10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended May 1, 2021
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from  _____________  to  _____________

Commission file number: 1-2191

CALERES, INC.
(Exact name of registrant as specified in its charter)
New York	43-0197190
(State or other jurisdiction	(IRS Employer Identification Number)
of incorporation or organization)
8300 Maryland Avenue	63105
St. Louis, Missouri	(Zip Code)
(Address of principal executive offices)
(314) 854-4000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☑   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☑
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐     No ☑

As of May 28, 2021, 38,282,472 common shares were outstanding.

INDEX
PART I		Page
Item 1	Financial Statements	3
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4	Controls and Procedures	36
PART II		37
Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	39
	Signature	40

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PART IFINANCIAL INFORMATION

ITEM 1FINANCIAL STATEMENTS

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Assets
Current assets:
Cash and cash equivalents	$	98,244	$	187,717	$	88,295
Receivables, net		132,698		145,333		126,994
Inventories, net		445,299		585,307		487,955
Income taxes		35,850		46,870		33,925
Prepaid expenses and other current assets		45,027		44,563		45,387
Total current assets		757,118		1,009,790		782,556
Prepaid pension costs		91,397		52,960		88,833
Lease right-of-use assets		526,011		648,534		554,303
Property and equipment, net		165,118		200,800		172,437
Deferred income taxes		—		9,456		—
Goodwill and intangible assets, net		236,924		273,648		240,071
Other assets		26,255		28,497		28,850
Total assets	$	1,802,823	$	2,223,685	$	1,867,050
Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	200,000	$	438,500	$	250,000
Mandatory purchase obligation - Blowfish Malibu		45,523		—		39,134
Trade accounts payable		293,309		297,557		280,501
Income taxes		11,359		7,592		5,069
Lease obligations		133,327		160,138		153,060
Other accrued expenses		182,419		173,752		177,745
Total current liabilities		865,937		1,077,539		905,509
Other liabilities:
Noncurrent lease obligations		490,355		601,133		518,942
Long-term debt		198,966		198,506		198,851
Income taxes		2,464		7,786		5,038
Deferred income taxes		10,256		11,780		8,244
Other liabilities		28,189		41,818		26,612
Total other liabilities		730,230		861,023		757,687
Equity:
Common stock		383		393		380
Additional paid-in capital		159,381		154,930		160,446
Accumulated other comprehensive loss		(8,936)		(33,216)		(9,136)
Retained earnings		52,041		160,189		48,557
Total Caleres, Inc. shareholders’ equity		202,869		282,296		200,247
Noncontrolling interests		3,787		2,827		3,607
Total equity		206,656		285,123		203,854
Total liabilities and equity	$	1,802,823	$	2,223,685	$	1,867,050

See notes to condensed consolidated financial statements.

3

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

	(Unaudited)
	Thirteen Weeks Ended
($ thousands, except per share amounts)	May 1, 2021		May 2, 2020
Net sales	$	638,636	$	397,184
Cost of goods sold		363,749		275,286
Gross profit		274,887		121,898
Selling and administrative expenses		243,535		225,194
Impairment of goodwill and intangible assets		—		262,719
Restructuring and other special charges, net		13,482		60,196
Operating earnings (loss)		17,870		(426,211)
Interest expense, net		(11,792)		(9,478)
Other income, net		3,828		3,585
Earnings (loss) before income taxes		9,906		(432,104)
Income tax (provision) benefit		(3,521)		85,932
Net earnings (loss)		6,385		(346,172)
Net earnings (loss) attributable to noncontrolling interests		238		(334)
Net earnings (loss) attributable to Caleres, Inc.	$	6,147	$	(345,838)
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)

See notes to condensed consolidated financial statements.

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CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	(Unaudited)
		Thirteen Weeks Ended
($ thousands)		May 1, 2021		May 2, 2020
Net earnings (loss)		$	6,385	$	(346,172)
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment			(224)		(1,550)
Pension and other postretirement benefits adjustments			366		66
Derivative financial instruments			—		92
Other comprehensive income (loss), net of tax			142		(1,392)
Comprehensive income (loss)			6,527		(347,564)
Comprehensive income (loss) attributable to noncontrolling interests			180		(353)
Comprehensive income (loss) attributable to Caleres, Inc.		$	6,347	$	(347,211)

See notes to condensed consolidated financial statements.

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CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating Activities
Net earnings (loss)	$	6,385	$	(346,172)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation		8,945		12,119
Amortization of capitalized software		1,518		1,493
Amortization of intangible assets		3,147		3,212
Amortization of debt issuance costs and debt discount		343		330
Fair value adjustments to mandatory purchase obligation		6,389		3,233
Share-based compensation expense		2,439		2,351
Loss on disposal of property and equipment		811		113
Impairment charges for property, equipment, and lease right-of-use assets		1,888		35,222
Impairment of goodwill and intangible assets		—		262,719
Provision/adjustment for expected credit losses		(152)		8,704
Deferred income taxes		2,012		(33,498)
Changes in operating assets and liabilities:
Receivables		(5,553)		5,999
Inventories		43,062		31,979
Prepaid expenses and other current and noncurrent assets		(10)		(56,231)
Trade accounts payable		12,665		30,969
Accrued expenses and other liabilities		(14,730)		31,838
Income taxes, net		1,791		6,600
Other, net		(572)		(252)
Net cash provided by operating activities		70,378		728
Investing Activities
Purchases of property and equipment		(2,659)		(3,523)
Capitalized software		(1,218)		(977)
Net cash used for investing activities		(3,877)		(4,500)
Financing Activities
Borrowings under revolving credit agreement		110,500		168,500
Repayments under revolving credit agreement		(160,500)		(5,000)
Dividends paid		(2,663)		(2,810)
Acquisition of treasury stock		—		(12,932)
Issuance of common stock under share-based plans, net		(3,501)		(906)
Other		(450)		(323)
Net cash (used for) provided by financing activities		(56,614)		146,529
Effect of exchange rate changes on cash and cash equivalents		62		(258)
Increase in cash and cash equivalents		9,949		142,499
Cash and cash equivalents at beginning of period		88,295		45,218
Cash and cash equivalents at end of period	$	98,244	$	187,717

See notes to condensed consolidated financial statements.

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CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

						Accumulated				Total
						Other				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) Income		Earnings		Equity		Interests		Total Equity
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
BALANCE FEBRUARY 1, 2020	40,396,757	$	404	$	153,489	$	(31,843)	$	523,900	$	645,950	$	3,180	$	649,130
Net loss									(345,838)		(345,838)		(334)		(346,172)
Foreign currency translation adjustment							(1,531)				(1,531)		(19)		(1,550)
Unrealized gain on derivative financial instruments, net of tax of $31							92				92				92
Pension and other postretirement benefits adjustments, net of tax of $628							66				66				66
Comprehensive loss							(1,373)		(345,838)		(347,211)		(353)		(347,564)
Dividends ($0.07 per share)									(2,810)		(2,810)				(2,810)
Acquisition of treasury stock	(1,510,888)		(15)						(12,917)		(12,932)				(12,932)
Issuance of common stock under share-based plans, net	414,121		4		(910)						(906)				(906)
Cumulative-effect adjustment from adoption of ASC 326									(2,146)		(2,146)				(2,146)
Share-based compensation expense					2,351						2,351				2,351
BALANCE MAY 2, 2020	39,299,990	$	393	$	154,930	$	(33,216)	$	160,189	$	282,296	$	2,827	$	285,123

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CALERES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1    Basis of Presentation and General

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the United States Securities and Exchange Commission (“SEC”) and reflect all adjustments and accruals of a normal recurring nature, which management believes are necessary to present fairly the financial position, results of operations, comprehensive income and cash flows of Caleres, Inc. ("the Company"). These statements, however, do not include all information and footnotes necessary for a complete presentation of the Company’s consolidated financial position, results of operations, comprehensive income and cash flows in conformity with accounting principles generally accepted in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries, after the elimination of intercompany accounts and transactions.

The Company’s business is seasonal in nature due to consumer spending patterns, with higher back-to-school and holiday season sales. Traditionally, the third fiscal quarter accounts for a substantial portion of the Company’s earnings for the year. Interim results may not necessarily be indicative of results which may be expected for any other interim period or for the year as a whole, particularly given the impact of the coronavirus pandemic, as further discussed below.

Certain prior period amounts in the condensed consolidated financial statements and footnotes have been reclassified to conform to the current period presentation. These reclassifications did not affect net (loss) earnings attributable to Caleres, Inc.

The accompanying condensed consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended January 30, 2021.

Noncontrolling Interests

During 2019, the Company entered into a joint venture with Brand Investment Holding Limited (“Brand Investment Holding”), a member of the Gemkell Group.  The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”).  Net sales and operating earnings were not significant during the thirteen weeks ended May 1, 2021 and May 2, 2020.

The Company had a joint venture agreement with a subsidiary of C. banner International Holdings Limited (“CBI”) to market Naturalizer footwear in China. The Company was a 51% owner of the joint venture (“B&H Footwear”), with CBI owning the other 49%.  The license enabling the joint venture to market the footwear expired in August 2017 and the parties are in the process of dissolving their joint venture agreements.  The Company anticipates the liquidation to be completed during 2021.

The Company consolidates CLT and B&H Footwear into its condensed consolidated financial statements.  Net earnings (loss) attributable to noncontrolling interests represents the share of net earnings or losses that are attributable to Brand Investment Holding equity.  Transactions between the Company and the joint ventures have been eliminated in the condensed consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Derivative Financial Instruments

The Company’s hedging policy permits the use of forward contracts as cash flow hedging instruments to manage its currency exposures in foreign-currency-denominated assets, liabilities and cash flows.  These derivative financial instruments are viewed as risk management tools and are not used for trading or speculative purposes.  The Company recognizes all derivative financial instruments as either assets or liabilities in the condensed consolidated balance sheets and measures those instruments at fair value.

COVID-19 Pandemic

The United States economy and the retail industry have begun to recover from the adverse impact of the coronavirus (“COVID-19”) pandemic. The Company’s financial results were significantly impacted during the first half of 2020 as a result of the temporary closure of all retail stores beginning in mid-March.  The Company experienced sequential improvement in sales in the second half of 2020, driven by the reopening of the retail stores, and continued solid growth of the e-commerce business.  During the first quarter of 2021, as the vaccine

8

became widely distributed and state and local governments continued to ease restrictions, consumer sentiment and spending began to improve.  In addition, the additional stimulus measures approved by the federal government provided a boost in consumer spending.  These factors strengthened demand for our products in the first quarter of 2021, which contributed to strong growth in our net sales and operating earnings.

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 May 1, 2021, approximately $4.7 million is recorded in other accrued expenses and $4.7 million is recorded in other liabilities on the condensed consolidated balance sheet.

Note 2    Impact of New Accounting Pronouncements

Impact of Recently Adopted Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20), Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans.  The guidance changes the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans, eliminating the requirements for certain disclosures that are no longer considered cost beneficial and requiring new disclosures that the FASB considers pertinent.  The Company adopted the ASU during the first quarter of 2021, which did not have a material impact on the Company’s financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions in Accounting Standards Codification 740 related to intraperiod tax allocation, simplifies certain elements of accounting for basis differences and deferred tax liabilities during a business combination, and standardizes the classification of franchise taxes.  The Company adopted ASU 2019-12 during the first quarter of 2021, which did not have a material impact on the Company’s condensed consolidated financial statements.

Impact of Prospective Accounting Pronouncements

The Company has evaluated all recently issued accounting pronouncements.  There are no prospective accounting pronouncements that are expected to have a material impact on the Company’s condensed consolidated financial statements or disclosures.

9

Note 3    Revenues

Disaggregation of Revenues

The following table disaggregates revenue by segment and major source for the periods ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended May 1, 2021
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	334,745	$	15,008	$	—	$	349,753
Landed wholesale - e-commerce - drop ship (1)		—		20,814		(394)		20,420
E-commerce - Company websites (1)		63,122		42,738		—		105,860
Total direct-to-consumer sales	$	397,867	$	78,560	$	(394)	$	476,033
First-cost wholesale - e-commerce (1)		—		904		—		904
Landed wholesale - e-commerce (1)		—		36,576		—		36,576
Landed wholesale - other		—		115,347		(9,379)		105,968
First-cost wholesale		—		16,718		—		16,718
Licensing and royalty		—		2,164		—		2,164
Other (2)		237		36		—		273
Total net sales	$	398,104	$	250,305	$	(9,773)	$	638,636

	Thirteen Weeks Ended May 2, 2020
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	137,117	$	11,822	$	—	$	148,939
Landed wholesale - e-commerce - drop ship (1)		—		19,231		—		19,231
E-commerce - Company websites (1)		54,178		32,989		—		87,167
Total direct-to-consumer sales	$	191,295	$	64,042	$	—	$	255,337
First-cost wholesale - e-commerce (1)		—		246		—		246
Landed wholesale - e-commerce (1)		—		26,242		—		26,242
Landed wholesale - other		—		112,568		(11,306)		101,262
First-cost wholesale		—		11,921		—		11,921
Licensing and royalty		—		2,186		—		2,186
Other (2)		(43)		33		—		(10)
Net sales	$	191,252	$	217,238	$	(11,306)	$	397,184

(1) Collectively referred to as "e-commerce" 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 Company records a returns reserve and a corresponding return asset for expected returns of merchandise.

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

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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.

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 "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.

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 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.

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 portfolio approach is applied to determine the variable consideration for each revenue stream. Reserves for projected returns are based on historical patterns and current expectations.

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

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Customer allowances and discounts	$	19,260	$	24,768	$	17,043
Loyalty programs liability		16,177		17,326		13,986
Returns reserve		14,469		15,427		11,040
Gift card liability		5,423		5,528		6,091

Changes in contract balances with customers generally reflect differences in relative sales volume for the periods presented. In addition, 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. During the thirteen weeks ended May 2, 2020, the loyalty programs liability increased $5.9 million due to points and material rights earned on purchases and decreased $5.0 million due to expirations and redemptions.

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The following table summarizes the activity in the Company’s allowance for expected credit losses during the thirteen weeks ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Balance, beginning of period	$	14,928	$	1,813
Adjustment upon adoption of ASU 2016-13		—		2,521
Provision/adjustment for expected credit losses (1)		(152)		8,704
Uncollectible accounts written off, net of recoveries		(3,404)		356
Balance, end of period	$	11,372	$	13,394

(1) The Company’s provision/adjustment for expected credit losses for the thirteen weeks ended May 2, 2020 was higher than the comparable period in 2021 as a result of the COVID-19 pandemic and its impact on the financial condition of several of the Company’s wholesale customers.

Note 4    Earnings (Loss) Per Share

The Company uses the two-class method to compute basic and diluted earnings (loss) 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 (loss) per common share attributable to Caleres, Inc. shareholders for the periods ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended
($ thousands, except per share amounts)	May 1, 2021		May 2, 2020
NUMERATOR
Net earnings (loss)	$	6,385	$	(346,172)
Net (earnings) loss attributable to noncontrolling interests		(238)		334
Net earnings (loss) attributable to Caleres, Inc.	$	6,147	$	(345,838)
Net earnings allocated to participating securities		(210)		—
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities	$	5,937	$	(345,838)
DENOMINATOR
Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders		36,707		38,649
Dilutive effect of share-based awards		158		—
Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders		36,865		38,649
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)

Options to purchase 16,667 and 22,667 shares of common stock for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, were not included in the denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders because the effect would be anti-dilutive.

During the thirteen weeks ended May 1, 2021 and May 2, 2020, the Company repurchased zero and 1,510,888 shares, respectively, under the 2018 and 2019 publicly announced share repurchase programs, which permits repurchases of up to 2.5 million and 5.0 million shares, respectively.  Refer to further discussion in Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.

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Note 5    Restructuring and Other Special Charges

Brand Exits

During the thirteen weeks ended May 1, 2021, the Company incurred costs of $13.5 million ($11.9 million on an after-tax basis, or $0.31 per diluted share) related to the strategic realignment of the Naturalizer retail store operations.  These costs primarily represent lease termination and other store closure costs, including employee severance, for the 73 stores that were closed during the first quarter of 2021.  These charges are presented in restructuring and special charges on the condensed consolidated statements of earnings (loss) within the Brand Portfolio segment.  As of May 1, 2021, reserves of $5.2 million were included on the condensed consolidated balance sheet.  

During the thirteen weeks ended May 2, 2020, the Company incurred costs of $1.6 million ($1.2 million on an after-tax basis, or $0.03 per diluted share) related to the decision to exit the Fergie brand.  These charges, which represented inventory markdowns required to reduce the value of inventory to net realizable value, are presented in cost of goods sold on the condensed consolidated statements of earnings (loss) within the Brand Portfolio segment.  

Blowfish Mandatory Purchase Obligation

In 2018, the Company acquired a controlling interest in Blowfish Malibu.  The noncontrolling interest is subject to a mandatory purchase obligation after a three-year period based upon an earnings multiple formula as specified in the purchase agreement.  Approximately $9.0 million was initially assigned to the mandatory purchase obligation and remeasurement adjustments are being recorded as interest expense.  The fair value adjustments on the mandatory purchase obligation totaled $6.4 million ($4.7 million on an after-tax basis, or $0.13 per diluted share) and $3.2 million ($2.4 million on an after-tax basis, or $0.06 per diluted share) for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  As of May 1, 2021, the mandatory purchase obligation is valued at $45.5 million.  The mandatory purchase obligation is expected to be settled during the third quarter of 2021.  Refer to further discussion regarding the mandatory purchase obligation in Note 14 to the condensed consolidated financial statements.

COVID-19-Related Expenses

During the thirteen weeks ended May 2, 2020, the Company incurred costs associated with the COVID-19 pandemic and related impacts on the Company’s business, totaling $93.6 million ($73.3 million on an after-tax basis, or $1.90 per diluted share).  These costs included non-cash impairment of property and equipment and lease right-of-use assets, incremental inventory markdowns, employee severance and other direct expenses specific to the impact of COVID-19 on the Company’s operations.  Of the $93.6 million in charges, $60.2 million is presented as restructuring and other special charges, net and $33.4 million is reflected as cost of goods sold in the condensed consolidated statements of earnings (loss).   Of the $60.2 million reflected as restructuring and other special charges, $43.8 million is reflected in the Brand Portfolio segment, $16.0 million is reflected in the Famous Footwear segment and $0.4 million is reflected within the Eliminations and Other category.  The $33.4 million reflected as cost of goods sold represents incremental inventory markdowns, of which $27.4 million is reflected in the Brand Portfolio segment and $6.0 million is reflected in the Famous Footwear segment.  There were no corresponding charges for the thirteen weeks ended May 1, 2021.  Refer to Note 9 to the condensed consolidated financial statements for additional information regarding the impact of COVID-19 on the Company’s leases.

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Note 6    Business Segment Information

Following is a summary of certain key financial measures for the Company’s business segments for the periods ended May 1, 2021 and May 2, 2020:

	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
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
Thirteen Weeks Ended May 2, 2020
Net sales	$	191,252	$	217,238	$	(11,306)	$	397,184
Intersegment sales (1)		—		11,306		—		11,306
Operating loss		(67,540)		(345,748)		(12,923)		(426,211)
Segment assets		897,046		995,760		330,879		2,223,685

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

The Eliminations and Other category includes corporate assets, administrative expenses and other costs and recoveries, which are not allocated to the operating segments, as well as the elimination of intersegment sales and profit.

Following is a reconciliation of operating earnings (loss) to earnings (loss) before income taxes:

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating earnings (loss)	$	17,870	$	(426,211)
Interest expense, net		(11,792)		(9,478)
Other income, net		3,828		3,585
Earnings (loss) before income taxes	$	9,906	$	(432,104)

Note 7    Inventories

The Company’s net inventory balance was comprised of the following:

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Raw materials	$	13,010	$	16,848	$	14,592
Work-in-process		365		357		349
Finished goods		431,924		568,102		473,014
Inventories, net	$	445,299	$	585,307	$	487,955

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Note 8    Goodwill and Intangible Assets

Goodwill and intangible assets were as follows:

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Intangible Assets
Famous Footwear	$	2,800	$	2,800	$	2,800
Brand Portfolio		342,083		365,888		342,083
Total intangible assets		344,883		368,688		344,883
Accumulated amortization		(112,915)		(99,996)		(109,768)
Total intangible assets, net		231,968		268,692		235,115
Goodwill
Brand Portfolio		4,956		4,956		4,956
Total goodwill		4,956		4,956		4,956
Goodwill and intangible assets, net	$	236,924	$	273,648	$	240,071

The Company’s intangible assets as of May 1, 2021, May 2, 2020 and January 30, 2021 were as follows:

($ thousands)	May 1, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis (1)		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
	May 2, 2020
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	15 - 40	$	288,788	$	94,294	$	—	$	194,494
Trade names	Indefinite		118,100		—		82,400		35,700
Customer relationships	15 - 16		44,200		5,702		—		38,498
		$	451,088	$	99,996	$	82,400	$	268,692
	January 30, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis (1)		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	101,919	$	10,200	$	187,369
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		7,849		4,005		32,346
		$	451,088	$	109,768	$	106,205	$	235,115

(1) The Via Spiga trade name was reclassified from indefinite-lived trade names to definite-lived trade names.  The remaining carrying value of $0.5 million is being amortized over two years.

Amortization expense related to intangible assets was $3.1 million and $3.2 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  The Company estimates that amortization expense related to intangible assets will be approximately $12.6 million in 2021, $12.1 million in 2022, $11.9 million in 2023, and $11.0 million in 2024 and 2025.

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.  During the first quarter of 2020, as a result of the significant decline in the Company’s share price and market capitalization and the impact of COVID-19 on the Company’s business operations, the Company determined that an interim assessment of goodwill was required.  A quantitative assessment was performed for all reporting units as of May 2, 2020.  The assessment indicated that the carrying value of the goodwill associated with the Brand Portfolio and Vionic reporting

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units was impaired, resulting in total goodwill impairment charges of $240.3 million.  The Company recorded no goodwill impairment charges during the thirteen weeks ended 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.  As a result of the triggering event from the economic impacts of COVID-19, an interim assessment was performed as of May 2, 2020.  The indefinite-lived intangible asset impairment review resulted in total impairment charges of $22.4 million for the thirteen weeks ended May 2, 2020, including $12.2 million associated with the indefinite-lived Allen Edmonds trade name and $10.2 million of impairment associated with the indefinite-lived Via Spiga trade name.  The carrying value of the Via Spiga trade name of $0.5 million is being amortized over approximately two years.  In addition to the interim assessment, the Company tested the indefinite-lived intangible assets as of the first day of the fourth fiscal quarter.  As a result of the impairment indicator for Allen Edmonds, the Company also tested the definite-lived Allen Edmonds customer relationships intangible asset.  Those assessments resulted in additional impairment totaling $23.8 million, consisting of $19.8 million associated with the Allen Edmonds trade name and $4.0 million associated with the Allen Edmonds customer relationships intangible asset.  The Company recorded no impairment charges during the thirteen weeks ended 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 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 $1.9 million and $35.2 million during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  The impairment charges recorded in the thirteen weeks ended May 1, 2021 are related to underperforming retail stores.  The impairment charges recorded in the thirteen weeks ended May 2, 2020, including $20.4 million associated with operating lease right-of-use assets and $14.8 million associated with property and equipment, reflect the impact of the COVID-19 pandemic on the Company’s retail operations and estimates of remaining cash flows for each store.  Refer to Note 5 and 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 COVID-19 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 (loss).  Rent concessions for leases that were extended will be recognized as a lease modification.  There were no lease concessions recorded during the thirteen weeks ended May 2, 2020.

During the thirteen weeks ended May 1, 2021, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $16.0 million on the condensed consolidated balance sheets.  As of May 1, 2021, the Company has entered into lease commitments for three retail locations for which the leases have not yet commenced.  The Company anticipates that one lease will begin in the current fiscal year and two leases will begin in the next fiscal year.  Upon commencement, right-of-use assets and lease liabilities of approximately $0.6 million will be recorded in the current fiscal year and $1.8 million in the next fiscal year on the condensed consolidated balance sheets.

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The components of lease expense for the thirteen weeks ended May 1, 2021 and May 2, 2020 were as follows:

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating lease expense	$	40,577	$	45,240
Variable lease expense		11,490		11,334
Short-term lease expense		565		712
Sublease income		(29)		(19)
Total lease expense	$	52,603	$	57,267

Supplemental cash flow information related to leases is as follows:

	Thirteen Weeks Ended
($ thousands)		May 1, 2021		May 2, 2020
Cash paid for lease liabilities (1)		$	56,453	$	15,117
Cash received from sublease income			29		19

(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.  In addition, cash paid for lease liabilities during the thirteen weeks ended May 2, 2020 was significantly lower than comparable periods, reflecting the deferral of lease payments during the onset of the pandemic.

Note 10  Long-term and Short-term 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 and Vionic are each co-borrowers and guarantors.  On April 14, 2020, the Company entered into a Fourth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the "Credit Agreement") which, among other modifications, increased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $600.0 million, subject to borrowing base restrictions, and may be further increased by up to $150.0 million.  The Credit Agreement increased the spread applied to the LIBOR or prime rate by a total of 75 basis points and increased the unused line fee by 5 basis points.

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 borrowings is at variable rates based on the London Interbank Offered Rate (“LIBOR”) (with a floor of 1.0% imposed by the Credit Agreement) or the prime rate, as defined in the Credit Agreement, plus a spread.  The interest rate and fees for letters 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.

The Credit Agreement limits the Company’s ability to create, incur, assume or permit to exist additional indebtedness and liens, make investments or specified payments, give guarantees, pay dividends, make capital expenditures and merge or acquire or sell assets.  In addition, if excess availability falls below the greater of 10.0% of the lesser of the Loan Cap and $40.0 million for three consecutive business days, and the fixed charge coverage ratio is less than 1.0 to 1.0, the Company would be in default under the Credit Agreement and certain additional covenants would be triggered.

The Credit Agreement contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, certain events of bankruptcy and insolvency, judgment defaults and the failure of any guaranty or security document supporting the agreement to be in full force and effect.  If an event of default occurs, the collateral agent may assume dominion and control over the Company’s cash (a “cash dominion event”) until such event of default is cured

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or waived or the excess availability exceeds such amount for 30 consecutive days, provided that a cash dominion event shall be deemed continuing (even if an event of default is no longer continuing and/or excess availability exceeds the required amount for 30 consecutive business days) after a cash dominion event has occurred and been discontinued on two occasions in any 12-month period.  The Credit Agreement also contains certain other covenants and restrictions.  The Company was in compliance with all covenants and restrictions under the Credit Agreement as of May 1, 2021.

At May 1, 2021, the Company had $200.0 million borrowings outstanding and $12.5 million in letters of credit outstanding under the Credit Agreement.  Total additional borrowing availability was $211.3 million at May 1, 2021.

$200 Million Senior Notes

On July 27, 2015, the Company issued $200.0 million aggregate principal amount of Senior Notes due on August 15, 2023 (the "Senior Notes").  The Senior Notes bear interest at 6.25%, which is payable on February 15 and August 15 of each year.  The Senior Notes are guaranteed on a senior unsecured basis by each of the Company’s subsidiaries that is a borrower or guarantor under the Credit Agreement.  

The Company may redeem some or all of the Senior Notes at a redemption price (expressed as a percentage of principal amount) of 101.563% if redeemed prior to August 15, 2021 and 100.000% if redeemed after August 15, 2021, plus accrued and unpaid interest and Additional Interest (as defined in the Senior Notes indenture).

If the Company experiences specific kinds of changes of control, it would be required to offer to purchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest and Additional Interest, if any, to, but not including, the date of repurchase.  The Senior Notes also contain certain other covenants and restrictions that limit certain activities including, among other things, levels of indebtedness, payments of dividends, the guarantee or pledge of assets, certain investments, common stock repurchases, mergers and acquisitions and sales of assets.  As of May 1, 2021, the Company was in compliance with all covenants and restrictions relating to the Senior Notes.

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Note 11  Shareholders’ Equity

Accumulated Other Comprehensive Loss

The following table sets forth the changes in accumulated other comprehensive loss (OCL) by component for the periods ended May 1, 2021 and May 2, 2020:

			Pension and		Derivative
			Other		Financial		Accumulated
	Foreign		Postretirement		Instrument		Other
	Currency		Transactions		Transactions		Comprehensive
($ thousands)	Translation		(1)		(2)		(Loss) Income
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)
Balance at February 1, 2020	$	(580)	$	(31,171)	$	(92)	$	(31,843)
Other comprehensive (loss) income before reclassifications		(1,531)		—		87		(1,444)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		694		6		700
Tax benefit		—		(628)		(1)		(629)
Net reclassifications		—		66		5		71
Other comprehensive (loss) income		(1,531)		66		92		(1,373)
Balance at May 2, 2020	$	(2,111)	$	(31,105)	$	—	$	(33,216)

(1) Amounts reclassified are included in other income, net. Refer to Note 13 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 and selling and administrative expenses. Refer to Note 1 to the condensed consolidated financial statements for additional information related to derivative financial instruments.

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $2.4 million for both the thirteen weeks ended May 1, 2021 and May 2, 2020.

The Company had net issuances of 327,268 and 414,121 shares of common stock during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, for restricted stock grants, stock performance awards issued to employees and common and restricted stock grants issued to non-employee directors, net of forfeitures and shares withheld to satisfy the tax withholding requirement.  

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Restricted Stock

The following table summarizes restricted stock activity for the periods ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	May 1, 2021				May 2, 2020
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
January 30, 2021	1,397,227	$	16.74	February 1, 2020	1,271,795	$	26.77
Granted	562,506		18.63	Granted	550,683		5.81
Forfeited	(46,500)		16.08	Forfeited	(32,687)		25.60
Vested	(484,389)		26.96	Vested	(368,048)		28.38
May 1, 2021	1,428,844	$	14.04	May 2, 2020	1,421,743	$	18.20

Of the 562,506 restricted shares granted during the thirteen weeks ended May 1, 2021, 20,000 shares have a cliff-vesting term of two years and 542,506 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  All of the restricted shares granted during the thirteen weeks ended May 2, 2020 have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  Share-based compensation expense for graded-vesting grants is recognized ratably over the respective vesting periods.

Performance Share Awards

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 in connection with the 2020 performance award.  There were no performance-based share awards granted by the Company during the thirteen weeks ended May 2, 2020.  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 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 value of the award, which is reflected within other liabilities on the condensed consolidated balance sheets, is being accrued over the three-year performance period.  

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of restricted stock units ("RSUs") payable in cash or common stock at no cost to the non-employee director.  The RSUs earn dividend equivalents at the same rate as dividends on the 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.  The Company granted 1,712 and 8,309 to non-employee directors for dividend equivalents, during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, with weighted-average grant date fair values of $20.91 and $3.86, respectively.  

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Note 13  Retirement and Other Benefit Plans

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

	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020		May 1, 2021		May 2, 2020
Service cost	$	1,942	$	2,160	$	—	$	—
Interest cost		2,813		3,154		10		10
Expected return on assets		(7,114)		(7,443)		—		—
Amortization of:
Actuarial loss (gain)		615		1,083		(27)		(39)
Prior service income		(125)		(350)		—		—
Total net periodic benefit income	$	(1,869)	$	(1,396)	$	(17)	$	(29)

The non-service cost components of net periodic benefit income are included in other income, net in the condensed consolidated statements of earnings (loss). Service cost is included in selling and administrative expenses.

Note 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.

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.  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 cash equivalents consisting of short-term money market funds backed by U.S. Treasury securities.  The primary objective of these investing activities is to preserve the Company’s capital for the purpose of funding operations, and 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 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 (loss).  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 were previously granted at no cost to non-employee directors.  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 12 to the condensed consolidated financial statements.

Mandatory Purchase Obligation

The Company recorded a mandatory purchase obligation of the noncontrolling interest in conjunction with the acquisition of Blowfish Malibu in July of 2018.  The fair value of the mandatory purchase obligation is based on the earnings formula specified in the purchase agreement (Level 3).  Fair value adjustments on the mandatory purchase obligation are recorded as interest expense.  During the thirteen weeks ended May 1, 2021 and May 2, 2020, the Company recorded fair value adjustments of $6.4 million and $3.2 million, respectively.  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 May 1, 2021, May 2, 2020 and January 30, 2021.  During the thirteen weeks ended May 1, 2021 and May 2, 2020, there were no transfers into or out of Level 3.

	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
May 1, 2021:
Cash equivalents – money market funds	$	57,000	$	57,000	$	—	$	—
Non-qualified deferred compensation plan assets		8,169		8,169		—		—
Non-qualified deferred compensation plan liabilities		(8,169)		(8,169)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,185)		(1,185)		—		—
Restricted stock units for non-employee directors		(2,571)		(2,571)		—		—
Mandatory purchase obligation - Blowfish Malibu		(45,523)		—		—		(45,523)
May 2, 2020:
Cash equivalents – money market funds	$	146,009	$	146,009	$	—	$	—
Non-qualified deferred compensation plan assets		7,435		7,435		—		—
Non-qualified deferred compensation plan liabilities		(7,435)		(7,435)		—		—
Deferred compensation plan liabilities for non-employee directors		(818)		(818)		—		—
Restricted stock units for non-employee directors		(1,093)		(1,093)		—		—
Mandatory purchase obligation - Blowfish Malibu		(18,433)		—		—		(18,433)
January 30, 2021:
Cash equivalents – money market funds	$	45,000	$	45,000	$	—	$	—
Non-qualified deferred compensation plan assets		7,918		7,918		—		—
Non-qualified deferred compensation plan liabilities		(7,918)		(7,918)		—		—
Deferred compensation plan liabilities for non-employee directors		(989)		(989)		—		—
Restricted stock units for non-employee directors		(1,661)		(1,661)		—		—
Mandatory purchase obligation - Blowfish Malibu		(39,134)		—		—		(39,134)

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 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 $571.5 million and $726.2 million at May 1, 2021 and May 2, 2020, respectively, were assessed for indicators of impairment and written down to their fair value.  This assessment resulted in the following impairment charges, primarily for operating lease right-of-use assets, leasehold improvements and furniture and fixtures in the Company’s retail stores.  Higher impairment charges were recorded in the thirteen weeks ended May 1, 2020, reflecting the deteriorating economic conditions driven in part by the COVID-19 pandemic, as further discussed in Note 5 and Note 9 to the condensed consolidated financial statements.

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Long-Lived Asset Impairment Charges
Famous Footwear	$	400	$	14,896
Brand Portfolio		1,488		20,326
Total long-lived asset impairment charges	$	1,888	$	35,222

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 other financial instruments subject to fair value disclosures are as follows:

	May 1, 2021				May 2, 2020				January 30, 2021
	Carrying				Carrying				Carrying
($ thousands)	Value (1)		Fair Value		Value (1)		Fair Value		Value (1)		Fair Value
Borrowings under revolving credit agreement	$	200,000	$	200,000	$	438,500	$	438,500	$	250,000	$	250,000
Long-term debt		200,000		200,500		200,000		178,000		200,000		201,000
Total debt	$	400,000	$	400,500	$	638,500	$	616,500	$	450,000	$	451,000

(1) Excludes unamortized debt issuance costs and debt discount

The fair value of 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 (Level 2).

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 35.5% and 19.9% for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  The higher tax rate for the thirteen weeks ended May 1, 2021 primarily reflects the non-deductibility of losses at the Company’s Canadian division, which were driven by exit-related costs associated with Naturalizer retail stores.  The tax rate was partially offset by discrete tax benefits totaling $1.2 million.  During the thirteen weeks ended May 2, 2020, the Company's effective tax rate was impacted by several discrete tax items, including the non-deductibility of a portion of the Company's intangible asset impairment charges, the provision of a valuation allowance related to net deferred tax assets of its Canadian business division and the incremental tax provision related to share-based compensation.  

As of May 1, 2021, no deferred taxes have been provided on the accumulated unremitted earnings of the Company’s foreign subsidiaries that are not subject to United States income tax, beyond the amounts recorded for the 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 foreign investment opportunities and plans, as well as its foreign working capital needs, to determine the level of investment required and, accordingly, determines the level of foreign earnings that is considered indefinitely reinvested. Based upon that evaluation, earnings of the Company’s foreign subsidiaries that are not otherwise subject to United States taxation are considered to be indefinitely reinvested, and accordingly, deferred taxes have not been provided. If changes occur in future investment opportunities and plans, those changes will be reflected when known and may result in providing residual United States deferred taxes on unremitted foreign earnings.

Note 16  Commitments and 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 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

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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 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.  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.  The Company continues to work with outside experts and the oversight authorities on the off-site work plan.

The cumulative expenditures for both on-site and off-site remediation through May 1, 2021 were $32.0 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 May 1, 2021 is $9.9 million, of which $8.9 million is recorded within other liabilities and $1.0 million is recorded within other accrued expenses.  Of the total $9.9 million reserve, $5.1 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 $13.6 million as of May 1, 2021.  The Company expects to spend approximately $0.5 million in 2021, $0.1 million in each of the following four years and $12.7 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 remediation plans in conjunction with its environmental consultants and records its best estimate of 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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ITEM 2    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

We experienced a strong recovery in the first quarter of 2021, recording sequential net sales and earnings growth, and stronger gross margins and balance sheet.  Our upward trajectory was driven in large part by an outstanding performance in our Famous Footwear business, as we continue to leverage our enhanced omni-channel capabilities and capitalize on our direct-to-consumer model.  

In the first quarter of last year, our financial results had been significantly impacted by the coronavirus (“COVID-19”) pandemic, including the temporary closure of all of our retail stores from mid-March through the end of the quarter.  We did experience sequential improvement in sales in the second half of 2020, driven by the reopening of our retail stores, and continued solid growth of our e-commerce business.  During the first quarter of 2021, as the vaccine became widely distributed and state and local governments continued to ease restrictions, consumer sentiment and spending began to improve.  The domestic economy and the retail industry have begun to recover, as reflected in our strong financial results.   The additional stimulus measures approved by the federal government also provided a boost in consumer spending.  These factors strengthened demand for our products in the first quarter of 2021, which contributed to strong growth in our net sales and operating earnings.

Financial Highlights

Following is a summary of the financial highlights for the first quarter of 2021:

● Consolidated net sales increased $241.4 million, or 60.8%, to $638.6 million in the first quarter of 2021, compared to $397.2 million in the first quarter of 2020.  The sales increase was primarily driven by our Famous Footwear segment, which experienced sequential improvement in store traffic and conversion rates, contributing to the sales increase of $206.8 million, or 108.2%.  Net sales in our Brand Portfolio segment also increased by $33.1 million, or 15.2%, compared to the first quarter of 2020.  We continued to leverage our enhanced digital platform to grow e-commerce sales in both segments during the first quarter of 2021.  Consolidated net sales from our owned e-commerce websites increased 21.4% compared to the first quarter of 2020.  On a consolidated basis, our direct-to-consumer sales represented 74.5% of consolidated net sales for the first quarter of 2021, compared to 64.3% in the first quarter of 2020.

● Consolidated gross profit increased $153.0 million, or 125.5%, to $274.9 million in the first quarter of 2021, compared to $121.9 million in the first quarter of 2020.  Our gross profit margin increased to 43.0% in the first quarter of 2021, compared to 30.7% in the first quarter of 2020.  Our gross profit margin in the first quarter of 2020 was negatively impacted by incremental inventory markdowns of $33.4 million, as further described below.

● Consolidated operating earnings increased $444.1 million to $17.9 million in the first quarter of 2021, compared to an operating loss of $426.2 million in the first quarter of 2020.  

● Consolidated net earnings attributable to Caleres, Inc. were $6.2 million, or $0.16 per diluted share, in the first quarter of 2021, compared to a net loss of $345.8 million, or $8.95 per diluted share, in the first quarter of 2020.

The following items should be considered in evaluating the comparability of our first quarter results in 2021 and 2020:

● 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 closure of all but two Naturalizer retail stores in North America.  In the first quarter of 2020, we incurred costs of $1.6 million ($1.2 million on an after-tax basis, or $0.03 per diluted share) in connection with our decision to exit the Fergie brand.

● Blowfish Malibu mandatory purchase obligation – As further discussed in Note 5 and Note 14 to the condensed consolidated financial statements, the Blowfish Malibu noncontrolling interest is 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), compared to $3.2 million ($2.4 million on an after-tax basis, or $0.06 per diluted share) in the first quarter of 2020.  The fair value adjustments are recorded as interest expense, net in the condensed consolidated statements of earnings (loss).  

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● Impairment of goodwill and intangible assets – During the first quarter of 2020, we recorded non-cash impairment charges totaling $262.7 million ($218.5 million on an after-tax basis, or $5.66 per diluted share), including $240.3 million of impairment associated with goodwill as a result of the unfavorable business climate and our lower stock price and market capitalization, and $22.4 million associated with our Allen Edmonds and Via Spiga indefinite-lived trade names. Refer to Note 8 to the condensed consolidated financial statements for further discussion.

● COVID-19-related expenses – During the first quarter of 2020, we incurred $93.6 million ($73.3 million on an after-tax basis, or $1.90 per diluted share) in costs associated with the economic impacts of the COVID-19 pandemic and related impacts on our business and industry. The $93.6 million was comprised of:

● Impairment charges associated with property and equipment and lease right-of use assets of $34.6 million, presented within restructuring and other special charges;

● Inventory markdowns of $33.4 million, presented within cost of goods sold;

● Expenses associated with factory order cancellations of $14.3 million, presented within restructuring and other special charges;

● Provision for expected credit losses of $8.5 million, presented within restructuring and other special charges; and

● Other special charges of $2.8 million, primarily including severance and incremental facility costs such as deep cleaning and supplies, presented within restructuring and other special charges on the condensed consolidated statements of earnings (loss).

Metrics Used in the Evaluation of Our Business

The following are a couple of key metrics by which we evaluate our business and make strategic decisions:

Same-store sales

The same-store sales metric is a metric commonly used in the retail industry to evaluate the revenue generated for 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 (whether temporary or permanent closures) are excluded from the same-store sales metric for each day of the closure.  Relocated stores are treated as new stores and therefore excluded from the calculation.  E-commerce sales for those 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.

Beginning in mid-March 2020, all of our Famous Footwear and Brand Portfolio stores in North America were temporarily closed and we began a phased reopening of retail stores in mid-May.  Our same-store sales calculation excludes the impact of both permanent and temporary store closures.  Accordingly, for the first quarter of 2020, our same-store sales calculation is impacted more heavily by our e-commerce sales penetration, which was higher than in prior periods, given the strong growth in that channel and the fact that our e-commerce sites continued to operate throughout the first quarter of 2020.

Sales per square foot

The sales per square foot metric is commonly used in the retail industry to calculate 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.  This metric was adversely impacted by the temporary retail store closures during a portion of the first quarter of 2020 and therefore, the metric is not comparable to the first quarter of 2021.

Outlook

While we experienced a slow start to the first quarter of 2021 related to the lingering impacts of the COVID-19 pandemic, we ended the quarter with strong financial results as we executed on our strategy, including merchandising, marketing and the consumer experience.  We

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expect continued strength at Famous Footwear to be combined with improving performance at the Brand Portfolio segment as we progress through the year.  Throughout the remainder of 2021, we will remain focused on building the momentum at Famous Footwear, leveraging our enhanced direct-to-consumer capabilities to drive e-commerce sales growth, utilizing our data-derived consumer insights to drive greater consumer alignment and engagement, and maintaining our balanced and disciplined approach to cost control and capital spending.  As we continue to align our inventory levels with consumer demand, we will also remain focused on the ongoing global supply chain disruptions by optimizing and maximizing our current inventory and emphasizing trending brands and styles.

Following are the consolidated results and the results by segment:

CONSOLIDATED RESULTS

	Thirteen Weeks Ended
	May 1, 2021				May 2, 2020
			% of				% of
($ millions)			Net Sales				Net Sales
Net sales	$	638.6	100.0	%	$	397.2	100.0	%
Cost of goods sold		363.7	57.0	%		275.3	69.3	%
Gross profit		274.9	43.0	%		121.9	30.7	%
Selling and administrative expenses		243.5	38.1	%		225.2	56.7	%
Impairment of goodwill and intangible assets		—	—	%		262.7	66.1	%
Restructuring and other special charges, net		13.5	2.1	%		60.2	15.2	%
Operating earnings (loss)		17.9	2.8	%		(426.2)	(107.3)	%
Interest expense, net		(11.8)	(1.8)	%		(9.5)	(2.4)	%
Other income, net		3.8	0.6	%		3.6	0.9	%
Earnings (loss) before income taxes		9.9	1.6	%		(432.1)	(108.8)	%
Income tax (provision) benefit		(3.5)	(0.6)	%		85.9	21.6	%
Net earnings (loss)		6.4	1.0	%		(346.2)	(87.2)	%
Net earnings (loss) attributable to noncontrolling interests		0.2	0.0	%		(0.4)	(0.1)	%
Net earnings (loss) attributable to Caleres, Inc.	$	6.2	1.0	%	$	(345.8)	(87.1)	%

Net Sales

Net sales increased $241.4 million, or 60.8%, to $638.6 million for the first quarter of 2021, compared to $397.2 million for the first quarter of 2020.  Our Famous Footwear segment experienced a sales increase of $206.8 million, or 108.2% during the first quarter of 2021, with net sales of $398.1 million exceeding our pre-pandemic first quarter 2019 sales level, achieving the highest net sales in a first quarter in our history.  Our strong performance was attributable to a number of factors, including positive consumer sentiment attributable to the widespread availability of the COVID-19 vaccine and easing of government restrictions, as well as the second round of government stimulus.  We believe that these factors led to a significant improvement in retail store traffic and conversion rates.  Net sales for our Brand Portfolio segment increased $33.1 million, or 15.2% during the first quarter of 2021.  While Brand Portfolio net sales improved over last year, they remain below pre-pandemic levels, due in part to the brand exits announced in late 2019 and early 2020 and the closure of all but two Naturalizer retail stores in North America. Our e-commerce and logistics capabilities helped drive a 21.4% increase in e-commerce sales on our owned websites during the first quarter of 2021, with consolidated e-commerce penetration representing approximately 26% of net sales.  On a consolidated basis, our direct-to-consumer sales represented 74.5% of total net sales for the first quarter of 2021.  Our casual, athletic and sport categories of footwear continued to be the strongest performers during the quarter, and demand for dress footwear is beginning to build.

Gross Profit

Gross profit increased $153.0 million, or 125.5%, to $274.9 million for the first quarter of 2021, compared to $121.9 million for the first quarter of 2020, due in part to higher net sales.  In addition, we were able to reduce promotional activity at Famous Footwear due to our well-positioned inventory and strong sell-throughs.  Furthermore, our gross profit in the first quarter of 2020 was impacted by higher incremental cost of goods sold primarily due to $33.4 million in inventory markdowns reflecting the difficult retail environment driven by the COVID pandemic, as well as $1.6 million in inventory markdowns related to the decision to exit our Fergie brand.  As a percentage of net sales, gross profit increased to 43.0% for the first quarter of 2021, compared to 30.7% for the first quarter of 2020.

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.

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Selling and Administrative Expenses

Selling and administrative expenses increased $18.3 million, or 8.1%, to $243.5 million for the first quarter of 2021, compared to $225.2 million for the first quarter of 2020.  The increase was primarily due to higher salaries in the first quarter of 2021, combined with higher expenses related to our incentive compensation plans.  In the first quarter of 2020, in response to our retail stores being shut down at the onset of the pandemic we took steps to reduce expense, including workforce reductions, furloughs for a significant portion of our retail store associates and temporary salary reductions for most remaining employees.  Logistics and other variable expenses were also higher in the first quarter of 2021 to support higher sales volume.  As a percentage of net sales, selling and administrative expenses decreased to 38.1% for the first quarter of 2021, from 56.7% for the first quarter of 2020.

Impairment of Goodwill and Intangible Assets

During the first quarter of 2020, we incurred impairment charges of $262.7 million ($218.5 million on an after-tax basis), including $240.3 million associated with goodwill and $22.4 million associated with the indefinite-lived Allen Edmonds and Via Spiga trade names.  There were no corresponding charges for the first quarter of 2021.   Refer to Note 5 and Note 8 to the condensed consolidated financial statements for further discussion of these charges.  

Restructuring and Other Special Charges, Net

We incurred restructuring and other special charges of $13.5 million ($11.9 million on an after-tax basis, or $0.31 per diluted share), reflecting expenses associated with the decision to close all Naturalizer retail stores in North America with the exception of two Naturalizer flagship retail stores in the United States.  Restructuring and other special charges of $60.2 million ($47.7 million on an after-tax basis, or $1.24 per diluted share) were incurred in the first quarter of 2020 related to the unfavorable business climate, driven by the impact of the COVID-19 pandemic on our business operations.  These charges were primarily for impairment associated with retail store furniture and fixtures and lease right-of-use assets and liabilities associated with factory order cancellations.  Refer to Note 5 to the condensed consolidated financial statements for further discussion of these charges.

Operating Earnings (Loss)

Operating earnings increased $444.1 million to $17.9 million for the first quarter of 2021, compared to an operating loss of $426.2 million for the first quarter of 2020, primarily reflecting higher net sales, gross profit and lower restructuring and impairment charges.  As a percentage of net sales, operating earnings were 2.8% for the first quarter of 2021, compared to an operating loss of 107.3% for the first quarter of 2020.

Interest Expense, Net

Interest expense, net increased $2.3 million, or 24.4%, to $11.8 million for the first quarter of 2021, compared to $9.5 million for the first quarter of 2020, reflecting the fair value adjustment to the Blowfish Malibu mandatory purchase obligation of $6.4 million in the first quarter of 2021, compared to $3.2 million in the first quarter of 2020.  The increase associated with the mandatory purchase obligation was partially offset by lower average borrowings under our revolving credit agreement.  We continued to make debt reduction a priority during the first quarter of 2021, repaying $50.0 million during the first quarter of 2021 and ending the quarter with $200.0 million of borrowings under our revolving credit facility.  

Other Income, Net

Other income, net increased $0.2 million, or 6.8%, to $3.8 million for the first quarter of 2021, compared to $3.6 million for the first quarter of 2020.  Refer to Note 13 of the condensed consolidated financial statements for further detail regarding the components of net periodic benefit income.

Income Tax Benefit (Provision)

Our effective tax rate can vary considerably from period to period, depending on a number of factors.  Our consolidated effective tax rate was 35.5% for the first quarter of 2021, compared to 19.9% for the first quarter of 2020.  Our higher tax rate for the thirteen weeks ended May 1, 2021 primarily reflects the non-deductibility of losses at our Canadian division, which were driven by exit-related costs associated with Naturalizer retail stores.  The rate was partially offset by discrete tax benefits totaling $1.2 million.  During the first quarter of 2020, our effective tax rate was impacted by several discrete tax items, including the non-deductibility of a portion of the Company's intangible asset impairment charges, the provision of a valuation allowance related to net deferred tax assets of its Canadian business division and the incremental tax provision related to share-based compensation.  

Net Earnings (Loss) Attributable to Caleres, Inc.

Net earnings attributable to Caleres, Inc. were $6.2 million for the first quarter of 2021, compared to a net loss of $345.8 million for the first quarter of 2020, respectively, as a result of the factors described above.

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FAMOUS FOOTWEAR

	Thirteen Weeks Ended
	May 1, 2021					May 2, 2020
				% of					% of
($ millions, except sales per square foot)				Net Sales					Net Sales
Net sales	$	398.1		100.0	%	$	191.3		100.0	%
Cost of goods sold		218.3		54.8	%		122.2		63.9	%
Gross profit		179.8		45.2	%	$	69.1		36.1	%
Selling and administrative expenses		131.9		33.2	%		120.6		63.0	%
Restructuring and other special charges, net		—		—	%		16.0		8.4	%
Operating earnings (loss)	$	47.9		12.0	%	$	(67.5)		(35.3)	%
Key Metrics
Same-store sales % change		3.3	%				12.6	%
Same-store sales $ change	$	6.2				$	21.8
Sales change from new and closed stores, net	$	200.2				$	(182.7)
Impact of changes in Canadian exchange rate on sales	$	0.4				$	(0.0)
Sales per square foot, excluding e-commerce (thirteen weeks ended)	$	55				$	22
Sales per square foot, excluding e-commerce (trailing twelve months)	$	193				$	195
Square footage (thousand sq. ft.)		6,043					6,198
Stores opened		4					—
Stores closed		7					15
Ending stores		913					934

Net Sales

Net sales increased $206.8 million, or 108.2%, to $398.1 million for the first quarter of 2021, compared to $191.3 million for the first quarter of 2020, and also exceeded our pre-pandemic first quarter 2019 sales level.  Our strong performance during the first quarter of 2021 was attributable to a number of factors.  Consumer confidence increased during the quarter as a result of the widespread availability of the COVID-19 vaccine and the easing of government restrictions, which led to a significant improvement in retail store traffic and conversion rates.  In addition, the second round of government stimulus positively impacted net sales for the quarter.  We also continue to experience strong growth in our e-commerce business, which increased approximately 17% for the first quarter of 2021.  E-commerce penetration was approximately 16% of net sales in the first quarter of 2021, compared to approximately 28% in the first quarter of 2020 when our retail stores were closed for approximately half of the quarter.  We opened four stores and closed seven stores during the first quarter of 2021, resulting in 913 stores and total square footage of 6.0 million at the end of the first quarter of 2021, compared to 934 stores and total square footage of 6.2 million at the end of the first quarter of 2020.  Sales to members of our customer loyalty program, Famously You Rewards ("Rewards"), continue to account for a majority of the segment’s sales, with approximately 81% of our net sales made to program members in the first quarter of 2021, compared to 79% in the first quarter of 2020.  

Gross Profit

Gross profit increased $110.7 million, or 160.3%, to $179.8 million for the first quarter of 2021, compared to $69.1 million for the first quarter of 2020, driven by the sales increase. As a percentage of net sales, our gross profit increased to 45.2% for the first quarter of 2021, compared to 36.1% for the first quarter of 2020.  Due to our well-positioned inventory and strong sell-throughs, we reduced promotional activity.  As a result, both our retail stores and e-commerce business experienced higher gross margins than the first quarter of 2020.  In addition, our gross margin in the first quarter of 2020 was impacted by $6.0 million in incremental inventory markdowns, reflecting the difficult retail environment in 2020 driven by the pandemic.

Selling and Administrative Expenses

Selling and administrative expenses increased $11.3 million, or 9.4%, to $131.9 million for the first quarter of 2021, compared to $120.6 million for the first quarter of 2020.  The increase was primarily due to higher salaries in the first quarter of 2021, as well as an increase in logistics and other variable expenses to support the higher sales volume.  In addition, in the first quarter of  2020, in response to our retail stores being shut down at the onset of the pandemic, we took steps to reduce expense, including workforce reductions, furloughs for a significant portion of our retail store associates and temporary salary reductions for most remaining employees. As a percentage of net sales, selling and administrative expenses decreased to 33.2% for the first quarter of 2021, compared to 63.0% for the first quarter of 2020.

Restructuring and Other Special Charges, Net

Restructuring and other special charges were $16.0 million for the first quarter of 2020, consisting primarily of impairment charges on furniture and fixtures in our retail stores and lease right-of use assets reflecting the impact of COVID-19 on our business operations.  Refer

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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 2021.  

Operating Earnings (Loss)

Our record sales performance also led to significant improvement in our operating earnings.  Operating earnings (loss) increased $115.4 million to operating earnings of $47.9 million for the first quarter of 2021, compared to an operating loss of $67.5 million for the first quarter of 2020.  As a percentage of net sales, operating earnings were 12.0% for the first quarter of 2021, compared to an operating loss of 35.3% for the first quarter of 2020.

BRAND PORTFOLIO

	Thirteen Weeks Ended
	May 1, 2021					May 2, 2020
				% of					% of
($ millions, except sales per square foot)				Net Sales					Net Sales
Net sales	$	250.3		100.0	%	$	217.2		100.0	%
Cost of goods sold		156.3		62.4	%		163.8		75.4	%
Gross profit		94.0		37.6	%		53.4		24.6	%
Selling and administrative expenses		83.3		33.3	%		92.6		42.6	%
Impairment of goodwill and intangible assets		—		—	%		262.7		120.9	%
Restructuring and other special charges, net		13.5		5.4	%		43.8		20.2	%
Operating loss	$	(2.8)		(1.1)	%	$	(345.7)		(159.2)	%
Key Metrics
Direct-to-consumer (% of net sales) (1)		31	%				29	%
Change in wholesale net sales ($)	$	14.9				$	(91.1)
Unfilled order position at end of period	$	264.5				$	188.3
Same-store sales % change		5.1	%				(24.8)	%
Same-store sales $ change	$	1.3				$	(9.6)
Sales change from new and closed stores, net	$	16.5				$	(23.1)
Impact of changes in Canadian exchange rate on retail sales	$	0.4				$	(0.1)
Sales per square foot, excluding e-commerce (thirteen weeks ended)	$	188				$	31
Sales per square foot, excluding e-commerce (trailing twelve months)	$	336				$	328
Square footage (thousands sq. ft.)		138					356
Stores opened		1					—
Stores closed		76					19
Ending stores		95					203

(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

Net sales increased $33.1 million, or 15.2%, to $250.3 million for the first quarter of 2021, compared to $217.2 million for the first quarter of 2020.  Net sales improved over last year, yet remain below pre-pandemic levels.  We experienced a rebound in demand for sport and casual product, and demand for dress footwear is also beginning to build.  During the first quarter of 2021, we experienced strong sales growth from our Sam Edelman, Blowfish, Vionic and Ryka brands, which carry a large assortment of athletic and casual styles.  

In the first quarter of 2021, we closed the remaining 73 Naturalizer stores in North America scheduled for closure as part of our strategic realignment of the Naturalizer retail store operations.  We will remain focused 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 and four stores in China that we continue to operate.    

In total, we closed 76 stores during the first quarter of 2021, including 73 stores in conjunction with the Naturalizer retail store exit described above, and opened one store, resulting in a total of 95 stores and total square footage of 0.1 million at the end of the first quarter of 2021, compared to 203 stores and total square footage of 0.4 million at the end of the first quarter of 2020.  On a trailing twelve-month basis, sales per square foot, excluding e-commerce sales, increased to $336 for the twelve months ended May 1, 2021, compared to $328 for the twelve

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months ended May 2, 2020.  E-commerce sales continued to grow as a percentage of the business during the first quarter, and we expect this trend to continue.

Our unfilled order position for our wholesale sales increased $76.2 million, or 40.5%, to $264.5 million at May 1, 2021, compared to $188.3 million at May 2, 2020.  The increase in our backlog order levels reflects increased demand for product as our wholesale customers placed more orders than last year due to the economic impact of the COVID-19 pandemic in the first quarter of 2020.  We have experienced global supply chain disruptions to our receipt of inventory due to port congestion and reduced shipping vessel and container availability.  We expect this to continue into the third quarter of 2021.  

Gross Profit

Gross profit increased $40.6 million, or 76.1%, to $94.0 million for the first quarter of 2021, compared to $53.4 million for the first quarter of 2020, due in part to higher net sales.  Our gross profit in 2021 was adversely impacted by the exit of the Naturalizer retail stores, as deeper discounts were provided to clear remaining inventory.  However, our gross profit in the first quarter of 2020 was impacted by higher incremental cost of goods sold primarily due to $27.5 million in inventory markdowns reflecting the difficult retail environment driven by the COVID pandemic, as well as $1.6 million in inventory markdowns related to the decision to exit our Fergie brand.  As a percentage of net sales, our gross profit increased to 37.6% for the first quarter of 2021, compared to 24.6% for the first quarter of 2020.

Selling and Administrative Expenses

Selling and administrative expenses decreased $9.3 million, or 10.0%, to $83.3 million for the first quarter of 2021, compared to $92.6 million for the first quarter of 2020.  The decrease was driven by lower logistics, retail facilities and salaries expense primarily associated with the Naturalizer retail store closures, partially offset by higher marketing expenses.  As a percentage of net sales, selling and administrative expenses decreased to 33.3% for the first quarter of 2021, compared to 42.6% for the first quarter of 2020.

Impairment of Goodwill and Intangible Assets

During the first quarter of 2020, we incurred impairment charges of $262.7 million, including $240.3 million associated with goodwill and $22.4 million associated with intangible assets, including $12.2 million for the Allen Edmonds trade name and $10.2 million for the Via Spiga trade name.  There were no corresponding charges in the first quarter of 2021. Refer to Note 5 and Note 8 to the condensed consolidated financial statements for further discussion of these charges.

Restructuring and Other Special Charges, Net

Restructuring and other special charges were $13.5 million for the first quarter of 2021, reflecting expenses associated with the decision to close all but two flagship Naturalizer retail stores in the U.S.  These costs primarily represent lease termination and other store closure costs, including employee severance.  In the first quarter of 2020, we recorded restructuring and other special charges of $43.8 million, reflecting expenses associated with the impact of COVID-19 on our business operations, primarily impairment charges on store furniture and fixtures and lease right-of-use assets of $19.3 million and liabilities due to our factories for order cancellations of $14.3 million.  Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.

Operating Loss

Operating loss decreased $342.9 million to $2.8 million for the first quarter of 2021, compared to $345.7 million for the first quarter of 2020 as a result of the factors described above.  As a percentage of net sales, the operating loss was 1.1% for the first quarter of 2021, compared to 159.2% in the first quarter of 2020.

ELIMINATIONS AND OTHER

	Thirteen Weeks Ended
	May 1, 2021				May 2, 2020
			% of				% of
($ millions)			Net Sales				Net Sales
Net sales	$	(9.8)	100.0	%	$	(11.3)	100.0	%
Cost of goods sold		(10.9)	110.9	%		(10.7)	94.8	%
Gross profit		1.1	(10.9)	%		(0.6)	5.2	%
Selling and administrative expenses		28.3	(289.0)	%		11.9	(105.9)	%
Restructuring and other special charges, net		—	—	%		0.4	(3.2)	%
Operating loss	$	(27.2)	278.1	%	$	(12.9)	114.3	%

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

The net sales elimination of $9.8 million for the first quarter of 2021 is $1.5 million, or 13.6%, lower than the first quarter of 2020, reflecting  a decrease in product sold from our Brand Portfolio segment to Famous Footwear.

Selling and administrative expenses increased $16.4 million, to $28.3 million in the first quarter of 2021, compared to $11.9 million for the first quarter of 2020.  The increase was primarily driven by higher expenses for our cash-based incentive compensation plan for certain employees and higher expenses associated with our cash-based director compensation plans, reflecting growth in our stock price during the first quarter of 2021 compared to a decline during the first quarter of 2020.  

Restructuring and other special charges were $0.4 million for the first quarter of 2020, with no corresponding costs in the first quarter of 2021.  The expenses incurred during the first quarter of 2020 were associated with workforce reductions as we sought to minimize our expense structure during the COVID-19 pandemic, as well as incremental expenses associated with deep cleaning our facilities and related supplies.  Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.

LIQUIDITY AND CAPITAL RESOURCES

Borrowings

($ millions)	May 1, 2021		May 2, 2020		January 30, 2021
Borrowings under revolving credit agreement	$	200.0	$	438.5	$	250.0
Long-term debt		199.0		198.5		198.9
Total debt (1)	$	399.0	$	637.0	$	448.9

(1) Total debt excludes the Blowfish Malibu mandatory purchase obligation, which was valued at $45.5 million, $18.4 million and $39.1 million as of May 1, 2021, May 2, 2020 and January 30, 2021, respectively.

Total debt obligations of $399.0 million at May 1, 2021 decreased $238.0 million, from $637.0 million at May 2, 2020, and decreased $49.9 million, from $448.9 million at January 30, 2021.  The decreases from both May 2, 2020 and January 30, 2021 reflect continued progress toward reducing the borrowings under our Credit Agreement.  We reduced the borrowings under our revolving credit facility by $50.0 million, ending the first quarter of 2021 with an outstanding balance of $200.0 million.  Net interest expense for the first quarter of 2021 increased $2.3 million to $11.8 million, compared to $9.5 million for the first quarter of 2020.  The increase is primarily attributable to the fair value adjustment for the mandatory purchase obligation associated with the Blowfish Malibu acquisition, as further discussed in Note 5 and Note 14 to the condensed consolidated financial statements, partially offset by lower average borrowings under our revolving credit agreement.

Credit Agreement

As further discussed in Note 10 to the condensed consolidated financial statements, the Company maintains a revolving credit facility for working capital needs.  On April 14, 2020, we entered into a Fourth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the "Credit Agreement") which, among other modifications, increased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $600.0 million, subject to borrowing base restrictions, and may be further increased by up to $150.0 million. Interest on the borrowings is at variable rates based on the London Interbank Offered Rate ("LIBOR") (with a floor of 1.0% imposed by the Credit Agreement) or the prime rate, plus a spread.  The Credit Agreement increased the spread applied to the LIBOR or prime rate by a total of 75 basis points and increased the unused line fee by 5 basis points.  At May 1, 2021, we had $200.0 million in borrowings and $12.5 million in letters of credit outstanding under the Credit Agreement.  Total borrowing availability was $211.3 million at May 1, 2021.  We were in compliance with all covenants and restrictions under the Credit Agreement as of May 1, 2021.

$200 Million Senior Notes

On July 27, 2015, we issued $200.0 million aggregate principal amount of Senior Notes due on August 15, 2023 (the "Senior Notes").  The Senior Notes bear interest at 6.25%, which is payable on February 15 and August 15 of each year.  We may redeem some or all of the Senior Notes at a redemption price (expressed as a percentage of principal amount) of 101.563% if redeemed prior to August 15, 2021 and 100.000% if redeemed after August 15, 2021, plus any accrued and unpaid interest and Additional Interest (as defined in the Senior Notes indenture).  The Senior Notes also contain covenants and restrictions that limit certain activities including, among other things, levels of indebtedness,

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payments of dividends, the guarantee or pledge of assets, certain investments, common stock repurchases, mergers and acquisitions and sales of assets.  As of May 1, 2021, we were in compliance with all covenants and restrictions relating to the Senior Notes.

Supplemental Guarantor Financial Information

The Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by all of its existing and future subsidiaries that are guarantors under the Company’s Credit Agreement.  The guarantors are 100% owned by Caleres, Inc. ("Parent").  On October 31, 2018, Vionic 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, Allen Edmonds and Vionic are each co-borrowers and guarantors under the Credit Agreement.  The following tables present summarized financial information for the Parent and guarantors on a combined basis after elimination of intercompany transactions between entities and amounts related to investments in any subsidiary that is a non-guarantor:

($ millions)	May 1, 2021		January 30, 2021
Current assets	$	684.1	$	686.3
Non-current assets		993.0		1,029.5
Current liabilities		795.6		818.4
Non-current liabilities		713.6		740.0

	Thirteen Weeks
	Ended
($ millions)	May 1, 2021
Net sales (1)	$	584.8
Gross profit		254.7
Operating earnings		13.9
Net earnings		10.5
Net earnings attributable to Caleres, Inc.		10.5

(1) Intercompany activity with the non-guarantor entities for the thirteen weeks ended May 1, 2021 was not material.

Working Capital and Cash Flow

	Thirteen Weeks Ended
($ millions)	May 1, 2021		May 2, 2020		Change
Net cash provided by operating activities	$	70.3	$	0.7	$	69.6
Net cash used for investing activities		(3.9)		(4.5)		0.6
Net cash (used for) provided by financing activities		(56.6)		146.5		(203.1)
Effect of exchange rate changes on cash and cash equivalents		0.1		(0.2)		0.3
Increase in cash and cash equivalents	$	9.9	$	142.5	$	(132.6)

Reasons for the major variances in cash provided (used) in the table above are as follows:

Cash provided by operating activities was $69.6 million higher in the three months ended May 1, 2021 as compared to the three months ended May 2, 2020, primarily reflecting the following factors:

● An increase in net earnings, after consideration of non-cash items, in the three months ended May 1, 2021, compared to the comparable period in 2020; and

● A decrease in prepaid expenses and other current and noncurrent assets in the three months ended May 1, 2021, compared to an increase in the three months ended May 2, 2020, due in part to a higher income tax receivable as of May 2, 2020; and

● A larger decrease in inventory for the three months ended May 1, 2021, compared to the three months ended May 2, 2020 driven by higher sales, the liquidation of inventory from the Naturalizer retail store closings and supply chain disruptions; partially offset by

● A decrease in accrued expenses and other liabilities for the three months ended May 1, 2021, compared to an increase in the three months ended May 2, 2020; and

● A smaller increase in accounts payable in the three months ended May 1, 2021, compared to the three months ended May 2, 2020.

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Supply chain financing:  Certain of our suppliers are given the opportunity to sell receivables from us related to products we’ve purchased to participating financial institutions at a rate that leverages our credit rating, which may be more beneficial to the suppliers than the rate they can obtain based upon their own credit rating. We negotiate payment and other terms with our suppliers, regardless of whether the supplier participates in the program, and our responsibility is limited to making payment based on the terms originally negotiated with the supplier.  These liabilities continue to be presented as accounts payable in our condensed consolidated balance sheets, with changes reflected within cash flows from operating activities when settled.  As of May 1, 2021, we had $55.0 million of accounts payable subject to supply chain financing arrangements.  There was an immaterial amount of accounts payable subject to supply chain financing arrangements at May 2, 2020.  

Cash used for investing activities was $0.6 million lower in the three months ended May 1, 2021 as compared to the three months ended May 2, 2020, reflecting slightly lower capital expenditures in the three months ended May 1, 2021.  In 2021, we expect our purchases of property and equipment and capitalized software to between $20 million and $30 million, as compared to $22.1 million in 2020.

Cash used for financing activities was $203.1 million higher for the three months ended May 1, 2021 as compared to the three months ended May 2, 2020, primarily due to $50.0 million of net repayments under our revolving credit agreement in the three months ended May 1, 2021, compared to net borrowings of $163.5 million in the comparable period in 2020.  In addition, we did not repurchase any shares under our share repurchase programs during the three months ended May 1, 2021, compared to $12.9 million in the three months ended May 2, 2020.

A summary of key financial data and ratios at the dates indicated is as follows:

	May 1, 2021			May 2, 2020			January 30, 2021
Operating working capital ($ millions) (1)	$	126.3		$	343.2		$	191.8
Current ratio (2)		0.87:1			0.94:1			0.86:1
Debt-to-capital ratio (3)		65.9	%		69.1	%		68.8	%

(1) Operating working capital has been computed as total current assets, excluding cash, less total current 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. Total capitalization is defined as total debt and total equity.

Operating working capital at May 1, 2021 was $126.3 million, which was $216.9 million lower than at May 2, 2020 and $65.5 million lower than at January 30, 2021.  Our current ratio was 0.87 to 1 as of May 1, 2021, compared to 0.94 to 1 at May 2, 2020 and 0.86:1 at January 30, 2021.  The decrease in both operating working capital and the current ratio from May 2, 2020 primarily reflects lower inventories driven by higher sales in the three months ended May 1, 2021 and ongoing logistics delays, as well as the reclassification of the mandatory purchase obligation to current liabilities, reflecting the anticipated settlement in the third quarter of 2021.  The decrease in operating working capital from January 30, 2021 primarily reflects lower inventories and a decrease in lease obligations, partially offset by higher trade accounts payable.  Our debt-to-capital ratio was 65.9% as of May 1, 2021, compared to 69.1% as of May 2, 2020 and 68.8% at January 30, 2021.  The decrease in our debt-to-capital ratio from May 2, 2020 and January 30, 2021 primarily reflects lower borrowings or our revolving credit facility at May 1, 2021.  We believe our cash flows from operations, as well as $211.3 million in borrowing availability under the Credit Agreement, provide ample liquidity to meet the Company’s working capital needs for the foreseeable future.

We declared and paid dividends of $0.07 per share in the first quarter of both 2021 and 2020.  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 contractual obligations primarily consist of purchase obligations, operating lease commitments, long-term debt, interest on long-term debt, minimum license commitments, financial instruments, mandatory purchase obligation associated with the acquisition of Blowfish Malibu, one-time transition tax for the mandatory deemed repatriation of cumulative foreign earnings, obligations for our supplemental executive retirement plan and other postretirement benefits and obligations.

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Except for these items and changes within the normal course of business (primarily changes in purchase obligations, which fluctuate throughout the year as a result of the seasonal nature of our operations, changes in borrowings under our revolving credit agreement, changes in the mandatory purchase obligation associated with the acquisition of Blowfish Malibu and changes in operating lease commitments as a result of new stores, store closures and lease renewals), there have been no other significant changes to the contractual obligations identified in our Annual Report on Form 10-K for the year ended January 30, 2021.

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 30, 2021.

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

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) the coronavirus pandemic and its adverse impact on our business operations, store traffic and financial condition (ii) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions and other factors; (iii) rapidly changing consumer preferences and purchasing patterns and fashion trends; (iv) intense competition within the footwear industry; (v) customer concentration and increased consolidation in the retail industry; (vi) foreign currency fluctuations; (vii) impairment charges resulting from a long-term decline in our stock price; (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; (ix) cybersecurity threats or other major disruption to the company’s information technology systems; (x) the ability to accurately forecast sales and manage inventory levels; (xi) a disruption in the company’s distribution centers; (xii) the ability to recruit and retain senior management and other key associates; (xiii) the ability to maintain relationships with current suppliers; (xiv) the ability to secure/exit leases on favorable terms; (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.  The 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 30, 2021, 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

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 Annual Report on Form 10-K for the year ended January 30, 2021.

ITEM 4    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

It is the Chief Executive Officer’s and Chief Financial Officer’s ultimate responsibility to ensure we maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  Our disclosure controls and

36

procedures include mandatory communication of material events, automated accounting processing and reporting, management review of monthly, quarterly and annual results, an established system of internal controls and ongoing monitoring by our internal auditors.

A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to errors or fraud may occur and not be detected. Our disclosure controls and procedures are designed to provide a reasonable level of assurance that their objectives are achieved.  As of May 1, 2021, management of the Company, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934).  Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded our disclosure controls and procedures were effective at the reasonable assurance level.

Based on the evaluation of internal control over financial reporting, the Chief Executive Officer and Chief Financial Officer have concluded that there have been no changes in the Company’s internal controls over financial reporting during the quarter ended May 1, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II  OTHER INFORMATION

ITEM 1    LEGAL PROCEEDINGS

We are 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 will not have a material adverse effect on our results of operations or financial position. All legal costs associated with litigation are expensed as incurred.

Information regarding Legal Proceedings is set forth within Note 16 to the condensed consolidated financial statements and incorporated by reference herein.

ITEM 1A  RISK FACTORS

There have been no material changes that have occurred related to our risk factors since the end of the most recent fiscal year. For further information, see Part I, Item 1A of our Annual Report on Form 10-K for the year ended January 30, 2021.

37

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 first quarter of 2021:

				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 31, 2021 - February 27, 2021	—	$	—	—	2,651,489
February 28, 2021 - April 3, 2021	188,738		18.54	—	2,651,489
April 4, 2021 - May 1, 2021	—		—	—	2,651,489
Total	188,738	$	18.54	—	2,651,489

(1) 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.  The employee shares were tendered in satisfaction of the exercise price of stock options and/or to satisfy tax withholding amounts for non-qualified stock options, restricted stock and stock performance awards.

(2) On December 14, 2018, the Board of Directors approved a stock repurchase program ("2018 Program") authorizing the repurchase of 2,500,000 shares of our outstanding common stock.  In addition, on September 2, 2019, the Board of Directors approved a stock repurchase program ("2019 Program") authorizing the repurchase of an additional 5,000,000 shares of our outstanding common stock.  We can use the repurchase programs to repurchase shares on the open market or in private transactions from time to time, depending on market conditions.  The repurchase programs do not have an expiration date.  The Company did not repurchase any shares under these plans during the thirteen weeks ended May 1, 2021.  During the thirteen weeks ended May 2, 2020, the Company repurchased 1,510,888 shares.  As of May 1, 2021, there were 2,651,489 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.

38

ITEM 6    EXHIBITS

Exhibit No.
3.1		Restated Certificate of Incorporation of Caleres, Inc. (the “Company”) incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed May 29, 2020.
3.2		Bylaws of the Company as amended through May 28, 2020, incorporated herein by reference to Exhibit 3.2 to the Company’s Form 8-K filed May 29, 2020.
22		List of Guarantor Subsidiaries, incorporated herein by reference to Exhibit 22 to the Company’s Form 10-Q for the quarter ended October 31, 2020, and filed December 9, 2020.
31.1	†	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	†	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	†	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	†	iXBRL Instance Document
101.SCH	†	iXBRL Taxonomy Extension Schema Document
101.CAL	†	iXBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	†	iXBRL Taxonomy Extension Label Linkbase Document
101.PRE	†	iXBRL Taxonomy Presentation Linkbase Document
101.DEF	†	iXBRL Taxonomy Definition Linkbase Document
104	†	Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.

† Denotes exhibit is filed with this Form 10-Q.

39

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CALERES, INC.
Date: June 9, 2021	/s/ Kenneth H. Hannah
	Kenneth H. Hannah Senior Vice President and Chief Financial Officer on behalf of the Registrant and as the Principal Financial Officer

40

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Diane M. Sullivan, certify that:

1.            I have reviewed this report on Form 10-Q of Caleres, Inc. (the “registrant”);

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)            Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Diane M. Sullivan

Diane M. Sullivan

Chief Executive Officer and Chairman of the Board of Directors

Caleres, Inc.

June 9, 2021

EX-31.2

Exhibit 31.2

CERTIFICATIONS 

I, Kenneth H. Hannah, certify that:

1.           I have reviewed this report on Form 10-Q of Caleres, Inc. (the “registrant”);

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Kenneth H. Hannah

Kenneth H. Hannah

Senior Vice President and Chief Financial Officer

Caleres, Inc.

June 9, 2021

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. §1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Caleres, Inc. (the “Registrant”) on Form 10-Q for the quarter ended May 1, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Diane M. Sullivan, Chief Executive Officer and Chairman of the Board of Directors of the Registrant, and Kenneth H. Hannah, Senior Vice President and Chief Financial Officer of the Registrant, certify, to the best of our knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Diane M. Sullivan

Diane M. Sullivan

Chief Executive Officer and Chairman of the Board of Directors

Caleres, Inc.

June 9, 2021

/s/ Kenneth H. Hannah

Kenneth H. Hannah

Senior Vice President and Chief Financial Officer

Caleres, Inc.

June 9, 2021

XML

Document And Entity Information - shares	3 Months Ended
	May 01, 2021	May 28, 2021
Document And Entity Information
Entity Central Index Key	0000014707
Entity Registrant Name	CALERES, INC
Amendment Flag	false
Current Fiscal Year End Date	--01-29
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	May 01, 2021
Document Transition Report	false
Entity File Number	1-2191
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	43-0197190
Entity Address, Address Line One	8300 Maryland Avenue
Entity Address, City or Town	St. Louis
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63105
City Area Code	314
Local Phone Number	854-4000
Title of 12(b) Security	Common Stock - par value of $0.01 per share
Trading Symbol	CAL
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		38,282,472

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	May 01, 2021	Jan. 30, 2021	May 02, 2020
Current assets:
Cash and cash equivalents	$ 98,244	$ 88,295	$ 187,717
Receivables, net	132,698	126,994	145,333
Inventories, net	445,299	487,955	585,307
Income taxes	35,850	33,925	46,870
Prepaid expenses and other current assets	45,027	45,387	44,563
Total current assets	757,118	782,556	1,009,790
Prepaid pension costs	91,397	88,833	52,960
Lease right-of-use assets	526,011	554,303	648,534
Property and equipment, net	165,118	172,437	200,800
Deferred income taxes	0	0	9,456
Goodwill and intangible assets, net	236,924	240,071	273,648
Other assets	26,255	28,850	28,497
Total assets	1,802,823	1,867,050	2,223,685
Current liabilities:
Borrowings under revolving credit agreement	200,000	250,000	438,500
Mandatory purchase obligation - Blowfish Malibu	45,523	39,134	0
Trade accounts payable	293,309	280,501	297,557
Income taxes	11,359	5,069	7,592
Lease obligations	133,327	153,060	160,138
Other accrued expenses	182,419	177,745	173,752
Total current liabilities	865,937	905,509	1,077,539
Other liabilities:
Noncurrent lease obligations	490,355	518,942	601,133
Long-term debt	198,966	198,851	198,506
Income taxes	2,464	5,038	7,786
Deferred income taxes	10,256	8,244	11,780
Other liabilities	28,189	26,612	41,818
Total other liabilities	730,230	757,687	861,023
Equity:
Common stock	383	380	393
Additional paid-in capital	159,381	160,446	154,930
Accumulated other comprehensive loss	(8,936)	(9,136)	(33,216)
Retained earnings	52,041	48,557	160,189
Total Caleres, Inc. shareholders' equity	202,869	200,247	282,296
Noncontrolling interests	3,787	3,607	2,827
Total equity	206,656	203,854	285,123
Total liabilities and equity	$ 1,802,823	$ 1,867,050	$ 2,223,685

XML

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
Net sales	$ 638,636	$ 397,184
Cost of goods sold	363,749	275,286
Gross profit	274,887	121,898
Selling and administrative expenses	243,535	225,194
Impairment of goodwill and intangible assets	0	262,719
Restructuring and other special charges, net	13,482	60,196
Operating earnings (loss)	17,870	(426,211)
Interest expense, net	(11,792)	(9,478)
Other income, net	3,828	3,585
Earnings (loss) before income taxes	9,906	(432,104)
Income tax (provision) benefit	(3,521)	85,932
Net earnings (loss)	6,385	(346,172)
Net earnings (loss) attributable to noncontrolling interests	238	(334)
Net earnings (loss) attributable to Caleres, Inc.	$ 6,147	$ (345,838)
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	$ 0.16	$ (8.95)
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	$ 0.16	$ (8.95)

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net earnings (loss)	$ 6,385	$ (346,172)
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment	(224)	(1,550)
Pension and other postretirement benefits adjustments	366	66
Derivative financial instruments	0	92
Other comprehensive income (loss), net of tax	142	(1,392)
Comprehensive income (loss)	6,527	(347,564)
Comprehensive income (loss) attributable to noncontrolling interests	180	(353)
Comprehensive income (loss) attributable to Caleres, Inc.	$ 6,347	$ (347,211)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Operating Activities
Net earnings (loss)	$ 6,385	$ (346,172)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation	8,945	12,119
Amortization of capitalized software	1,518	1,493
Amortization of intangible assets	3,147	3,212
Amortization of debt issuance costs and debt discount	343	330
Fair value adjustments to mandatory purchase obligation	6,389	3,233
Share-based compensation expense	2,439	2,351
Loss on disposal of property and equipment	811	113
Impairment charges for property, equipment, and lease right-of-use assets	1,888	35,222
Impairment of goodwill and intangible assets	0	262,719
Provision/adjustment for expected credit losses	(152)	8,704
Deferred income taxes	2,012	(33,498)
Changes in operating assets and liabilities:
Receivables	(5,553)	5,999
Inventories	43,062	31,979
Prepaid expenses and other current and noncurrent assets	(10)	(56,231)
Trade accounts payable	12,665	30,969
Accrued expenses and other liabilities	(14,730)	31,838
Income taxes, net	1,791	6,600
Other, net	(572)	(252)
Net cash provided by operating activities	70,378	728
Investing Activities
Purchases of property and equipment	(2,659)	(3,523)
Capitalized software	(1,218)	(977)
Net cash used for investing activities	(3,877)	(4,500)
Financing Activities
Borrowings under revolving credit agreement	110,500	168,500
Repayments under revolving credit agreement	(160,500)	(5,000)
Dividends paid	(2,663)	(2,810)
Acquisition of treasury stock	0	(12,932)
Issuance of common stock under share-based plans, net	(3,501)	(906)
Other	(450)	(323)
Net cash (used for) provided by financing activities	(56,614)	146,529
Effect of exchange rate changes on cash and cash equivalents	62	(258)
Increase in cash and cash equivalents	9,949	142,499
Cash and cash equivalents at beginning of period	88,295	45,218
Cash and cash equivalents at end of period	$ 98,244	$ 187,717

XML

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Cumulative effect adjustment Retained Earnings	Cumulative effect adjustment Calares, Inc.	Cumulative effect adjustment	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Retained Earnings	Calares, Inc.	Non-controlling Interest	Total
BALANCE (Accounting Standards Update 2016-13) at Feb. 01, 2020	$ (2,146)	$ (2,146)	$ (2,146)
BALANCE at Feb. 01, 2020				$ 404	$ 153,489	$ (31,843)	$ 523,900	$ 645,950	$ 3,180	$ 649,130
BALANCE (in shares) at Feb. 01, 2020				40,396,757
Net earnings (loss)							(345,838)	(345,838)	(334)	(346,172)
Foreign currency translation adjustment						(1,531)		(1,531)	(19)	(1,550)
Unrealized gain (loss) on derivative financial instruments, net of tax						92		92		92
Pension and other postretirement benefits adjustments						66		66		66
Comprehensive income (loss)						(1,373)	(345,838)	(347,211)	(353)	(347,564)
Dividends							(2,810)	(2,810)		(2,810)
Acquisition of treasury stock				$ (15)			(12,917)	(12,932)		(12,932)
Acquisition of treasury stock (in shares)				(1,510,888)
Issuance of common stock under share-based plans, net				$ 4	(910)			(906)		(906)
Issuance of common stock under share-based plans, net (in shares)				414,121
Share-based compensation expense					2,351			2,351		2,351
BALANCE at May. 02, 2020				$ 393	154,930	(33,216)	160,189	282,296	2,827	285,123
BALANCE (in shares) at May. 02, 2020				39,299,990
BALANCE at Jan. 30, 2021				$ 380	160,446	(9,136)	48,557	200,247	3,607	203,854
BALANCE (in shares) at Jan. 30, 2021				37,966,204
Net earnings (loss)							6,147	6,147	238	6,385
Foreign currency translation adjustment						(166)		(166)	(58)	(224)
Unrealized gain (loss) on derivative financial instruments, net of tax										0
Pension and other postretirement benefits adjustments						366		366		366
Comprehensive income (loss)						200	6,147	6,347	180	6,527
Dividends							(2,663)	(2,663)		(2,663)
Issuance of common stock under share-based plans, net				$ 3	(3,504)			(3,501)		(3,501)
Issuance of common stock under share-based plans, net (in shares)				327,268
Share-based compensation expense					2,439			2,439		2,439
BALANCE at May. 01, 2021				$ 383	$ 159,381	$ (8,936)	$ 52,041	$ 202,869	$ 3,787	$ 206,656
BALANCE (in shares) at May. 01, 2021				38,293,472

XML

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Pension and other postretirement benefits adjustments, tax	$ 97	$ 628
Dividends, per share (in dollars per share)	$ 0.07	$ 0.07
Unrealized gain (loss) on derivative financial instruments, tax		$ 31

XML

Basis of Presentation and General

3 Months Ended

May 01, 2021

Basis of Presentation and General

Basis of Presentation and General

Note 1    Basis of Presentation and General

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the United States Securities and Exchange Commission (“SEC”) and reflect all adjustments and accruals of a normal recurring nature, which management believes are necessary to present fairly the financial position, results of operations, comprehensive income and cash flows of Caleres, Inc. ("the Company"). These statements, however, do not include all information and footnotes necessary for a complete presentation of the Company’s consolidated financial position, results of operations, comprehensive income and cash flows in conformity with accounting principles generally accepted in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries, after the elimination of intercompany accounts and transactions.

The Company’s business is seasonal in nature due to consumer spending patterns, with higher back-to-school and holiday season sales. Traditionally, the third fiscal quarter accounts for a substantial portion of the Company’s earnings for the year. Interim results may not necessarily be indicative of results which may be expected for any other interim period or for the year as a whole, particularly given the impact of the coronavirus pandemic, as further discussed below.

Certain prior period amounts in the condensed consolidated financial statements and footnotes have been reclassified to conform to the current period presentation. These reclassifications did not affect net (loss) earnings attributable to Caleres, Inc.

The accompanying condensed consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended January 30, 2021.

Noncontrolling Interests

During 2019, the Company entered into a joint venture with Brand Investment Holding Limited (“Brand Investment Holding”), a member of the Gemkell Group.  The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”).  Net sales and operating earnings were not significant during the thirteen weeks ended May 1, 2021 and May 2, 2020.

The Company had a joint venture agreement with a subsidiary of C. banner International Holdings Limited (“CBI”) to market Naturalizer footwear in China. The Company was a 51% owner of the joint venture (“B&H Footwear”), with CBI owning the other 49%.  The license enabling the joint venture to market the footwear expired in August 2017 and the parties are in the process of dissolving their joint venture agreements.  The Company anticipates the liquidation to be completed during 2021.

The Company consolidates CLT and B&H Footwear into its condensed consolidated financial statements.  Net earnings (loss) attributable to noncontrolling interests represents the share of net earnings or losses that are attributable to Brand Investment Holding equity.  Transactions between the Company and the joint ventures have been eliminated in the condensed consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Derivative Financial Instruments

The Company’s hedging policy permits the use of forward contracts as cash flow hedging instruments to manage its currency exposures in foreign-currency-denominated assets, liabilities and cash flows.  These derivative financial instruments are viewed as risk management tools and are not used for trading or speculative purposes.  The Company recognizes all derivative financial instruments as either assets or liabilities in the condensed consolidated balance sheets and measures those instruments at fair value.

COVID-19 Pandemic

The United States economy and the retail industry have begun to recover from the adverse impact of the coronavirus (“COVID-19”) pandemic. The Company’s financial results were significantly impacted during the first half of 2020 as a result of the temporary closure of all retail stores beginning in mid-March.  The Company experienced sequential improvement in sales in the second half of 2020, driven by the reopening of the retail stores, and continued solid growth of the e-commerce business.  During the first quarter of 2021, as the vaccine

became widely distributed and state and local governments continued to ease restrictions, consumer sentiment and spending began to improve.  In addition, the additional stimulus measures approved by the federal government provided a boost in consumer spending.  These factors strengthened demand for our products in the first quarter of 2021, which contributed to strong growth in our net sales and operating earnings.

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 May 1, 2021, approximately $4.7 million is recorded in other accrued expenses and $4.7 million is recorded in other liabilities on the condensed consolidated balance sheet.

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Impact of New Accounting Pronouncements

3 Months Ended

May 01, 2021

Impact of New Accounting Pronouncements

Impact of New Accounting Pronouncements

Note 2    Impact of New Accounting Pronouncements

Impact of Recently Adopted Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20), Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans.  The guidance changes the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans, eliminating the requirements for certain disclosures that are no longer considered cost beneficial and requiring new disclosures that the FASB considers pertinent.  The Company adopted the ASU during the first quarter of 2021, which did not have a material impact on the Company’s financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminates certain exceptions in Accounting Standards Codification 740 related to intraperiod tax allocation, simplifies certain elements of accounting for basis differences and deferred tax liabilities during a business combination, and standardizes the classification of franchise taxes.  The Company adopted ASU 2019-12 during the first quarter of 2021, which did not have a material impact on the Company’s condensed consolidated financial statements.

Impact of Prospective Accounting Pronouncements

The Company has evaluated all recently issued accounting pronouncements.  There are no prospective accounting pronouncements that are expected to have a material impact on the Company’s condensed consolidated financial statements or disclosures.

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Revenues

3 Months Ended

May 01, 2021

Revenues

Revenues

Note 3    Revenues

Disaggregation of Revenues

The following table disaggregates revenue by segment and major source for the periods ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended May 1, 2021
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	334,745	$	15,008	$	—	$	349,753
Landed wholesale - e-commerce - drop ship (1)		—		20,814		(394)		20,420
E-commerce - Company websites (1)		63,122		42,738		—		105,860
Total direct-to-consumer sales	$	397,867	$	78,560	$	(394)	$	476,033
First-cost wholesale - e-commerce (1)		—		904		—		904
Landed wholesale - e-commerce (1)		—		36,576		—		36,576
Landed wholesale - other		—		115,347		(9,379)		105,968
First-cost wholesale		—		16,718		—		16,718
Licensing and royalty		—		2,164		—		2,164
Other (2)		237		36		—		273
Total net sales	$	398,104	$	250,305	$	(9,773)	$	638,636

	Thirteen Weeks Ended May 2, 2020
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	137,117	$	11,822	$	—	$	148,939
Landed wholesale - e-commerce - drop ship (1)		—		19,231		—		19,231
E-commerce - Company websites (1)		54,178		32,989		—		87,167
Total direct-to-consumer sales	$	191,295	$	64,042	$	—	$	255,337
First-cost wholesale - e-commerce (1)		—		246		—		246
Landed wholesale - e-commerce (1)		—		26,242		—		26,242
Landed wholesale - other		—		112,568		(11,306)		101,262
First-cost wholesale		—		11,921		—		11,921
Licensing and royalty		—		2,186		—		2,186
Other (2)		(43)		33		—		(10)
Net sales	$	191,252	$	217,238	$	(11,306)	$	397,184

(1) Collectively referred to as "e-commerce" 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 Company records a returns reserve and a corresponding return asset for expected returns of merchandise.

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

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.

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 "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.

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 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.

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 portfolio approach is applied to determine the variable consideration for each revenue stream. Reserves for projected returns are based on historical patterns and current expectations.

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

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Customer allowances and discounts	$	19,260	$	24,768	$	17,043
Loyalty programs liability		16,177		17,326		13,986
Returns reserve		14,469		15,427		11,040
Gift card liability		5,423		5,528		6,091

Changes in contract balances with customers generally reflect differences in relative sales volume for the periods presented. In addition, 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. During the thirteen weeks ended May 2, 2020, the loyalty programs liability increased $5.9 million due to points and material rights earned on purchases and decreased $5.0 million due to expirations and redemptions.

The following table summarizes the activity in the Company’s allowance for expected credit losses during the thirteen weeks ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Balance, beginning of period	$	14,928	$	1,813
Adjustment upon adoption of ASU 2016-13		—		2,521
Provision/adjustment for expected credit losses (1)		(152)		8,704
Uncollectible accounts written off, net of recoveries		(3,404)		356
Balance, end of period	$	11,372	$	13,394

(1) The Company’s provision/adjustment for expected credit losses for the thirteen weeks ended May 2, 2020 was higher than the comparable period in 2021 as a result of the COVID-19 pandemic and its impact on the financial condition of several of the Company’s wholesale customers.

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Earnings (Loss) Per Share

3 Months Ended

May 01, 2021

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Note 4    Earnings (Loss) Per Share

The Company uses the two-class method to compute basic and diluted earnings (loss) 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 (loss) per common share attributable to Caleres, Inc. shareholders for the periods ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended
($ thousands, except per share amounts)	May 1, 2021		May 2, 2020
NUMERATOR
Net earnings (loss)	$	6,385	$	(346,172)
Net (earnings) loss attributable to noncontrolling interests		(238)		334
Net earnings (loss) attributable to Caleres, Inc.	$	6,147	$	(345,838)
Net earnings allocated to participating securities		(210)		—
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities	$	5,937	$	(345,838)
DENOMINATOR
Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders		36,707		38,649
Dilutive effect of share-based awards		158		—
Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders		36,865		38,649
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)

Options to purchase 16,667 and 22,667 shares of common stock for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, were not included in the denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders because the effect would be anti-dilutive.

During the thirteen weeks ended May 1, 2021 and May 2, 2020, the Company repurchased zero and 1,510,888 shares, respectively, under the 2018 and 2019 publicly announced share repurchase programs, which permits repurchases of up to 2.5 million and 5.0 million shares, respectively.  Refer to further discussion in Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.

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Restructuring and Other Special Charges

3 Months Ended

May 01, 2021

Restructuring and Other Special Charges

Restructuring and Other Special Charges

Note 5    Restructuring and Other Special Charges

Brand Exits

During the thirteen weeks ended May 1, 2021, the Company incurred costs of $13.5 million ($11.9 million on an after-tax basis, or $0.31 per diluted share) related to the strategic realignment of the Naturalizer retail store operations.  These costs primarily represent lease termination and other store closure costs, including employee severance, for the 73 stores that were closed during the first quarter of 2021.  These charges are presented in restructuring and special charges on the condensed consolidated statements of earnings (loss) within the Brand Portfolio segment.  As of May 1, 2021, reserves of $5.2 million were included on the condensed consolidated balance sheet.  

During the thirteen weeks ended May 2, 2020, the Company incurred costs of $1.6 million ($1.2 million on an after-tax basis, or $0.03 per diluted share) related to the decision to exit the Fergie brand.  These charges, which represented inventory markdowns required to reduce the value of inventory to net realizable value, are presented in cost of goods sold on the condensed consolidated statements of earnings (loss) within the Brand Portfolio segment.  

Blowfish Mandatory Purchase Obligation

In 2018, the Company acquired a controlling interest in Blowfish Malibu.  The noncontrolling interest is subject to a mandatory purchase obligation after a three-year period based upon an earnings multiple formula as specified in the purchase agreement.  Approximately $9.0 million was initially assigned to the mandatory purchase obligation and remeasurement adjustments are being recorded as interest expense.  The fair value adjustments on the mandatory purchase obligation totaled $6.4 million ($4.7 million on an after-tax basis, or $0.13 per diluted share) and $3.2 million ($2.4 million on an after-tax basis, or $0.06 per diluted share) for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  As of May 1, 2021, the mandatory purchase obligation is valued at $45.5 million.  The mandatory purchase obligation is expected to be settled during the third quarter of 2021.  Refer to further discussion regarding the mandatory purchase obligation in Note 14 to the condensed consolidated financial statements.

COVID-19-Related Expenses

During the thirteen weeks ended May 2, 2020, the Company incurred costs associated with the COVID-19 pandemic and related impacts on the Company’s business, totaling $93.6 million ($73.3 million on an after-tax basis, or $1.90 per diluted share).  These costs included non-cash impairment of property and equipment and lease right-of-use assets, incremental inventory markdowns, employee severance and other direct expenses specific to the impact of COVID-19 on the Company’s operations.  Of the $93.6 million in charges, $60.2 million is presented as restructuring and other special charges, net and $33.4 million is reflected as cost of goods sold in the condensed consolidated statements of earnings (loss).   Of the $60.2 million reflected as restructuring and other special charges, $43.8 million is reflected in the Brand Portfolio segment, $16.0 million is reflected in the Famous Footwear segment and $0.4 million is reflected within the Eliminations and Other category.  The $33.4 million reflected as cost of goods sold represents incremental inventory markdowns, of which $27.4 million is reflected in the Brand Portfolio segment and $6.0 million is reflected in the Famous Footwear segment.  There were no corresponding charges for the thirteen weeks ended May 1, 2021.  Refer to Note 9 to the condensed consolidated financial statements for additional information regarding the impact of COVID-19 on the Company’s leases.

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Business Segment Information

3 Months Ended

May 01, 2021

Business Segment Information

Business Segment Information

Note 6    Business Segment Information

Following is a summary of certain key financial measures for the Company’s business segments for the periods ended May 1, 2021 and May 2, 2020:

	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
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
Thirteen Weeks Ended May 2, 2020
Net sales	$	191,252	$	217,238	$	(11,306)	$	397,184
Intersegment sales (1)		—		11,306		—		11,306
Operating loss		(67,540)		(345,748)		(12,923)		(426,211)
Segment assets		897,046		995,760		330,879		2,223,685

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

The Eliminations and Other category includes corporate assets, administrative expenses and other costs and recoveries, which are not allocated to the operating segments, as well as the elimination of intersegment sales and profit.

Following is a reconciliation of operating earnings (loss) to earnings (loss) before income taxes:

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating earnings (loss)	$	17,870	$	(426,211)
Interest expense, net		(11,792)		(9,478)
Other income, net		3,828		3,585
Earnings (loss) before income taxes	$	9,906	$	(432,104)

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Inventories

3 Months Ended

May 01, 2021

Inventories

Inventories

Note 7    Inventories

The Company’s net inventory balance was comprised of the following:

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Raw materials	$	13,010	$	16,848	$	14,592
Work-in-process		365		357		349
Finished goods		431,924		568,102		473,014
Inventories, net	$	445,299	$	585,307	$	487,955

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Goodwill and Intangible Assets

3 Months Ended

May 01, 2021

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 8    Goodwill and Intangible Assets

Goodwill and intangible assets were as follows:

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Intangible Assets
Famous Footwear	$	2,800	$	2,800	$	2,800
Brand Portfolio		342,083		365,888		342,083
Total intangible assets		344,883		368,688		344,883
Accumulated amortization		(112,915)		(99,996)		(109,768)
Total intangible assets, net		231,968		268,692		235,115
Goodwill
Brand Portfolio		4,956		4,956		4,956
Total goodwill		4,956		4,956		4,956
Goodwill and intangible assets, net	$	236,924	$	273,648	$	240,071

The Company’s intangible assets as of May 1, 2021, May 2, 2020 and January 30, 2021 were as follows:

($ thousands)	May 1, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis (1)		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
	May 2, 2020
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	15 - 40	$	288,788	$	94,294	$	—	$	194,494
Trade names	Indefinite		118,100		—		82,400		35,700
Customer relationships	15 - 16		44,200		5,702		—		38,498
		$	451,088	$	99,996	$	82,400	$	268,692
	January 30, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis (1)		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	101,919	$	10,200	$	187,369
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		7,849		4,005		32,346
		$	451,088	$	109,768	$	106,205	$	235,115

(1) The Via Spiga trade name was reclassified from indefinite-lived trade names to definite-lived trade names.  The remaining carrying value of $0.5 million is being amortized over two years.

Amortization expense related to intangible assets was $3.1 million and $3.2 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  The Company estimates that amortization expense related to intangible assets will be approximately $12.6 million in 2021, $12.1 million in 2022, $11.9 million in 2023, and $11.0 million in 2024 and 2025.

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.  During the first quarter of 2020, as a result of the significant decline in the Company’s share price and market capitalization and the impact of COVID-19 on the Company’s business operations, the Company determined that an interim assessment of goodwill was required.  A quantitative assessment was performed for all reporting units as of May 2, 2020.  The assessment indicated that the carrying value of the goodwill associated with the Brand Portfolio and Vionic reporting

units was impaired, resulting in total goodwill impairment charges of $240.3 million.  The Company recorded no goodwill impairment charges during the thirteen weeks ended 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.  As a result of the triggering event from the economic impacts of COVID-19, an interim assessment was performed as of May 2, 2020.  The indefinite-lived intangible asset impairment review resulted in total impairment charges of $22.4 million for the thirteen weeks ended May 2, 2020, including $12.2 million associated with the indefinite-lived Allen Edmonds trade name and $10.2 million of impairment associated with the indefinite-lived Via Spiga trade name.  The carrying value of the Via Spiga trade name of $0.5 million is being amortized over approximately two years.  In addition to the interim assessment, the Company tested the indefinite-lived intangible assets as of the first day of the fourth fiscal quarter.  As a result of the impairment indicator for Allen Edmonds, the Company also tested the definite-lived Allen Edmonds customer relationships intangible asset.  Those assessments resulted in additional impairment totaling $23.8 million, consisting of $19.8 million associated with the Allen Edmonds trade name and $4.0 million associated with the Allen Edmonds customer relationships intangible asset.  The Company recorded no impairment charges during the thirteen weeks ended May 1, 2021.

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Leases

3 Months Ended

May 01, 2021

Leases

Leases

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 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 $1.9 million and $35.2 million during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  The impairment charges recorded in the thirteen weeks ended May 1, 2021 are related to underperforming retail stores.  The impairment charges recorded in the thirteen weeks ended May 2, 2020, including $20.4 million associated with operating lease right-of-use assets and $14.8 million associated with property and equipment, reflect the impact of the COVID-19 pandemic on the Company’s retail operations and estimates of remaining cash flows for each store.  Refer to Note 5 and 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 COVID-19 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 (loss).  Rent concessions for leases that were extended will be recognized as a lease modification.  There were no lease concessions recorded during the thirteen weeks ended May 2, 2020.

During the thirteen weeks ended May 1, 2021, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $16.0 million on the condensed consolidated balance sheets.  As of May 1, 2021, the Company has entered into lease commitments for three retail locations for which the leases have not yet commenced.  The Company anticipates that one lease will begin in the current fiscal year and two leases will begin in the next fiscal year.  Upon commencement, right-of-use assets and lease liabilities of approximately $0.6 million will be recorded in the current fiscal year and $1.8 million in the next fiscal year on the condensed consolidated balance sheets.

The components of lease expense for the thirteen weeks ended May 1, 2021 and May 2, 2020 were as follows:

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating lease expense	$	40,577	$	45,240
Variable lease expense		11,490		11,334
Short-term lease expense		565		712
Sublease income		(29)		(19)
Total lease expense	$	52,603	$	57,267

Supplemental cash flow information related to leases is as follows:

	Thirteen Weeks Ended
($ thousands)		May 1, 2021		May 2, 2020
Cash paid for lease liabilities (1)		$	56,453	$	15,117
Cash received from sublease income			29		19

(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.  In addition, cash paid for lease liabilities during the thirteen weeks ended May 2, 2020 was significantly lower than comparable periods, reflecting the deferral of lease payments during the onset of the pandemic.

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Long-term and Short-term Financing Arrangements

3 Months Ended

May 01, 2021

Long-term and Short-term Financing Arrangements

Long-term and Short-term Financing Arrangements

Note 10  Long-term and Short-term 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 and Vionic are each co-borrowers and guarantors.  On April 14, 2020, the Company entered into a Fourth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the "Credit Agreement") which, among other modifications, increased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $600.0 million, subject to borrowing base restrictions, and may be further increased by up to $150.0 million.  The Credit Agreement increased the spread applied to the LIBOR or prime rate by a total of 75 basis points and increased the unused line fee by 5 basis points.

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 borrowings is at variable rates based on the London Interbank Offered Rate (“LIBOR”) (with a floor of 1.0% imposed by the Credit Agreement) or the prime rate, as defined in the Credit Agreement, plus a spread.  The interest rate and fees for letters 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.

The Credit Agreement limits the Company’s ability to create, incur, assume or permit to exist additional indebtedness and liens, make investments or specified payments, give guarantees, pay dividends, make capital expenditures and merge or acquire or sell assets.  In addition, if excess availability falls below the greater of 10.0% of the lesser of the Loan Cap and $40.0 million for three consecutive business days, and the fixed charge coverage ratio is less than 1.0 to 1.0, the Company would be in default under the Credit Agreement and certain additional covenants would be triggered.

The Credit Agreement contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, certain events of bankruptcy and insolvency, judgment defaults and the failure of any guaranty or security document supporting the agreement to be in full force and effect.  If an event of default occurs, the collateral agent may assume dominion and control over the Company’s cash (a “cash dominion event”) until such event of default is cured

or waived or the excess availability exceeds such amount for 30 consecutive days, provided that a cash dominion event shall be deemed continuing (even if an event of default is no longer continuing and/or excess availability exceeds the required amount for 30 consecutive business days) after a cash dominion event has occurred and been discontinued on two occasions in any 12-month period.  The Credit Agreement also contains certain other covenants and restrictions.  The Company was in compliance with all covenants and restrictions under the Credit Agreement as of May 1, 2021.

At May 1, 2021, the Company had $200.0 million borrowings outstanding and $12.5 million in letters of credit outstanding under the Credit Agreement.  Total additional borrowing availability was $211.3 million at May 1, 2021.

$200 Million Senior Notes

On July 27, 2015, the Company issued $200.0 million aggregate principal amount of Senior Notes due on August 15, 2023 (the "Senior Notes").  The Senior Notes bear interest at 6.25%, which is payable on February 15 and August 15 of each year.  The Senior Notes are guaranteed on a senior unsecured basis by each of the Company’s subsidiaries that is a borrower or guarantor under the Credit Agreement.  

The Company may redeem some or all of the Senior Notes at a redemption price (expressed as a percentage of principal amount) of 101.563% if redeemed prior to August 15, 2021 and 100.000% if redeemed after August 15, 2021, plus accrued and unpaid interest and Additional Interest (as defined in the Senior Notes indenture).

If the Company experiences specific kinds of changes of control, it would be required to offer to purchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest and Additional Interest, if any, to, but not including, the date of repurchase.  The Senior Notes also contain certain other covenants and restrictions that limit certain activities including, among other things, levels of indebtedness, payments of dividends, the guarantee or pledge of assets, certain investments, common stock repurchases, mergers and acquisitions and sales of assets.  As of May 1, 2021, the Company was in compliance with all covenants and restrictions relating to the Senior Notes.

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Shareholders' Equity

3 Months Ended

May 01, 2021

Shareholders' Equity

Shareholders' Equity

Note 11  Shareholders’ Equity

Accumulated Other Comprehensive Loss

The following table sets forth the changes in accumulated other comprehensive loss (OCL) by component for the periods ended May 1, 2021 and May 2, 2020:

			Pension and		Derivative
			Other		Financial		Accumulated
	Foreign		Postretirement		Instrument		Other
	Currency		Transactions		Transactions		Comprehensive
($ thousands)	Translation		(1)		(2)		(Loss) Income
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)
Balance at February 1, 2020	$	(580)	$	(31,171)	$	(92)	$	(31,843)
Other comprehensive (loss) income before reclassifications		(1,531)		—		87		(1,444)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		694		6		700
Tax benefit		—		(628)		(1)		(629)
Net reclassifications		—		66		5		71
Other comprehensive (loss) income		(1,531)		66		92		(1,373)
Balance at May 2, 2020	$	(2,111)	$	(31,105)	$	—	$	(33,216)

(1) Amounts reclassified are included in other income, net. Refer to Note 13 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 and selling and administrative expenses. Refer to Note 1 to the condensed consolidated financial statements for additional information related to derivative financial instruments.

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Share-Based Compensation

3 Months Ended

May 01, 2021

Share-Based Compensation

Share-Based Compensation

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $2.4 million for both the thirteen weeks ended May 1, 2021 and May 2, 2020.

The Company had net issuances of 327,268 and 414,121 shares of common stock during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, for restricted stock grants, stock performance awards issued to employees and common and restricted stock grants issued to non-employee directors, net of forfeitures and shares withheld to satisfy the tax withholding requirement.  

Restricted Stock

The following table summarizes restricted stock activity for the periods ended May 1, 2021 and May 2, 2020:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	May 1, 2021				May 2, 2020
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
January 30, 2021	1,397,227	$	16.74	February 1, 2020	1,271,795	$	26.77
Granted	562,506		18.63	Granted	550,683		5.81
Forfeited	(46,500)		16.08	Forfeited	(32,687)		25.60
Vested	(484,389)		26.96	Vested	(368,048)		28.38
May 1, 2021	1,428,844	$	14.04	May 2, 2020	1,421,743	$	18.20

Of the 562,506 restricted shares granted during the thirteen weeks ended May 1, 2021, 20,000 shares have a cliff-vesting term of two years and 542,506 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  All of the restricted shares granted during the thirteen weeks ended May 2, 2020 have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  Share-based compensation expense for graded-vesting grants is recognized ratably over the respective vesting periods.

Performance Share Awards

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 in connection with the 2020 performance award.  There were no performance-based share awards granted by the Company during the thirteen weeks ended May 2, 2020.  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 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 value of the award, which is reflected within other liabilities on the condensed consolidated balance sheets, is being accrued over the three-year performance period.  

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of restricted stock units ("RSUs") payable in cash or common stock at no cost to the non-employee director.  The RSUs earn dividend equivalents at the same rate as dividends on the 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.  The Company granted 1,712 and 8,309 to non-employee directors for dividend equivalents, during the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively, with weighted-average grant date fair values of $20.91 and $3.86, respectively.  

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Retirement and Other Benefit Plans

3 Months Ended

May 01, 2021

Retirement and Other Benefit Plans

Retirement and Other Benefit Plans

Note 13  Retirement and Other Benefit Plans

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

	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020		May 1, 2021		May 2, 2020
Service cost	$	1,942	$	2,160	$	—	$	—
Interest cost		2,813		3,154		10		10
Expected return on assets		(7,114)		(7,443)		—		—
Amortization of:
Actuarial loss (gain)		615		1,083		(27)		(39)
Prior service income		(125)		(350)		—		—
Total net periodic benefit income	$	(1,869)	$	(1,396)	$	(17)	$	(29)

The non-service cost components of net periodic benefit income are included in other income, net in the condensed consolidated statements of earnings (loss). Service cost is included in selling and administrative expenses.

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Fair Value Measurements

3 Months Ended

May 01, 2021

Fair Value Measurements

Fair Value Measurements

Note 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.

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.  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 cash equivalents consisting of short-term money market funds backed by U.S. Treasury securities.  The primary objective of these investing activities is to preserve the Company’s capital for the purpose of funding operations, and 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

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 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 (loss).  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 were previously granted at no cost to non-employee directors.  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 12 to the condensed consolidated financial statements.

Mandatory Purchase Obligation

The Company recorded a mandatory purchase obligation of the noncontrolling interest in conjunction with the acquisition of Blowfish Malibu in July of 2018.  The fair value of the mandatory purchase obligation is based on the earnings formula specified in the purchase agreement (Level 3).  Fair value adjustments on the mandatory purchase obligation are recorded as interest expense.  During the thirteen weeks ended May 1, 2021 and May 2, 2020, the Company recorded fair value adjustments of $6.4 million and $3.2 million, respectively.  Refer to further discussion of the mandatory purchase obligation in Note 5 to the condensed consolidated financial statements.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at May 1, 2021, May 2, 2020 and January 30, 2021.  During the thirteen weeks ended May 1, 2021 and May 2, 2020, there were no transfers into or out of Level 3.

	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
May 1, 2021:
Cash equivalents – money market funds	$	57,000	$	57,000	$	—	$	—
Non-qualified deferred compensation plan assets		8,169		8,169		—		—
Non-qualified deferred compensation plan liabilities		(8,169)		(8,169)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,185)		(1,185)		—		—
Restricted stock units for non-employee directors		(2,571)		(2,571)		—		—
Mandatory purchase obligation - Blowfish Malibu		(45,523)		—		—		(45,523)
May 2, 2020:
Cash equivalents – money market funds	$	146,009	$	146,009	$	—	$	—
Non-qualified deferred compensation plan assets		7,435		7,435		—		—
Non-qualified deferred compensation plan liabilities		(7,435)		(7,435)		—		—
Deferred compensation plan liabilities for non-employee directors		(818)		(818)		—		—
Restricted stock units for non-employee directors		(1,093)		(1,093)		—		—
Mandatory purchase obligation - Blowfish Malibu		(18,433)		—		—		(18,433)
January 30, 2021:
Cash equivalents – money market funds	$	45,000	$	45,000	$	—	$	—
Non-qualified deferred compensation plan assets		7,918		7,918		—		—
Non-qualified deferred compensation plan liabilities		(7,918)		(7,918)		—		—
Deferred compensation plan liabilities for non-employee directors		(989)		(989)		—		—
Restricted stock units for non-employee directors		(1,661)		(1,661)		—		—
Mandatory purchase obligation - Blowfish Malibu		(39,134)		—		—		(39,134)

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 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 $571.5 million and $726.2 million at May 1, 2021 and May 2, 2020, respectively, were assessed for indicators of impairment and written down to their fair value.  This assessment resulted in the following impairment charges, primarily for operating lease right-of-use assets, leasehold improvements and furniture and fixtures in the Company’s retail stores.  Higher impairment charges were recorded in the thirteen weeks ended May 1, 2020, reflecting the deteriorating economic conditions driven in part by the COVID-19 pandemic, as further discussed in Note 5 and Note 9 to the condensed consolidated financial statements.

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Long-Lived Asset Impairment Charges
Famous Footwear	$	400	$	14,896
Brand Portfolio		1,488		20,326
Total long-lived asset impairment charges	$	1,888	$	35,222

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.

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

	May 1, 2021				May 2, 2020				January 30, 2021
	Carrying				Carrying				Carrying
($ thousands)	Value (1)		Fair Value		Value (1)		Fair Value		Value (1)		Fair Value
Borrowings under revolving credit agreement	$	200,000	$	200,000	$	438,500	$	438,500	$	250,000	$	250,000
Long-term debt		200,000		200,500		200,000		178,000		200,000		201,000
Total debt	$	400,000	$	400,500	$	638,500	$	616,500	$	450,000	$	451,000

(1) Excludes unamortized debt issuance costs and debt discount

The fair value of 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 (Level 2).

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Income Taxes

3 Months Ended

May 01, 2021

Income Taxes

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 35.5% and 19.9% for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.  The higher tax rate for the thirteen weeks ended May 1, 2021 primarily reflects the non-deductibility of losses at the Company’s Canadian division, which were driven by exit-related costs associated with Naturalizer retail stores.  The tax rate was partially offset by discrete tax benefits totaling $1.2 million.  During the thirteen weeks ended May 2, 2020, the Company's effective tax rate was impacted by several discrete tax items, including the non-deductibility of a portion of the Company's intangible asset impairment charges, the provision of a valuation allowance related to net deferred tax assets of its Canadian business division and the incremental tax provision related to share-based compensation.  

As of May 1, 2021, no deferred taxes have been provided on the accumulated unremitted earnings of the Company’s foreign subsidiaries that are not subject to United States income tax, beyond the amounts recorded for the 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 foreign investment opportunities and plans, as well as its foreign working capital needs, to determine the level of investment required and, accordingly, determines the level of foreign earnings that is considered indefinitely reinvested. Based upon that evaluation, earnings of the Company’s foreign subsidiaries that are not otherwise subject to United States taxation are considered to be indefinitely reinvested, and accordingly, deferred taxes have not been provided. If changes occur in future investment opportunities and plans, those changes will be reflected when known and may result in providing residual United States deferred taxes on unremitted foreign earnings.

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Commitments and Contingencies

3 Months Ended

May 01, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 16  Commitments and 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 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 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.  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.  The Company continues to work with outside experts and the oversight authorities on the off-site work plan.

The cumulative expenditures for both on-site and off-site remediation through May 1, 2021 were $32.0 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 May 1, 2021 is $9.9 million, of which $8.9 million is recorded within other liabilities and $1.0 million is recorded within other accrued expenses.  Of the total $9.9 million reserve, $5.1 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 $13.6 million as of May 1, 2021.  The Company expects to spend approximately $0.5 million in 2021, $0.1 million in each of the following four years and $12.7 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 remediation plans in conjunction with its environmental consultants and records its best estimate of 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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Basis of Presentation and General (Policies)

3 Months Ended

May 01, 2021

Basis of Presentation and General

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the United States Securities and Exchange Commission (“SEC”) and reflect all adjustments and accruals of a normal recurring nature, which management believes are necessary to present fairly the financial position, results of operations, comprehensive income and cash flows of Caleres, Inc. ("the Company"). These statements, however, do not include all information and footnotes necessary for a complete presentation of the Company’s consolidated financial position, results of operations, comprehensive income and cash flows in conformity with accounting principles generally accepted in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries, after the elimination of intercompany accounts and transactions.

The Company’s business is seasonal in nature due to consumer spending patterns, with higher back-to-school and holiday season sales. Traditionally, the third fiscal quarter accounts for a substantial portion of the Company’s earnings for the year. Interim results may not necessarily be indicative of results which may be expected for any other interim period or for the year as a whole, particularly given the impact of the coronavirus pandemic, as further discussed below.

Certain prior period amounts in the condensed consolidated financial statements and footnotes have been reclassified to conform to the current period presentation. These reclassifications did not affect net (loss) earnings attributable to Caleres, Inc.

The accompanying condensed consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended January 30, 2021.

Noncontrolling Interests

Noncontrolling Interests

During 2019, the Company entered into a joint venture with Brand Investment Holding Limited (“Brand Investment Holding”), a member of the Gemkell Group.  The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”).  Net sales and operating earnings were not significant during the thirteen weeks ended May 1, 2021 and May 2, 2020.

The Company had a joint venture agreement with a subsidiary of C. banner International Holdings Limited (“CBI”) to market Naturalizer footwear in China. The Company was a 51% owner of the joint venture (“B&H Footwear”), with CBI owning the other 49%.  The license enabling the joint venture to market the footwear expired in August 2017 and the parties are in the process of dissolving their joint venture agreements.  The Company anticipates the liquidation to be completed during 2021.

The Company consolidates CLT and B&H Footwear into its condensed consolidated financial statements.  Net earnings (loss) attributable to noncontrolling interests represents the share of net earnings or losses that are attributable to Brand Investment Holding equity.  Transactions between the Company and the joint ventures have been eliminated in the condensed consolidated financial statements.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Derivative Financial Instruments

Derivative Financial Instruments

The Company’s hedging policy permits the use of forward contracts as cash flow hedging instruments to manage its currency exposures in foreign-currency-denominated assets, liabilities and cash flows.  These derivative financial instruments are viewed as risk management tools and are not used for trading or speculative purposes.  The Company recognizes all derivative financial instruments as either assets or liabilities in the condensed consolidated balance sheets and measures those instruments at fair value.

COVID-19 Pandemic

COVID-19 Pandemic

The United States economy and the retail industry have begun to recover from the adverse impact of the coronavirus (“COVID-19”) pandemic. The Company’s financial results were significantly impacted during the first half of 2020 as a result of the temporary closure of all retail stores beginning in mid-March.  The Company experienced sequential improvement in sales in the second half of 2020, driven by the reopening of the retail stores, and continued solid growth of the e-commerce business.  During the first quarter of 2021, as the vaccine

became widely distributed and state and local governments continued to ease restrictions, consumer sentiment and spending began to improve.  In addition, the additional stimulus measures approved by the federal government provided a boost in consumer spending.  These factors strengthened demand for our products in the first quarter of 2021, which contributed to strong growth in our net sales and operating earnings.

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 May 1, 2021, approximately $4.7 million is recorded in other accrued expenses and $4.7 million is recorded in other liabilities on the condensed consolidated balance sheet.

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Revenues (Tables)

3 Months Ended

May 01, 2021

Revenues

Schedule of disaggregated revenue by segment and major source

	Thirteen Weeks Ended May 1, 2021
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	334,745	$	15,008	$	—	$	349,753
Landed wholesale - e-commerce - drop ship (1)		—		20,814		(394)		20,420
E-commerce - Company websites (1)		63,122		42,738		—		105,860
Total direct-to-consumer sales	$	397,867	$	78,560	$	(394)	$	476,033
First-cost wholesale - e-commerce (1)		—		904		—		904
Landed wholesale - e-commerce (1)		—		36,576		—		36,576
Landed wholesale - other		—		115,347		(9,379)		105,968
First-cost wholesale		—		16,718		—		16,718
Licensing and royalty		—		2,164		—		2,164
Other (2)		237		36		—		273
Total net sales	$	398,104	$	250,305	$	(9,773)	$	638,636

	Thirteen Weeks Ended May 2, 2020
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	137,117	$	11,822	$	—	$	148,939
Landed wholesale - e-commerce - drop ship (1)		—		19,231		—		19,231
E-commerce - Company websites (1)		54,178		32,989		—		87,167
Total direct-to-consumer sales	$	191,295	$	64,042	$	—	$	255,337
First-cost wholesale - e-commerce (1)		—		246		—		246
Landed wholesale - e-commerce (1)		—		26,242		—		26,242
Landed wholesale - other		—		112,568		(11,306)		101,262
First-cost wholesale		—		11,921		—		11,921
Licensing and royalty		—		2,186		—		2,186
Other (2)		(43)		33		—		(10)
Net sales	$	191,252	$	217,238	$	(11,306)	$	397,184

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

(2) Includes breakage revenue from unredeemed gift cards

Schedule of significant contract balances from contracts with customers

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Customer allowances and discounts	$	19,260	$	24,768	$	17,043
Loyalty programs liability		16,177		17,326		13,986
Returns reserve		14,469		15,427		11,040
Gift card liability		5,423		5,528		6,091

Schedule of allowance for expected credit losses

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Balance, beginning of period	$	14,928	$	1,813
Adjustment upon adoption of ASU 2016-13		—		2,521
Provision/adjustment for expected credit losses (1)		(152)		8,704
Uncollectible accounts written off, net of recoveries		(3,404)		356
Balance, end of period	$	11,372	$	13,394

(1) The Company’s provision/adjustment for expected credit losses for the thirteen weeks ended May 2, 2020 was higher than the comparable period in 2021 as a result of the COVID-19 pandemic and its impact on the financial condition of several of the Company’s wholesale customers.

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Earnings (Loss) Per Share (Tables)

3 Months Ended

May 01, 2021

Earnings (Loss) Per Share

Schedule of earnings per share, basic and diluted

	Thirteen Weeks Ended
($ thousands, except per share amounts)	May 1, 2021		May 2, 2020
NUMERATOR
Net earnings (loss)	$	6,385	$	(346,172)
Net (earnings) loss attributable to noncontrolling interests		(238)		334
Net earnings (loss) attributable to Caleres, Inc.	$	6,147	$	(345,838)
Net earnings allocated to participating securities		(210)		—
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities	$	5,937	$	(345,838)
DENOMINATOR
Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders		36,707		38,649
Dilutive effect of share-based awards		158		—
Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders		36,865		38,649
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	$	0.16	$	(8.95)

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Business Segment Information (Tables)

3 Months Ended

May 01, 2021

Business Segment Information

Schedule of segment reporting information, by segment

	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
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
Thirteen Weeks Ended May 2, 2020
Net sales	$	191,252	$	217,238	$	(11,306)	$	397,184
Intersegment sales (1)		—		11,306		—		11,306
Operating loss		(67,540)		(345,748)		(12,923)		(426,211)
Segment assets		897,046		995,760		330,879		2,223,685

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

Reconciliation of operating profit (loss) from segments to consolidated

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating earnings (loss)	$	17,870	$	(426,211)
Interest expense, net		(11,792)		(9,478)
Other income, net		3,828		3,585
Earnings (loss) before income taxes	$	9,906	$	(432,104)

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Inventories (Tables)

3 Months Ended

May 01, 2021

Inventories

Schedule of inventory, current

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Raw materials	$	13,010	$	16,848	$	14,592
Work-in-process		365		357		349
Finished goods		431,924		568,102		473,014
Inventories, net	$	445,299	$	585,307	$	487,955

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Goodwill and Intangible Assets (Tables)

3 Months Ended

May 01, 2021

Goodwill and Intangible Assets

Schedule of intangible assets and goodwill

($ thousands)	May 1, 2021		May 2, 2020		January 30, 2021
Intangible Assets
Famous Footwear	$	2,800	$	2,800	$	2,800
Brand Portfolio		342,083		365,888		342,083
Total intangible assets		344,883		368,688		344,883
Accumulated amortization		(112,915)		(99,996)		(109,768)
Total intangible assets, net		231,968		268,692		235,115
Goodwill
Brand Portfolio		4,956		4,956		4,956
Total goodwill		4,956		4,956		4,956
Goodwill and intangible assets, net	$	236,924	$	273,648	$	240,071

Schedule of finite-lived and indefinite lived intangible assets

($ thousands)	May 1, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis (1)		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
	May 2, 2020
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	15 - 40	$	288,788	$	94,294	$	—	$	194,494
Trade names	Indefinite		118,100		—		82,400		35,700
Customer relationships	15 - 16		44,200		5,702		—		38,498
		$	451,088	$	99,996	$	82,400	$	268,692
	January 30, 2021
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis (1)		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	101,919	$	10,200	$	187,369
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		7,849		4,005		32,346
		$	451,088	$	109,768	$	106,205	$	235,115

(1) The Via Spiga trade name was reclassified from indefinite-lived trade names to definite-lived trade names.  The remaining carrying value of $0.5 million is being amortized over two years.

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Leases (Tables)

3 Months Ended

May 01, 2021

Leases

Schedule of components of lease expenses

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Operating lease expense	$	40,577	$	45,240
Variable lease expense		11,490		11,334
Short-term lease expense		565		712
Sublease income		(29)		(19)
Total lease expense	$	52,603	$	57,267

Schedule of supplemental cash flow information related to leases

	Thirteen Weeks Ended
($ thousands)		May 1, 2021		May 2, 2020
Cash paid for lease liabilities (1)		$	56,453	$	15,117
Cash received from sublease income			29		19

(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.  In addition, cash paid for lease liabilities during the thirteen weeks ended May 2, 2020 was significantly lower than comparable periods, reflecting the deferral of lease payments during the onset of the pandemic.

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Shareholders' Equity (Tables)

3 Months Ended

May 01, 2021

Shareholders' Equity

Schedule of accumulated other comprehensive income (loss)

			Pension and		Derivative
			Other		Financial		Accumulated
	Foreign		Postretirement		Instrument		Other
	Currency		Transactions		Transactions		Comprehensive
($ thousands)	Translation		(1)		(2)		(Loss) Income
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)
Balance at February 1, 2020	$	(580)	$	(31,171)	$	(92)	$	(31,843)
Other comprehensive (loss) income before reclassifications		(1,531)		—		87		(1,444)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		694		6		700
Tax benefit		—		(628)		(1)		(629)
Net reclassifications		—		66		5		71
Other comprehensive (loss) income		(1,531)		66		92		(1,373)
Balance at May 2, 2020	$	(2,111)	$	(31,105)	$	—	$	(33,216)

(1) Amounts reclassified are included in other income, net. Refer to Note 13 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 and selling and administrative expenses. Refer to Note 1 to the condensed consolidated financial statements for additional information related to derivative financial instruments.

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Share-Based Compensation (Tables)

3 Months Ended

May 01, 2021

Share-Based Compensation

Share-based payment arrangement, restricted stock and restricted stock unit, activity

	Thirteen Weeks Ended				Thirteen Weeks Ended
	May 1, 2021				May 2, 2020
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
January 30, 2021	1,397,227	$	16.74	February 1, 2020	1,271,795	$	26.77
Granted	562,506		18.63	Granted	550,683		5.81
Forfeited	(46,500)		16.08	Forfeited	(32,687)		25.60
Vested	(484,389)		26.96	Vested	(368,048)		28.38
May 1, 2021	1,428,844	$	14.04	May 2, 2020	1,421,743	$	18.20

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Retirement and Other Benefit Plans (Tables)

3 Months Ended

May 01, 2021

Notes Tables

Schedule of net benefit costs

	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020		May 1, 2021		May 2, 2020
Service cost	$	1,942	$	2,160	$	—	$	—
Interest cost		2,813		3,154		10		10
Expected return on assets		(7,114)		(7,443)		—		—
Amortization of:
Actuarial loss (gain)		615		1,083		(27)		(39)
Prior service income		(125)		(350)		—		—
Total net periodic benefit income	$	(1,869)	$	(1,396)	$	(17)	$	(29)

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Fair Value Measurements (Tables)

3 Months Ended

May 01, 2021

Fair Value Measurements

Schedule of fair value, assets and liabilities measured on recurring basis

	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
May 1, 2021:
Cash equivalents – money market funds	$	57,000	$	57,000	$	—	$	—
Non-qualified deferred compensation plan assets		8,169		8,169		—		—
Non-qualified deferred compensation plan liabilities		(8,169)		(8,169)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,185)		(1,185)		—		—
Restricted stock units for non-employee directors		(2,571)		(2,571)		—		—
Mandatory purchase obligation - Blowfish Malibu		(45,523)		—		—		(45,523)
May 2, 2020:
Cash equivalents – money market funds	$	146,009	$	146,009	$	—	$	—
Non-qualified deferred compensation plan assets		7,435		7,435		—		—
Non-qualified deferred compensation plan liabilities		(7,435)		(7,435)		—		—
Deferred compensation plan liabilities for non-employee directors		(818)		(818)		—		—
Restricted stock units for non-employee directors		(1,093)		(1,093)		—		—
Mandatory purchase obligation - Blowfish Malibu		(18,433)		—		—		(18,433)
January 30, 2021:
Cash equivalents – money market funds	$	45,000	$	45,000	$	—	$	—
Non-qualified deferred compensation plan assets		7,918		7,918		—		—
Non-qualified deferred compensation plan liabilities		(7,918)		(7,918)		—		—
Deferred compensation plan liabilities for non-employee directors		(989)		(989)		—		—
Restricted stock units for non-employee directors		(1,661)		(1,661)		—		—
Mandatory purchase obligation - Blowfish Malibu		(39,134)		—		—		(39,134)

Details of long-lived asset impairment charges

	Thirteen Weeks Ended
($ thousands)	May 1, 2021		May 2, 2020
Long-Lived Asset Impairment Charges
Famous Footwear	$	400	$	14,896
Brand Portfolio		1,488		20,326
Total long-lived asset impairment charges	$	1,888	$	35,222

Fair value, by balance Sheet grouping

	May 1, 2021				May 2, 2020				January 30, 2021
	Carrying				Carrying				Carrying
($ thousands)	Value (1)		Fair Value		Value (1)		Fair Value		Value (1)		Fair Value
Borrowings under revolving credit agreement	$	200,000	$	200,000	$	438,500	$	438,500	$	250,000	$	250,000
Long-term debt		200,000		200,500		200,000		178,000		200,000		201,000
Total debt	$	400,000	$	400,500	$	638,500	$	616,500	$	450,000	$	451,000

(1) Excludes unamortized debt issuance costs and debt discount

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Basis of Presentation and General (Details) - USD ($) $ in Millions	May 01, 2021	Jan. 30, 2021
Basis of Presentation
Deferred employer social security payroll taxes, CARES Act		$ 9.4
Other Accrued Liabilities
Basis of Presentation
Deferred employer social security payroll taxes, CARES Act	$ 4.7
Other Noncurrent Liabilities
Basis of Presentation
Deferred employer social security payroll taxes, CARES Act	$ 4.7
CLT Brand Solutions
Basis of Presentation
Percentage of joint venture		50.00%
B&H Footwear
Basis of Presentation
Percentage of joint venture	51.00%
B&H Footwear | C. banner International Holdings Limited
Basis of Presentation
Noncontrolling interest, ownership percentage by noncontrolling owners	49.00%

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Revenues (Details) - Loyalty Program - USD ($) $ in Millions	3 Months Ended
	May 01, 2021	May 02, 2020
Revenues
Contract with customer, liability, increase due to points and material rights accrued for purchases	$ 9.3	$ 5.9
Contract with customer, liability, decrease due to expirations and redemptions	$ 7.1	$ 5.0

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Revenues
Net sales	$ 638,636	$ 397,184
Famous Footwear
Revenues
Net sales	398,104	191,252
Brand Portfolio
Revenues
Net sales	250,305	217,238
Eliminations and Other
Revenues
Net sales	(9,773)	(11,306)
Retail stores
Revenues
Net sales	349,753	148,939
Retail stores | Famous Footwear
Revenues
Net sales	334,745	137,117
Retail stores | Brand Portfolio
Revenues
Net sales	15,008	11,822
Retail stores | Eliminations and Other
Revenues
Net sales	0	0
Landed wholesale - E-commerce / drop ship
Revenues
Net sales	20,420	19,231
Landed wholesale - E-commerce / drop ship | Famous Footwear
Revenues
Net sales	0	0
Landed wholesale - E-commerce / drop ship | Brand Portfolio
Revenues
Net sales	20,814	19,231
Landed wholesale - E-commerce / drop ship | Eliminations and Other
Revenues
Net sales	(394)	0
E-commerce - Company websites
Revenues
Net sales	105,860	87,167
E-commerce - Company websites | Famous Footwear
Revenues
Net sales	63,122	54,178
E-commerce - Company websites | Brand Portfolio
Revenues
Net sales	42,738	32,989
E-commerce - Company websites | Eliminations and Other
Revenues
Net sales	0	0
Direct to consumer
Revenues
Net sales	476,033	255,337
Direct to consumer | Famous Footwear
Revenues
Net sales	397,867	191,295
Direct to consumer | Brand Portfolio
Revenues
Net sales	78,560	64,042
Direct to consumer | Eliminations and Other
Revenues
Net sales	(394)	0
First-cost wholesale - e-commerce
Revenues
Net sales	904	246
First-cost wholesale - e-commerce | Famous Footwear
Revenues
Net sales	0	0
First-cost wholesale - e-commerce | Brand Portfolio
Revenues
Net sales	904	246
First-cost wholesale - e-commerce | Eliminations and Other
Revenues
Net sales	0	0
Landed wholesale - e-commerce
Revenues
Net sales	36,576	26,242
Landed wholesale - e-commerce | Famous Footwear
Revenues
Net sales	0	0
Landed wholesale - e-commerce | Brand Portfolio
Revenues
Net sales	36,576	26,242
Landed wholesale - e-commerce | Eliminations and Other
Revenues
Net sales	0	0
Landed wholesale - other
Revenues
Net sales	105,968	101,262
Landed wholesale - other | Famous Footwear
Revenues
Net sales	0	0
Landed wholesale - other | Brand Portfolio
Revenues
Net sales	115,347	112,568
Landed wholesale - other | Eliminations and Other
Revenues
Net sales	(9,379)	(11,306)
First-cost wholesale
Revenues
Net sales	16,718	11,921
First-cost wholesale | Famous Footwear
Revenues
Net sales	0	0
First-cost wholesale | Brand Portfolio
Revenues
Net sales	16,718	11,921
First-cost wholesale | Eliminations and Other
Revenues
Net sales	0	0
Licensing and royalty
Revenues
Net sales	2,164	2,186
Licensing and royalty | Famous Footwear
Revenues
Net sales	0	0
Licensing and royalty | Brand Portfolio
Revenues
Net sales	2,164	2,186
Licensing and royalty | Eliminations and Other
Revenues
Net sales	0	0
Other
Revenues
Net sales	273	(10)
Other | Famous Footwear
Revenues
Net sales	237	(43)
Other | Brand Portfolio
Revenues
Net sales	36	33
Other | Eliminations and Other
Revenues
Net sales	$ 0	$ 0

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Revenues - Contract Balances (Details) - USD ($) $ in Thousands	May 01, 2021	Jan. 30, 2021	May 02, 2020
Revenues
Customer allowances and discounts	$ 19,260	$ 17,043	$ 24,768
Loyalty programs liability	16,177	13,986	17,326
Returns reserve	14,469	11,040	15,427
Gift card liability	$ 5,423	$ 6,091	$ 5,528

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Revenues - Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Balance, beginning of period	$ 14,928	$ 1,813
Provision/adjustment for expected credit losses	(152)	8,704
Uncollectible accounts written off, net of recoveries	(3,404)	356
Balance, end of period	$ 11,372	13,394
Cumulative effect adjustment | Accounting Standards Update 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Balance, beginning of period		$ 2,521

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Earnings (Loss) Per Share (Details) - shares	3 Months Ended
	May 01, 2021	May 02, 2020
Earnings (Loss) Per Share
Antidilutive securities excluded from computation of earnings per share, amount	16,667	22,667
Stock Repurchase Program
Earnings (Loss) Per Share
Treasury stock, shares, acquired (in shares)	0	1,510,888
Stock Repurchase Program, 2018
Earnings (Loss) Per Share
Stock repurchase program, number of shares authorized to be repurchased	2,500,000
Stock Repurchase Program, 2019
Earnings (Loss) Per Share
Stock repurchase program, number of shares authorized to be repurchased	5,000,000.0

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Earnings (Loss) Per Share - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Earnings (Loss) Per Share
Net earnings (loss)	$ 6,385	$ (346,172)
Net (earnings) loss attributable to noncontrolling interests	(238)	334
Net earnings (loss) attributable to Caleres, Inc.	6,147	(345,838)
Net earnings allocated to participating securities	(210)
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities	$ 5,937	$ (345,838)
Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	36,707	38,649
Dilutive effect of share-based awards (in shares)	158
Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	36,865	38,649
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders	$ 0.16	$ (8.95)
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders	$ 0.16	$ (8.95)

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Restructuring and Other Special Charges (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	May 01, 2021 USD ($) store $ / shares	May 02, 2020 USD ($) $ / shares	Jul. 06, 2018 USD ($)
Restructuring and Other Special Charges
Fair value adjustments of mandatory purchase obligation	$ 6,389	$ 3,233
Restructuring and other special charges, net	13,482	60,196
Blowfish, LLC
Restructuring and Other Special Charges
Business acquisitions purchase obligation	$ 45,500		$ 9,000
Period after which noncontrolling interest is subject to the mandatory purchase obligation	3 years
Fair value adjustments of mandatory purchase obligation	$ 6,400	3,200
Fair value adjustments of mandatory purchase obligation, after tax basis	$ 4,700	$ 2,400
Fair value adjustments of mandatory purchase obligation, per diluted share (in dollars per share) | $ / shares	$ 0.13	$ 0.06
Brand Portfolio | Naturalizer Store Closings | Restructuring and Other Special Charges
Restructuring and Other Special Charges
Number of retail stores closed | store	73
Restructuring reserve	$ 5,200
Brand Portfolio | Cost of Sales | Fergie Brand Exit | Inventory Mark downs
Restructuring and Other Special Charges
Total restructuring costs		$ 1,600
Restructuring costs, after-tax basis		$ 1,200
Restructuring and related cost, incurred cost, per diluted share | $ / shares		$ 0.03
Brand Portfolio | Restructuring and Other Special Charges | Naturalizer Store Closings | Restructuring and Other Special Charges
Restructuring and Other Special Charges
Total restructuring costs	13,500
Restructuring costs, after-tax basis	$ 11,900
Restructuring and related cost, incurred cost, per diluted share | $ / shares	$ 0.31
COVID-19
Restructuring and Other Special Charges
Restructuring and related cost, incurred cost, per diluted share | $ / shares		$ 1.90
Restructuring and related costs, incurred cost, total	$ 0	$ 93,600
Restructuring and other special charges, net		60,200
Restructuring and related cost, incurred cost, after tax		73,300
COVID-19 | Cost of Sales
Restructuring and Other Special Charges
Inventory write-down		33,400
COVID-19 | Brand Portfolio
Restructuring and Other Special Charges
Restructuring and other special charges, net		43,800
COVID-19 | Brand Portfolio | Cost of Sales
Restructuring and Other Special Charges
Inventory write-down		27,400
COVID-19 | Famous Footwear
Restructuring and Other Special Charges
Restructuring and other special charges, net		16,000
COVID-19 | Famous Footwear | Cost of Sales
Restructuring and Other Special Charges
Inventory write-down		6,000
COVID-19 | Eliminations and Other
Restructuring and Other Special Charges
Restructuring and other special charges, net		$ 400

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Business Segment Information - Key Financial Measures (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020	Jan. 30, 2021
Business Segment Information - Key Financial Measures
Net sales	$ 638,636	$ 397,184
Intersegment sales	9,773	11,306
Operating earnings (loss)	17,870	(426,211)
Segment assets	1,802,823	2,223,685	$ 1,867,050
Famous Footwear
Business Segment Information - Key Financial Measures
Net sales	398,104	191,252
Operating earnings (loss)	47,873	(67,540)
Segment assets	758,823	897,046
Brand Portfolio
Business Segment Information - Key Financial Measures
Net sales	250,305	217,238
Intersegment sales	9,773	11,306
Operating earnings (loss)	(2,821)	(345,748)
Segment assets	794,430	995,760
Eliminations and Other
Business Segment Information - Key Financial Measures
Net sales	(9,773)	(11,306)
Operating earnings (loss)	(27,182)	(12,923)
Segment assets	$ 249,570	$ 330,879

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Business Segment Information - Reconciliation of Operating Earnings Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Business Segment Information
Operating earnings (loss)	$ 17,870	$ (426,211)
Interest expense, net	(11,792)	(9,478)
Other income, net	3,828	3,585
Earnings (loss) before income taxes	$ 9,906	$ (432,104)

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	May 01, 2021	Jan. 30, 2021	May 02, 2020
Inventories
Raw materials	$ 13,010	$ 14,592	$ 16,848
Work-in-process	365	349	357
Finished goods	431,924	473,014	568,102
Inventories, net	$ 445,299	$ 487,955	$ 585,307

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands		3 Months Ended
	Nov. 01, 2020	May 01, 2021	May 02, 2020	Jan. 30, 2021
Goodwill and Intangible Assets
Amortization of intangible assets		$ 3,147	$ 3,212
2022		12,100
2023		11,900
2024 and 2025		11,000
Goodwill, impairment loss		0	240,300
Indefinite-Lived Intangible Assets, Impairment		0
Indefinite-lived Trade names
Goodwill and Intangible Assets
Indefinite-lived intangible assets, net carrying value		15,400	35,700	$ 15,400
Indefinite-Lived Intangible Assets, Impairment			22,400
Accumulated Impairment		92,000	82,400	92,000
Tradenames
Goodwill and Intangible Assets
Accumulated Impairment		10,200		10,200
Customer Relationships
Goodwill and Intangible Assets
Accumulated Impairment		$ 4,005		$ 4,005
Allen Edmonds
Goodwill and Intangible Assets
Finite-lived intangible assets, impairment	$ 23,800
Allen Edmonds | Indefinite-lived Trade names
Goodwill and Intangible Assets
Indefinite-Lived Intangible Assets, Impairment			12,200
Allen Edmonds | Tradenames
Goodwill and Intangible Assets
Finite-lived intangible assets, impairment	19,800
Allen Edmonds | Customer Relationships
Goodwill and Intangible Assets
Finite-lived intangible assets, impairment	$ 4,000
Via Spiga | Indefinite-lived Trade names
Goodwill and Intangible Assets
Indefinite-lived intangible assets, net carrying value			500
Indefinite-Lived Intangible Assets, Impairment			$ 10,200
Indefinite-lived intangible assets, impairment period (in years)			2 years

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Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	May 01, 2021	Jan. 30, 2021	May 02, 2020
Goodwill and Intangible Assets
Intangible assets	$ 344,883	$ 344,883	$ 368,688
Accumulated amortization	(112,915)	(109,768)	(99,996)
Total intangible assets, net	231,968	235,115	268,692
Goodwill	4,956	4,956	4,956
Goodwill and intangible assets, net	236,924	240,071	273,648
Famous Footwear
Goodwill and Intangible Assets
Intangible assets	2,800	2,800	2,800
Brand Portfolio
Goodwill and Intangible Assets
Intangible assets	342,083	342,083	365,888
Goodwill	$ 4,956	$ 4,956	$ 4,956

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Goodwill and Intangible Assets - Finite and Infinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	May 01, 2021	May 02, 2020	Jan. 30, 2021
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Accumulated Amortization	$ 112,915	$ 99,996	$ 109,768
Indefinite-Lived Intangible Assets, Impairment	0
Intangible assets, cost basis	451,088	451,088	451,088
Intangible Assets, Impairment	106,205	82,400	106,205
Intangible Assets, Net Carrying Value	231,968	268,692	235,115
Indefinite-lived Trade names
Goodwill and Intangible Assets
Indefinite-Lived Intangible Assets, Cost Basis	107,400	118,100	107,400
Indefinite-Lived Intangible Assets, Impairment		22,400
Indefinite-lived intangible assets, net carrying value	$ 15,400	35,700	15,400
Indefinite-lived Trade Names excluding Via Spiga Trademark
Goodwill and Intangible Assets
Indefinite-lived intangible assets, impairment period (in years)	2 years
Indefinite-lived intangible assets, net carrying value	$ 500
Tradenames
Goodwill and Intangible Assets
Finite-lived intangible assets, cost basis	299,488	288,788	299,488
Finite-Lived Intangible Assets, Accumulated Amortization	104,459	94,294	101,919
Finite-Lived Intangible Assets, Net Carrying Value	$ 184,829	$ 194,494	$ 187,369
Tradenames | Minimum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (Year)	2 years	15 years	2 years
Tradenames | Maximum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (Year)	40 years	40 years	40 years
Customer Relationships
Goodwill and Intangible Assets
Finite-lived intangible assets, cost basis	$ 44,200	$ 44,200	$ 44,200
Finite-Lived Intangible Assets, Accumulated Amortization	8,456	5,702	7,849
Finite-Lived Intangible Assets, Net Carrying Value	$ 31,739	$ 38,498	$ 32,346
Customer Relationships | Minimum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (Year)	15 years	15 years	15 years
Customer Relationships | Maximum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (Year)	16 years	16 years	16 years
Via Spiga | Indefinite-lived Trade names
Goodwill and Intangible Assets
Indefinite-Lived Intangible Assets, Impairment		$ 10,200
Indefinite-lived intangible assets, impairment period (in years)		2 years
Indefinite-lived intangible assets, net carrying value		$ 500

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Leases (Details) $ in Thousands	3 Months Ended
	May 01, 2021 USD ($) location lease	May 02, 2020 USD ($)	Jan. 30, 2021 USD ($)
Leases
Impairment of long-lived assets held-for-use	$ 1,888	$ 35,222
Lease concessions		0
Right-of-use asset obtained in exchange for operating lease liability	16,000
Operating lease, right-of-use asset	$ 526,011	648,534	$ 554,303
Current Fiscal Year
Leases
Number of locations of Lease commitments not yet commenced in current fiscal year | location	3
Number of anticipated leases in current fiscal year | lease	1
Total operating lease liability	$ 600
Operating lease, right-of-use asset	$ 600
Next Fiscal Year
Leases
Number of anticipated leases in next fiscal year | lease	2
Total operating lease liability	$ 1,800
Operating lease, right-of-use asset	1,800
Selling and Administrative Expenses
Leases
Lease concessions	1,300
COVID-19
Leases
Operating lease, impairment loss		20,400
Impairment of long-lived assets held-for-use		14,800
Retail Stores
Leases
Asset impairment charges	$ 1,900	$ 35,200

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Leases
Operating lease expense	$ 40,577	$ 45,240
Variable lease expense	11,490	11,334
Short-term lease expense	565	712
Sublease income	(29)	(19)
Total lease expense	$ 52,603	$ 57,267

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Leases
Cash paid for lease liabilities	$ 56,453	$ 15,117
Cash received from sublease income	$ 29	$ 19

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Long-term and Short-term Financing Arrangements (Details) - USD ($) $ in Millions		3 Months Ended
	Apr. 14, 2020	May 01, 2021	Jul. 27, 2015
Long-term and Short-term Financing Arrangements
Debt instrument, interest rate, stated percentage			6.25%
Redeemed prior to August15, 2021
Long-term and Short-term Financing Arrangements
Senior notes redemption price		101.563%
Redeemed after August15, 2021
Long-term and Short-term Financing Arrangements
Senior notes redemption price		100.00%
Senior Notes Due 2023
Long-term and Short-term Financing Arrangements
Total senior notes			$ 200.0
Senior notes, repurchase price, change of control		101.00%
Revolving Credit Facility
Long-term and Short-term Financing Arrangements
Total long-term line of credit		$ 200.0
Letters of credit outstanding, amount		12.5
Line of credit facility, remaining borrowing capacity		$ 211.3
Revolving Credit Facility | Third Amendment to Fourth Amended and Restated Credit Agreement
Long-term and Short-term Financing Arrangements
Line of credit facility, excess availability, percent to trigger debt restrictions		10.00%
Line of credit facility, excess availability to trigger debt restrictions		$ 40.0
Line of credit facility, fixed charge coverage ratio to trigger debt restrictions		1.0
Revolving Credit Facility | Fourth Amendment to Fourth Amended and Restated Credit Agreement
Long-term and Short-term Financing Arrangements
Line of credit facility, maximum borrowing capacity	$ 600.0
Line of credit facility, option to increase, amount	150.0
Line of credit facility, additional maximum borrowing capacity	$ 100.0
Debt instrument, increase in basis spread on variable rate	0.75%
Line of credit facility, unused capacity, commitment fee percentage increase	0.05%
Minimum | Revolving Credit Facility | Fourth Amendment to Fourth Amended and Restated Credit Agreement
Long-term and Short-term Financing Arrangements
Debt instrument, basis spread on variable rate	1.00%

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Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Balance	$ (9,136)
Other comprehensive income (loss), net of tax	142	$ (1,392)
Balance	(8,936)	(33,216)
Accumulated Foreign Currency Adjustment Attributable to Parent
Balance	(111)	(580)
Other comprehensive (loss) income before reclassifications	(166)	(1,531)
Other comprehensive income (loss), net of tax	(166)	(1,531)
Balance	(277)	(2,111)
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent
Balance	(9,025)	(31,171)
Amounts reclassified from accumulated other comprehensive loss	463	694
Tax (benefit) provision	(97)	(628)
Net reclassifications	366	66
Other comprehensive income (loss), net of tax	366	66
Balance	(8,659)	(31,105)
AOCI, Derivative Qualifying as Hedge, Excluded Component, Parent
Balance		(92)
Other comprehensive (loss) income before reclassifications		87
Amounts reclassified from accumulated other comprehensive loss		6
Tax (benefit) provision		(1)
Net reclassifications		5
Other comprehensive income (loss), net of tax		92
Accumulated Other Comprehensive (Loss) Income
Balance	(9,136)	(31,843)
Other comprehensive (loss) income before reclassifications	(166)	(1,444)
Amounts reclassified from accumulated other comprehensive loss	463	700
Tax (benefit) provision	(97)	(629)
Net reclassifications	366	71
Other comprehensive income (loss), net of tax	200	(1,373)
Balance	$ (8,936)	$ (33,216)

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Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	May 01, 2021	May 02, 2020
Share-based Compensation
Share-based payment arrangement, expense	$ 2.4	$ 2.4
Share-based compensation arrangement by share-based payment award shares issued in period	327,268	414,121
Long-term incentive awards granted during the period target value	$ 6.5
Long-term incentive awards granted during the period maximum value	$ 13.0
Long-term incentive award vesting period	3 years
Restricted Stock
Share-based Compensation
Granted, total number of restricted shares (in shares)	562,506	550,683
Granted (in dollars per share)	$ 18.63	$ 5.81
Restricted Stock | Share-based Compensation Award, Cliff-vesting, Tranche One
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period	2 years
Granted, total number of restricted shares (in shares)	20,000
Restricted Stock | Share-based Compensation Award, Graded-vesting
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period	3 years	3 years
Granted, total number of restricted shares (in shares)	542,506
Restricted Stock | Share-based Compensation Award, Graded-vesting Tranche One
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period	2 years	2 years
Share-based compensation arrangement by share-based payment award, performance percentage earned	50.00%	50.00%
Restricted Stock | Share-based Compensation Award, Graded-vesting Tranche Two
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period	3 years	3 years
Share-based compensation arrangement by share-based payment award, performance percentage earned	50.00%	50.00%
Performance Shares
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period	3 years
Granted, total number of restricted shares (in shares)	175,500	0
Granted (in dollars per share)	$ 18.63
Performance Shares | Minimum
Share-based Compensation
Share-based compensation arrangement by share-based payment award, performance percentage earned	0.00%
Performance Shares | Maximum
Share-based Compensation
Share-based compensation arrangement by share-based payment award, performance percentage earned	200.00%
Restricted Stock Units (RSUs)
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period	1 year
Restricted Stock Units (RSUs) | Non-employee Director
Share-based Compensation
Granted (in dollars per share)	$ 20.91	$ 3.86
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, dividend equivalent	1,712	8,309

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Share-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock - $ / shares	3 Months Ended
	May 01, 2021	May 02, 2020
Share-based Compensation
Nonvested, total number of restricted shares (in shares)	1,397,227	1,271,795
Granted, total number of restricted shares (in shares)	562,506	550,683
Vested, total number of restricted shares (in shares)	(484,389)	(368,048)
Forfeited, total number of restricted shares (in shares)	(46,500)	(32,687)
Nonvested, total number of restricted shares (in shares)	1,428,844	1,421,743
Nonvested, weighted-average grant date fair value (in dollars per share)	$ 16.74	$ 26.77
Granted (in dollars per share)	18.63	5.81
Vested (in dollars per share)	26.96	28.38
Forfeited (in dollars per share)	16.08	25.60
Nonvested, weighted-average grant date fair value (in dollars per share)	$ 14.04	$ 18.20

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Retirement and Other Benefit Plans - Components of Net Periodic Benefit Income (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Pension Plan
Retirement and Other Benefit Plans
Service cost	$ 1,942	$ 2,160
Interest cost	2,813	3,154
Expected return on assets	(7,114)	(7,443)
Actuarial loss (gain)	615	1,083
Prior service credit	(125)	(350)
Total net periodic benefit income	(1,869)	(1,396)
Other Postretirement Benefits Plan
Retirement and Other Benefit Plans
Service cost	0	0
Interest cost	10	10
Expected return on assets	0	0
Actuarial loss (gain)	(27)	(39)
Prior service credit	0	0
Total net periodic benefit income	$ (17)	$ (29)

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Fair Value Measurements (Details) - USD ($) $ in Millions	3 Months Ended
	May 01, 2021	May 02, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan, maximum percentage of deferral of base salary	50.00%
Deferred compensation plan, maximum percentage of deferral of annual incentive compensation	100.00%
Long-lived assets, held and used	$ 571.5	$ 726.2
Restricted Stock Units (RSUs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period	1 year

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Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020	Jan. 30, 2021
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Transfers into level 3	$ 0	$ 0
Transfers out of level 3	0	0
Fair Value, Recurring
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Cash equivalents - money market funds	57,000	146,009	$ 45,000
Non-qualified deferred compensation plan assets	8,169	7,435	7,918
Non-qualified deferred compensation plan liabilities	(8,169)	(7,435)	(7,918)
Deferred compensation plan liabilities for non-employee directors	(1,185)	(818)	(989)
Restricted stock units for non-employee directors	(2,571)	(1,093)	(1,661)
Mandatory purchase obligation - Blowfish Malibu	(45,523)	(18,433)	(39,134)
Fair Value, Recurring | Fair Value, Inputs, Level 1
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Cash equivalents - money market funds	57,000	146,009	45,000
Non-qualified deferred compensation plan assets	8,169	7,435	7,918
Non-qualified deferred compensation plan liabilities	(8,169)	(7,435)	(7,918)
Deferred compensation plan liabilities for non-employee directors	(1,185)	(818)	(989)
Restricted stock units for non-employee directors	(2,571)	(1,093)	(1,661)
Mandatory purchase obligation - Blowfish Malibu	0	0	0
Fair Value, Recurring | Fair Value, Inputs, Level 2
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Cash equivalents - money market funds	0	0	0
Non-qualified deferred compensation plan assets	0	0	0
Non-qualified deferred compensation plan liabilities	0	0	0
Deferred compensation plan liabilities for non-employee directors	0	0	0
Restricted stock units for non-employee directors	0	0	0
Mandatory purchase obligation - Blowfish Malibu	0	0	0
Fair Value, Recurring | Fair Value, Inputs, Level 3
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Cash equivalents - money market funds	0	0	0
Non-qualified deferred compensation plan assets	0	0	0
Non-qualified deferred compensation plan liabilities	0	0	0
Deferred compensation plan liabilities for non-employee directors	0	0	0
Restricted stock units for non-employee directors	0	0	0
Mandatory purchase obligation - Blowfish Malibu	$ (45,523)	$ (18,433)	$ (39,134)

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Fair Value Measurements - Impairment Charges (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Total long-lived asset impairment charges	$ 1,888	$ 35,222
Famous Footwear | Selling and Administrative Expenses
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Total long-lived asset impairment charges	400	14,896
Brand Portfolio | Selling and Administrative Expenses
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Total long-lived asset impairment charges	$ 1,488	$ 20,326

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Fair Value Measurements - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands		May 01, 2021	Jan. 30, 2021	May 02, 2020
Reported Value Measurement
Fair Value of Financial Instruments
Borrowings under revolving credit agreement	[1]	$ 200,000	$ 250,000	$ 438,500
Long-term debt	[1]	200,000	200,000	200,000
Total debt	[1]	400,000	450,000	638,500
Estimate of Fair Value Measurement
Fair Value of Financial Instruments
Borrowings under revolving credit agreement		200,000	250,000	438,500
Long-term debt		200,500	201,000	178,000
Total debt		$ 400,500	$ 451,000	$ 616,500

[1] Excludes unamortized debt issuance costs and debt discount

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	May 01, 2021	May 02, 2020
Income Taxes
Effective income tax rate reconciliation percent	35.50%	19.90%
Discrete tax benefits	$ 1.2
Deferred taxes	$ 0.0

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Commitments and Contingencies (Details) - Redfield Site $ in Millions	3 Months Ended
	May 01, 2021 USD ($)
Commitments and Contingencies
Cumulative environmental eemediation expense	$ 32.0
Environmental exit costs, assets previously disposed, liability for remediation	9.9
Reserve for anticipated future remediation activities for off site remediation	5.1
Reserve for anticipated future remediation activities for on site remediation	$ 4.8
Accrual for environmental loss contingencies, discount rate	4.80%
Accrual for environmental loss contingencies, gross, total	$ 13.6
Accrual for environmental loss contingencies, undiscounted, next twelve months	0.5
Accrual for environmental loss contingencies, undiscounted, second year	0.1
Accrual for environmental loss contingencies, undiscounted, third year	0.1
Accrual for environmental loss contingencies, undiscounted, fourth year	0.1
Accrual for environmental loss contingencies, undiscounted, fifth Year	0.1
Accrual for environmental loss contingencies, undiscounted, after fifth year	12.7
Other Noncurrent Liabilities
Commitments and Contingencies
Environmental exit costs, assets previously disposed, liability for remediation	8.9
Other Accrued Expenses
Commitments and Contingencies
Environmental exit costs, assets previously disposed, liability for remediation	$ 1.0