What Happened?
Shares of footwear company Caleres (NYSE: CAL) jumped 11.4% in the afternoon session after investors looked past a significant earnings miss from the previous day, focusing instead on recent market share gains and a strategic acquisition.
The rally marks a sharp reversal from the previous day's trading when the stock fell after the company reported second-quarter adjusted earnings of $0.35 per share, missing analyst expectations by 37.5%. The weak results were driven by a 3.6% year-over-year sales decline and lower gross margins, which were impacted by tariff-related costs and increased promotions. Despite the earnings shortfall, investors appeared to be focused on the positives.
An analyst note from Telsey Advisory Group highlighted that Caleres gained market share in women's fashion and shoe chains during the quarter. Furthermore, the company recently acquired luxury brand Stuart Weitzman, a move analysts believe could boost future revenue and profitability, allowing it to benefit from being owned by a dedicated footwear company.
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What Is The Market Telling Us
Caleres’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. But moves this big are rare even for Caleres and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 12% on the news that the company reported disappointing second-quarter 2025 results and missed Wall Street's profit estimates. The company posted adjusted earnings of $0.35 per share, a 59% drop from the prior year and significantly below analysts' expectations of $0.56. While revenue of $658.5 million met expectations, it still represented a 3.6% decline year-over-year. Profitability was a key concern as the company's operating margin contracted sharply to 1.4% from 6.3% in the same period last year. The significant earnings miss and shrinking margins prompted a negative reaction from investors.
Caleres is down 29.8% since the beginning of the year, and at $15.77 per share, it is trading 60.1% below its 52-week high of $39.54 from September 2024. Investors who bought $1,000 worth of Caleres’s shares 5 years ago would now be looking at an investment worth $1,665.
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