What Happened?
Shares of footwear company Caleres (NYSE: CAL) jumped 4.3% in the afternoon session after it completed its acquisition of the luxury footwear brand Stuart Weitzman. The company finalized the deal to buy the luxury footwear brand from Tapestry, Inc. for a net purchase price of $108.7 million. This strategic move strengthened Caleres' position in the global footwear market. According to company leadership, this addition meant the Brand Portfolio segment would represent nearly half of Caleres' total revenue. The stock's climb also happened amid a wider rally for consumer stocks, which moved up on investor hopes for a Federal Reserve interest rate cut following weaker-than-expected jobs data.
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What Is The Market Telling Us
Caleres’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 4.5% on the news that the latest U.S. consumer confidence report revealed underlying weakness despite a headline increase, raising concerns about future spending. While the Conference Board's headline Consumer Confidence Index rose to 97.2 in July, the details painted a more cautious picture for investors. The Present Situation Index, a measure of consumers' assessment of current business and labor market conditions, actually fell. More telling for the sector, the report showed a decline in buying intentions for major discretionary items such as homes, cars, and most appliances. This combination of factors signals potential weakness in future consumer spending, casting a shadow over companies that rely on non-essential purchases.
Caleres is down 38.6% since the beginning of the year, and at $13.80 per share, it is trading 68.6% below its 52-week high of $43.97 from August 2024. Investors who bought $1,000 worth of Caleres’s shares 5 years ago would now be looking at an investment worth $2,160.
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