Liabilities and Equity

Current liabilities

Trade accounts payable $ 70,501
$ 123,003
$ 18,584
$ —
$ 212,088
Other accrued expenses 48,614
75,797
17,475
—
141,886
Intercompany payable – current 5,145
—
11,771
(16,916 ) —
Total current liabilities 124,260
198,800
47,830
(16,916 ) 353,974
Other liabilities

Long-term debt 196,888
—
—
—
196,888
Other liabilities 34,463
68,146
3,661
—
106,270
Intercompany payable – noncurrent 1,099,537
41,933
301,693
(1,443,163 ) —
Total other liabilities 1,330,888
110,079
305,354
(1,443,163 ) 303,158
Equity

Caleres, Inc. shareholders’ equity 646,110
650,576
404,948
(1,055,524 ) 646,110
Noncontrolling interests —
—
953
—
953
Total equity 646,110
650,576
405,901
(1,055,524 ) 647,063
Total liabilities and equity $ 2,101,258
$ 959,455
$ 759,085
$ (2,515,603 ) $ 1,304,195

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED OCTOBER 29, 2016
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Net sales $ 235,094
$ 487,558
$ 48,055
$ (38,477 ) $ 732,230
Cost of goods sold 162,629
281,926
25,669
(31,765 ) 438,459
Gross profit 72,465
205,632
22,386
(6,712 ) 293,771
Selling and administrative expenses 53,225
177,466
14,340
(6,712 ) 238,319
Operating earnings 19,240
28,166
8,046
—
55,452
Interest expense (3,472 ) (3 ) —
—
(3,475 )
Interest income 200
—
150
—
350
Intercompany interest income (expense) 2,083
(2,107 ) 24
—
—
Earnings before income taxes 18,051
26,056
8,220
—
52,327
Income tax provision (6,193 ) (9,743 ) (1,665 ) —
(17,601 )
Equity in earnings (loss) of subsidiaries, net of tax 22,872
—
(499 ) (22,373 ) —
Net earnings 34,730
16,313
6,056
(22,373 ) 34,726
Less: Net loss attributable to noncontrolling interests —
—
(4 ) —
(4 )
Net earnings attributable to Caleres, Inc. $ 34,730
$ 16,313
$ 6,060
$ (22,373 ) $ 34,730

Comprehensive income $ 33,816
$ 16,313
$ 5,661
$ (21,999 ) $ 33,791
Less: Comprehensive loss attributable to noncontrolling interests —
—
(25 ) —
(25 )
Comprehensive income attributable to Caleres, Inc. $ 33,816
$ 16,313
$ 5,686
$ (21,999 ) $ 33,816

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 29, 2016
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Net sales $ 617,177
$ 1,279,080
$ 156,649
$ (113,006 ) $ 1,939,900
Cost of goods sold 434,833
707,584
87,688
(91,324 ) 1,138,781
Gross profit 182,344
571,496
68,961
(21,682 ) 801,119
Selling and administrative expenses 155,608
505,032
45,708
(21,682 ) 684,666
Operating earnings 26,736
66,464
23,253
—
116,453
Interest expense (10,561 ) (3 ) —
—
(10,564 )
Interest income 531
—
376
—
907
Intercompany interest income (expense) 6,590
(6,685 ) 95
—
—
Earnings before income taxes 23,296
59,776
23,724
—
106,796
Income tax provision (7,369 ) (22,483 ) (4,662 ) —
(34,514 )
Equity in earnings (loss) of subsidiaries, net of tax 56,353
—
(1,545 ) (54,808 ) —
Net earnings 72,280
37,293
17,517
(54,808 ) 72,282
Less: Net earnings attributable to noncontrolling interests —
—
2
—
2
Net earnings attributable to Caleres, Inc. $ 72,280
$ 37,293
$ 17,515
$ (54,808 ) $ 72,280

Comprehensive income $ 71,871
$ 37,293
$ 17,692
$ (55,020 ) $ 71,836
Less: Comprehensive loss attributable to noncontrolling interests —
—
(35 ) —
(35 )
Comprehensive income attributable to Caleres, Inc. $ 71,871
$ 37,293
$ 17,727
$ (55,020 ) $ 71,871

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 29, 2016
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Net cash provided by operating activities $ 23,770
$ 83,584
$ 29,649
$ —
$ 137,003

Investing activities

Purchases of property and equipment (2,748 ) (37,154 ) (3,117 ) —
(43,019 )
Capitalized software (3,859 ) (1,783 ) (30 ) —
(5,672 )
Intercompany investing (3,129 ) 3,129
—
—
—
Net cash used for investing activities (9,736 ) (35,808 ) (3,147 ) —
(48,691 )

Financing activities

Borrowings under revolving credit agreement 103,000
—
—
—
103,000
Repayments under revolving credit agreement (103,000 ) —
—
—
(103,000 )
Dividends paid (9,094 ) —
—
—
(9,094 )
Acquisition of treasury stock (23,139 ) —
—
—
(23,139 )
Issuance of common stock under share-based plans, net (4,205 ) —
—
—
(4,205 )
Excess tax benefit related to share-based plans 3,264
—
—
—
3,264
Intercompany financing 38,603
(41,879 ) 3,276
—
—
Net cash provided by (used for) financing activities 5,429
(41,879 ) 3,276
—
(33,174 )
Effect of exchange rate changes on cash and cash equivalents —
—
146
—
146
Increase in cash and cash equivalents 19,463
5,897
29,924
—
55,284
Cash and cash equivalents at beginning of period 31,000
—
87,151
—
118,151
Cash and cash equivalents at end of period $ 50,463
$ 5,897
$ 117,075
$ —
$ 173,435

CONDENSED CONSOLIDATING BALANCE SHEET
JANUARY 28, 2017
Non-

($ thousands) Parent
Guarantors
Guarantors
Eliminations
Total
Assets

Current assets

Cash and cash equivalents $ 23,999
$ 9,029
$ 22,304
$ —
$ 55,332
Receivables, net 118,746
5,414
28,961
—
153,121
Inventories, net 150,098
410,867
24,799
—
585,764
Prepaid expenses and other current assets 24,293
23,040
8,058
(5,863 ) 49,528
Intercompany receivable – current 695
263
22,091
(23,049 ) —
Total current assets 317,831
448,613
106,213
(28,912 ) 843,745
Other assets 51,181
16,567
826
—
68,574
Goodwill and intangible assets, net 113,333
219,337
11,088
—
343,758
Property and equipment, net 31,424
176,358
11,414
—
219,196
Investment in subsidiaries 1,343,954
—
(21,946 ) (1,322,008 ) —
Intercompany receivable – noncurrent 568,541
366,902
581,624
(1,517,067 ) —
Total assets $ 2,426,264
$ 1,227,777
$ 689,219
$ (2,867,987 ) $ 1,475,273

Liabilities and Equity

Current liabilities

Borrowings under revolving credit agreement $ 110,000
$ —
$ —
$ —
$ 110,000
Trade accounts payable 116,783
112,434
37,153
—
266,370
Other accrued expenses 74,941
65,228
16,919
(5,863 ) 151,225
Intercompany payable – current 12,794
—
10,255
(23,049 ) —
Total current liabilities 314,518
177,662
64,327
(28,912 ) 527,595
Other liabilities

Long-term debt 197,003
—
—
—
197,003
Other liabilities 91,683
40,507
3,999
—
136,189
Intercompany payable – noncurrent 1,209,943
98,982
208,142
(1,517,067 ) —
Total other liabilities 1,498,629
139,489
212,141
(1,517,067 ) 333,192
Equity

Caleres, Inc. shareholders’ equity 613,117
910,626
411,382
(1,322,008 ) 613,117
Noncontrolling interests —
—
1,369
—
1,369
Total equity 613,117
910,626
412,751
(1,322,008 ) 614,486
Total liabilities and equity $ 2,426,264
$ 1,227,777
$ 689,219
$ (2,867,987 ) $ 1,475,273



~~ITEM 2~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~OVERVIEW~~

do so.

Financial Highlights

~~The following~~

Following is a summary of the financial highlights for the ~~third~~first quarter of ~~2017:~~ 2022:

●

Consolidated net sales increased $96.5 million, or 15.1%, to $735.1 million in the first quarter of 2022, compared to $638.6 million in the first quarter of 2021. Our Famous Footwear segment continued its strong performance with net sales of $384.5 million. Net sales of our Brand Portfolio segment increased $115.4 million, or 46.1%, compared to the first quarter of 2021. On a consolidated basis, our direct-to-consumer sales represented approximately 65% of consolidated net sales for the first quarter of 2022, compared to 74.5% in the first quarter of 2021.

●

Consolidated gross profit increased $52.1 million, or 19.0%, to $327.0 million in the first quarter of 2022, compared to $274.9 million in the first quarter of 2021. Our gross profit margin increased to 44.5% in the first quarter of 2022, compared to 43.0% in the first quarter of 2021, reflecting a decline in promotional activity driven by strong consumer demand and an improved sales mix of higher margin product.

●

Consolidated operating earnings increased $48.3 million to $66.2 million in the first quarter of 2022, compared to $17.9 million in the first quarter of 2021.

●

Consolidated net earnings attributable to Caleres, Inc. were $50.5 million, or $1.32 per diluted share, in the first quarter of 2022, compared to $6.2 million, or $0.16 per diluted share, in the first quarter of 2021.

The following items should be considered in evaluating the comparability of our first quarter results in 2022 and 2021:

●

Supply Chain Disruptions and Inflationary Pressures – During the first quarter of 2022, we continued to experience global supply chain disruptions, including a delay in the receipt of inventory due to port congestion and reduced shipping vessel and container availability. We have also experienced inflationary pressures on product costs and inbound freight. In order to mitigate these inflationary pressures, we began implementing price increases in the second half of 2021. We believe our ability to continue full price selling and our disciplined approach to inventory management will continue to mitigate the impact of these supply chain disruptions and inflationary pressures on our financial results. As of April 30, 2022, we have nearly $98 million of inventory in transit that is not yet available to sell, an increase of 105% compared to our in-transit inventory levels at May 1, 2021, but a reduction of 45% from January 29, 2022.

●

Brand Portfolio – business exits – During the first quarter of 2021, we incurred costs totaling $13.5 million ($11.9 million on an after-tax basis, or $0.31 per diluted share), related to the strategic realignment of Naturalizer retail store operations. There were no corresponding charges recorded during the first quarter of 2022.

●

Blowfish Malibu mandatory purchase obligation – As further discussed in Note 5 and Note 14 to the condensed consolidated financial statements, the remaining interest in Blowfish Malibu was subject to a mandatory purchase obligation after a three-year period following the 2018 acquisition, based on an earnings multiple formula. During the first quarter of 2021, we recorded a fair value adjustment of $6.4 million ($4.7 million on an after-tax basis, or $0.13 per diluted share). The fair value adjustment was recorded as interest expense, net in the condensed consolidated statement of earnings. There were no corresponding charges in the first quarter of 2022. The purchase obligation was settled for $54.6 million on November 4, 2021.

Table of Contents

Metrics Used in the ~~third quarter~~Evaluation of ~~2017, driven~~Our Business

The following are a couple of key metrics by ~~our Allen Edmonds business,~~ which we ~~acquired late last year.~~ evaluate our business and make strategic decisions:

Same-store sales ~~at our Famous Footwear segment were up 0.9% for the third quarter of 2017 and 2.6% for the back-to-school season. Boot~~

The same-store sales ~~in both our Brand Portfolio and Famous Footwear segments were lower as~~metric is a ~~result of unseasonably warm weather across the United States.~~

~~During the third quarter of 2017, Hurricanes Harvey and Irma caused extensive damage~~metric commonly used in Texas and Florida. These are major markets for us and several of our stores were closed for a period of time. We estimate that the hurricanes negatively impacted our net sales for the third quarter of 2017 by approximately $4 million, with approximately a $3 million impact at our Famous Footwear segment and $1 million at our Brand Portfolio segment.

We continued to experience strong gross margins in the third quarter of 2017 across both segments, primarily reflecting a higher consolidated mix of retail versus wholesale sales and an improved mix of higher margin brands. In addition, we continue to benefit from our sourcing initiatives, which have lowered our cost of merchandise.

Consolidated net earnings attributable to Caleres, Inc. were $34.4 million, or $0.80 per diluted share, in the third quarter of 2017, compared to $34.7 million, or $0.81 per diluted share, in the third quarter of 2016.

We continue to improve our balance sheet. In late 2016, we used approximately $260.0 million of proceeds from our revolving credit agreement to fund the Allen Edmonds acquisition. Since that time, we have paid down all but $20.0 million of our revolving credit agreement, driven by our strong operating cash flows. We expect to pay down the remaining $20.0 million during the fourth quarter of 2017. Our debt-to-capital ratio was 24.4% as of October 28, 2017, compared to 23.3% as of October 29, 2016 and 33.3% at January 28, 2017.

~~Outlook for the Remainder of 2017~~

Although boot sales were lower in the third quarter, we saw improvements in boot sales in November as more seasonal weather arrived. We also continue to benefit from our speed-to-market initiative, which has allowed us to react more rapidly to shifting trends and respond to consumer demand. We remain focused on day-to-day execution and managing the factors under our control, despite the challenges the retail industry ~~is facing. We remain confident in our ability~~ to ~~drive results and believe we have~~evaluate the ~~right strategy, plan and people in place to consistently deliver.~~

~~Following are the consolidated results and the results by segment:~~

CONSOLIDATED RESULTS
Thirteen Weeks Ended
Thirty-nine Weeks Ended
October 28, 2017 October 29, 2016
October 28, 2017 October 29, 2016
% of
Net Sales
% of
Net Sales
% of
Net Sales
% of
Net Sales
($ millions)
Net sales $ 774.7
100.0 % $ 732.2
100.0 % $ 2,083.1
100.0 % $ 1,939.9
100.0 %
Cost of goods sold 457.8
59.1 % 438.4
59.9 % 1,207.8
58.0 % 1,138.8
58.7 %
Gross profit 316.9
40.9 % 293.8
40.1 % 875.3
42.0 % 801.1
41.3 %
Selling and administrative expenses 264.0
34.1 % 238.3
32.5 % 761.6
36.5 % 684.6
35.3 %
Restructuring and other special charges, net —
— % —
— % 4.0
0.2 % —
— %
Operating earnings 52.9
6.8 % 55.5
7.6 % 109.7
5.3 % 116.5
6.0 %
Interest expense (4.2 ) (0.5 )% (3.5 ) (0.5 )% (13.8 ) (0.7 )% (10.6 ) (0.5 )%
Interest income 0.1
0.0 % 0.3
0.0 % 0.6
0.0 % 0.9
0.0 %
Earnings before income taxes 48.8
6.3 % 52.3
7.1 % 96.5
4.6 % 106.8
5.5 %
Income tax provision (14.4 ) (1.9 )% (17.6 ) (2.4 )% (29.6 ) (1.4 )% (34.5 ) (1.8 )%
Net earnings 34.4
4.4 % 34.7
4.7 % 66.9
3.2 % 72.3
3.7 %
Net (loss) earnings attributable to noncontrolling interests (0.0) (0.0 %) (0.0) (0.0 %) 0.0
0.0 % 0.0
0.0 %
Net earnings attributable to Caleres, Inc. $ 34.4
4.4 % $ 34.7
4.7 % $ 66.9
3.2 % $ 72.3
3.7 %

~~Net Sales~~

~~Net sales increased $42.5 million, or 5.8%, to $774.7 million~~revenue generated for the third quarter of 2017, compared to $732.2 million for the third quarter of 2016. Our Brand Portfolio segment reported a $37.1 million, or 14.0%, increase in net sales, reflecting $44.1 million of sales from our recently acquired Allen Edmonds business and higher net sales of our Sam Edelman and Naturalizer brands, partially offset by lower sales from our Franco Sarto and Via Spiga brands. Our Famous Footwear segment reported a $5.3 million, or 1.1%, increase in net sales, primarily driven by a 0.9% increase in same-store sales and a strong back-to-school selling season. As discussed in the ~~Overview~~ section, we estimate that our net sales were lower by approximately $4 million for the third quarter of 2017 related to the impacts of Hurricanes Harvey and Irma. In addition, unseasonably warm weather resulted in a delayed start to the fall boot season, impacting boot sales in both our Famous Footwear and Brand Portfolio segments.

Net sales increased $143.2 million, or 7.4%, to $2,083.1 million for the nine months ended October 28, 2017, compared to $1,939.9 million for the nine months ended October 29, 2016. Our Brand Portfolio segment reported a $121.2 million, or 16.9%, increase in net sales, reflecting $128.3 million of sales from our recently acquired Allen Edmonds business and sales growth from our Sam Edelman and Vince brands, partially offset by lower sales from our Franco Sarto, Via Spiga and Dr. Scholl's brands. Net sales of our Famous Footwear segment increased $22.0 million, or 1.8%, driven by a 1.0% increase in same-store sales and a net increase in sales from new and closed stores.

~~Same-store sales changes are calculated by comparing the sales in~~ stores that have been open for more than a year, though other retailers may calculate the metric differently. Management uses the same-store sales metric as a measure of an individual store’s success to determine whether it is performing in line with expectations. Our same-store sales metric is a daily-weighted calculation for the period, which includes sales for stores that have been open for at least 13 months. In addition, in order to be included in the same-store sales metric, a store must be open in the current period as well as the corresponding day(s) of the comparable retail calendar in the prior year. Accordingly, closed stores are excluded from the same-store sales metric for each day of the closure. Relocated stores are treated as new stores and ~~closed stores are~~therefore excluded from the calculation. Sales change from new and closed stores, net reflects the change in net sales due to stores that have been opened or closed during the period and are therefore excluded from the same-store sales calculation. E-commerce sales for those ~~e-commerce~~ websites that function as an extension of a retail chain are included in the same-store sales calculation. We believe the same-store sales metric is useful to shareholders and investors in assessing our retail sales performance of existing locations with comparable prior year sales, separate from the impact of store openings or store closures.

Sales per square foot

The sales per square foot metric is commonly used in the retail industry tocalculate the efficiency of sales based upon the square footage in a store. Management uses the sales per square foot metric as a measure of an individual store’s success to determine whether it is performing in line with expectations. The sales per square foot metric is calculated by dividing total retail store sales, excluding e-commerce sales, by the total square footage of the retail store base at the end of each month of the respective period.

Outlook

During the first quarter of 2022, we made significant progress against our key strategic initiatives. We believe we are well-positioned to capitalize on favorable market dynamics, despite the geopolitical concerns, inflationary pressures and ongoing supply chain disruptions. As we progress throughout 2022, we will maintain our focus on aligning inventory with consumer demand, which we believe will capture demand for our brands and products. We will continue to leverage our core competencies and execute on our short and long-term strategic priorities in an effort to enhance long-term value for our shareholders.

Following are the consolidated results and the results by segment:

CONSOLIDATED RESULTS


	Thirteen Weeks Ended
	April 30, 2022				May 1, 2021
			% of				% of
($ millions)			Net Sales				Net Sales
Net sales	$	735.1	100.0	%	$	638.6	100.0	%
Cost of goods sold		408.1	55.5	%		363.7	57.0	%
Gross profit		327.0	44.5	%		274.9	43.0	%
Selling and administrative expenses		260.8	35.5	%		243.5	38.1	%
Restructuring and other special charges, net		—	—	%		13.5	2.1	%
Operating earnings		66.2	9.0	%		17.9	2.8	%
Interest expense, net		(2.3)	(0.3)	%		(11.8)	(1.8)	%
Other income, net		3.4	0.5	%		3.8	0.6	%
Earnings before income taxes		67.3	9.2	%		9.9	1.6	%
Income tax provision		(17.3)	(2.4)	%		(3.5)	(0.6)	%
Net earnings		50.0	6.8	%		6.4	1.0	%
Net (loss) earnings attributable to noncontrolling interests		(0.5)	(0.1)	%		0.2	0.0	%
Net earnings attributable to Caleres, Inc.	$	50.5	6.9	%	$	6.2	1.0	%

Net Sales

Net sales increased $96.5 million, or 15.1%, to $735.1 million for the first quarter of 2022, compared to $638.6 million for the first quarter of 2021. Net sales for our Brand Portfolio segment increased $115.4 million, or 46.1% during the first quarter of 2022, compared to the first quarter of 2021, and the segment surpassed its pre-pandemic sales levels. Our Famous Footwear segment’s strong sales performance from 2021 carried over to the first quarter of 2022. However, net sales for Famous Footwear decreased $13.6 million, or 3.4%, in the first quarter of 2022 compared to the first quarter of 2021, primarily reflecting a lower store count. On a consolidated basis, our direct-to-consumer sales represented approximately 65% of total net sales for the first quarter of 2022. Our casual, athletic and sport footwear categories continue to resonate with consumers and demand for the dress, occasion and wear-to-work product categories continues to improve with the rebound in

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social events and celebrations and the return-to-office trending higher. During the first quarter of 2022, we remained focused on maximizing the vertical opportunity between the Famous Footwear and Brand Portfolio segments, with LifeStride, Dr. Scholl’s and Blowfish Malibu representing three of our top 15 best-selling brands during the quarter.

Gross Profit

Gross profit increased ~~$23.1~~$52.1 million, or ~~7.9%~~19.0%, to ~~$316.9~~$327.0 million for the ~~third~~first quarter of ~~2017,~~2022, compared to ~~$293.8~~$274.9 million for the ~~third~~first quarter of ~~2016,~~2021, reflecting higher net sales ~~volume, as described above,~~ and ~~an improved~~a higher gross profit rate. As a percentage of net sales, gross profit increased to ~~40.9%~~44.5% for the ~~third~~first quarter of ~~2017,~~2022, compared to ~~40.1%~~43.0% for the ~~third~~first quarter of ~~2016, primarily reflecting a higher consolidated~~2021, as strong consumer demand enabled more full-price selling and minimal promotional activity. The greater sales mix of retail versus wholesale sales and an improved mix of our higher margin brands. Retail and wholesale net sales were 71% and 29%, respectively, in the third quarter of 2017, compared to 69% and 31% in the third quarter of 2016.

Gross profit increased $74.2 million, or 9.3%, to $875.3 million for the nine months ended October 28, 2017, compared to $801.1 million for the nine months ended October 29, 2016, reflecting the above named factors. As a percentage of net sales, gross profit increased to 42.0% for the nine months ended October 28, 2017, compared to 41.3% for the nine months ended October 29, 2016, reflecting a higher consolidated mix of retail versus wholesale sales and growth in our higher margin brands ~~partially offset by amortization of~~and product categories within our Brand Portfolio segment also contributed to the inventory fair value adjustment in conjunction with the acquisition of Allen Edmonds of $4.9 million ($3.0 million on an after-tax basis, or $0.07 per diluted share). Retail and wholesale net sales were 70% and 30%, respectively, in the nine months ended October 28, 2017, compared to 68% and 32% in the nine months ended October 29, 2016.

gross margin improvement.

We classify certain warehousing, distribution, sourcing and other inventory procurement costs in selling and administrative expenses. Accordingly, our gross profit and selling and administrative expense rates, as a percentage of net sales, may not be comparable to other companies.

Selling and Administrative Expenses

Selling and administrative expenses increased ~~$25.7~~$17.3 million, or ~~10.8%~~7.1%, to ~~$264.0~~$260.8 million for the ~~third~~first quarter of ~~2017,~~2022, compared to ~~$238.3~~$243.5 million for the ~~third~~first quarter of ~~2016,~~2021. The increase primarily reflects higher salary and benefits expenses and cash and stock-based incentive compensation plan expenses driven by our strong financial results in the ~~recently acquired Allen Edmonds business and higher anticipated payments under~~quarter as well as our ~~cash-based incentive compensation plans.~~expectations for the full year. Our marketing expenses also increased as a result of tailoring our e-commerce marketing to the individual consumer in an effort to drive repeat purchases. As a percentage of net sales, selling and administrative expenses ~~increased~~decreased to ~~34.1%~~35.5% for the ~~third~~first quarter of ~~2017~~2022, from ~~32.5%~~38.1% for the ~~third~~first quarter of ~~2016.~~

~~Selling and administrative~~2021, reflecting better leveraging of expenses increased $77.0 million, or 11.2%, to $761.6 million for the nine months ended October 28, 2017, compared to $684.6 million for the nine months ended October 29, 2016, driven by the above named factors. As a percentage ofover higher net ~~sales, selling and administrative expenses increased to 36.5% for the nine months ended October 28, 2017 from 35.3% for the nine months ended October 29, 2016.~~

sales.

Restructuring and Other Special Charges, Net

~~Restructuring~~

We incurred restructuring and other special charges of ~~$4.0~~$13.5 million ($~~2.6~~11.9 million on an after-tax basis, or ~~$0.06~~$0.31 per diluted share)~~, primarily for professional fees and severance expense, were incurred in~~ during the ~~nine months ended October 28, 2017 related to the men's business. No restructuring charges were incurred in the third~~first quarter of ~~2017 or during~~2021, reflecting expenses associated with the ~~nine months ended October 29, 2016.~~strategic realignment of the Naturalizer retail store operations. Refer to Note 5 to the condensed consolidated financial statements for ~~additional information related to~~further discussion of these charges.

Operating Earnings

Operating earnings ~~decreased $2.6~~increased $48.3 million or~~4.7%,~~ to ~~$52.9~~$66.2 million for the~~third~~ first quarter of ~~2017,~~2022, compared to ~~$55.5~~$17.9 million for the~~third~~ first quarter of ~~2016. Although~~2021, primarily reflecting higher net sales and gross ~~profit were higher in the third quarter, higher selling and administrative expenses resulted in lower operating earnings.~~profit. As a percentage of net sales, operating earnings ~~decreased to6.8%~~were 9.0% for the~~third~~ first quarter of ~~2017,~~2022, compared to~~7.6%~~ 2.8% for the ~~third~~first quarter of ~~2016.~~

~~Operating earnings~~2021.

Interest Expense, Net

Interest expense, net decreased ~~$6.8~~$9.5 million, or ~~5.8%~~80.5%, to ~~$109.7~~$2.3 million for the ~~nine months ended October 28, 2017,~~first quarter of 2022, compared to ~~$116.5~~$11.8 million for the nine months ended October 29, 2016, reflecting the factors described above for the third quarter, as well as restructuring and other special charges incurred earlier in 2017. As a percentage of net sales, operating earnings decreased to 5.3% for the nine months ended October 28, 2017, compared to 6.0% for the nine months ended October 29, 2016.

~~Interest Expense~~

~~Interest expense increased $0.7 million, or 19.2%, to $4.2 million for the third~~first quarter of ~~2017, compared~~2021, primarily due to ~~$3.5~~the non-recurrence of the $6.4 million ~~for~~fair value adjustment to the ~~third~~Blowfish Malibu mandatory purchase obligation in the first quarter of ~~2016, reflecting higher interest expense~~2021. The purchase obligation was settled for $54.6 million on November 4, 2021. In addition, we redeemed our $200 million aggregate principal of senior notes in the second half of 2021. By retiring our senior notes, we shifted our higher-rate debt to the lower-rate borrowings under our revolving credit agreement, which ~~was used~~reduced our interest expense by approximately $3.1 million compared to ~~fund~~ the ~~acquisition of Allen Edmonds in the fourth~~first quarter of ~~2016. In addition, during the third quarter of 2016, we capitalized~~2021. These decreases were partially offset by an increase in interest ofexpense attributable to higher average borrowings under our revolving credit agreement.

Other Income, Net

Other income, net decreased $0.4 million, ~~associated with the expansion and modernization of our Lebanon, Tennessee distribution center, which was completed in the fourth quarter of 2016.~~

~~Interest expense increased $3.2 million,~~ or ~~30.8%~~10.6%, to ~~$13.8~~$3.4 million for the ~~nine months ended October 28, 2017,~~first quarter of 2022, compared to ~~$10.6~~$3.8 million for the ~~nine months ended October 29, 2016, reflecting~~first quarter of 2021, which reflects a reduction of certain components of net periodic benefit income. Refer to Note 13 of the ~~acquisition~~condensed consolidated financial statements for further detail regarding the components of Allen Edmonds. In addition, during the nine months ended October 29, 2016, we capitalized interest of $1.3 million associated with the expansion and modernization of our Lebanon, Tennessee distribution center.

net periodic benefit income.

Income Tax Provision

Our effective tax rate can vary considerably from period to period, depending on a number of factors. Our consolidated effective tax rate was ~~29.6%~~25.7% for the third quarter of 2017, compared to 33.6% for the third quarter of 2016. During the third quarter of 2017, we recognized discrete tax benefits of $0.9 million, reflecting greater deductibility of certain 2016 expenses than originally estimated. During the third quarter of 2016, we recognized a discrete tax benefit of $0.3 million reflecting the settlement of a federal tax audit issue. If these discrete tax benefits had not been recognized during the third quarter of 2017 and 2016, our effective tax rates would have been 31.5% and 34.1%, respectively. Excluding the discrete tax items, our tax rate is lower in the current period, reflecting a higher mix of international earnings in our lowest tax rate jurisdictions.

For the nine months ended October 28, 2017, our consolidated effective tax rate was 30.6%, compared to 32.3% for the nine months ended October 29, 2016. Discrete tax benefits of $2.0 million were recognized during the thirty-nine weeks ended October 28, 2017, including a discrete tax benefit of $1.2 million related to share-based compensation as a result of the adoption of ASU 2016-09 during the first quarter of ~~2017,~~2022, compared to 35.5% for the first quarter of 2021. The higher effective tax rate for the first quarter of 2021 primarily reflects the non-deductibility of losses at our Canadian division, which ~~requires prospective recognition of excess~~were driven by exit-related costs associated with Naturalizer retail stores. This impact on the tax benefits and deficiencies in the statement of earnings. We recognized a discrete tax benefit of $1.1 million during the nine months ended October 29, 2016, reflecting the settlement of a federal tax audit issue. If theserate was partially offset by discrete tax benefits had not been recognized during the nine months ended October 28, 2017 and October 29, 2016, our effective tax rates would have been 32.7% and 33.4%, respectively. Excluding the discrete tax items, our tax rate is lower for the nine months ended October 28, 2017, reflecting a higher mix of international earnings in our lowest tax rate jurisdictions.

~~Both the U.S. House of Representatives and the Senate have proposed tax reform legislation that could significantly alter the tax landscape~~totaling $1.2 million in the ~~United States. We cannot predict the tax reform legislation that will ultimately be enacted. Therefore, the impact on our future effective tax rate and income tax provision is uncertain.~~first quarter of 2021.

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Net Earnings Attributable to Caleres, Inc.

Net earnings attributable to Caleres, Inc. were ~~$34.4 million and $66.9~~$50.5 million for the ~~third~~first quarter ~~and nine months ended October 28, 2017,~~of April 30, 2022, compared to net earnings of ~~$34.7 million and $72.3~~$6.2 million for the ~~third~~first quarter ~~and nine months ended October 29, 2016,~~of 2021, as a result of the factors described above.

FAMOUS FOOTWEAR
Thirteen Weeks Ended Thirty-nine Weeks Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016
% of
Net Sales
% of
Net Sales
% of
Net Sales
% of
Net Sales
($ millions, except sales per square foot)
Operating Results

Net sales $ 473.1
100.0 % $ 467.8
100.0 % $ 1,244.5
100.0 % $ 1,222.5
100.0 %
Cost of goods sold 275.0
58.1 % 273.1
58.4 % 695.4
55.9 % 681.7
55.8 %
Gross profit 198.1
41.9 % 194.7
41.6 % 549.1
44.1 % 540.8
44.2 %
Selling and administrative expenses 164.4
34.8 % 162.0
34.6 % 470.0
37.7 % 459.7
37.6 %
Operating earnings $ 33.7
7.1 % $ 32.7
7.0 % $ 79.1
6.4 % $ 81.1
6.6 %

Key Metrics

Same-store sales % change 0.9 %
2.1 %
1.0 %
0.7 %
Same-store sales $ change $ 3.8

$ 9.3

$ 12.2

$ 8.7

Sales change from new and closed stores, net $ 1.0
$ 2.3
$ 9.6
$ 2.0

Impact of changes in Canadian exchange rate on sales $ 0.5
$ 0.0
$ 0.2
$ (0.3 )

Sales per square foot, excluding e-commerce (thirteen and thirty-nine weeks ended) $ 64
$ 63
$ 169
$ 167

Sales per square foot, excluding e-commerce (trailing twelve months) $ 217

$ 216

$ 217

$ 216

Square footage (thousand sq. ft.) 6,894

6,960

6,894

6,960

Stores opened 12

16

33

37

Stores closed (25 )
9

(46 )
32

Ending stores 1,042

1,051

1,042

1,051

FAMOUS FOOTWEAR


	Thirteen Weeks Ended
	April 30, 2022					May 1, 2021
				% of					% of
($ millions, except sales per square foot)				Net Sales					Net Sales
Net sales	$	384.5		100.0	%	$	398.1		100.0	%
Cost of goods sold		195.3		50.8	%		218.3		54.8	%
Gross profit		189.2		49.2	%	$	179.8		45.2	%
Selling and administrative expenses		139.5		36.3	%		131.9		33.2	%
Operating earnings	$	49.7		12.9	%	$	47.9		12.0	%

Key Metrics
Same-store sales % change		(4.0)	%				3.3	%
Same-store sales $ change	$	(15.6)				$	6.2
Sales change from new and closed stores, net	$	2.0				$	200.2
Impact of changes in Canadian exchange rate on sales	$	(0.0)				$	0.4

Sales per square foot, excluding e-commerce (thirteen weeks ended)	$	57				$	55
Sales per square foot, excluding e-commerce (trailing twelve months)	$	251				$	193
Square footage (thousand sq. ft.)		5,870					6,043

Stores opened		—					4
Stores closed		7					7
Ending stores		887					913

Net Sales

Net sales ~~increased $5.3~~of $384.5 million in the first quarter of 2022 decreased $13.6 million, or ~~1.1%~~3.4%, compared to ~~$473.1 million for~~ the ~~third~~first quarter of ~~2017, compared to $467.8 million for~~2021, primarily reflecting a lower store count. Consumer demand remained strong and the ~~third quarter of 2016. The increase was primarily driven by a 0.9% increase in same-store~~ sales and a strong back-to-school selling season. Famous Footwear experienced growth in e-commerce sales and reported improvement in the online conversion rate, due in part to the successful implementation of our buy online, pick up in store initiative. The strong e-commerce sales were partially offset by a decline in customer traffic at our retail store locations, due in part tomomentum from 2021 continued into 2022, despite the impact of ~~Hurricanes Harvey and Irma. As discussed~~lower government stimulus in the ~~Overview~~ ~~section, we estimate that these hurricanes negatively impacted~~current period. Athletics and casual continue to be our ~~net sales for~~top selling categories while the ~~third~~Caleres brands of LifeStride, Dr. Scholl’s and Blowfish Malibu were all in our top 15 best-selling brands. During the first quarter of ~~2017 by approximately $3 million. The segment experienced sales growth in lifestyle athletic and sport-influenced product. Sales of boots were lower in the third quarter of 2017, which~~2022, we ~~believe is due in part to unseasonably warm weather. During the third quarter of 2017, we opened 12 new stores and~~ closed 25seven stores, resulting in ~~1,042~~887 stores and total square footage of ~~6.9~~5.9 million at the end of the ~~third~~first quarter of ~~2017,~~2022, compared to ~~1,051~~913 stores and total square footage of ~~7.0~~6.0 million at the end of the ~~third~~first quarter of ~~2016. On a trailing twelve-month basis, sales per square foot, excluding e-commerce, increased 0.4%~~2021. Sales to ~~$217 for the twelve months ended October 28, 2017, compared to $216 for the twelve months ended October 29, 2016. Members~~members of ~~Rewards,~~ our customer loyalty program, Famously You Rewards ("Rewards"), continue to account for a majority of the segment’s sales, with approximately ~~76%~~79% of our net sales made to ~~Rewards~~ program members in the ~~third~~first quarter of ~~2017, consistent with~~2022, compared to 81% in the ~~third~~first quarter of ~~2016. In addition, we continue to experience growth in the number of our Rewards members.~~

~~Net sales~~2021.

Gross Profit

Gross profit increased ~~$22.0~~$9.4 million, or ~~1.8%~~5.2%, to ~~$1,244.5~~$189.2 million for the ~~nine months ended October 28, 2017,~~first quarter of 2022, compared to ~~$1,222.5~~$179.8 million for the ~~nine months ended October 29, 2016.~~first quarter of 2021, driven by a higher gross profit rate. As a percentage of net sales, our gross profit increased to 49.2% for the first quarter of 2022, compared to 45.2% for the first quarter of 2021. Our higher gross profit margin in the first quarter of 2022 was primarily due to more full price selling and a reduction in promotional activity driven by strong demand for our product assortment and disciplined inventory management.

Selling and Administrative Expenses

Selling and administrative expenses increased $7.6 million, or 5.8%, to $139.5 million for the first quarter of 2022, compared to $131.9 million for the first quarter of 2021. The increase was primarily due to higher salaries and benefits expenses and higher logistics costs. As a percentage of net sales, selling and administrative expenses increased to 36.3% for the first quarter of 2022, compared to 33.2% for the first quarter of 2021.

Operating Earnings

Operating earnings increased $1.8 million to $49.7 million for the first quarter of 2022, compared to $47.9 million for the first quarter of 2021. As a percentage of net sales, operating earnings were 12.9% for the first quarter of 2022, compared to 12.0% for the first quarter of 2021.

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BRAND PORTFOLIO


	Thirteen Weeks Ended
	April 30, 2022					May 1, 2021
				% of					% of
($ millions, except sales per square foot)				Net Sales					Net Sales
Net sales	$	365.7		100.0	%	$	250.3		100.0	%
Cost of goods sold		226.4		61.9	%		156.3		62.4	%
Gross profit		139.3		38.1	%		94.0		37.6	%
Selling and administrative expenses		98.0		26.8	%		83.3		33.3	%
Restructuring and other special charges, net		—		—	%		13.5		5.4	%
Operating earnings (loss)	$	41.3		11.3	%	$	(2.8)		(1.1)	%

Key Metrics
Direct-to-consumer (% of net sales) ⁽¹⁾		26	%				31	%
Change in wholesale net sales ($)	$	104.2				$	14.9
Unfilled order position at end of period	$	401.5				$	264.5

Same-store sales % change		66.0	%				5.1	%
Same-store sales $ change	$	17.9				$	1.3
Sales change from new and closed stores, net	$	(6.7)				$	16.5
Impact of changes in Canadian exchange rate on retail sales	$	(0.0)				$	0.4

Sales per square foot, excluding e-commerce (thirteen weeks ended)	$	269				$	188
Sales per square foot, excluding e-commerce (trailing twelve months)	$	987				$	336
Square footage (thousands sq. ft.)		108					138

Stores opened		1					1
Stores closed		4					76
Ending stores		83					95

(1)	Direct-to-consumer includes sales of our retail stores and e-commerce sites and sales through our customers’ websites that we fulfill on a drop-ship basis.

Net Sales

Our Brand Portfolio segment achieved record-setting first quarter net sales of $365.7 million in the first quarter of 2022, driven by our strong product design, diverse and targeted assortments, and our strategic approach to inventory management. While the net sales increase of $115.4 million, or 46.1%, compared to the first quarter of 2021, was broad-based across all of our brands, our Sam Edelman, LifeStride, Naturalizer, Blowfish Malibu, Allen Edmonds and Vionic brands were the most significant contributors. We experienced strong growth in the dress, occasion and wear-to-work footwear categories for many of our brands, including Sam Edelman, Naturalizer, LifeStride and Allen Edmonds. Our sport-inspired and casual footwear categories also resonated strongly with our customers during the quarter. In addition, our net sales benefited as our retail partners sought to replenish their inventories during the first quarter of 2022. The incremental sales from inventory replenishment is expected to moderate as we move through fiscal 2022 as our partners return to more normal buying and replenishment patterns. During the first quarter of 2022, we closed four stores and opened one store, resulting in a ~~1.0%~~total of 83 stores and total square footage of 0.1 million at the end of the first quarter of 2022, compared to 95 stores and total square footage of 0.1 million at the end of the first quarter of 2021.

In the first quarter of 2021, we permanently closed the remaining 73 Naturalizer stores in North America that were scheduled for closure as part of our strategic realignment of the Naturalizer retail store operations. We continue to focus on growing the brand’s e-commerce business through naturalizer.com, our retail partners and their websites, and the two flagship stores in the United States. On a trailing twelve-month basis, sales per square foot, excluding e-commerce sales, increased to $987 for the twelve months ended April 30, 2022, compared to $336 for the twelve months ended May 1, 2021. With the closure of nearly all of our Naturalizer retail stores, the majority of our Brand Portfolio segment stores are for our Allen Edmonds brand, which have higher retail price points than the Naturalizer brand.

Our unfilled order position for our wholesale sales increased $137.0 million, or 51.8 %, to $401.5 million at April 30, 2022, compared to $264.5 million at May 1, 2021. The increase in same-store sales and a net increase in sales from new and closed stores. Famous Footwear experienced solid growth in e-commerce sales, and reported improvement in both conversion rate and online customer traffic. However, the strong e-commerce sales were offset by a decline in customer traffic at our ~~retail store locations.~~

backlog order levels primarily reflects higher consumer demand.

Gross Profit

Gross profit increased ~~$3.4~~$45.3 million, or ~~1.8%~~48.2%, to ~~$198.1~~$139.3 million for the ~~third~~first quarter of ~~2017,~~2022, compared to ~~$194.7~~$94.0 million for the ~~third~~first quarter of ~~2016,~~2021, reflecting ~~both~~ higher net sales and gross profit rate. As a percentage of net sales, our gross profit increased to ~~41.9%~~38.1% for the ~~third~~first quarter

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of 2022, compared to 37.6% for the first quarter of ~~2017, compared to 41.6% for the third quarter of 2016.~~

Gross profit increased $8.3 million, or 1.5%, to $549.1 million for the nine months ended October 28, 2017, compared to $540.8 million for the nine months ended October 29, 2016 primarily driven by higher net sales. As a percentage of net sales,2021. The increase in our gross profit margin was ~~44.1% for~~driven by an improved mix of higher margin brands and product categories and a less promotional retail environment. While we have experienced inflationary pressures related to product costs and inbound freight through the ~~nine months ended October 28, 2017, compared~~first quarter, we have been able to ~~44.2% for~~successfully offset these impacts through price increases. We anticipate the ~~nine months ended October 29, 2016.~~

inflationary pressures to continue throughout 2022 and will continue to focus on mitigating the impact of these costs.

Selling and Administrative Expenses

Selling and administrative expenses increased ~~$2.4~~$14.7 million, or ~~1.5%~~17.5%, to ~~$164.4~~$98.0 million for the ~~third~~first quarter of ~~2017,~~2022, compared to ~~$162.0~~$83.3 million for the ~~third~~first quarter of ~~2016.~~2021. The increase was ~~primarily~~ driven by higher salaries and benefits expenses ~~related to cash-based incentive compensation~~ and higher ~~facilities costs.~~marketing expenses. As a percentage of net sales, selling and administrative expenses ~~increased~~decreased to ~~34.8%~~26.8% for the ~~third~~first quarter of ~~2017,~~2022, compared to ~~34.6%~~33.3% for the ~~third~~first quarter of ~~2016.~~

~~Selling and administrative~~2021, reflecting better leveraging of expenses increased $10.3 million, or 2.2%, to $470.0 million for the nine months ended October 28, 2017, compared to $459.7 million for the nine months ended October 29, 2016. The increase was primarily attributable to higher store rent and facilities costs and higher expenses related to cash-based incentive compensation. Asover a ~~percentage of net sales, selling and administrative expenses increased to 37.7% for the nine months ended October 28, 2017, compared to 37.6% for the nine months ended October 29, 2016.~~

~~Operating Earnings~~

~~Operating earnings increased $1.0 million, or3.2%, to $33.7 million for thethird quarter of 2017, compared to $32.7 million for the~~third quarter of 2016. The increase reflects our net sales growth and a higher gross profit rate, partially offset by higher selling and administrative expenses. As a percentage of net sales, operating earnings increasedto~~7.1% for thethird quarter of 2017, comparedto 7.0% for thethird quarter of 2016.~~

Operating earnings decreased $2.0 million, or 2.4%, to $79.1 million for the nine months ended October 28, 2017, compared to $81.1 million for the nine months ended October 29, 2016. The decrease reflects higher selling and administrative expenses and a slight decline in gross profit rate, partially offset by higher net sales. As a percentage of net sales, operating earnings decreased to 6.4% for the nine months ended October 28, 2017, compared to 6.6% for the nine months ended October 29, 2016.

BRAND PORTFOLIO
Thirteen Weeks Ended Thirty-nine Weeks Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016

% of
Net Sales

% of
Net Sales

% of
Net Sales

% of
Net Sales

($ millions, except sales per square foot)
Operating Results

Net sales $ 301.5
100.0 % $ 264.4
100.0 % $ 838.6
100.0 % $ 717.4
100.0 %
Cost of goods sold 182.7
60.6 % 165.3
62.5 % 512.4
61.1 % 457.1
63.7 %
Gross profit 118.8
39.4 % 99.1
37.5 % 326.2
38.9 % 260.3
36.3 %
Selling and administrative expenses 94.5
31.3 % 68.6
26.0 % 271.2
32.3 % 202.8
28.3 %
Restructuring and other special charges, net —
— % —
— % 1.5
0.2 % —
— %
Operating earnings $ 24.3
8.1 % $ 30.5
11.5 % $ 53.5
6.4 % $ 57.5
8.0 %

Key Metrics

Wholesale/retail sales mix (%) ⁽¹⁾
75%/25%

86%/14%

75%/25%

86%/14%

Change in wholesale net sales ($) ⁽¹⁾
$ (0.6 ) $ (8.9 ) $ 7.7
$ (39.3 )
Unfilled order position at end of period ⁽¹⁾
$ 302.4
$ 315.2

Same-store sales % change ⁽²⁾
2.4 % (5.4 )% 6.7 % (5.2 )%
Same-store sales $ change ⁽²⁾
$ 0.8
$ (1.8 ) $ 5.8
$ (4.6 )
Sales change from new and closed stores, net ⁽³⁾
$ 36.3
$ 2.6
$ 107.4
$ 5.6

Impact of changes in Canadian exchange rate on retail sales $ 0.6
$ 0.0
$ 0.3
$ (1.0 )

Sales per square foot, excluding e-commerce (thirteen and thirty-nine weeks ended) ⁽²⁾
$ 87
$ 84
$ 245
$ 236

Sales per square foot, excluding e-commerce (trailing twelve months) ⁽²⁾
$ 323
$ 316
$ 323
$ 316

Square footage (thousands sq. ft.) ⁽³⁾
403
306
403
306

Stores opened ⁽³⁾
3
2
11
7

Stores closed ⁽³⁾
(6 ) 2
(12 ) 5

Ending stores⁽³⁾
235
167
235
167


~~(1)~~	~~These metrics include our recently acquired Allen Edmonds business. Refer to Note 3 to the condensed consolidated financial statements for additional information.~~


~~(2)~~	~~These metrics exclude our recently acquired Allen Edmonds business since the business was not included in our operations in the prior year comparative period.~~


~~(3)~~	~~These metrics for the third quarter and nine months ended October 28, 2017 include our recently acquired Allen Edmonds retail stores, which total approximately 121,000 square feet.~~

~~Net Sales~~

~~Net sales increased $37.1 million, or14.0%, to $301.5 million for thethird quarter of 2017, compared to $264.4 million forthe third quarter of 2016, driven by $44.1 million in sales from our recently acquired Allen Edmonds business. In addition, we experienced~~ higher net sales of our Sam Edelman and Naturalizer brands, partially offset by lower sales from our Franco Sarto and Via Spiga brands. Our sales were negatively impacted by unseasonably warm weather, which resulted in lower sales of boots during the third quarter of 2017. Our same-store sales, which exclude the impact of Allen Edmonds stores because they have not been part of the Company for 13 months, increased 2.4% during the quarter. During the third quarter of 2017, we opened three stores and closed six stores, resulting in a total of 235 stores (of which 77 are Allen Edmonds) and total square footage of 0.4 million at the end of the third quarter of 2017, compared to 167 stores and total square footage of 0.3 million at the end of the third quarter of 2016. On a trailing twelve-month basis, sales per square foot, excluding e-commerce and sales from our Allen Edmonds stores, increased 2.1% to $323 for the twelve months ended October 28, 2017, compared to $316 for the twelve months ended October 29, 2016.

Net sales increased $121.2 million, or 16.9%, to $838.6 million for the nine months ended October 28, 2017, compared to $717.4 million for the nine months ended October 29, 2016, driven by $128.3 million in sales from our Allen Edmonds business and sales growth from our Sam Edelman and Vince brands, partially offset by lower sales from our Franco Sarto, Via Spiga and Dr. Scholl's brands. Our retail sales benefited from a net increase in sales from our acquisition of Allen Edmonds and an increase in same-store sales of 6.7%. During the nine months ended October 28, 2017, we opened 11 stores and closed 12 stores.

~~Gross Profit~~

Gross profit increased $19.7 million, or 19.9%, to $118.8 million for the third quarter of 2017, compared to $99.1 million for the third quarter of 2016, primarily as a result of the recently acquired Allen Edmonds business. As a percentage of net sales, our gross profit increased to 39.4% for the third quarter of 2017, compared to 37.5% for the third quarter of 2016. Our gross profit rate for the third quarter of 2017 benefited from the higher mix of retail versus wholesale sales and growth in our higher margin brands.

Gross profit increased $65.9 million, or 25.3%, to $326.2 million for the nine months ended October 28, 2017, compared to $260.3 million for the nine months ended October 29, 2016, primarily as a result of the recently acquired Allen Edmonds business. The Brand Portfolio segment recognized $4.9 million ($3.0 million on an after-tax basis, or $0.07 per diluted share) in cost of goods sold for the nine months ended October 28, 2017 related to the amortization of the Allen Edmonds inventory fair value adjustment required for purchase accounting. As a percentage of net sales, our gross profit rate increased to 38.9% for the nine months ended October 28, 2017, compared to 36.3% for the nine months ended October 29, 2016, reflecting the above named factors.

~~Selling and Administrative Expenses~~

Selling and administrative expenses increased $25.9 million, or 37.7%, to $94.5 million for the third quarter of 2017, compared to $68.6 million for the third quarter of 2016, primarily due to costs associated with the recently acquired Allen Edmonds business and additional costs associated with investments in our fulfillment program and distribution centers. As a percentage of net sales, selling and administrative expenses increased to 31.3% for the third quarter of 2017, compared to 26.0% for the third quarter of 2016.

Selling and administrative expenses increased $68.4 million, or 33.7%, to $271.2 million for the nine months ended October 28, 2017, compared to $202.8 million for the nine months ended October 29, 2016, driven by costs associated with the recently acquired Allen Edmonds business, an increase in anticipated payments under our cash-based incentive compensation plans and additional costs associated with investments in our fulfillment program and distribution centers. As a percentage of net sales, selling and administrative expenses increased to 32.3% for the nine months ended October 28, 2017, compared to 28.3% for the nine months ended October 29, 2016.

base.

Restructuring and Other Special Charges, Net

~~Restructuring and other special charges were $1.5 million in the nine months ended October 28, 2017 related to the integration and reorganization of our men's business. No~~

We incurred restructuring and other special charges ~~were incurred in~~of $13.5 million during the ~~third~~first quarter of ~~2017 or~~2021 for expenses associated with the strategic realignment of our Naturalizer retail store operations. These costs primarily represented lease termination and other store closure costs, including employee severance, for the 73 stores that were closed during the ~~nine months ended October 29, 2016.~~first quarter of 2021. Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.

There were no corresponding charges during the first quarter of 2022.

Operating Earnings

(Loss)

Operating earnings ~~decreased $6.2 million~~, ~~or 20.3%~~, increased to ~~$24.3~~$41.3 million for the~~third~~ first quarter of ~~2017,~~2022, compared to ~~$30.5~~an operating loss of $2.8 million for the~~third~~ first quarter of ~~2016. Despite net sales growth and expansion in our gross profit rate, higher selling and administrative expenses resulted in lower operating earnings.~~2021, as a result of the factors described above. As a percentage of net sales, operating earnings ~~decreased to8.1%~~were 11.3% for the~~third~~ first quarter of ~~2017,~~2022, compared to~~11.5%~~ an operating loss of 1.1% in the~~third~~ first quarter of ~~2016.~~

Operating earnings decreased $4.0 million, or 7.0%, to $53.5 million for the nine months ended October 28, 2017, compared to $57.5 million for nine months ended October 29, 2016, driven by the above named factors. As a percentage of net sales, operating earnings decreased to 6.4% for the nine months ended October 28, 2017, compared to 8.0% for the nine months ended October 29, 2016.

2021.

~~OTHER~~

ELIMINATIONS AND OTHER


	Thirteen Weeks Ended
	April 30, 2022				May 1, 2021
			% of				% of
($ millions)			Net Sales				Net Sales
Net sales	$	(15.1)	100.0	%	$	(9.8)	100.0	%
Cost of goods sold		(13.6)	89.8	%		(10.9)	110.9	%
Gross profit		(1.5)	10.2	%		1.1	(10.9)	%
Selling and administrative expenses		23.3	(154.0)	%		28.3	(289.0)	%
Operating loss	$	(24.8)	164.2	%	$	(27.2)	278.1	%

The Eliminations and Other category includes the elimination of intersegment sales and profit, unallocated corporate administrative expenses, and other costs and recoveries. ~~Costs~~

The net sales elimination of ~~$5.2 million were incurred for the third quarter of 2017, compared to $7.7~~$15.1 million for the ~~third~~first quarter of ~~2016, primarily~~2022 is $5.3 million, or 54.8%, higher than the first quarter of 2021, reflecting ~~lower expenses related~~an increase in product sold from our Brand Portfolio segment to ~~our cash-based incentive plans.~~

~~Unallocated corporate~~Famous Footwear.

Selling and administrative expenses ~~and other costs and recoveries were $23.0~~decreased $5.0 million, to $23.3 million in the first quarter of 2022, compared to $28.3 million for the ~~nine months ended October 28, 2017,~~first quarter of 2021. The decrease primarily reflects lower expenses for certain employee benefits and lower expenses associated with our cash-based director compensation plans, reflecting a decrease in our stock price during the first quarter of 2022, compared to ~~$22.1~~an increase in the first quarter of 2021.

LIQUIDITY AND CAPITAL RESOURCES

Borrowings


($ millions)	April 30, 2022		May 1, 2021		⁽¹⁾	January 29, 2022
Borrowings under revolving credit agreement	$	305.0	$	200.0		$	290.0
Long-term debt		—		199.0			—
Total debt	$	305.0	$	399.0		$	290.0

Table of Contents

(1)

As presented here, total debt as of May 1, 2021 excludes the Blowfish Malibu mandatory purchase obligation, which was valued at $45.5 million. The mandatory purchase obligation of $54.6 million was paid on November 4, 2021, as further discussed in Note 14 to the condensed consolidated financial statements.

Total debt obligations of $305.0 million at April 30, 2022 decreased $94.0 million, from $399.0 million at May 1, 2021, and increased $15.0 million, from $290.0 million at January 29, 2022. The decrease from May 1, 2021 reflects continued progress toward reducing our debt levels using our strong cash generation over the last twelve months. In August 2021, we redeemed $100.0 million aggregate principal amount of our senior notes and on January 3, 2022, we redeemed the remaining $100.0 million of senior notes. We shifted this higher interest rate debt to borrowings under the revolving credit facility, which is expected to result in net interest expense savings on an ongoing basis. The increase in total debt from January 29, 2022 is due primarily to higher inventory purchases during the quarter to satisfy the stronger consumer demand. Net interest expense for the first quarter of 2022 decreased $9.5 million to $2.3 million, compared to $11.8 million for the ~~nine months ended October 29, 2016.~~first quarter of 2021. The ~~increase~~decrease is primarily ~~reflects $2.5~~attributable to the non-recurrence of the $6.4 million fair value adjustment to the Blowfish Malibu mandatory purchase obligation recorded in the first quarter of ~~restructuring costs for the integration and reorganization~~2021. The Blowfish Malibu mandatory purchase obligation of ~~our men's brands,~~$54.6 million was paid on November 4, 2021, as further discussed in Note 5 and Note 14 to the condensed consolidated financial statements.

~~LIQUIDITY AND CAPITAL RESOURCES~~

~~Borrowings~~

($ millions) October 28, 2017
October 29, 2016
January 28, 2017
Borrowings under revolving credit agreement $ 20.0
$ —
$ 110.0
Long-term debt 197.3
196.9
197.0
Total debt $ 217.3
$ 196.9
$ 307.0

~~Total debt obligations~~ In addition, as discussed above, the redemption of ~~$217.3 million at October 28, 2017 increased $20.4 million, compared~~all outstanding senior notes in 2021 also contributed to ~~$196.9 million at October 29, 2016, primarily due to higher borrowings under our revolving credit agreement, which we used to fund~~ the ~~acquisition of Allen Edmonds~~decrease in interest expense in the ~~fourth~~first quarter of 2016. Total debt obligations decreased $89.7 million, compared to $307.0 million at January 28, 2017, as we paid down an incremental $90.0 million of our borrowings during the nine months ended October 28, 2017. Interest expense for the third quarter of 2017 increased $0.7 million to $4.2 million, compared to $3.5 million for the third quarter of 2016, and increased $3.2 million to $13.8 million for the nine months ended October 28, 2017, compared to $10.6 million for the nine months ended October 29, 2016. The increases2022. These decreases were ~~attributable to~~partially offset by higher average borrowings under our revolving credit ~~agreement due~~agreement.

Credit Agreement

As further discussed in Note 10 to the ~~acquisition of Allen Edmonds in~~condensed consolidated financial statements, the fourth quarter of 2016. In addition, during the third quarter and nine months ended October 29, 2016, we capitalized interest of $0.4 million and $1.3 million, respectively, associated with the expansion and modernization of our Lebanon, Tennessee distribution center that was completed in the fourth quarter of 2016.

~~Credit Agreement~~

~~The~~ Company maintains a revolving credit facility for working capital ~~needs in~~needs. On October 5, 2021, we entered into a Fifth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the “Credit Agreement”) which, among other modifications, extended the maturity date of the credit facility from January 18, 2024, to October 5, 2026 and decreased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to ~~$600.0~~$500.0 million, ~~with the option~~subject to ~~increase~~borrowing base restrictions, and may be further increased by up to ~~$150.0~~$250.0 million. On December 18, 2014, the Company and certain of its subsidiaries (the “Loan Parties”) entered into a Fourth Amended and Restated Credit Agreement, which was further amended on July 20, 2015 to release all of the Company’s subsidiaries that were borrowers under or that guaranteed the Credit Agreement other than Sidney Rich Associates, Inc. and BG Retail, LLC (as so amended, the “Credit Agreement”). On December 13, 2016, Allen Edmonds was joined to the Credit Agreement as a guarantor. After giving effect to the joinder, the Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC and Allen Edmonds are each co-borrowers and guarantors under the Credit Agreement. The Credit Agreement matures on December 18, 2019.

Borrowing availability under the Credit Agreement is limited to the lesser of the total commitments and the borrowing base ("Loan Cap"), which is based on stated percentages of the sum of eligible accounts receivable, eligible inventory and eligible credit card receivables, as defined, less applicable reserves. Under the Credit Agreement, the Loan Parties’ obligations are secured by a first-priority security interest in all accounts receivable, inventory and certain other collateral.

Interest on the borrowings is at variable rates based on the London Interbank Offered Rate ~~(“LIBOR”~~("LIBOR") (with a floor of 0.0%), or the prime rate as(as defined in the Credit ~~Agreement,~~Agreement), plus a spread. The ~~interest~~Credit Agreement decreased the spread applied to the LIBOR or prime rate ~~and fees for letters~~by a total of credit vary based upon the level of excess availability under the Credit Agreement. There is an unused line fee payable on the unused portion under the facility and a letter of credit fee payable on the outstanding face amount under letters of credit.

75 basis points. At ~~October 28, 2017,~~April 30, 2022, we had ~~$20.0~~$305.0 million in borrowings and ~~$8.9~~$10.8 million in letters of credit outstanding under the Credit Agreement. Total borrowing availability was ~~$514.0~~$184.2 million at ~~October 28, 2017.~~April 30, 2022. We were in compliance with all covenants and restrictions under the Credit Agreement as of ~~October 28, 2017.~~

~~$200 Million~~ April 30, 2022.

Senior Notes

On July 27, 2015, we issued $200.0 million aggregate principal amount of ~~Senior Notes~~senior notes due in 2023 (the ~~"2023 Senior~~"Senior Notes") ~~in a private placement. On October 22, 2015, we commenced an offer to exchange our 2023~~. The Senior Notes outstanding for substantially identical debt securities registered under the Securities Act of 1933. The exchange offer was completed on November 23, 2015 and did not affect the amount of our indebtedness outstanding.

~~The 2023 Senior Notes are~~were guaranteed on a senior unsecured basis by each of the subsidiaries of Caleres, Inc. that is an obligor under the Credit Agreement, and ~~bear~~bore interest atof 6.25%, which iswas payable on February 15 and August 15 of each ~~year beginning on February 15, 2016. The 2023 Senior Notes mature on~~year. On August ~~15, 2023. Prior to August 15, 2018,~~16, 2021, we ~~may redeem some or all~~redeemed $100.0 million of the ~~2023~~ Senior Notes at ~~various redemption prices.~~

~~The 2023~~100.0%. In addition, on January 3, 2022, we redeemed the remaining $100.0 million of Senior Notes ~~also contain covenants and restrictions that limit certain activities including, among other things, levels of indebtedness, payments of dividends,~~at 100.0%. Refer to further discussion regarding the ~~guarantee or pledge of assets, certain investments, common stock repurchases, mergers and acquisitions and sales of assets. As of~~ ~~October 28, 2017, we were~~Senior Notes in ~~compliance with all covenants and restrictions relating~~Note 10 to the ~~2023 Senior Notes.~~

condensed consolidated financial statements.

Working Capital and Cash Flow


	Thirteen Weeks Ended
($ millions)	April 30, 2022		May 1, 2021		Change
Net cash provided by operating activities	$	19.7	$	70.3	$	(50.6)
Net cash used for investing activities		(11.7)		(3.9)		(7.8)
Net cash used for provided by financing activities		(4.4)		(56.6)		52.2
Effect of exchange rate changes on cash and cash equivalents		(0.0)		0.1		(0.1)
Increase in cash and cash equivalents	$	3.6	$	9.9	$	(6.3)

Table of Contents

the ~~impact~~settlement of the ~~Allen Edmonds acquisition~~Blowfish Malibu mandatory purchase obligation in the fourth quarter of 2016, which was funded with borrowings under our revolving credit agreement. A significant portion of the Allen Edmonds purchase price was allocated to intangible assets, which are noncurrent, while the entire purchase price was funded using current liabilities.2021. The increase in operating working capital ~~and the current ratio~~ from January ~~28, 2017 was~~29, 2022 primarily ~~due to lower borrowings under our revolving credit agreement and lower payables,~~reflects higher inventories, partially offset by ~~lower cash~~higher trade payables. Our current ratio was 0.87 to 1 as of April 30, 2022, consistent with May 1, 2021, and ~~cash equivalents.~~0.82:1 at January 29, 2022. Our debt-to-capital ratio was ~~24.4%~~46.0% as of ~~October 28, 2017,~~April 30, 2022, compared to ~~23.3%~~65.9% as of ~~October 29, 2016~~May 1, 2021 and ~~33.3%~~47.3% at January ~~28, 2017. The increase in our debt-to-capital ratio from October~~ 29, ~~2016 primarily reflects higher borrowings under our revolving credit agreement.~~2022. The decrease in our debt-to-capital ratio from May 1, 2021 and January ~~28, 2017~~29, 2022 primarily reflects ~~lower borrowings under our revolving credit agreement.~~

~~At October 28, 2017, we had $31.4 million of cash and cash equivalents. Approximately half of this balance represents~~ the ~~accumulated unremitted earnings~~extinguishment of our ~~foreign subsidiaries, which are considered indefinitely reinvested.~~

senior notes and higher equity attributable to our strong financial results.

We declared and paid dividends of~~$0.07~~ $0.07 per share in ~~both~~ the ~~third~~first quarter of ~~2017~~both 2022 and ~~2016.~~2021. The declaration and payment of any future dividend is at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors. However, we presently expect that dividends will continue to be paid.

~~CONTRACTUAL OBLIGATIONS~~

~~Our~~

We have various contractual or other obligations, ~~primarily consist of purchase obligations, operating lease commitments, long-term debt, interest on long-term debt, minimum license commitments, financial instruments,~~including borrowings under our revolving credit ~~agreement,~~facility, operating lease commitments, one-time transition tax for the mandatory deemed repatriation of cumulative foreign earnings and obligations for our supplemental executive retirement plan and other postretirement ~~benefits and obligations.~~

During the third quarter of 2017, the Company signed a lease for a new wholesale distribution center in California. The lease term is 10 years and requires aggregate minimum lease payments of approximately $3.4 million in 2018, $10.2 million in 2019-2020, $10.7 million in 2021-2022 and $28.6 million thereafter.

~~Except for changes within the normal course of business (primarily changes in~~benefits. We also have purchase obligations ~~which fluctuate throughout~~to purchase inventory, assets and other goods and services. We believe our operating cash flows are sufficient to meet our material cash requirements for at least the year as a result of the seasonal nature of our operations, borrowings under and repayments of our revolving credit agreement and changes in operating lease commitments as a result of new stores, store closures and lease renewals) and the lease described above, there have been no other significant changes to our contractual obligations identified in our Annual Report on Form 10-K for the year ended January 28, 2017.

next 12 months.

~~CRITICAL ACCOUNTING POLICIES AND ESTIMATES~~

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

No material changes have occurred related to critical accounting policies and estimates since the end of the most recent fiscal year. For further information on the Company’s critical accounting policies and estimates, see Part II, Item 7 of our Annual Report on Form 10-K for the year ended January ~~28, 2017.~~

~~RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS~~

29, 2022.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Recently issued accounting pronouncements and their impact on the Company are described in Note 2 to the condensed consolidated financial statements.

~~FORWARD-LOOKING STATEMENTS~~

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain forward-looking statements and expectations regarding the Company’s future performance and the performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) supply chain disruptions and inflationary pressures; (ii) the coronavirus pandemic and its adverse impact on our business operations and financial condition; (iii) changing consumer demands, which may be influenced by ~~consumers' disposable income, which in turn can be influenced by~~ general economic ~~conditions; (ii)~~conditions and other factors; (iv) rapidly changing ~~fashion trends~~consumer preferences and purchasing ~~patterns; (iii)~~patterns and fashion trends; (v) customer concentration and increased consolidation in the retail industry; (vi) intense competition within the footwear industry; ~~(iv)~~(vii) foreign currency fluctuations; (viii) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the Company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; ~~(v) the ability to accurately forecast sales and manage inventory levels; (vi)~~(ix) cybersecurity threats or other major disruption to the Company’s information technology systems; ~~(vii) transitional challenges with acquisitions; (viii) customer concentration~~(x) the ability to accurately forecast sales and ~~increased consolidation in the retail industry; (ix)~~manage inventory levels; (xi) a disruption in the Company’s distribution centers; ~~(x)~~(xii) the ability to recruit and retain senior management and other key associates; ~~(xi) foreign currency fluctuations; (xii) compliance with applicable laws and standards with respect to labor, trade and product safety issues;~~ (xiii) the ability to secure/exit leases on favorable terms; (xiv) the ability to maintain relationships with current suppliers; (xv) transitional challenges with acquisitions and divestitures; (xvi) changes to tax laws, policies and treaties; (xvii) compliance with applicable laws and standards with respect to labor, trade and product safety issues; and (xviii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property ~~rights; and (xvi) changes to tax laws, policies and treaties.~~rights. The ~~Company's~~Company’s reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended January ~~28, 2017,~~29, 2022, which information is incorporated by reference herein and updated by the Company’s Quarterly Reports on Form 10-Q. The Company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.



~~ITEM 3~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No material changes have taken place in the quantitative and qualitative information about market risk since the end of the most recent fiscal year. For further information, see Part II, Item 7A of the ~~Company's~~Company’s Annual Report on Form 10-K for the year ended January ~~28, 2017.~~ 29, 2022.

Table of Contents



~~ITEM 2~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information relating to our repurchases of common stock during the ~~third~~first quarter of ~~2017:~~

2022:


				Total Number	Maximum Number
				Purchased as Part	of Shares that May
	Total Number of			of Publicly	Yet be Purchased
	Shares	Average Price Paid		Announced	Under the
Fiscal Period	Purchased⁽¹⁾		per Share ⁽¹⁾	Program ⁽²⁾	Program ⁽²⁾
January 30, 2022 - February 26, 2022	—	$	—	—	1,990,224

February 27, 2022 - April 2, 2022	424,662		20.37	250,000	8,740,224

April 3, 2022 - April 30, 2022	451,324		21.32	451,324	8,288,900

Total	875,986	$	20.86	701,324	8,288,900

Maximum Number of Shares that May Yet be Purchased Under the Program ⁽²⁾

Total Number Purchased as Part of Publicly Announced Program ⁽²⁾

Total Number of Shares Purchased ⁽¹⁾

Average Price Paid per Share ⁽¹⁾

Fiscal Period

July 30, 2017 – August 26, 2017 —
$ —
—
1,223,500

August 27, 2017 – September 30, 2017 2,118
30.65
—
1,223,500

October 1, 2017 – October 28, 2017 —
—
—
1,223,500

Total 2,118
$ 30.65
—
1,223,500

(1)

~~Reflects~~Includes shares purchased as part of our publicly announced stock repurchase programs and shares that were tendered by employees related to certain share-based awards. ~~These~~The employee shares were tendered in satisfaction of the exercise price of stock options and/or to satisfy ~~minimum~~ tax withholding amounts for non-qualified stock options, restricted stock and stock performance awards. ~~Accordingly, these share purchases are not considered a part of our publicly announced stock repurchase program.~~

(2)

On ~~August 25, 2011,~~September 2, 2019, the Board of Directors approved a stock repurchase program ("2019 Program") authorizing the repurchase of ~~up to 2,500,000~~5,000,000 shares of our outstanding common stock. In addition, on March 10, 2022, the Board of Directors approved a stock repurchase program ("2022 Program") authorizing the repurchase of an additional 7,000,000 shares of our outstanding common stock. We can use the repurchase ~~program~~programs to repurchase shares on the open market or in private transactions from time to time, depending on market conditions. The repurchase ~~program does~~programs do not have an expiration date. ~~Under this plan, 225,000 and 900,000~~During the thirteen weeks ended April 30, 2022, the Company repurchased 701,324 shares ~~were repurchased~~under these programs. The Company did not repurchase any shares under these programs during the ~~nine months~~thirteen weeks ended May 1, 2021. As of April 30, 2022, there were 8,288,900 shares authorized to be repurchased under the repurchase programs. Our repurchases of common stock are limited under our debt agreements.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 OTHER INFORMATION

None.



~~[X]~~ ☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended ~~October 28, 2017~~ April 30, 2022

~~[ ]~~ ☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to _____________



CALERES, ~~INC.~~ INC.
(Exact name of registrant as specified in its charter)

New York	43-0197190
(State or other jurisdiction ~~of incorporation or organization)~~	~~43-0197190~~ (IRS Employer Identification Number)
of incorporation or organization)

8300 Maryland Avenue	63105
St. Louis, Missouri	(Zip Code)
(Address of principal executive offices)	~~63105~~ ~~(Zip Code)~~
~~(314)~~
(314) 854-4000
(~~Registrant's~~Registrant’s telephone number, including area code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - par value of $0.01 per share	CAL	New York Stock Exchange



Large accelerated filer þ ☑	Accelerated filer ¨ ☐
Non-accelerated filer ¨ ~~(Do not check if a smaller reporting company)~~ ☐	Smaller reporting company ¨ ☐
	Emerging growth company ¨ ☐


PART I		Page
~~PART I~~ Item 1	Financial Statements	~~Page~~ 3
~~Item 1~~	~~Financial Statements~~	3
Item 2	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	33 25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	44 33
Item 4	Controls and Procedures	44 34

PART II		34
Item 1	Legal Proceedings	45 34
Item 1A	Risk Factors	45 34
Item 2	Unregistered ~~Sale~~Sales of Equity Securities and Use of Proceeds	45 35
Item 3	Defaults Upon Senior ~~Notes~~Securities	46 35
Item 4	Mine Safety Disclosures	46 35
Item 5	Other Information	46 35
Item 6	Exhibits	47
	~~Signature~~	48



CALERES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	(Unaudited)
	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
($ thousands)	October 28, 2017			October 29, 2016			October 28, 2017		October 29, 2016
Net earnings	$	34,373		$	34,726		$	66,931	$	72,282
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(633		)	(545		)	647		961
Pension and other postretirement benefits adjustments	379			(289		)	1,106		(865		)
Derivative financial instruments	183			(101		)	559		(542		)
Other comprehensive (loss) income, net of tax	(71		)	(935		)	2,312		(446		)
Comprehensive income	34,302			33,791			69,243		71,836
Comprehensive (loss) income attributable to noncontrolling interests	(3		)	(25		)	73		(35		)
Comprehensive income attributable to Caleres, Inc.	$	34,305		$	33,816		$	69,170	$	71,871



	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
($ thousands, except per share amounts)	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
NUMERATOR
Net earnings	$	34,373		$	34,726		$	66,931		$	72,282
Net loss (earnings) attributable to noncontrolling interests	14			4			(47		)	(2		)
Net earnings allocated to participating securities	(949		)	(910		)	(1,841		)	(1,933		)
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities	$	33,438		$	33,820		$	65,043		$	70,347

DENOMINATOR
Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders	41,788			41,802			41,801			42,093
Dilutive effect of share-based awards	182			137			173			144
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders	41,970			41,939			41,974			42,237

Basic earnings per common share attributable to Caleres, Inc. shareholders	$	0.80		$	0.81		$	1.56		$	1.67

Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	0.80		$	0.81		$	1.55		$	1.67



		October 29, 2016
	Estimated Useful Lives	Original Cost		Accumulated Amortization		Net Carrying Value
Trademarks	15-40 years	$	165,068	$	71,681	$	93,387
Trademarks	Indefinite	20,800		—		20,800
		$	185,868	$	71,681	$	114,187



		January 28, 2017
	Estimated Useful Lives	Original Cost			Accumulated Amortization		Net Carrying Value
Trademarks	15-40 years	$	165,288		$	72,604	$	92,684
Trademarks	Indefinite	117,900		⁽¹⁾	—		117,900
Customer relationships	15 years	6,100		⁽¹⁾	24		6,076
		$	289,288		$	72,628	$	216,660
(1) The Allen Edmonds trademark and customer relationships intangible assets were acquired in the Allen Edmonds acquisition, as further discussed in Note 3 to the condensed consolidated financial statements. Immaterial adjustments attributable to the purchase price allocation were recorded during the thirty-nine weeks ended October 28, 2017, resulting in an adjustment to the original cost.



($ thousands)	Caleres, Inc. Shareholders’ Equity			Noncontrolling Interests		Total Equity
Equity at January 28, 2017	$	613,117		$	1,369	$	614,486
Net earnings	66,884			47		66,931
Other comprehensive income	2,312			26		2,338
Dividends paid	(9,033		)	—		(9,033		)
Acquisition of treasury stock	(5,993		)	—		(5,993		)
Issuance of common stock under share-based plans, net	(2,477		)	—		(2,477		)
Cumulative-effect adjustment from adoption of ASU 2016-09	441			—		441
Share-based compensation expense	8,394			—		8,394
Equity at October 28, 2017	$	673,645		$	1,442	$	675,087


			Pension and
			Other		Accumulated
	Foreign		Postretirement		Other
	Currency		Transactions		Comprehensive
($ thousands)	Translation		(1)		(Loss) Income
Balance at January 29, 2022	$	(788)	$	(7,818)	$	(8,606)
Other comprehensive loss before reclassifications		(162)		—		(162)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		581		581
Tax benefit		—		(141)		(141)
Net reclassifications		—		440		440
Other comprehensive (loss) income		(162)		440		278
Balance at April 30, 2022	$	(950)	$	(7,378)	$	(8,328)

Balance at January 30, 2021	$	(111)	$	(9,025)	$	(9,136)
Other comprehensive loss before reclassifications		(166)		—		(166)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		463		463
Tax benefit		—		(97)		(97)
Net reclassifications		—		366		366
Other comprehensive (loss) income		(166)		366		200
Balance at May 1, 2021	$	(277)	$	(8,659)	$	(8,936)



($ thousands)	Foreign Currency Translation			Pension and Other Postretirement Transactions⁽¹⁾			Derivative Financial Instrument Transactions ⁽²⁾			Accumulated Other Comprehensive (Loss) Income
Balance July 29, 2017	$	1,472		$	(29,357	)	$	(166	)	$	(28,051	)
Other comprehensive (loss) income before reclassifications	(633		)	—			258			(375		)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss	—			615			(118		)	497
Tax (benefit) provision	—			(236		)	43			(193		)
Net reclassifications	—			379			(75		)	304
Other comprehensive (loss) income	(633		)	379			183			(71		)
Balance October 28, 2017	$	839		$	(28,978	)	$	17		$	(28,122	)

Balance July 30, 2016	$	606		$	(5,932	)	$	(49	)	$	(5,375	)
Other comprehensive loss before reclassifications	(545		)	—			(150		)	(695		)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss	—			(478		)	79			(399		)
Tax provision (benefit)	—			189			(30		)	159
Net reclassifications	—			(289		)	49			(240		)
Other comprehensive loss	(545		)	(289		)	(101		)	(935		)
Balance October 29, 2016	$	61		$	(6,221	)	$	(150	)	$	(6,310	)

Balance January 28, 2017	$	192		$	(30,084	)	$	(542	)	(30,434		)
Other comprehensive income before reclassifications	647			—			716			1,363
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss	—			1,794			(235		)	1,559
Tax (benefit) provision	—			(688		)	78			(610		)
Net reclassifications	—			1,106			(157		)	949
Other comprehensive income	647			1,106			559			2,312
Balance October 28, 2017	$	839		$	(28,978	)	$	17		$	(28,122	)

Balance January 30, 2016	$	(900	)	$	(5,356	)	$	392		$	(5,864	)
Other comprehensive income (loss) before reclassifications	961			—			(789		)	172
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss	—			(1,432		)	392			(1,040		)
Tax provision (benefit)	—			567			(145		)	422
Net reclassifications	—			(865		)	247			(618		)
Other comprehensive income (loss)	961			(865		)	(542		)	(446		)
Balance October 29, 2016	$	61		$	(6,221	)	$	(150	)	$	(6,310	)


(1)	Amounts reclassified are included in ~~selling and administrative expenses. See~~other income, net. Refer to Note 1113 to the condensed consolidated financial statements for additional information related to pension and other postretirement benefits.


~~(2)~~	Amounts reclassified are included in net sales, costs of goods sold, selling and administrative expenses and interest expense. See Notes 12 and 13 to the condensed consolidated financial statements for additional information related to derivative financial instruments.



(U.S. $ equivalent in thousands)	October 28, 2017		October 29, 2016		January 28, 2017
Financial Instruments
U.S. dollars (purchased by the Company’s Canadian division with Canadian dollars)	$	18,242	$	17,229	$	18,826
Euro	18,815		10,854		13,297
Chinese yuan	12,613		13,038		7,723
New Taiwanese dollars	580		538		526
United Arab Emirates dirham	—		1,143		823
Japanese yen	—		1,145		769
Other currencies	—		206		124
Total financial instruments	$	50,250	$	44,153	$	42,088


INDEX
~~INDEX~~



~~Note 1~~	~~Basis of Presentation~~



~~Note 6~~	~~Business Segment Information~~



~~Note~~7	~~Inventories~~



	Asset Derivatives			Liability Derivatives
($ thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign Exchange Forward Contracts
October 28, 2017	Prepaid expenses and other current assets	$	760	Other accrued expenses	$	564
October 29, 2016	Prepaid expenses and other current assets	362		Other accrued expenses	570
January 28, 2017	Prepaid expenses and other current assets	234		Other accrued expenses	874



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED OCTOBER 28, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	226,019		$	541,007		$	47,765		$	(40,135	)	$	774,656
Cost of goods sold	152,714			313,646			23,351			(31,940		)	457,771
Gross profit	73,305			227,361			24,414			(8,195		)	316,885
Selling and administrative expenses	59,335			197,481			15,394			(8,195		)	264,015
Operating earnings	13,970			29,880			9,020			—			52,870
Interest expense	(4,140		)	(1		)	—			—			(4,141		)
Interest income	47			—			48			—			95
Intercompany interest income (expense)	1,981			(2,003		)	22			—			—
Earnings before income taxes	11,858			27,876			9,090			—			48,824
Income tax provision	(3,963		)	(9,479		)	(1,009		)	—			(14,451		)
Equity in earnings (loss) of subsidiaries, net of tax	26,492			—			(457		)	(26,035		)	—
Net earnings	34,387			18,397			7,624			(26,035		)	34,373
Less: Net loss attributable to noncontrolling interests	—			—			(14		)	—			(14		)
Net earnings attributable to Caleres, Inc.	$	34,387		$	18,397		$	7,638		$	(26,035	)	$	34,387

Comprehensive income	$	34,305		$	18,397		$	7,457		$	(25,857	)	$	34,302
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income attributable to Caleres, Inc.	$	34,305		$	18,397		$	7,460		$	(25,857	)	$	34,305



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED OCTOBER 29, 2016
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	235,094		$	487,558		$	48,055		$	(38,477	)	$	732,230
Cost of goods sold	162,629			281,926			25,669			(31,765		)	438,459
Gross profit	72,465			205,632			22,386			(6,712		)	293,771
Selling and administrative expenses	53,225			177,466			14,340			(6,712		)	238,319
Operating earnings	19,240			28,166			8,046			—			55,452
Interest expense	(3,472		)	(3		)	—			—			(3,475		)
Interest income	200			—			150			—			350
Intercompany interest income (expense)	2,083			(2,107		)	24			—			—
Earnings before income taxes	18,051			26,056			8,220			—			52,327
Income tax provision	(6,193		)	(9,743		)	(1,665		)	—			(17,601		)
Equity in earnings (loss) of subsidiaries, net of tax	22,872			—			(499		)	(22,373		)	—
Net earnings	34,730			16,313			6,056			(22,373		)	34,726
Less: Net loss attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Net earnings attributable to Caleres, Inc.	$	34,730		$	16,313		$	6,060		$	(22,373	)	$	34,730

Comprehensive income	$	33,816		$	16,313		$	5,661		$	(21,999	)	$	33,791
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(25		)	—			(25		)
Comprehensive income attributable to Caleres, Inc.	$	33,816		$	16,313		$	5,686		$	(21,999	)	$	33,816



CONDENSED CONSOLIDATING BALANCE SHEET
JANUARY 28, 2017
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	23,999	$	9,029	$	22,304		$	—		$	55,332
Receivables, net	118,746		5,414		28,961			—			153,121
Inventories, net	150,098		410,867		24,799			—			585,764
Prepaid expenses and other current assets	24,293		23,040		8,058			(5,863		)	49,528
Intercompany receivable – current	695		263		22,091			(23,049		)	—
Total current assets	317,831		448,613		106,213			(28,912		)	843,745
Other assets	51,181		16,567		826			—			68,574
Goodwill and intangible assets, net	113,333		219,337		11,088			—			343,758
Property and equipment, net	31,424		176,358		11,414			—			219,196
Investment in subsidiaries	1,343,954		—		(21,946		)	(1,322,008		)	—
Intercompany receivable – noncurrent	568,541		366,902		581,624			(1,517,067		)	—
Total assets	$	2,426,264	$	1,227,777	$	689,219		$	(2,867,987	)	$	1,475,273

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	110,000	$	—	$	—		$	—		$	110,000
Trade accounts payable	116,783		112,434		37,153			—			266,370
Other accrued expenses	74,941		65,228		16,919			(5,863		)	151,225
Intercompany payable – current	12,794		—		10,255			(23,049		)	—
Total current liabilities	314,518		177,662		64,327			(28,912		)	527,595
Other liabilities
Long-term debt	197,003		—		—			—			197,003
Other liabilities	91,683		40,507		3,999			—			136,189
Intercompany payable – noncurrent	1,209,943		98,982		208,142			(1,517,067		)	—
Total other liabilities	1,498,629		139,489		212,141			(1,517,067		)	333,192
Equity
Caleres, Inc. shareholders’ equity	613,117		910,626		411,382			(1,322,008		)	613,117
Noncontrolling interests	—		—		1,369			—			1,369
Total equity	613,117		910,626		412,751			(1,322,008		)	614,486
Total liabilities and equity	$	2,426,264	$	1,227,777	$	689,219		$	(2,867,987	)	$	1,475,273



($ millions)	October 28, 2017		October 29, 2016		January 28, 2017
Borrowings under revolving credit agreement	$	20.0	$	—	$	110.0
Long-term debt	197.3		196.9		197.0
Total debt	$	217.3	$	196.9	$	307.0


(1)	~~Working~~Operating working capital has been computed as total current assets, excluding cash and property and equipment, held for sale, less total current ~~liabilities.~~liabilities, excluding borrowings under revolving credit agreement and lease obligations.


(2)	The current ratio has been computed by dividing total current assets by total current liabilities.


(3)	The debt-to-capital ratio has been computed by dividing total debt by total capitalization. Total debt is defined as long-term debt and borrowings under ~~the Credit Agreement.~~revolving credit agreement. Total capitalization is defined as total debt and total ~~equity.~~equity.



					Maximum Number of Shares that May Yet be Purchased Under the Program ⁽²⁾
				Total Number Purchased as Part of Publicly Announced Program ⁽²⁾
	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid per Share ⁽¹⁾

Fiscal Period

July 30, 2017 – August 26, 2017	—	$	—	—	1,223,500

August 27, 2017 – September 30, 2017	2,118	30.65		—	1,223,500

October 1, 2017 – October 28, 2017	—	—		—	1,223,500

Total	2,118	$	30.65	—	1,223,500

Thirteen Weeks Ended

($ thousands)

April 30, 2022

May 1, 2021

Cash paid for lease liabilities⁽¹⁾

48,793

Cash received from sublease income