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 October 28, 2023
☐	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 November 24, 2023, 35,502,200 common shares were outstanding.

INDEX
PART I		Page
Item 1	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Earnings	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Shareholders’ Equity	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	37
PART II		38
Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3	Defaults Upon Senior Securities	39
Item 4	Mine Safety Disclosures	39
Item 5	Other Information	39
Item 6	Exhibits	40
	Signature	41

2

PART IFINANCIAL INFORMATION

ITEM 1FINANCIAL STATEMENTS

CALERES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Assets
Current assets:
Cash and cash equivalents	$	34,031	$	32,773	$	33,700
Receivables, net		161,544		161,367		132,802
Inventories, net		556,034		649,257		580,215
Income taxes		5,065		12,046		17,527
Property and equipment, held for sale		16,777		16,777		16,777
Prepaid expenses and other current assets		49,422		48,864		50,434
Total current assets		822,873		921,084		831,455
Prepaid pension costs		87,541		106,781		83,396
Lease right-of-use assets		508,736		523,011		518,196
Property and equipment, net		167,681		151,798		160,883
Goodwill and intangible assets, net		206,275		218,420		215,392
Other assets		33,787		27,219		27,150
Total assets	$	1,826,893	$	1,948,313	$	1,836,472
Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	222,000	$	364,500	$	307,500
Trade accounts payable		257,224		279,704		229,908
Income taxes		21,269		31,106		7,650
Lease obligations		132,461		133,227		136,051
Other accrued expenses		194,967		230,377		230,087
Total current liabilities		827,921		1,038,914		911,196
Other liabilities:
Noncurrent lease obligations		431,474		453,718		444,074
Income taxes		2,464		7,786		7,786
Deferred income taxes		19,502		15,044		19,001
Other liabilities		25,360		27,440		28,302
Total other liabilities		478,800		503,988		499,163
Equity:
Common stock		355		356		357
Additional paid-in capital		181,630		177,269		180,747
Accumulated other comprehensive loss		(25,596)		(7,187)		(26,750)
Retained earnings		356,993		228,006		266,329
Total Caleres, Inc. shareholders’ equity		513,382		398,444		420,683
Noncontrolling interests		6,790		6,967		5,430
Total equity		520,172		405,411		426,113
Total liabilities and equity	$	1,826,893	$	1,948,313	$	1,836,472

See notes to condensed consolidated financial statements.

3

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	(Unaudited)
	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands, except per share amounts)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	761,904	$	798,258	$	2,120,171	$	2,271,704
Cost of goods sold		421,530		458,382		1,162,942		1,268,019
Gross profit		340,374		339,876		957,229		1,003,685
Selling and administrative expenses		273,652		283,119		789,570		812,313
Restructuring and other special charges, net		2,304		2,910		3,951		2,910
Operating earnings		64,418		53,847		163,708		188,462
Interest expense, net		(4,488)		(4,003)		(15,240)		(8,886)
Other income, net		1,552		2,997		4,660		9,636
Earnings before income taxes		61,482		52,841		153,128		189,212
Income tax provision		(14,467)		(13,849)		(36,956)		(48,683)
Net earnings		47,015		38,992		116,172		140,529
Net earnings (loss) attributable to noncontrolling interests		101		(254)		588		(404)
Net earnings attributable to Caleres, Inc.	$	46,914	$	39,246	$	115,584	$	140,933
Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.09	$	3.23	$	3.83
Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.08	$	3.23	$	3.79

See notes to condensed consolidated financial statements.

4

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	(Unaudited)
	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net earnings	$	47,015	$	38,992	$	116,172	$	140,529
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment		(626)		(980)		(1,054)		(1,100)
Pension and other postretirement benefits adjustments		660		908		1,980		1,931
Other comprehensive income (loss), net of tax		34		(72)		926		831
Comprehensive income		47,049		38,920		117,098		141,360
Comprehensive income (loss) attributable to noncontrolling interests		201		(419)		360		(992)
Comprehensive income attributable to Caleres, Inc.	$	46,848	$	39,339	$	116,738	$	142,352

See notes to condensed consolidated financial statements.

5

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating Activities
Net earnings	$	116,172	$	140,529
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		25,575		23,945
Amortization of capitalized software		3,713		3,669
Amortization of intangible assets		9,117		9,080
Amortization of debt issuance costs and debt discount		305		305
Share-based compensation expense		10,924		13,249
Loss on disposal of property and equipment		1,121		1,167
Impairment charges for property, equipment, and lease right-of-use assets		589		1,979
Adjustment to expected credit losses		1,053		(303)
Deferred income taxes		501		313
Changes in operating assets and liabilities:
Receivables		(29,794)		(38,826)
Inventories		23,769		(53,025)
Prepaid expenses and other current and noncurrent assets		(8,414)		(4,496)
Trade accounts payable		27,491		(51,547)
Accrued expenses and other liabilities		(45,727)		(33,667)
Income taxes, net		20,759		34,833
Other, net		29		(939)
Net cash provided by operating activities		157,183		46,266
Investing Activities
Purchases of property and equipment		(33,976)		(40,056)
Capitalized software		(3,404)		(5,350)
Net cash used for investing activities		(37,380)		(45,406)
Financing Activities
Borrowings under revolving credit agreement		365,000		708,500
Repayments under revolving credit agreement		(450,500)		(634,000)
Dividends paid		(7,483)		(7,698)
Acquisition of treasury stock		(17,445)		(63,225)
Issuance of common stock under share-based plans, net		(10,035)		(4,804)
Contributions by noncontrolling interests		1,000		3,142
Net cash (used for) provided by financing activities		(119,463)		1,915
Effect of exchange rate changes on cash and cash equivalents		(9)		(117)
Increase in cash and cash equivalents		331		2,658
Cash and cash equivalents at beginning of period		33,700		30,115
Cash and cash equivalents at end of period	$	34,031	$	32,773

See notes to condensed consolidated financial statements.

6

CALERES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

						Accumulated				Total
						Other				Caleres, Inc.
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		Noncontrolling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE JULY 29, 2023	35,540,093	$	355	$	177,602	$	(25,530)	$	312,565	$	464,992	$	6,589	$	471,581
Net earnings									46,914		46,914		101		47,015
Foreign currency translation adjustment							(726)				(726)		100		(626)
Pension and other postretirement benefits adjustments, net of tax of $228							660				660				660
Comprehensive (loss) income							(66)		46,914		46,848		201		47,049
Dividends ($0.07 per share)									(2,486)		(2,486)				(2,486)
Issuance of common stock under share-based plans, net	3,365		0		(25)						(25)				(25)
Share-based compensation expense					4,053						4,053				4,053
BALANCE OCTOBER 28, 2023	35,543,458	$	355	$	181,630	$	(25,596)	$	356,993	$	513,382	$	6,790	$	520,172
BALANCE JULY 30, 2022	36,450,780	$	364	$	173,246	$	(7,280)	$	212,803	$	379,133	$	5,744	$	384,877
Net earnings									39,246		39,246		(254)		38,992
Foreign currency translation adjustment							(815)				(815)		(165)		(980)
Pension and other postretirement benefits adjustments, net of tax of $86							908				908				908
Comprehensive income (loss)							93		39,246		39,339		(419)		38,920
Contributions by noncontrolling interests											—		1,642		1,642
Dividends ($0.07 per share)									(2,498)		(2,498)				(2,498)
Acquisition of treasury stock	(838,025)		(8)						(21,545)		(21,553)				(21,553)
Issuance of common stock under share-based plans, net	20,699		0		(990)						(990)				(990)
Share-based compensation expense					5,013						5,013				5,013
BALANCE OCTOBER 29, 2022	35,633,454	$	356	$	177,269	$	(7,187)	$	228,006	$	398,444	$	6,967	$	405,411

						Accumulated
						Other				Total Caleres, Inc.
(Unaudited)	Common Stock			Additional		Comprehensive		Retained		Shareholders’		Noncontrolling
($ thousands, except number of shares and per share amounts)	Shares	Dollars		Paid-In Capital		Loss		Earnings		Equity		Interests		Total Equity
BALANCE JANUARY 28, 2023	35,715,752	$	357	$	180,747	$	(26,750)	$	266,329	$	420,683	$	5,430	$	426,113
Net earnings									115,584		115,584		588		116,172
Foreign currency translation adjustment							(826)				(826)		(228)		(1,054)
Pension and other postretirement benefits adjustments, net of tax of $684							1,980				1,980				1,980
Comprehensive income							1,154		115,584		116,738		360		117,098
Contributions by noncontrolling interests											—		1,000		1,000
Dividends ($0.21 per share)									(7,483)		(7,483)				(7,483)
Acquisition of treasury stock	(763,000)		(8)						(17,437)		(17,445)				(17,445)
Issuance of common stock under share-based plans, net	590,706		6		(10,041)						(10,035)				(10,035)
Share-based compensation expense					10,924						10,924				10,924
BALANCE OCTOBER 28, 2023	35,543,458	$	355	$	181,630	$	(25,596)	$	356,993	$	513,382	$	6,790	$	520,172
BALANCE JANUARY 29, 2022	37,635,145	$	376	$	168,830	$	(8,606)	$	157,970	$	318,570	$	4,817	$	323,387
Net earnings (loss)									140,933		140,933		(404)		140,529
Foreign currency translation adjustment							(512)				(512)		(588)		(1,100)
Pension and other postretirement benefits adjustments, net of tax of $417							1,931				1,931				1,931
Comprehensive income (loss)							1,419		140,933		142,352		(992)		141,360
Contributions by noncontrolling interests											—		3,142		3,142
Dividends ($0.21 per share)									(7,698)		(7,698)				(7,698)
Acquisition of treasury stock	(2,622,845)		(26)						(63,199)		(63,225)				(63,225)
Issuance of common stock under share-based plans, net	621,154		6		(4,810)						(4,804)				(4,804)
Share-based compensation expense					13,249						13,249				13,249
BALANCE OCTOBER 29, 2022	35,633,454	$	356	$	177,269	$	(7,187)	$	228,006	$	398,444	$	6,967	$	405,411

See notes to condensed consolidated financial statements.

7

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.  Although the third fiscal quarter has historically accounted for a substantial portion of the Company’s earnings for the year, the Company has experienced more equal distribution among the quarters in recent years.  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.

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 28, 2023.

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 condensed consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

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, to sell Sam Edelman, Naturalizer and other branded footwear in China.  The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”).  During the thirty-nine weeks ended October 28, 2023, capital contributions of $2.0 million were made to CLT, including $1.0 million received from Brand Investment Holding.  During the thirty-nine weeks ended October 29, 2022, capital contributions of $6.3 million were made to CLT, including $3.1 million received from Brand Investment Holding.  

Net sales and operating earnings (loss) of CLT for the periods ended October 28, 2023 and October 29, 2022 were as follows:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	6,810	$	5,418	$	19,675	$	13,167
Operating earnings (loss)		229		(302)		1,327		(631)

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

Supplier Finance Program

The Company facilitates a voluntary supplier finance program (“the Program”) that provides certain of the Company’s suppliers the opportunity to sell receivables related to products that the Company has purchased to participating financial institutions at a rate that leverages the Company’s credit rating, which may be more beneficial to the suppliers than the rate they can obtain based upon their own credit rating. The Company negotiates payment and other terms directly with the suppliers, regardless of whether the supplier participates in the Program, and the Company’s responsibility is limited to making payment based on the terms originally negotiated with the supplier.  The suppliers that participate in the Program have discretion to determine which invoices, if any, are sold to the participating financing institutions.  The liabilities to the suppliers that participate in the Program are presented as accounts payable in the Company’s condensed

8

consolidated balance sheets, with changes reflected within cash flows from operating activities when settled.  As of October 28, 2023 and October 29, 2022, the Company had $25.0 million and $17.8 million, respectively, of accounts payable subject to the Program arrangements.

Property and Equipment, Held for Sale

The Company continues to actively market for sale its nine-acre corporate headquarters campus (the “Campus”) located in Clayton, Missouri and, as of October 28, 2023, was engaged in discussions with multiple potential buyers.  The Company expects the Campus to qualify as a completed sale within the next year.  Accordingly, the Campus, primarily consisting of land and buildings, has been classified as property and equipment, held for sale on the condensed consolidated balance sheets as of October 28, 2023 within the Eliminations and Other category.  The Company evaluated the Campus asset group for impairment and determined that no indicators were present as of October 28, 2023.

Note 2    Impact of New Accounting Pronouncements

Impact of Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities – Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations.  The guidance requires qualitative and quantitative disclosures about supplier finance programs in annual financial statements, including key terms of the programs, amounts outstanding, balance sheet presentation and a rollforward of amounts outstanding during the year.  For interim periods, the ASU requires disclosure of total obligations outstanding that have been confirmed as valid.  The ASU is effective for the Company in fiscal year 2023, except for the rollforward requirement, which is effective in fiscal year 2024.  The Company adopted the amendments on a retrospective basis during the first quarter of 2023, with the exception of the annual rollforward requirement, which will be adopted on a prospective basis by the effective date.  Refer to Note 1 to the condensed consolidated financial statements for additional information regarding the Company’s supplier finance program.

Impact of Recently Issued Accounting Pronouncements

The Company has evaluated all recently issued ASUs and they were determined to be either not applicable or not expected to have a material impact on the consolidated financial statements.  

9

Note 3    Revenues

Disaggregation of Revenues

The following table disaggregates revenue by segment and major source for the periods ended October 28, 2023 and October 29, 2022:

	Thirteen Weeks Ended October 28, 2023
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	388,764	$	17,126	$	—	$	405,890
E-commerce - Company websites (1)		60,276		56,204		—		116,480
E-commerce - wholesale drop-ship (1)		—		34,151		(1,720)		32,431
Total direct-to-consumer sales		449,040		107,481		(1,720)		554,801
Wholesale - e-commerce (1)		—		72,424		—		72,424
Wholesale - landed		—		121,893		(6,924)		114,969
Wholesale - first cost		—		16,332		—		16,332
Licensing and royalty		612		2,627		—		3,239
Other (2)		121		18		—		139
Net sales	$	449,773	$	320,775	$	(8,644)	$	761,904

	Thirteen Weeks Ended October 29, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	415,678	$	14,810	$	—	$	430,488
E-commerce - Company websites (1)		65,549		53,673		—		119,222
E-commerce - wholesale drop-ship (1)		—		40,672		(1,854)		38,818
Total direct-to-consumer sales		481,227		109,155		(1,854)		588,528
Wholesale - e-commerce (1)		—		59,035		—		59,035
Wholesale - landed		—		135,161		(5,081)		130,080
Wholesale - first cost		—		16,424		—		16,424
Licensing and royalty		601		3,454		—		4,055
Other (2)		123		13		—		136
Net sales	$	481,951	$	323,242	$	(6,935)	$	798,258

	Thirty-Nine Weeks Ended October 28, 2023
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	1,065,448	$	50,323	$	—	$	1,115,771
E-commerce - Company websites (1)		145,585		163,088		—		308,673
E-commerce - wholesale drop-ship (1)		—		97,565		(4,119)		93,446
Total direct-to-consumer sales		1,211,033		310,976		(4,119)		1,517,890
Wholesale - e-commerce (1)		—		181,980		—		181,980
Wholesale - landed		—		377,033		(36,043)		340,990
Wholesale - first cost		—		67,940		—		67,940
Licensing and royalty		1,775		9,193		—		10,968
Other (2)		361		42		—		403
Net sales	$	1,213,169	$	947,164	$	(40,162)	$	2,120,171

10

	Thirty-Nine Weeks Ended October 29, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	1,133,276	$	43,371	$	—	$	1,176,647
E-commerce - Company websites (1)		167,604		155,698		—		323,302
E-commerce - wholesale drop-ship (1)		—		106,348		(3,759)		102,589
Total direct-to-consumer sales		1,300,880		305,417		(3,759)		1,602,538
Wholesale - e-commerce (1)		—		167,494		—		167,494
Wholesale - landed		—		441,544		(40,408)		401,136
Wholesale - first cost		—		88,205		—		88,205
Licensing and royalty		1,538		10,329		—		11,867
Other (2)		410		54		—		464
Net sales	$	1,302,828	$	1,013,043	$	(44,167)	$	2,271,704

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

(2) Includes breakage revenue from unredeemed gift cards

Retail stores

The Company generates revenue 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 converted to savings certificates and 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.

E-commerce

The Company 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, or picked up directly by the consumer from the Company’s stores (“e-commerce – Company websites”); sales from the Company’s wholesale customers’ websites that are fulfilled on a drop-ship basis (“e-commerce – wholesale drop ship”); and other e-commerce sales (“wholesale – e-commerce”), 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.

Landed wholesale

Landed sales are wholesale sales in which the Company obtains title to the footwear from the overseas suppliers and maintains title until the merchandise clears United States customs.  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.  Landed sales generally carry a higher profit rate than first-cost wholesale sales as a result of the brand equity associated with the product along with the additional customs, warehousing and logistics services provided to customers and the risks associated with inventory ownership.

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. Many of the customers then import this product into the United States.  Revenue is recognized at the time the merchandise is delivered to the customer’s designated freight forwarder and control is transferred to the customer.

Licensing and royalty

The Company has license agreements with third parties allowing them to sell the Company’s branded product, or other merchandise that uses the Company’s owned or licensed brand names. These license agreements provide the licensee access to the Company’s symbolic

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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.

The Company also licenses its Famous Footwear trade name and logo to a third-party financial institution to offer Famous Footwear-branded credit cards to its consumers.  The Company receives royalties based upon cardholder spending, which is recognized as licensing revenue at the time the credit card is used.    

Contract Balances

Revenue is recorded at the transaction price, net of estimates for variable consideration for which reserves are established, including returns, allowances and discounts. Variable consideration is estimated using the expected value method and given the large number of contracts with similar characteristics, the 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)	October 28, 2023		October 29, 2022		January 28, 2023
Customer allowances and discounts	$	23,849	$	23,164	$	21,917
Loyalty programs liability		13,770		17,690		17,732
Returns reserve		14,609		16,619		12,038
Gift card liability		5,664		5,718		6,659

Changes in contract balances with customers generally reflect differences in relative sales volume for the periods presented.  In addition, during the thirty-nine weeks ended October 28, 2023, the loyalty programs liability increased $41.9 million due to points and material rights earned on purchases and decreased $45.9 million due to expirations and redemptions.  During the thirty-nine weeks ended October 29, 2022, the loyalty programs liability increased $32.5 million due to points and material rights earned on purchases and decreased $33.6 million due to expirations and redemptions.  The liability for loyalty programs is presented within other accrued expenses when earned and is generally expected to be recognized as revenue within one year.  The gift card liability is established upon the sale of a gift card and revenue is recognized either upon redemption of the gift card by the consumer or based upon the gift card breakage rate, which is generally within the 24-month period following the sale of the gift card.

The Company estimates and records an expected lifetime credit loss on accounts receivable by utilizing credit ratings and other customer-related information, as well as historical loss experience.  The following table summarizes the activity in the Company’s allowance for expected credit losses during the thirty-nine weeks ended October 28, 2023 and October 29, 2022:

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Balance, beginning of period	$	8,903	$	9,601
Adjustment to expected credit losses		1,053		(303)
Uncollectible accounts written off, net of recoveries		18		(300)
Balance, end of period	$	9,974	$	8,998

Note 4    Earnings Per Share

The Company uses the two-class method to compute basic and diluted earnings per common share attributable to Caleres, Inc. shareholders.  In periods of net loss, no effect is given to the Company’s participating securities since they do not contractually participate in the losses of

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the Company.  The following table sets forth the computation of basic and diluted earnings per common share attributable to Caleres, Inc. shareholders for the periods ended October 28, 2023 and October 29, 2022:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands, except per share amounts)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
NUMERATOR
Net earnings	$	47,015	$	38,992	$	116,172	$	140,529
Net (earnings) loss attributable to noncontrolling interests		(101)		254		(588)		404
Net earnings attributable to Caleres, Inc.	$	46,914	$	39,246	$	115,584	$	140,933
Net earnings allocated to participating securities		(2,121)		(1,723)		(5,103)		(5,951)
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities	$	44,793	$	37,523	$	110,481	$	134,982
DENOMINATOR
Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders		33,933		34,379		34,206		35,207
Dilutive effect of share-based awards		—		507		—		450
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders		33,933		34,886		34,206		35,657
Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.09	$	3.23	$	3.83
Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.08	$	3.23	$	3.79

There were no outstanding options to purchase shares of common stock for the thirty-nine weeks ended October 28, 2023.  Options to purchase 16,667 shares of common stock for both the thirteen and thirty-nine weeks ended October 29, 2022 were not included in the denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders because the effect would be anti-dilutive.  

As further discussed in Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, the Company has two publicly announced share repurchase programs.  The Company did not repurchase any shares under these programs during the thirteen weeks ended October 28, 2023 and repurchased 763,000 shares during the thirty-nine weeks ended October 28, 2023.  During the thirteen and thirty-nine weeks ended October 29, 2022, the Company repurchased 838,025 and 2,622,845 shares, respectively, under the share repurchase programs.  No excise taxes were due on the Company’s share repurchases during the thirty-nine weeks ended October 28, 2023 under the provisions of the Inflation Reduction Act of 2022.

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Note 5    Restructuring and Other Special Charges

The Company incurred costs of $2.3 million ($1.7 million on an after-tax basis, or $0.05 per diluted share) and $3.9 million ($2.9 million on an after-tax basis, or $0.08 per diluted share) during the thirteen and thirty-nine weeks ended October 28, 2023, respectively, associated with its expense reduction initiatives.  The costs were primarily severance related to organizational changes in the Famous Footwear segment and the Company’s corporate office, as well as severance and other costs to integrate the Blowfish Malibu office and information systems into the St. Louis infrastructure.  Of the $2.3 million in charges presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirteen weeks ended October 28, 2023, $1.2 million is reflected in the Famous Footwear segment, $0.8 million is reflected in the Brand Portfolio segment and $0.3 million is reflected within the Eliminations and Other category.  Of the  $3.9 million in charges presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirty-nine weeks ended October 28, 2023, $1.7 million is reflected in the Brand Portfolio segment, $1.3 million is reflected in the Famous Footwear segment and $0.9 million is reflected within the Eliminations and Other category.  As of October 28, 2023, restructuring reserves of $2.6 million were included in other accrued expenses on the condensed consolidated balance sheet.

During the thirteen and thirty-nine weeks ended October 29, 2022, the Company incurred costs of $2.9 million ($2.7 million on an after-tax basis, or $0.07 per diluted share) related to the CFO transition at the corporate headquarters.  These costs were recognized as restructuring and other special charges in the condensed consolidated statement of earnings within the Eliminations and Other category.  

Note 6    Business Segment Information

Following is a summary of certain key financial measures for the Company’s business segments for the periods ended October 28, 2023 and October 29, 2022:

	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
Thirteen Weeks Ended October 28, 2023
Net sales	$	449,773	$	320,775	$	(8,644)	$	761,904
Intersegment sales (1)		—		8,644		—		8,644
Operating earnings (loss)		46,600		38,211		(20,393)		64,418
Segment assets		828,691		834,645		163,557		1,826,893
Thirteen Weeks Ended October 29, 2022
Net sales	$	481,951	$	323,242	$	(6,935)	$	798,258
Intersegment sales (1)		—		6,935		—		6,935
Operating earnings (loss)		59,267		22,304		(27,724)		53,847
Segment assets		833,268		955,712		159,333		1,948,313
Thirty-Nine Weeks Ended October 28, 2023
Net sales	$	1,213,169	$	947,164	$	(40,162)	$	2,120,171
Intersegment sales (1)		—		40,162		—		40,162
Operating earnings (loss)		104,286		107,708		(48,286)		163,708
Thirty-Nine Weeks Ended October 29, 2022
Net sales	$	1,302,828	$	1,013,043	$	(44,167)	$	2,271,704
Intersegment sales (1)		—		44,167		—		44,167
Operating earnings (loss)		171,451		93,063		(76,052)		188,462

(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.

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

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Operating earnings	$	64,418	$	53,847	$	163,708	$	188,462
Interest expense, net		(4,488)		(4,003)		(15,240)		(8,886)
Other income, net		1,552		2,997		4,660		9,636
Earnings before income taxes	$	61,482	$	52,841	$	153,128	$	189,212

Note 7    Inventories

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

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Raw materials	$	14,381	$	21,044	$	21,172
Work-in-process		628		629		569
Finished goods		541,025		627,584		558,474
Inventories, net	$	556,034	$	649,257	$	580,215

Note 8    Goodwill and Intangible Assets

Goodwill and intangible assets were as follows:

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Intangible Assets
Famous Footwear	$	2,800	$	2,800	$	2,800
Brand Portfolio (1)		342,083		342,083		342,083
Total intangible assets		344,883		344,883		344,883
Accumulated amortization		(143,564)		(131,419)		(134,447)
Total intangible assets, net		201,319		213,464		210,436
Goodwill
Brand Portfolio (2)		4,956		4,956		4,956
Total goodwill		4,956		4,956		4,956
Goodwill and intangible assets, net	$	206,275	$	218,420	$	215,392

(1) The carrying amount of intangible assets as of October 28, 2023, October 29, 2022  and January 28, 2023 is presented net of accumulated impairment charges of $106.2 million.

(2) The carrying amount of goodwill as of October 28, 2023, October 29, 2022 and January 28, 2023 is presented net of accumulated impairment charges of $415.7 million.

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The Company’s intangible assets as of October 28, 2023, October 29, 2022 and January 28, 2023 were as follows:

($ thousands)	October 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	128,592	$	10,200	$	160,696
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		14,972		4,005		25,223
		$	451,088	$	143,564	$	106,205	$	201,319
	October 29, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	119,461	$	10,200	$	169,827
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		11,958		4,005		28,237
		$	451,088	$	131,419	$	106,205	$	213,464
	January 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	121,928	$	10,200	$	167,360
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		12,519		4,005		27,676
		$	451,088	$	134,447	$	106,205	$	210,436

Amortization expense related to intangible assets was $3.0 million for both the thirteen weeks ended October 28, 2023 and October 29, 2022,  and $9.1 million for both the thirty-nine weeks ended October 28, 2023 and October 29, 2022.  The Company estimates that amortization expense related to intangible assets will be approximately $11.9 million in 2023, $11.0 million in 2024, 2025 and 2026, and $10.9 million in 2027.

Goodwill is tested for impairment as of the first day of the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate it might be impaired, using either the qualitative assessment or a quantitative fair value-based test.  The Company recorded no goodwill impairment charges during the thirty-nine weeks ended October 28, 2023 or October 29, 2022.

Indefinite-lived intangible assets are tested for impairment as of the first day of the fourth quarter of each fiscal year unless events or circumstances indicate an interim test is required.  The Company recorded no impairment charges for indefinite-lived intangible assets during the thirty-nine weeks ended October 28, 2023 or October 29, 2022.

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.  For operating leases, 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

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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.  Refer to Note 14 to the condensed consolidated financial statements for further discussion of impairment charges on the Company’s operating lease right-of-use assets and property and equipment in retail stores.

During the thirty-nine weeks ended October 28, 2023, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $94.3 million on the condensed consolidated balance sheets.  As of October 28, 2023, the Company has entered into lease commitments for 11 retail locations for which the leases have not yet commenced.  The Company anticipates that six leases will begin in the current fiscal year, four leases will begin in fiscal 2024 and one lease will begin in fiscal 2025.  Upon commencement, right-of-use assets and lease liabilities of approximately $5.2 million, $3.1 million and $0.3 million will be recorded on the condensed consolidated balance sheets in 2023, 2024 and 2025, respectively.

The components of lease expense for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022 were as follows:

	Thirteen Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating lease expense	$	39,308	$	38,116
Variable lease expense		10,404		10,679
Short-term lease expense		727		970
Total lease expense	$	50,439	$	49,765

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating lease expense	$	117,241	$	109,810
Variable lease expense		32,154		29,567
Short-term lease expense		2,157		3,340
Sublease income		—		(59)
Total lease expense	$	151,552	$	142,658

​
Supplemental cash flow information related to leases is as follows:

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Cash paid for lease liabilities	$	124,691	$	125,967
Cash received from sublease income		—		59

Note 10  Financing Arrangements

Credit Agreement

The Company maintains a revolving credit facility for working capital needs.  The Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC, Allen Edmonds LLC, Vionic Group LLC, Vionic International LLC and Blowfish, LLC are each co-borrowers and guarantors.    

On October 5, 2021, the Company entered into a Fifth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the "Credit Agreement") which, among other modifications, decreased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $500.0 million, subject to borrowing base restrictions, and may be increased by up to $250.0 million.  The Credit Agreement also decreased the spread applied to the London Interbank Offered Rate (“LIBOR”) or prime rate by a total of 75 basis points.   On April 27, 2023, the Company entered into a Sixth Amendment to Fourth Amended and Restated Credit agreement to transition the borrowings on the revolving credit facility from bearing interest based on LIBOR to a term secured overnight financing rate (“SOFR”).

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

17

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 SOFR, 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 Loan Cap and $40.0 million for three consecutive business days, and the fixed charge coverage ratio is less than 1.25 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 October 28, 2023.

At October 28, 2023, the Company had $222.0 million of borrowings outstanding and $10.6 million in letters of credit outstanding under the Credit Agreement.  Total additional borrowing availability was $267.4 million at October 28, 2023.

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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 October 28, 2023 and October 29, 2022:

			Pension and		Accumulated
	Foreign		Other		Other
	Currency		Postretirement		Comprehensive
($ thousands)	Translation		Transactions (1)		(Loss) Income
Balance at July 29, 2023	$	(1,313)	$	(24,217)	$	(25,530)
Other comprehensive loss before reclassifications		(726)		—		(726)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		888		888
Tax benefit		—		(228)		(228)
Net reclassifications		—		660		660
Other comprehensive (loss) income		(726)		660		(66)
Balance at October 28, 2023	$	(2,039)	$	(23,557)	$	(25,596)
Balance at July 30, 2022	$	(485)	$	(6,795)	$	(7,280)
Other comprehensive loss before reclassifications		(815)		—		(815)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		994		994
Tax benefit		—		(86)		(86)
Net reclassifications		—		908		908
Other comprehensive (loss) income		(815)		908		93
Balance at October 29, 2022	$	(1,300)	$	(5,887)	$	(7,187)
Balance at January 28, 2023	$	(1,213)	$	(25,537)	$	(26,750)
Other comprehensive loss before reclassifications		(826)		—		(826)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		2,664		2,664
Tax benefit		—		(684)		(684)
Net reclassifications		—		1,980		1,980
Other comprehensive (loss) income		(826)		1,980		1,154
Balance at October 28, 2023	$	(2,039)	$	(23,557)	$	(25,596)
Balance at January 29, 2022	$	(788)	$	(7,818)	$	(8,606)
Other loss income before reclassifications		(512)		—		(512)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		2,348		2,348
Tax benefit		—		(417)		(417)
Net reclassifications		—		1,931		1,931
Other comprehensive (loss) income		(512)		1,931		1,419
Balance at October 29, 2022	$	(1,300)	$	(5,887)	$	(7,187)

(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.

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $4.1 million and $5.0 million during the thirteen weeks and $10.9 million and $13.2 million during the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively.

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The Company had net issuances of 3,365 and 20,699 shares of common stock during the thirteen weeks ended October 28, 2023 and October 29, 2022, 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.  During the thirty-nine weeks ended October 28, 2023 and October 29, 2022, the Company had net issuances of 590,706 and 621,154 shares of common stock, respectively, related to share-based plans.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended October 28, 2023 and October 29, 2022:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	October 28, 2023				October 29, 2022
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
July 29, 2023	1,608,057	$	21.55	July 30, 2022	1,579,202	$	17.53
Granted	10,906		28.35	Granted	45,050		26.65
Forfeited	(6,650)		21.48	Forfeited	(15,500)		21.00
Vested	(3,000)		9.76	Vested	(58,000)		13.16
October 28, 2023	1,609,313	$	21.62	October 29, 2022	1,550,752	$	17.92

	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023				October 29, 2022
		Weighted-				Weighted-
	Total Number	Average			Total Number	Average
	of Restricted	Grant Date			of Restricted	Grant Date
	Shares		Fair Value		Shares	Fair Value
January 28, 2023	1,603,960	$	18.57	January 29, 2022	1,390,397	$	14.24
Granted	590,900		22.97	Granted	726,720		21.45
Forfeited	(150,823)		18.68	Forfeited	(95,716)		15.35
Vested	(434,724)		13.24	Vested	(470,649)		13.02
October 28, 2023	1,609,313	$	21.62	October 29, 2022	1,550,752	$	17.92

The Company granted 10,906 restricted shares during the thirteen weeks ended October 28, 2023, which have a graded vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 590,900 restricted shares granted during the thirty-nine weeks ended October 28, 2023, 554,832 shares have a graded vesting term of three years, with 50% vesting after two years and 50% after three years, 23,268 shares have a cliff-vesting term of one year, 7,000 shares have a graded vesting term of three years, with 50% vesting after eighteen months and 50% after three years, and 5,800 shares have a cliff-vesting term of two years.  The Company granted 45,050 restricted shares during the thirteen weeks ended October 29, 2022, which have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 726,720 restricted shares the Company granted during the thirty-nine weeks ended October 29, 2022, 716,250 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years and 10,470 shares have a cliff-vesting term of one year.  

Performance Awards

During the thirty-nine weeks ended October 28, 2023, the Company granted performance share awards for a targeted 276,434 shares, with a weighted-average grant date fair value of $23.12 in connection with the 2023 performance award (2023 – 2025 performance period).  During the thirty-nine weeks ended October 29, 2022, the Company granted performance share awards for a targeted 87,750 shares, with a weighted-average grant date fair value of $20.99 in connection with the 2020 performance award.  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 attainment of certain financial goals for the service period and individual achievement of strategic initiatives over the cumulative period of the award.  The 2023 performance award is payable in common stock for up to 100% of the targeted award and the remainder in cash if any portion exceeds the targeted award.  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.  

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In connection with the Company’s CFO transition during the thirteen weeks ended October 29, 2022, the Company approved the accelerated vesting of 30,000 performance-based share awards, representing two of the four award tranches from the 2020 performance award.  The performance conditions had been satisfied for the two award tranches based on the achievement of financial goals for the 2020 and 2021 fiscal periods.  The modification to accelerate vesting eliminated the remaining service requirement.  These awards had a weighted-average grant date fair value of $13.05 per share, but were revalued using a fair value on the date of modification of $24.31 per share.  The modification of these awards resulted in incremental compensation expense of $0.4 million, which is presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirteen and thirty-nine weeks ended October 29, 2022.

During the thirty-nine weeks ended October 29, 2022, the Company granted long-term incentive awards payable in cash for the 2022-2024 performance period, with a target value of $8.3 million and a maximum value of $16.6 million.  This award, which vests after a three-year period, is 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 expensed ratably 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 are subject to a vesting requirement (usually one year) and earn dividend equivalents at the same rate as dividends on the Company’s common stock.  The dividend equivalents, which vest immediately, are automatically reinvested in additional RSUs.  Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs.  The RSUs payable in cash are remeasured at the end of each period.  Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted.  Gains and losses resulting from changes in the fair value of the RSUs payable in cash subsequent to the vesting period and through the settlement date are recognized in the Company’s condensed consolidated statements of earnings.  The Company granted 1,081 and 1,314 RSUs for dividend equivalents, during the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively, with weighted-average grant date fair values of $28.80 and $24.30, respectively.  The Company granted 50,376 and 41,325 RSUs to non-employee directors, including 3,840 and 4,680 and for dividend equivalents, during the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively, with weighted-average grant date fair values of $19.72 and $27.23, respectively.

Note 13  Retirement and Other Benefit Plans

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

	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	1,256	$	1,786	$	—	$	—
Interest cost		3,635		2,997		12		9
Expected return on assets		(6,087)		(6,997)		—		—
Amortization of:
Actuarial loss (gain)		946		779		(27)		(26)
Prior service income		(31)		(79)		—		—
Settlement cost		—		320		—		—
Total net periodic benefit income	$	(281)	$	(1,194)	$	(15)	$	(17)

	Pension Benefits				Other Postretirement Benefits
	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	3,767	$	5,358	$	—	$	—
Interest cost		10,905		8,994		36		27
Expected return on assets		(18,265)		(21,005)		—		—
Amortization of:
Actuarial loss (gain)		2,840		2,343		(82)		(78)
Prior service income		(94)		(237)		—		—
Settlement cost		—		320		—		—
Total net periodic benefit income	$	(847)	$	(4,227)	$	(46)	$	(51)

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The non-service cost components of net periodic benefit income are included in other income, net in the condensed consolidated statements of earnings.  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.

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 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).  

Non-Qualified Restoration Plan Liabilities

In 2023, the Company adopted a non-qualified restoration deferred compensation plan (the “Restoration Plan”) for the benefit of certain members of executive management.  The Restoration Plan provides an incremental retirement benefit to key executives whose contributions to qualified retirement plans are limited by Internal Revenue Service annual compensation maximums.  The investment funds offered to the participants generally correspond to the funds offered in the Company’s 401(k) plan.  Upon the initial contribution to the Restoration Plan, which is expected to be in January 2024, the plan assets and liabilities will fluctuate with the returns on the investment funds.  The deferrals will be held in a separate trust, which will be established by the Company to administer the Restoration Plan.  The assets of the trust will be subject to the claims of the Company’s creditors in the event that the Company becomes insolvent.  The liabilities of the Restoration Plan are presented in other accrued expenses in the condensed consolidated balance sheet as of October 28, 2023.    

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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 reinvested 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 condensed consolidated balance sheets.  Gains and losses resulting from changes in the fair value of the PSUs are presented in selling and administrative expenses in the Company’s condensed consolidated statements of earnings.  The fair value of each PSU is based on an unadjusted quoted market price for the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1).

Restricted Stock Units for Non-Employee Directors

Under the Company’s incentive compensation plans, cash-equivalent restricted stock units (“RSUs”) of the Company 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.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at October 28, 2023, October 29, 2022 and January 28, 2023.  During the thirty-nine weeks ended October 28, 2023 and October 29, 2022, there were no transfers into or out of Level 3.

	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
October 28, 2023:
Non-qualified deferred compensation plan assets	$	8,908	$	8,908	$	—	$	—
Non-qualified deferred compensation plan liabilities		(8,908)		(8,908)		—		—
Non-qualified restoration plan liabilities		(173)		(173)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,547)		(1,547)		—		—
Restricted stock units for non-employee directors		(2,057)		(2,057)		—		—
October 29, 2022:
Non-qualified deferred compensation plan assets		7,769		7,769		—		—
Non-qualified deferred compensation plan liabilities		(7,769)		(7,769)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,805)		(1,805)		—		—
Restricted stock units for non-employee directors		(2,220)		(2,220)		—		—
January 28, 2023:
Non-qualified deferred compensation plan assets		7,890		7,890		—		—
Non-qualified deferred compensation plan liabilities		(7,890)		(7,890)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,662)		(1,662)		—		—
Restricted stock units for non-employee directors		(2,028)		(2,028)		—		—

​
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 $559.0 million and $564.6 million at October 28, 2023 and October 29, 2022, respectively, were assessed for indicators of impairment.  This assessment resulted

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in impairment charges for operating lease right-of-use assets, leasehold improvements and furniture and fixtures in the Company’s retail stores, and in the thirty-nine weeks ended October 29, 2022, capitalized software.  

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Long-Lived Asset Impairment Charges
Famous Footwear	$	175	$	—	$	589	$	419
Brand Portfolio		—		—		—		1,560
Total long-lived asset impairment charges	$	175	$	—	$	589	$	1,979

Fair Value of the Company’s Other Financial Instruments

The fair values of cash and cash equivalents, receivables and trade accounts payable approximate their carrying values due to the short-term nature of these instruments.

The fair values of the borrowings under revolving credit agreement of $222.0 million and $364.5 million as of October 28, 2023 and October 29, 2022, respectively, approximate their carrying values due to the short-term nature of the borrowings (Level 1).  

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 23.5% and 26.2% for the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively.  The higher effective tax rate for the third quarter of 2022 was driven by an increase in permanent adjustments, primarily the non-deductible portion of executive compensation.

The Company’s consolidated effective tax rates were 24.1% and 25.7% for the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively.  The lower effective tax rate for the thirty-nine weeks ended October 28, 2023 was driven by discrete tax benefits of $0.9 million, primarily related to the Company’s share-based compensation.

As of October 28, 2023, 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 international earnings, as required by the Tax Cuts and Jobs Act.  The Company periodically evaluates its international investment opportunities and plans, as well as its international working capital needs, to determine the level of investment required and, accordingly, determines the level of international earnings that is considered indefinitely reinvested.  Based upon that evaluation, earnings of the Company’s international 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 international 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.  The Company

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received permission from the oversight authorities to convert the pump and treat system to a passive treatment barrier system and completed the conversion during the second quarter of 2023.

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 and to work with the oversight authorities on the off-site work plan.

The cumulative expenditures for both on-site and off-site remediation through October 28, 2023 were $34.0 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 October 28, 2023 is $9.4 million, of which $8.4 million is recorded within other liabilities and $1.0 million is recorded within other accrued expenses.  Of the total $9.4 million reserve, $4.8 million is for off-site remediation and $4.6 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 $13.2 million as of October 28, 2023.  The Company expects to spend approximately $0.6 million in 2023, $0.1 million in each of the following four years and $12.2 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 expensed as incurred.

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

OVERVIEW

Business Overview

We are a global footwear company that operates retail stores and e-commerce websites, and designs, develops, sources, manufactures and distributes footwear for people of all ages.  Our mission is to inspire people to feel great...feet first.  We offer the consumer a diversified portfolio of leading footwear brands built on deep consumer insights, generating unwavering consumer loyalty and trust.  As both a retailer and a wholesaler, we have a perspective on the marketplace that enables us to serve consumers from different vantage points.  We believe our diversified business model provides us with synergies by spanning consumer segments, categories and distribution channels.  A combination of thoughtful planning and rigorous execution is key to our success in optimizing our business and portfolio of brands.  

Known Trends Impacting Our Business

Macroeconomic Environment

Macroeconomic factors, including, among others, inflation, the rising interest rate environment, increasing real estate costs, higher consumer debt levels, the end to the student loan repayment pause, and fears of a recession continued to impact consumer discretionary spending and our financial results during the third quarter of 2023.  We continued to experience lighter consumer traffic in our retail stores during the third quarter, resulting in lower net sales.  While we believe that the structural changes we’ve implemented in the last few years, as well as our diversified model and operational discipline, enable the Company to drive value in a variety of market conditions, changes in macro-level consumer spending trends may continue to adversely impact our financial results in the future.  To mitigate the impact of these macroeconomic factors, we began initiating expense reduction initiatives in the first quarter of 2023, which resulted in savings beginning in the second quarter.  These actions, which included eliminating open corporate positions, reducing non-merchandise procurement costs and integrating our Blowfish Malibu office and information systems into the St. Louis infrastructure, are expected to result in additional savings for the remainder of 2023 and into 2024.  We believe our focus on cost control and our commitment to execute our clearly defined strategic initiatives have positioned us for sustainable, long-term growth.

Financial Highlights

Highlights of our consolidated and segment results for the third quarter of 2023 and 2022 are as follows:

	Thirteen Weeks Ended
($ millions, except per share amounts)	October 28, 2023		October 29, 2022		Change (1)
Consolidated net sales	$761.9		$798.3		($36.4)	(4.6)	%
Famous Footwear segment net sales	$449.8		$482.0		($32.2)	(6.7)	%
Famous Footwear comparable sales % change	(6.9)	%	(0.8)	%	n/m	n/m
Brand Portfolio segment net sales	$320.8		$323.2		($2.4)	(0.8)	%
Gross profit	$340.4		$339.9		$0.5	0.1	%
Gross margin	44.7	%	42.6	%	n/m	210 bps
Operating earnings	$64.4		$53.8		$10.6	19.6	%
Diluted earnings per share	$1.32		$1.08		$0.24	22.2	%

(1) n/m – not meaningful

The following items should be considered in evaluating the comparability of our third quarter results in 2023 and 2022:

● Expense reduction initiatives – As further discussed in Note 5 to the condensed consolidated financial statements, during the third quarter of 2023, we incurred costs of approximately $2.3 million ($1.7 million on an after-tax basis, or $0.05 per diluted share) associated with the expense reduction initiatives we began initiating at the end of the first quarter of 2023.  These expense reduction initiatives will continue in the fourth quarter of 2023 and are expected to result in additional costs of approximately $3 million, or $0.06 per diluted share.  

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● Organizational changes – During the third quarter of 2022, we incurred costs of $2.9 million ($2.7 million on an after-tax basis, or $0.07 per diluted share) related to a CFO transition at our corporate headquarters.  Refer to Note 5 to the condensed consolidated financial statements for further discussion of these charges.

Metrics Used in the Evaluation of Our Business

The following are a few key metrics by which we evaluate our business, identify trends and make strategic decisions:

Comparable sales

The comparable 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 comparable sales metric as a measure of an individual store’s success to determine whether it is performing in line with expectations.  Our comparable 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 comparable sales metric, a store must be open in the current period as well as the corresponding day(s) of the comparable retail calendar in the prior year.  Accordingly, closed stores are excluded from the comparable 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 comparable sales calculation.  We believe the comparable sales metric is useful to shareholders and investors in assessing our retail sales performance of existing locations with comparable prior year sales, separate from the impact of store openings or store closures.

Sales per square foot

The sales per square foot metric is commonly used in the retail industry 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 and the retail operations of our joint venture in China, by the total square footage of the retail store base in North America at the end of each month of the respective period.  

Direct-to-consumer sales

Direct-to-consumer sales includes sales from our retail stores, our company-owned websites and sales through our customers’ websites that we fulfill on a drop-ship basis.  While we take an omni-channel approach to reach consumers, we believe that our direct-to-consumer channels reinforce the image of our brands and strengthens our connection with the end consumer.  In addition, direct-to-consumer sales generally result in a higher gross margin for the Company as compared to wholesale sales.  As a result, management monitors trends in direct-to-consumer sales as a percentage of our Brand Portfolio segment and total consolidated net sales.

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RESULTS OF OPERATIONS

Following are the consolidated results and the results by segment:

CONSOLIDATED RESULTS

	Thirteen Weeks Ended								Thirty-Nine Weeks Ended
	October 28, 2023				October 29, 2022				October 28, 2023				October 29, 2022
			% of				% of				% of				% of
($ millions)			Net Sales				Net Sales				Net Sales				Net Sales
Net sales	$	761.9	100.0	%	$	798.3	100.0	%	$	2,120.2	100.0	%	$	2,271.7	100.0	%
Cost of goods sold		421.5	55.3	%		458.4	57.4	%		1,163.0	54.9	%		1,268.0	55.8	%
Gross profit		340.4	44.7	%		339.9	42.6	%		957.2	45.1	%		1,003.7	44.2	%
Selling and administrative expenses		273.7	35.9	%		283.2	35.5	%		789.6	37.2	%		812.3	35.8	%
Restructuring and other special charges, net		2.3	0.3	%		2.9	0.4	%		3.9	0.2	%		2.9	0.1	%
Operating earnings		64.4	8.5	%		53.8	6.7	%		163.7	7.7	%		188.5	8.3	%
Interest expense, net		(4.5)	(0.6)	%		(4.0)	(0.5)	%		(15.3)	(0.7)	%		(8.9)	(0.4)	%
Other income, net		1.6	0.2	%		3.0	0.4	%		4.7	0.2	%		9.6	0.4	%
Earnings before income taxes		61.5	8.1	%		52.8	6.6	%		153.1	7.2	%		189.2	8.3	%
Income tax provision		(14.5)	(1.9)	%		(13.8)	(1.7)	%		(36.9)	(1.7)	%		(48.7)	(2.1)	%
Net earnings		47.0	6.2	%		39.0	4.9	%		116.2	5.5	%		140.5	6.2	%
Net earnings (loss) attributable to noncontrolling interests		0.1	0.0	%		(0.2)	(0.0)	%		0.6	0.0	%		(0.4)	(0.0)	%
Net earnings attributable to Caleres, Inc.	$	46.9	6.2	%	$	39.2	4.9	%	$	115.6	5.5	%	$	140.9	6.2	%

Net Sales

Net sales decreased $36.4 million, or 4.6%, to $761.9 million for the third quarter of 2023, compared to $798.3 million for the third quarter of 2022, driven by a $32.2 million, or 6.7%, decline in net sales for our Famous Footwear segment, reflecting lower consumer traffic in our retail stores and the challenging macroeconomic environment.  Comparable sales for Famous Footwear were down 6.9%.  Despite softening consumer demand trends, our kids category, which is a key differentiator for Famous Footwear, remained strong during the third quarter of 2023, as families prioritized purchases of kids’ footwear during the back-to-school selling season.  We experienced weakness in the athletics and boots categories during the quarter.  Net sales of our Brand Portfolio segment decreased $2.4 million, or 0.8%, during the third quarter of 2023, compared to the third quarter of 2022.  Our e-commerce sales increased during the quarter, while wholesale shipments were lower.  Many of our wholesale customers continued to tightly manage inventory levels and moderate purchases, which contributed to the decrease in wholesale net sales compared to the prior year.  On a consolidated basis, our direct-to-consumer sales represented approximately 73% of total net sales for the third quarter of 2023, compared to 74% in the third quarter of 2022.  We remain focused on maximizing the vertical opportunity between the Famous Footwear and Brand Portfolio segments, with LifeStride, Dr. Scholl’s, Naturalizer and Blowfish Malibu representing four of Famous Footwear’s top 20 best-selling footwear brands during the quarter.

Net sales decreased $151.5 million, or 6.7%, to $2,120.2 million for the nine months ended October 28, 2023, compared to $2,271.7 million for the nine months ended October 29, 2022.  Net sales for our Famous Footwear segment decreased $89.6 million, or 6.9%, in the first nine months of 2023, compared to the first nine months of 2022, due in part to a decline in consumer traffic in our retail stores driven by cautious consumer spending.  Comparable sales declined 6.5% in the nine months ended October 28, 2023.  Net sales for our Brand Portfolio segment

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decreased $65.8 million, or 6.5% during the first nine months of 2023, compared to the first nine months of 2022, reflecting the challenging macroeconomic environment.  Despite the competitive retail landscape, we leveraged our leading speed capabilities in certain brands to drive sales of selected trending product, including casual flats, loafers, moccasins, ballerina flats and fashion sneakers.  On a consolidated basis, our direct-to-consumer sales grew to approximately 72% of total net sales for the nine months ended October 28, 2023, compared to 71% for the nine months ended October 29, 2022.

Gross Profit

Gross profit increased $0.5 million, or 0.1%, to $340.4 million for the third quarter of 2023, compared to $339.9 million for the third quarter of 2022.  As a percentage of net sales, gross profit increased to 44.7% for the third quarter of 2023, compared to 42.6% for the third quarter of 2022, driven by an increase in the Brand Portfolio segment gross margin reflecting lower inbound freight costs, lower inventory markdown requirements reflecting our improved inventory position, and higher merchandise margins.  We anticipate the trend of lower freight costs to continue for the remainder of fiscal 2023.

Gross profit decreased $46.5 million, or 4.6%, to $957.2 million for the nine months ended October 28, 2023, compared to $1,003.7 million for the nine months ended October 29, 2022, primarily reflecting lower net sales.  As a percentage of net sales, gross profit increased to 45.1% for the nine months ended October 28, 2023, compared to 44.2% for the nine months ended October 29, 2022, driven by an increase in the gross margin of our Brand Portfolio segment, partially offset by a decrease in the gross margin of our Famous Footwear segment.  

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

Selling and Administrative Expenses

Selling and administrative expenses decreased $9.5 million, or 3.3%, to $273.7 million for the third quarter of 2023, compared to $283.2 million for the third quarter of 2022.  The decrease was driven by lower anticipated payments under our cash and share-based incentive compensation plans, partially offset by higher advertising expense and higher retail facilities costs.  As a percentage of net sales, selling and administrative expenses increased to 35.9% for the third quarter of 2023, from 35.5% for the third quarter of 2022, reflecting deleveraging of expenses on lower net sales.

Selling and administrative expenses decreased $22.7 million, or 2.8%, to $789.6 million for the nine months ended October 28, 2023, compared to $812.3 million for the nine months ended October 29, 2022.  The decrease was primarily due to lower anticipated payments under our cash and share-based incentive compensation plans and lower warehouse costs, partially offset by an increase in facilities costs.  As a percentage of net sales, selling and administrative expenses increased to 37.2% for the nine months ended October 28, 2023, from 35.8% for the nine months ended October 29, 2022, reflecting deleveraging of expenses on lower net sales.

Restructuring and Other Special Charges, Net

Restructuring and other special charges of approximately $2.3 million ($1.7 million on an after-tax basis, or $0.05 per diluted share) and $3.9 million ($2.9 million on an after-tax basis, or $0.08 per diluted share) for the three and nine months ended October 28, 2023, respectively, were associated with expense reduction initiatives, primarily severance.  Restructuring and other special charges of $2.9 million ($2.7 million on an after-tax basis, or $0.07 per diluted share) during the third quarter and nine months ended October 29, 2022, related to a CFO transition at our corporate headquarters.  Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.

Operating Earnings

Operating earnings increased $10.6 million to $64.4 million for the third quarter of 2023, compared to $53.8 million for the third quarter of 2022, reflecting the factors described above.  As a percentage of net sales, operating earnings were 8.5% for the third quarter of 2023, compared to 6.7% for the third quarter of 2022.

Operating earnings decreased $24.8 million to $163.7 million for the nine months ended October 28, 2023, compared to $188.5 million for the nine months ended October 29, 2022, primarily reflecting lower net sales and gross profit.  As a percentage of net sales, operating earnings were 7.7% for the nine months ended October 28, 2023, compared to 8.3% for the nine months ended October 29, 2022.

Interest Expense, Net

Interest expense, net increased $0.5 million, or 12.1%, to $4.5 million for the third quarter of 2023, compared to $4.0 million for the third quarter of 2022.  Interest expense, net increased $6.4 million, or 71.5%, to $15.3 million for the nine months ended October 28, 2023,

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compared to $8.9 million for the nine months ended October 29, 2022.  The increases reflect higher interest expense on the revolving credit facility attributable to higher interest rates, partially offset by lower average borrowings.  The interest on our revolving credit facility is based on a variable interest rate, which has resulted in higher interest expense in the current rising interest rate environment.  While our interest expense in the fourth quarter of 2023 will continue to be adversely affected by the elevated interest rates, we expect to continue to reduce the borrowings under our revolving credit agreement to mitigate the impact of the high interest rate environment.

Other Income, Net

Other income, net decreased $1.4 million, or 48.2%, to $1.6 million for the third quarter of 2023, compared to $3.0 million for the third quarter of 2022, primarily attributable to lower expected return on assets and higher interest costs for our pension plans.  

Other income, net decreased $4.9 million, or 51.6%, to $4.7 million for the nine months ended October 28, 2023, compared to $9.6 million for the nine months ended October 29, 2022, primarily attributable to lower expected return on assets and higher interest costs for the pension plans.  Refer to Note 13 of the condensed consolidated financial statements for additional information regarding our retirement plans.

Income Tax Provision

Our effective tax rate can vary considerably from period to period, depending on a number of factors.  Our consolidated effective tax rate was 23.5% for the third quarter of 2023, compared to 26.2% for the third quarter of 2022.  The higher effective tax rate for the third quarter of 2022 was driven by an increase in permanent adjustments, primarily due to the non-deductible portion of executive compensation.    

Our consolidated effective tax rate was 24.1% for the nine months ended October 28, 2023, compared to 25.7% for the nine months ended October 29, 2022.  The lower effective tax rate was driven by discrete tax benefits of approximately $0.9 million in the nine months ended October 28, 2023, primarily related to share-based compensation.

In 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation.  The OECD continues to release guidance and countries are implementing legislation to adopt the rules, which are expected to become effective on January 1, 2024.  The United States has not yet enacted legislation implementing Pillar Two.  We are continuing to evaluate the Pillar Two rules and their potential impact on future periods, but we do not expect the rules to have a material impact on our effective tax rate.

Net Earnings Attributable to Caleres, Inc.

Net earnings attributable to Caleres, Inc. were $46.9 million and $115.6 million for the third quarter and nine months ended October 28, 2023, respectively, compared to $39.2 million and $140.9 million for the third quarter and nine months ended October 29, 2022, respectively, as a result of the factors described above.

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FAMOUS FOOTWEAR

	Thirteen Weeks Ended										Thirty-Nine Weeks Ended
	October 28, 2023					October 29, 2022					October 28, 2023					October 29, 2022
				% of					% of					% of					% of
($ millions, except sales per square foot)				Net Sales					Net Sales					Net Sales					Net Sales
Net sales	$	449.8		100.0	%	$	482.0		100.0	%	$	1,213.2		100.0	%	$	1,302.8		100.0	%
Cost of goods sold		251.0		55.8	%		266.4		55.3	%		663.8		54.7	%		684.4		52.5	%
Gross profit		198.8		44.2	%	$	215.6		44.7	%		549.4		45.3	%	$	618.4		47.5	%
Selling and administrative expenses		151.0		33.6	%		156.3		32.4	%		443.8		36.6	%		446.9		34.3	%
Restructuring and other special charges, net		1.2		0.2	%		—		—			1.3		0.1	%		—		—	%
Operating earnings	$	46.6		10.4	%	$	59.3		12.3	%	$	104.3		8.6	%	$	171.5		13.2	%
Key Metrics
Comparable sales % change		(6.9)	%				(0.8)	%				(6.5)	%				(2.5)	%
Comparable sales $ change	$	(32.4)				$	(3.7)				$	(82.4)				$	(32.8)
Sales change from new and closed stores, net	$	0.4				$	(8.5)				$	(6.1)				$	(9.9)
Impact of changes in Canadian exchange rate on sales	$	(0.2)				$	(0.5)				$	(1.1)				$	(0.9)
Sales per square foot, excluding e-commerce (thirteen and thirty-nine weeks ended)	$	69				$	72				$	188				$	194
Sales per square foot, excluding e-commerce (trailing twelve months)	$	246				$	250				$	246				$	250
Square footage (thousand sq. ft.)		5,677					5,787					5,677					5,787
Stores opened		3					4					5					4
Stores closed		2					9					16					22
Ending stores		862					876					862					876

Net Sales

Net sales of $449.8 million in the third quarter 2023 decreased $32.2 million, or 6.7%, compared to the third quarter of 2022.  Comparable sales decreased 6.9% compared to the third quarter of 2022.  The challenging macroeconomic environment continued to impact sales as traffic in our retail stores was down in the third quarter of 2023, compared to the third quarter of 2022.  Despite softening consumer demand trends, our kids category, which is a key differentiator for Famous Footwear, remained strong during the third quarter of 2023, as families prioritized purchases of kids’ footwear during the back-to-school selling season.  We achieved record-setting sales of product in this category during the back-to-school season and have made investments in the kids category to drive future growth.  We experienced lower sales of seasonal categories, particularly boots, during the quarter.  We opened three stores and closed two stores during the third quarter of 2023, resulting in 862 stores and total square footage of 5.7 million at the end of the quarter, compared to 876 stores and total square footage of 5.8 million at the end of the third quarter of 2022.  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 77% of our net sales made to program members in both the third quarter of 2023 and 2022.

Net sales of $1,213.2 million in the nine months ended October 28, 2023 decreased $89.6 million, or 6.9%, compared to the nine months ended October 29, 2022, primarily due to the factors described above.  Comparable sales declined 6.5% in the nine months ended October 28, 2023, driven by a decline in consumer traffic in our retail stores.  Athletics and casual continue to be our top-selling categories.  We remain focused on maximizing the vertical opportunity between the Famous Footwear and Brand Portfolio segments, with Dr. Scholl’s, LifeStride, Naturalizer and Blowfish Malibu representing four of Famous Footwear’s top 20 best-selling footwear brands for the nine months ended October 28, 2023.  We opened five stores and closed 16 stores during the nine months ended October 28, 2023.  Although we anticipate the soft consumer demand and challenging macroeconomic landscape to persist in the fourth quarter of 2023, we believe that Famous Footwear is well-situated to grow its leadership position with the Millennial family.    

Gross Profit

Gross profit decreased $16.8 million, or 7.8%, to $198.8 million for the third quarter of 2023, compared to $215.6 million for the third quarter of 2022, reflecting lower net sales.  As a percentage of net sales, our gross profit decreased to 44.2% for the third quarter of 2023, from 44.7% for the third quarter of 2022.        

Gross profit decreased $69.0 million, or 11.2%, to $549.4 million for the nine months ended October 28, 2023, compared to $618.4 million for the nine months ended October 29, 2022, primarily due to the decrease in net sales.  As a percentage of net sales, our gross profit

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decreased to 45.3% for the nine months ended October 28, 2023, compared to 47.5% for the nine months ended October 29, 2022.  During the nine-months ended October 29, 2022, there were fewer markdowns and minimal clearance selling due to higher demand and a higher mix of current inventory.   During the nine-months ended October 28, 2023, we experienced a more historical mix of clearance product sold and margins on those clearance sales were in line with historical levels.  

Selling and Administrative Expenses

Selling and administrative expenses decreased $5.3 million, or 3.4%, to $151.0 million for the third quarter of 2023, compared to $156.3 million for the third quarter of 2022.  The decrease was driven by lower salary and benefit expenses and distribution expense.  As a result of the softer demand, we managed most of our expense categories lower than the prior year.  As a percentage of net sales, selling and administrative expenses increased to 33.6% for the third quarter of 2023, compared to 32.4% for the third quarter of 2022, reflecting deleveraging of expenses on lower net sales.

Selling and administrative expenses decreased $3.1 million, or 0.7%, to $443.8 million for the nine months ended October 28, 2023, compared to $446.9 million for the nine months ended October 29, 2022.  The decrease was driven by lower salary and benefits expenses, lower distribution expenses and lower advertising expenses.  These decreases were partially offset by higher facilities costs, including depreciation expense, as we continued to invest in store remodels.  As a percentage of net sales, selling and administrative expenses increased to 36.6% for the nine months ended October 28, 2023, compared to 34.3% for the nine months ended October 29, 2022, reflecting deleveraging of expenses on lower net sales.

Restructuring and Other Special Charges, Net

Restructuring and other special charges of $1.2 million and $1.3 million for the three and nine months ended October 28, 2023, respectively, were associated with expense reduction initiatives, primarily severance.  Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.  There were no corresponding charges for the nine months ended October 29, 2022.

Operating Earnings 

Operating earnings decreased $12.7 million to $46.6 million for the third quarter of 2023, compared to $59.3 million for the third quarter of 2022, primarily reflecting lower sales and gross profit, as described above.  As a percentage of net sales, operating earnings were 10.4% for the third quarter of 2023, compared to 12.3% for the third quarter of 2022.

Operating earnings decreased $67.2 million to $104.3 million for the nine months ended October 28, 2023, compared to $171.5 million for the nine months ended October 29, 2022.  As a percentage of net sales, operating earnings were 8.6% for the nine months ended October 28, 2023, compared to 13.2% for the nine months ended October 29, 2022.

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BRAND PORTFOLIO

	Thirteen Weeks Ended										Thirty-Nine Weeks Ended
	October 28, 2023					October 29, 2022					October 28, 2023					October 29, 2022
				% of					% of					% of					% of
($ millions, except sales per square foot)				Net Sales					Net Sales					Net Sales					Net Sales
Net sales	$	320.8		100.0	%	$	323.2		100.0	%	$	947.2		100.0	%	$	1,013.0		100.0	%
Cost of goods sold		180.6		56.3	%		200.8		62.1	%		539.1		56.9	%		627.2		61.9	%
Gross profit		140.2		43.7	%		122.4		37.9	%		408.1		43.1	%		385.8		38.1	%
Selling and administrative expenses		101.1		31.5	%		100.1		31.0	%		298.7		31.5	%		292.7		28.9	%
Restructuring and other special charges, net		0.9		0.3	%		—		—	%		1.7		0.2	%		—		—	%
Operating earnings	$	38.2		11.9	%	$	22.3		6.9	%	$	107.7		11.4	%	$	93.1		9.2	%
Key Metrics
Direct-to-consumer (% of net sales) (1)		34	%				34	%				33	%				30	%
Change in wholesale net sales ($)	$	(4.9)				$	13.0				$	(74.5)				$	197.2
Change in retail net sales ($)	$	2.5				$	9.7				$	8.7				$	26.0
Unfilled order position at end of period	$	243.9				$	286.8
Sales per square foot, excluding e-commerce (trailing twelve months) (2)	$	1,191				$	1,047				$	1,191				$	1,047
Square footage (thousands sq. ft.) (2)		99					104					99					104
North America stores:
Stores opened		1					—					3					1
Stores closed		—					3					4					8
Ending stores - North America		62					63					62					63
Ending stores - China		34					26					34					26
Ending stores - Total Brand Portfolio		96					89					96					89

(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.

(2) These metrics exclude the retail operations of our joint venture in China.  Refer to Note 1 to the condensed consolidated financial statements for further discussion of the joint venture.

Net Sales

Net sales of $320.8 million in the third quarter of 2023 decreased $2.4 million, or 0.8%, compared to the third quarter of 2022.  The modest decrease in our net sales was a result of the challenging consumer environment that we are currently experiencing.  Our e-commerce sales increased during the quarter, while wholesale shipments were lower.  Net sales from our owned e-commerce business increased approximately 4.7% during the third quarter of 2023.  Our key categories of casual shoes and sneakers both experienced gains in the third quarter of 2023 compared to the third quarter of 2022, as the consumer continued to navigate toward newness in non-seasonal categories, including casual flats, loafers, moccasins, ballerina flats and fashion sneakers.  The gains in these categories were offset by sales weakness in our boots category.  We opened one store in the United States during the third quarter of 2023, resulting in a total of 62 stores and total square footage of 0.1 million, compared to 63 stores and total square footage of 0.1 million at the end of the third quarter of 2022.  In addition, we continued to expand our retail store presence in China by opening one new store, resulting in a total of 34 stores, compared to 26 stores at the end of the third quarter of 2022.  

Net sales decreased $65.8 million, or 6.5%, to $947.2 million for the nine months ended October 28, 2023, compared to $1,013.0 million for the nine months ended October 29, 2022, reflecting the challenging macroeconomic environment and competitive retail landscape described above.  Despite the competitive retail landscape, we have leveraged our leading speed capabilities to drive sales of selected trending product.  Speed is a key differentiator for the Brand Portfolio segment, as we are generally able to restock product that is part of the speed program within three months or less to align with consumer demand.  We continue to experience growth in our owned e-commerce business, which increased 4.7% in the nine months ended October 28, 2023, compared to the nine months ended October 29, 2022.  

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Our unfilled order position for our wholesale sales decreased $42.9 million, or 15.0%, to $243.9 million at October 28, 2023, compared to $286.8 million at October 29, 2022.  The decrease in our backlog order levels compared to last year reflects more conservative ordering patterns by our wholesale customers as they manage their inventory levels in response to soft consumer demand and consumers buying closer to need.

Gross Profit

Gross profit increased $17.8 million, or 14.5%, to $140.2 million for the third quarter of 2023, compared to $122.4 million for the third quarter of 2022.  As a percentage of net sales, our gross profit increased to 43.7% for the third quarter of 2023, compared to 37.9% for the third quarter of 2022, reflecting lower inbound freight costs, lower inventory markdown requirements reflecting our improved inventory position, and higher merchandise margins.

Gross profit increased $22.3 million, or 5.8%, to $408.1 million for the nine months ended October 28, 2023, compared to $385.8 million for the nine months ended October 29, 2022, reflecting lower inventory markdowns, lower inbound freight costs, higher merchandise margins and higher average prices in our retail operations.  As a percentage of net sales, our gross profit increased significantly to 43.1% for the nine months ended October 28, 2023, compared to 38.1% for the nine months ended October 29, 2022.  

Selling and Administrative Expenses

Selling and administrative expenses increased $1.0 million, or 1.0%, to $101.1 million for the third quarter of 2023, compared to $100.1 million for the third quarter of 2022.  The increase was primarily due to higher marketing expenses, partially offset by lower salary and benefits expenses.  As a percentage of net sales, selling and administrative expenses increased to 31.5% for the third quarter of 2023, compared to 31.0% for the third quarter of 2022.

Selling and administrative expenses increased $6.0 million, or 2.0%, to $298.7 million for the nine months ended October 28, 2023, compared to $292.7 million for the nine months ended October 29, 2022.  The increase was driven by higher marketing expenses and higher facilities costs, partially offset by lower salary and benefits expenses and lower logistics costs.  As a percentage of net sales, selling and administrative expenses increased to 31.5% for the nine months ended October 28, 2023, compared to 28.9% for the nine months ended October 29, 2022, reflecting deleveraging of expenses over lower net sales.

Restructuring and Other Special Charges, Net

Restructuring and other special charges of $0.9 million and $1.7 million for the three and nine months ended October 28, 2023, respectively, were associated with expense reduction initiatives, primarily severance.  Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.  There were no corresponding charges for the nine months ended October 29, 2022.

Operating Earnings

Operating earnings increased to $38.2 million for the third quarter of 2023, from $22.3 million for the third quarter of 2022, as a result of the factors described above.  As a percentage of net sales, operating earnings were 11.9% for the third quarter of 2023, compared to 6.9% in the third quarter of 2022.  

Operating earnings increased to $107.7 million for the nine months ended October 28, 2023, compared to $93.1 million for the nine months ended October 29, 2022, as a result of the factors described above.  As a percentage of net sales, operating earnings were 11.4% for the nine months ended October 28, 2023, compared to 9.2% in the nine months ended October 29, 2022.

ELIMINATIONS AND OTHER

	Thirteen Weeks Ended								Thirty-Nine Weeks Ended
	October 28, 2023				October 29, 2022				October 28, 2023				October 29, 2022
			% of				% of				% of				% of
($ millions)			Net Sales				Net Sales				Net Sales				Net Sales
Net sales	$	(8.6)	100.0	%	$	(6.9)	100.0	%	$	(40.2)	100.0	%	$	(44.2)	100.0	%
Cost of goods sold		(10.0)	116.3	%		(8.8)	127.6	%		(39.9)	99.2	%		(43.6)	98.7	%
Gross profit		1.4	(16.3)	%		1.9	(27.6)	%		(0.3)	0.8	%		(0.6)	1.3	%
Selling and administrative expenses		21.5	(248.9)	%		26.7	(385.4)	%		47.1	(117.3)	%		72.6	(164.3)	%
Restructuring and other special charges, net		0.3	(3.3)	%		2.9	(42.0)	%		0.9	(2.1)	%		2.9	(6.6)	%
Operating loss	$	(20.4)	235.9	%	$	(27.7)	399.8	%	$	(48.3)	120.2	%	$	(76.1)	172.2	%

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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 $8.6 million for the third quarter of 2023 is $1.7 million, or 24.7%, higher than the third quarter of 2022 reflecting an increase in product sold from our Brand Portfolio segment to Famous Footwear.  The net sales elimination of $40.2 million for the nine months ended October 28, 2023 is $4.0 million, or 9.1%, lower than the nine months ended October 29, 2022 reflecting a decrease in product sold from our Brand Portfolio segment to Famous Footwear.  

Selling and administrative expenses decreased $5.2 million, to $21.5 million in the third quarter of 2023, compared to $26.7 million for the third quarter of 2022.  Selling and administrative expenses decreased $25.5 million, to $47.1 million for the nine months ended October 28, 2023, compared to $72.6 million for the nine months ended October 29, 2022.  These decreases primarily reflect lower anticipated payments under our cash and share-based incentive compensation and other employee benefits.  

Restructuring and other special charges of $0.3 million and $0.9 million for the three and nine months ended October 28, 2023, respectively, were associated with expense reduction initiatives at our corporate headquarters.  Refer to Note 5 to the condensed consolidated financial statements for additional information related to these charges.  Restructuring and other special charges of $2.9 million for the nine months ended October 29, 2022 were associated with a CFO transition at our corporate headquarters.

LIQUIDITY AND CAPITAL RESOURCES

Borrowings

Total debt obligations of $222.0 million at October 28, 2023 decreased $142.5 million, from $364.5 million at October 29, 2022, and decreased $85.5 million, from $307.5 million at January 28, 2023.  Net interest expense for the third quarter of 2023 increased $0.5 million to $4.5 million, compared to $4.0 million for the third quarter of 2022, primarily due to higher interest rates.  This increase was partially offset by lower average borrowings under our revolving credit agreement.  The interest on our revolving credit facility is based on a variable rate, which has resulted in higher interest expense in the current rising interest rate environment.  While our interest expense in the fourth quarter of 2023 will continue to be adversely affected by the elevated interest rates, we expect to continue to reduce the borrowings under our revolving credit agreement to mitigate the impact of the high interest rate environment.  

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 October 5, 2021, we entered into a Fifth Amendment to Fourth Amended and Restated Credit Agreement (“Fifth Amendment”) that, among other modifications, extended the maturity date of the credit facility from January 18, 2024, to October 5, 2026 and decreased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $500.0 million, subject to borrowing base restrictions, and may be increased by up to $250.0 million.  Interest on the borrowings was previously calculated using variable rates based on the London Interbank Offered Rate ("LIBOR") (with a floor of 0.0%), or the prime rate (as defined in the Fifth Amendment), plus a spread.  The Fifth Amendment decreased the spread applied to the LIBOR or prime rate by a total of 75 basis points.  On April 27, 2023, the Company entered into a Sixth Amendment to Fourth Amended and Restated Credit agreement (as so amended, the “Credit Agreement”) to transition the borrowings on the revolving credit facility from bearing interest based on LIBOR to a term secured overnight financing rate (“SOFR”).

At October 28, 2023, we had $222.0 million in borrowings and $10.6 million in letters of credit outstanding under the Credit Agreement.  Total borrowing availability was $267.4 million at October 28, 2023.  We were in compliance with all covenants and restrictions under the Credit Agreement as of October 28, 2023.  

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Working Capital and Cash Flow

	Thirty-Nine Weeks Ended
($ millions)	October 28, 2023		October 29, 2022		Change
Net cash provided by operating activities	$	157.2	$	46.3	$	110.9
Net cash used for investing activities		(37.4)		(45.4)		8.0
Net cash (used for) provided by financing activities		(119.5)		1.9		(121.4)
Effect of exchange rate changes on cash and cash equivalents		(0.0)		(0.1)		0.1
Increase in cash and cash equivalents	$	0.3	$	2.7	$	(2.4)

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

Cash provided by operating activities was $110.9 million higher in the nine months ended October 28, 2023 as compared to the nine months ended October 29, 2022, primarily reflecting the following factors:

● An increase in trade accounts payable during the thirty-nine weeks ended October 28, 2023, compared to a decrease during the thirty-nine weeks ended October 29, 2022, reflecting higher inventory purchases;

● A decrease in inventory during the thirty-nine weeks ended October 28, 2023, compared to an increase during the thirty-nine weeks ended October 29, 2022, due in part to lower inventory primarily within our Brand Portfolio segment, as we aggressively managed product receipts in the current year; partially offset by

● Lower net earnings in the thirty-nine weeks ended October 28, 2023, compared to the thirty-nine weeks ended October 29, 2022,

● A smaller increase in net income taxes payable during the thirty-nine weeks ended October 28, 2023, compared to the thirty-nine weeks ended October 29, 2022; and

● A larger decrease in accrued expenses and other liabilities during the thirty-nine weeks ended October 28, 2023, compared to the thirty-nine weeks ended October 29, 2022, due in part to lower anticipated payments under our cash-based incentive compensation plans.

Cash used for investing activities was $8.0 million lower for the thirty-nine weeks ended October 28, 2023 as compared to the thirty-nine weeks ended October 29, 2022, reflecting lower capital expenditures.  Our expected purchases of property and equipment and capitalized software to be approximately $50 million in 2023, compared to $64.0 million in 2022.

Cash used for financing activities was $121.4 million higher for the nine months ended October 28, 2023 as compared to the nine months ended October 29, 2022, primarily due to net repayments on our revolving credit agreement of $85.5 million in the nine months ended October 28, 2023, compared to net borrowings of $74.5 million in the comparable period in 2022.  In addition, the issuance of common stock under share-based plans was $5.2 million higher in the nine months ended October 28, 2023, compared to the nine months ended October 29, 2022.  These increases were partially offset by a $45.8 million decrease in repurchases of our common stock under our share repurchase programs during the nine months ended October 28, 2023, compared to the nine months ended October 29, 2022.

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

	October 28, 2023			October 29, 2022			January 28, 2023
Working capital ($ millions) (1)	$	(5.0)		$	(117.8)		$	(79.7)
Current ratio (2)		0.99:1			0.89:1			0.91:1
Debt-to-capital ratio (3)		29.9	%		47.3	%		41.9	%

(1) Working capital has been computed as total current assets less total current liabilities.  

(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 the borrowings under our revolving credit agreement by total capitalization. Total capitalization is defined as total debt and total equity.

Working capital at October 28, 2023 was a deficit of $5.0 million, which was an improvement of $112.8 million and $74.7 million from October 29, 2022 and January 28, 2023, respectively.  The increase in working capital from October 29, 2022 primarily reflects lower accrued expenses and trade accounts payable, partially offset by lower inventory.  The increase in working capital from January 28, 2023 primarily reflects lower accrued expenses and higher accounts receivable, partially offset by higher trade accounts payable and lower

36

inventory.  Our current ratio was 0.99:1 as of October 28, 2023, compared to 0.89:1 at October 29, 2022 and 0.91:1 at January 28, 2023.  Our debt-to-capital ratio was 29.9% as of October 28, 2023, compared to 47.3% as of October 29, 2022 and 41.9% at January 28, 2023.  

We declared and paid dividends of $0.07 per share in the third quarter of both 2023 and 2022.  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.

We have various contractual or other obligations, including borrowings under our revolving credit facility, operating lease commitments, one-time transition tax for the mandatory deemed repatriation of cumulative foreign earnings and obligations for our supplemental executive retirement plan and other postretirement benefits.  We also have purchase obligations to purchase inventory, assets and other goods and services.  We believe our operating cash flows are sufficient to meet our material cash requirements for at least the next 12 months.  

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

No material changes have occurred related to critical accounting policies and estimates since the end of the most recent fiscal year.  For further information on the Company’s critical accounting policies and estimates, see Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 28, 2023.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Recently issued accounting pronouncements, if any, 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) changing consumer demands, which may be influenced by general economic conditions and other factors; (ii) inflationary pressures;  (iii) supply chain disruptions; (iv) rapidly changing consumer preferences and purchasing patterns and fashion trends; (v) customer concentration and increased consolidation in the retail industry; (vi) intense competition within the footwear industry; (vii) foreign currency fluctuations; (viii) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the Company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (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 secure/exit leases on favorable terms; (xiv) the ability to maintain relationships with current suppliers; (xv) transitional challenges with acquisitions and divestitures;  (xvi) changes to tax laws, policies and treaties; (xvii) compliance with applicable laws and standards with respect to labor, trade and product safety issues; and (xviii) the ability to attract, retain, and maintain good relationships with licensors and protect our intellectual property rights.  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 28, 2023, 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 28, 2023.

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

37

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 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 October 28, 2023, 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 October 28, 2023 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 28, 2023.

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ITEM 2    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information relating to our repurchases of common stock during the third quarter of 2023:

				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)
July 30, 2023 - August 26, 2023	—	$	—	—	5,604,379
August 27, 2023 - September 30, 2023	818		28.88	—	5,604,379
October 1, 2023 - October 28, 2023	73		27.34	—	5,604,379
Total	891	$	28.75	—	5,604,379

(1) Includes shares that are tendered by employees related to certain share-based awards to satisfy tax withholding amounts for restricted stock awards.  

(2) On September 2, 2019, the Board of Directors approved a stock repurchase program ("2019 Program") authorizing the repurchase of 5,000,000 shares of our outstanding common stock.  In addition, on March 10, 2022, the Board of Directors approved a stock repurchase program ("2022 Program") authorizing the repurchase of an additional 7,000,000 shares of our outstanding common stock.  We can use the repurchase programs to repurchase shares on the open market or in private transactions.  During the thirteen and thirty-nine weeks ended October 28, 2023, the Company repurchased zero and 763,000 shares, respectively, under the 2022 Program.  During the thirteen and thirty-nine weeks ended October 29, 2022, the Company repurchased 838,025 and 2,622,845 shares, respectively, under these programs.  As of October 28, 2023, there were 5,604,379 shares authorized to be repurchased under the 2022 Program.  Our repurchases of common stock are limited under our revolving credit agreement.

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5    OTHER INFORMATION

Director and Section 16 Officer Trading Arrangements

On October 11, 2023, John W. Schmidt, President, Chief Executive Officer and Director, adopted a Rule 10b5-1 plan (“Rule 10b5-1 Plan”) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act of 1934.  Mr. Schmidt’s Rule 10b5-1 Plan provides for the sale of up to 76,000 shares of the Company’s common stock, pursuant to the terms of the Rule 10b5-1 Plan.  The Rule 10b5-1 Plan expires on July 12, 2024, or upon the earlier completion of all authorized transactions under such Rule 10b5-1 Plan.

No other director or Section 16 officer adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K, during the thirteen weeks ended October 28, 2023.

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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 June 1, 2020.
3.2		Bylaws of the Company as amended through March 9, 2023, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed March 15, 2023.
10.1*	†	Caleres, Inc. Nonqualified Restoration Plan, filed herewith.
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 management contract or compensatory plan arrangements.

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

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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: December 5, 2023	/s/ Jack P. Calandra
	Jack P. Calandra Senior Vice President and Chief Financial Officer on behalf of the Registrant and as the Principal Financial Officer

41

EX-10.1

THE CALERES, INC. NONQUALIFIED RESTORATION PLAN

PLAN DOCUMENT

THE CALERES, INC. NONQUALIFIED RESTORATION PLAN

Section 1. Purpose

ByexecutionoftheAdoptionAgreement,theCompanyhasadoptedthePlansetforthherein,and in the Adoption Agreement, to provide a means by which certain management Employees or IndependentContractorsoftheEmployermayelecttodeferreceiptofcurrentCompensationfrom the Employer in order to provide retirement and other benefits on behalf of such Employees or Independent Contractors of the Employer, as selected in the Adoption Agreement. The Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code (the "Code"). The Plan is also intended to be an unfundedplanmaintainedprimarilyforthepurposeofprovidingdeferredcompensationbenefits for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3)and401(a)(l)oftheEmployeeRetirementIncomeSecurityActof1974(“ERISA”)or independent contractors. Notwithstanding any other provision of this Plan, this Plan shall be interpreted,operatedandadministeredinamannerconsistentwiththeseintentions.

Section 2. Definitions

2.0“401(k)RefundOffset”meansadeferraloftheParticipant’sbasesalaryequalto thegrossamountofa401(k)-refundcausedbyAverageDeferralPercentage(ADP)testing

failures in the qualified plan. The 401(k) refund itself shall be paid to the Participant from the 401(k) plan and reported on Form 1099-R. This deferral shall not apply to Roth 401(k) refunds or any other refund not generated due to failed testing.

2.1"ActiveParticipant"means,withrespecttoanydayordate,aParticipantwhoisin Service on such day or date; provided, that a Participant shall cease to be an Active Participant

(i) immediately upon a determination by the Committee that the Participant has ceased to be an Employee or Independent Contractor, or (ii) at the end of the Plan Year that the committee determines the Participant no longer meets the eligibility requirements of the Plan.

2.2"Adoption Agreement" means the written agreement pursuant to which the Company adopts the Plan. The Adoption Agreement is a part of the Plan as applied to the Company.

2.3"Beneficiary" means the person, persons, entity or entities designated or determined pursuant to the provisions of Section 13 of the Plan.

2.4"Board" means the Board of Directors of the Company, if the Company is a corporation.

2

If the Company is not a corporation, "Board" shall mean the Company.

2.5"ChangeinControlEvent"meansaneventdescribedinSection409A(a)(2)(A)(v) of the Code (or any successor provision thereto) and the regulations thereunder.

2.6"Committee" means the Employer, an administrative committee appointed by the Board to serve at the pleasure of the Board, the Board itself, any other person or persons as determined in the Employer’s discretion, or any other person or persons noted in the Adoption Agreement. The Recordkeeper is not the Committee.

2.7 "Company"means thecompanydesignated intheAdoption Agreement.

2.8 "Compensation"shall havethe meaningdesignated intheAdoption Agreement.

2.9"Crediting Date" means the date any corresponding asset payment used to informallyfinancethePlan,ifapplicable,iscreditedtotheEmployer’scorporateowned investment account or any other day directed by the Employer.Otherwise, all Credits shall be credited on any business day as specified by the Employer.

2.10"Deferred Compensation Account" means the account maintained with respect to each Participant under the Plan. The Deferred Compensation Account shall be credited with Participant Deferral Credits and Employer Credits, credited or debited for deemed investment gains or losses, and adjusted for payments in accordance with the rules and elections in effect underSection8.AspermittedintheAdoptionAgreement,theDeferredCompensationAccount of a Participant may consist of one or more accounts. A Participant may elect payment options for each account as described in Section 7.1 and deemed investments for each account as described in Section 8.2.

2.11"Disabled or Disability" means Disabled or Disability within the meaning of Section 409A of the Code and the regulations thereunder. Generally, this means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically determinablephysical or mental impairment which can be expectedto result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacementbenefitsforaperiodofnotlessthanthreemonthsunderanaccidentandhealthplan covering Employees of the Employer.

2.12“Education Account” is an In-Service Account which will be used by the Participant for educational purposes.

3

2.13"EffectiveDate"shallbethe date designated in the Adoption Agreement.

2.14"Employee"meansanindividualintheServiceoftheEmployeriftherelationship betweentheindividualandtheEmployeristhelegalrelationshipofemployerandemployee.An individual shall cease to be an Employee upon the Employee's Separation from Service.

2.15"Employer" means the Company, as identified in the Adoption Agreement, and anyParticipatingEmployerwhichadoptsthisPlan.AnEmployermaybeacorporation,alimited liability company, a partnership or sole proprietorship.

2.16"Employer Credits" means the amounts credited to the Participant's Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.2.

2.17"Grandfathered Amounts" means, if applicable, the amounts that were deferred underthePlanandwereearnedandvestedwithinthemeaningofSection409AoftheCodeand regulationsthereunderasofDecember31,2004.GrandfatheredAmountsshallbesubjecttothe terms designated in the Plan which were in effect as of October 3, 2004.

2.18"Independent Contractor" means an individual in the Service of the Employer if therelationshipbetweentheindividualandtheEmployerisnotthelegalrelationshipofemployer and employee. An individual shall cease to be an Independent Contractor upon the termination of the Independent Contractor's Service. An Independent Contractor shall include a director of the Employer who is not an Employee.

2.19"In-ServiceAccount"meansaseparateaccounttobekeptforeachParticipantthat has elected to take in-service distributions as described in Section 5.4. The In-Service Account shallbeadjustedinthesamemannerandatthesametimeastheDeferredCompensationAccount under Section 8 and in accordance with the rules and elections in effect under Section 8.

2.20"Normal Retirement Age", which may also be called “Full Vesting Age”, of a Participant means the age designated in the Adoption Agreement.

2.21"Participant" means with respect to any Plan Year an Employee or Independent Contractorwhohas been designated by theCommitteeas aParticipant and whohas entered the Plan or who has a Deferred Compensation Account under the Plan; provided that if the Participant is an Employee, the individual must be a member of a select group of management or highly compensated employee of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

2.22"Participant Deferral Credits" means the amounts credited to the Participant's Deferred

4

Compensation Account by the Employer pursuant to the provisions of Section 4.1.

2.23"Participating Employer" means any trade or business (whether or not incorporated)whichadoptsthisPlanwiththeconsentoftheCompanyidentifiedintheAdoption Agreement.

2.24"Participation Agreement" means a written agreement, including electronic submissionsbytheParticipantorattheParticipant’sdirection,enteredintobetweenaParticipant and the Employer pursuant to the provisions of Section 4.1

2.25"Performance-Based Compensation" means compensation where the amount of, orentitlementto,thecompensationiscontingentonthesatisfactionof preestablished organizational or individual performance criteria relating to a performance period of at least twelve months. Organizational or individual performance criteria are considered preestablished if established in writing within 90 days after the commencement of the period of service to which the criteria relates, provided that the outcome is substantially uncertain at the time the criteria are established.Performance-basedcompensationmay include payments based upon subjective performance criteria as provided in regulations and administrative guidance promulgated under Section 409A of the Code.

2.26 "Plan"means thenameof thePlanas designated inthe Adoption Agreement.

2.27"Plan-Approved Domestic Relations Order" shall mean a judgment, decree, or order (including the approval of a settlement agreement) which is:

2.27.1Issuedpursuant toaState'sdomesticrelations law;

2.27.2Relates to the provision of child support, alimony payments or marital property rights to a Spouse, former Spouse, child or other dependent of the Participant;

2.27.3Creates or recognizes the right of a Spouse, former Spouse, child or other dependentoftheParticipanttoreceivealloraportionoftheParticipant'sbenefits under the Plan;

2.27.4Requires payment to such person of their interest in the Participant's benefits in a lump sum payment or any other form of payment allowed under the Plan at a specific time; and

2.27.5 MeetssuchotherrequirementsestablishedbytheCommittee.

2.28"Plan Year" means the twelve-month period ending on the last day of December, unlessotherwisenotedintheAdoptionAgreement,provided,thattheinitialPlanYearmayhave fewer than

5

twelve months.

2.28.1“Recordkeeper” means the individual or entity responsible for keeping records of PlanactivityincludingthetrackingofParticipantDeferredCompensationAccountbalances.As toapplicabletaxandregulatoryrules,theactionsoftheRecordkeeperarelimitedtoexecutingthe decisionsanddirectionsoftheCommittee.TheRecordkeeperdoesnotmakeplanadministration decisions.

2.29"Qualifying Distribution Event"means (i) the Separation from Serviceof the Participant, (ii) the date the Participant becomes Disabled, (iii) the death of the Participant, (iv)

the time specified by the Participant for an In-Service Distribution, (v) a Change in Control Event, or (vi) an Unforeseeable Emergency, each to the extent provided in Section 5.

2.30"SeniorityDate"whichmayalsobecalled“InstallmentEligibilityDate”shallhave the meaning designated in the Adoption Agreement and shall apply to both the initial deferral election described in Section 4 and the Subsequent deferral election described in Section 7.5.

2.31"Separation from Service" or "Separates from Service" means a "separation from service" within the meaning of Section 409A of the Code.

2.32"Service" as an Employee means employment by the Employer. For purposes of the Plan, the employment relationship is treated as continuing intact while the Employee is on militaryleave,sickleave,orotherbonafideleaveofabsenceiftheperiodofsuchleavedoesnot exceed six months, or if longer, so long as the Employee's right to reemployment is provided eitherbystatuteorcontract.IftheParticipantisanIndependentContractor,"Service"shallmean the period during which the contractual relationship exists between the Employer and the Participant.ThecontractualrelationshipisnotterminatediftheParticipantanticipatesarenewal of the contract or becomes an Employee. A Participant who has a Deferred Compensation Account which contains amounts deferred or contributed as an Employee and a member of the Board(DualStatus),Servicesperformedinthosecapacitieswillbelookedat independentlywhen determining if a Separation from Service has occurred.Services as a member of the Board and Independent Contractor (in a capacity not on the Board) will be looked collectively when determining if a Separation from Service has occurred.

2.33"Service Bonus" means any bonus that does not meet the definition of Performance-Based Compensation that is paid to a Participant by the Employer as noted in the Adoption Agreement.

2.34"Specified Employee" means an Employee who meets the requirements for key employeetreatmentunderSection416(i)(l)(A)(i),(ii)or(iii)oftheCode(appliedinaccordance withtheregulationsthereunderandwithoutregardtoSection416(i)(5)oftheCode)atanytime duringthe

6

twelvemonthperiodendingonDecember31of eachyear(the"identificationdate"). Ifthepersonis akey employeeas of any identification date,thepersonis treated as aSpecified Employeeforthetwelve-monthperiodbeginningonthefirstdayofthefourthmonthfollowing the identification date. Unless binding corporate action is taken to establish different rules for determiningSpecifiedEmployeesforallplansoftheCompanyanditscontrolledgroupmembers thataresubjecttoSection409AoftheCode,theforegoingrulesandtheotherdefaultrulesunder the regulations of Section 409A of the Code shall apply.

2.35"Spouse"or''SurvivingSpouse"means, except as otherwiseprovidedinthePlan, a person who is the legally married spouse or surviving spouse of a Participant.

2.36"Unforeseeable Emergency" means an "unforeseeable emergency" within the meaning of Section 409A of the Code.

2.37 "YearsofService"meanseachPlanYearofServicecompletedbytheParticipant.

For vesting purposes, Years of Service shall be calculated from the date designated in the Adoption Agreement and Service shall be based on service with the Company and all Participating Employers.

Section 3. Participation

TheCommitteeinitsdiscretionshalldesignateeachEmployeeorIndependent ContractorwhoiseligibletoparticipateinthePlan.AParticipantwhoSeparatesfromService

withtheEmployerandwholaterreturnstoServicemaybeeligibleconsistentwithSection409A oftheCodeanduponsatisfactionofsuchtermsandconditionsastheCommitteeshallestablish.

Section 4. Credits to Deferred Compensation Account

4.1Participant Deferral Credits. To the extent provided in the Adoption Agreement, each Active Participant may elect, by entering into a Participation Agreement with the Employer, to defer the receipt of Compensation from the Employer by a dollar amountor percentage specified in the Participation Agreement. The amount of Compensation the Participantelectstodefer,theParticipantDeferralCredit,shallbecredited by theEmployerto the Deferred Compensation Account maintained for the Participantpursuant toSection8.The following special provisions shall apply with respect to the Participant Deferral Credits of a Participant:

4.1.1The Employer shall credit to the Participant's Deferred Compensation Account on each Crediting Date an amount equal to the total Participant Deferral Credit for the period ending on such Crediting Date.

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4.1.2AnelectionpursuanttothisSection4.1shallbemadebytheParticipantby executing and delivering a Participation Agreement to the Committee. Except as otherwise provided in this Section 4.1, the Participation Agreement shall become effective with respect to such Participant as of the first day of January following the date such Participation Agreement is received by the Committee. A Participant'selectionmaybechangedatanytimepriortothelastpermissibledate for making the election as permitted in this Section 4.1, and shall thereafter be irrevocable. Any election of a Participant shall continue in effect for the time period as set forth in the Adoption Agreement.

4.1.3A Participant may execute and deliver a Participation Agreementto the Committee within 30 days after the date the Participant first becomes eligible to participate in the Plan. After the 30-day period expires, or after any shorter time periodasagreedtobytheParticipantandtheCommittee,thelatestelectionmade bytheParticipantduringthatperiodbecomesirrevocable.Suchelectionshallthen be effective as of the first payroll period commencing following the date the Participation Agreement becomes irrevocable. Whether a Participant is treated as newlyeligibleforparticipationunderthisSectionshallbedeterminedin accordance with Section 409A of the Code and the regulations thereunder, including(i)rulesthattreatallelectivedeferralaccountbalanceplansasoneplan, and (ii) rules that treat a previously eligible Employee as newly eligible if the Participant’s benefits had been previously distributed or if he has been ineligible for 24 months. For Compensation that is earned based upon a specified performance period (for example, an annual bonus), where a deferral election is made under this Section but after the beginning of the performance period, the election will only apply to the portion of the Compensation equal to the total amount of the Compensation for the service period multiplied by the ratio of the number of days remaining in the performance period after the date the election becomes irrevocable over the total number of days in the performance period.

4.1.4A Participant may unilaterally modify a Participation Agreement (either to terminate, increase or decrease future Compensation which is subject to deferral within the percentage limits set forth in Section 4.1 of the Adoption Agreement) by providing a written modification of the Participation Agreement to the Committee.ThemodificationshallbecomeeffectiveasofthefirstdayofJanuary following the date such written modification is received by the Committee, or at such later date as required under

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Section 409A of theCode.

4.1.5If the Participant performed services continuously from the later of the beginning of the performance period or the date upon which the performance criteriaareestablishedthroughthedateuponwhichtheParticipantmakesaninitial deferralelection, aParticipationAgreementrelatingtothedeferralofPerformance- BasedCompensationmaybeexecutedanddeliveredtotheCommitteenolaterthan thedatewhichis6monthspriortotheendoftheperformanceperiod,providedthat in no event may an election to defer Performance-Based Compensation be made after such Compensation has become readily ascertainable.

4.1.6IftheEmployerhasafiscalyearotherthanthecalendaryear,Compensation relatingtoServiceinthefiscalyearoftheEmployer(suchasabonus based on the fiscal year of the Employer), of which no amount is paid or payable during the fiscal year, may be deferred at the Participant's election if the election to defer is madenotlaterthanthecloseoftheEmployer'sfiscalyearnext precedingthefirst fiscal year in which the Participant performs any services for which such Compensation is payable.

4.1.7Compensation payable after the last day of the Participant's taxable year solelyforservicesprovidedduringthefinalpayrollperiodcontainingthelastday of the Participant's taxable year (i.e., generally December 31) is treated for purposes of this Section 4.1 as Compensation for services performed in the subsequent taxable year.

4.1.8TheCommitteemayfromtimetotimeestablishpoliciesorrulesconsistent withtherequirementsofSection409AoftheCodetogovernthemanner in which Participant Deferral Credits may be made.

4.1.9If a Participant becomes Disabled all currently effective deferral elections for such Participant shall be cancelled. At the time the participant is no longer Disabled, subsequent elections to defer future compensation will be permitted under this Section 4.

4.1.10If a Participant applies for and receives a distribution on account of an Unforeseeable Emergency, all currently effective deferral elections for such Participant shall be cancelled. Subsequent elections to defer future compensation willbepermittedunderthisSection4.Furthermore,aParticipantmayapplytothe Committee to cancel all deferral elections due to an Unforeseeable Emergency.

4.2Employer Credits. If designated by the Employer in the Adoption Agreement, the

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Employer shall cause the Committee to credit to the Deferred Compensation Account of each Active Participant an Employer Credit as determined in accordance with the Adoption Agreement. A Participant must make distribution elections with respect to any Employer Creditscreditedto theDeferredCompensationAccountbythedeadlinethatwouldapplyunder Section 4.1 for distribution elections with respect to Participant Deferral Creditscredited atthe sametime,onaParticipationAgreementthatistimelyexecutedanddeliveredtotheCommittee pursuant to Section 4.1. If no distribution electionismade,vestedamountsintheDeferred CompensationAccountwillbedistributed in a lump sum upon the earliest of any Qualifying Distribution Event limited toSeparation from Service, Disability, Death or Change in Control.

4.3.Deferred Compensation Account.AllParticipant DeferralCreditsandEmployer Credits shall be credited to the Deferred Compensation Account of the Participant as provided in Section 8.

Section 5. Qualifying Distribution Events

5.1Separation from Service. If the Participant Separates from Service with the Employer,thevestedbalanceintheDeferredCompensationAccountshallbepaidtothe Participant by the Employer as provided in Section 7. Notwithstanding the foregoing, no distributionshallbemadeearlierthansixmonthsafterthedateofSeparationfrom Service (or, if earlier, the date of death) with respect to a Participant who as of the date of Separation from Service is a Specified Employee of a corporation (or a member of such corporation's controlledgroup)thestockinwhichistradedonanestablishedsecuritiesmarket(eitherforeign or domestic) or otherwise. Any payments to which such Specified Employee would be entitled during the first six months following the date of Separation from Service shall be accumulated and paid on the first day of the seventh month following the date of Separation from Service, andshallbeadjustedfordeemedinvestmentgainandlossincurredduringthesixmonthperiod.

5.2Disability. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan when a Participant becomes Disabled, and the ParticipantbecomesDisabledwhileinService,thevestedbalanceintheDeferredCompensation Account shall be paid to the Participant by the Employer as provided in Section 7.

5.3Death. If the Participant dies while in Service, the Employer shall pay a benefit totheParticipant'sBeneficiaryintheamountofthevestedbalanceintheDeferredCompensation Account and any additional amount designated in the Adoption Agreement.Payment of such benefit shall be made bythe Employer as provided in Section 7.

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5.4In-Service Distributions. Ifthe Employer designates in the Adoption Agreement that in-service distributions are permitted under the Plan, a Participant may designate in the Participation Agreement to have a specified amount credited to the Participant's In-Service Account for in-service distributions at the date specified by the Participant. In no event may an in-servicedistributionofanamountbemadebeforethedatethatistwoyearsafterthefirstday oftheyearinwhichanydeferralelectiontosuchIn-ServiceAccountbecameeffective. Notwithstandingtheforegoing,ifaParticipantincursaQualifyingDistributionEventpriortothe dateonwhichtheentirebalanceintheIn-Service Account has been distributed, then the vested balanceintheIn-ServiceAccountonthedateoftheQualifyingDistributionEventshallbepaid as provided under Section 7.1 for payments on such Qualifying DistributionEvent.

5.5ChangeinControlEvent.IftheEmployerdesignatesintheAdoptionAgreement thatdistributionsarepermittedunderthePlanupontheoccurrenceofaChangeinControlEvent, the Participant may designate in the Participation Agreement to have the vested balance in the DeferredCompensation AccountpaidtotheParticipantuponaChangeinControlEventbythe Employer as provided in Section 7.

5.6Unforeseeable Emergency. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan upon the occurrence of an Unforeseeable Emergency event, a distribution from the Deferred Compensation Account may be made to a Participant in the event of an Unforeseeable Emergency, subject to the following provisions:

5.6.1AParticipantmay,makeanapplicationtotheCommitteetocancelallactive deferralelectionsortocanceldeferralelectionsandreceiveadistributioninalump sumofalloraportionofthevestedbalanceintheDeferredCompensationAccount (determined as of the date the distribution, if any, is made under this Section 5.6) because of an Unforeseeable Emergency. A distribution because of an Unforeseeable Emergency shall not exceed the amount required to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution, after taking into account the extent to which the Unforeseeable Emergency may be relieved through reimbursement or compensationbyinsuranceorotherwiseorbyliquidationoftheParticipant'sassets (totheextenttheliquidationofsuchassetswouldnotitselfcauseseverefinancial hardship)orbystoppingcurrentdeferralsunderthePlanpursuanttoSection4.1.10.

5.6.2The Participant's request for a distribution on account of Unforeseeable

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Emergency must be made in writing to the Committee. The request must specify the nature of the financial hardship, the total amount requested to be distributed from the Deferred Compensation Account, and the total amount of the actual expense incurred or to be incurred on account of the Unforeseeable Emergency.

5.6.3If a cancellation of deferral elections is approved such cancellation will be effectiveassoonaspracticable.IfadistributionunderthisSection5.6isapproved by the Committee,suchdistributionwillbemadeassoonaspracticablefollowing thedate it is approved. The processing of the request shall be completed as soon as practicable from the date on which the Committee receives the properly completed written request for a distribution on account of an Unforeseeable Emergency. If a Participant's Separation from Service occurs after a request is approvedinaccordancewiththisSection5.6.3,butpriortodistributionofthefull amountapproved,theapprovaloftherequestshallbeautomaticallynullandvoid andthebenefitswhichtheParticipantisentitledtoreceiveunderthePlanshallbe distributed in accordance with the applicable distribution provisions of thePlan.

5.6.4The Committee may from time to time adopt additional policies or rules consistentwiththerequirementsofSection409AoftheCodetogovernthemanner in which such distributions may be made so that the Plan may be conveniently administered.

Section 6. Vesting

AParticipantshallbefullyvestedintheportionoftheDeferredCompensationAccount attributabletoParticipantDeferralCredits,andallincome,gainsandlossesattributablethereto. A Participant shall become fully vested in the portion of the Deferred Compensation Account attributabletoEmployerCredits,andincome,gainsandlossesattributablethereto,inaccordance with the vesting schedule and provisions designated by the Employer in the Adoption Agreement.OnceaParticipantachievesvestingonanEmployerCredit,itcannotbereducedor eliminated.If Change in Control was elected as a vesting event in the Adoption Agreement participants accounts shall be fully vested upon a Change in Control, however new vesting schedules may be applied to future Employer Credits. If a Participant's Deferred Compensation Account is not fully vested upon Separation from Service, the portion of the Deferred Compensation Account that is not fully vested shall be forfeited.

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Section 7. Distribution Rules

7.1Payment Options. The Employer shall designate in the Adoption Agreementthe paymentoptionswhichmaybeelectedbytheParticipant.TheParticipantmay atsuchtimeelect amethodofpaymentforQualifyingDistributionEventsasspecifiedintheAdoptionAgreement. If the Participant is permitted by the Employer in the Adoption Agreement to elect different payment options and does not make a valid election, the vested balance in the Deferred CompensationAccountwillbedistributedasalumpsumupontheQualifyingDistributionEvent.

Notwithstanding the foregoing, if certain Qualifying Distribution Events occur prior to the date on which the vested balance of a Participant's Deferred Compensation Account is completely paid pursuant to this Section 7.1 following the occurrence of certain Qualifying Distribution Events, the following rules apply:

7.1.1IfthecurrentlyeffectiveQualifyingDistributionEventisaSeparationfrom Service or Disability, and the Participant subsequently dies, the remainingunpaid vestedbalanceofaParticipant'sDeferredCompensationAccountshall be paid as a lump sum.

7.1.2If the currently effective Qualifying Distribution Event is a Change in ControlEvent,andanysubsequentQualifyingDistributionEventoccurs(except an In-ServiceDistributiondescribedinSection2.29(iv)),theremainingunpaidvested balanceofaParticipant'sDeferredCompensationAccountshallbepaid asprovided underSection7.1forpaymentsonsuchsubsequentQualifyingDistributionEvent.

7.2Timing of Payments. Payment shall be made in the manner elected by the Participantandshallcommenceassoonaspracticableafter thedistributiondatespecifiedforthe QualifyingDistributionEvent.Distributionshallbenolaterthanwithin60daysfollowingthedayafter theQualifyingDistributionEvent.Suchpaymentshallnotbedeemedlateifthepaymentismade on or before the later of (i) December 31 of the calendar year in which the Qualifying DistributionEventoccurs,or(ii)thedatethatis2-1/2monthsaftertheQualifyingDistribution Event occurs. Participants shall not have any influence as to the tax year or timing of the distribution.For each payment, the Committee must specify a date for the Deferred CompensationAccount(s)tobevalued.IntheeventtheParticipantfailstomakeavalidelection of the payment method, the distribution will be made in a single lump sum payment as soon as practicable after the Qualifying Distribution Event. A payment may be further delayed to the extentpermitted inaccordance with regulations and guidanceunderSection 409A of the Code.

7.3Installment Payments. If the Participant elects to receive installment payments upon a

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Qualifying Distribution Event, the payment of each installment shall be made on the anniversary ofthedate of the first installment payment, and the amount of the installment shall be adjusted on such anniversary for credits or debits to the Participant's account pursuant to Section 8 of the Plan. Such adjustment shall be made by dividing the balance in the Deferred Compensation Account on such date by the number of installments remaining to be paid hereunder; provided that the last installment due under the Planshall be the entire amount credited to the Participant's account on the date of payment.

7.4De Minimis Amounts. Notwithstanding any payment election made by the Participant, if the Employer designates a pre-determined de minimis amount in the Adoption Agreement,thevestedbalanceinallDeferredCompensationAccountsoftheParticipantwillbe distributed in a single lump sum payment if at the time of a permitted Qualifying Distribution Event the vested balance does not exceed such pre-determined de minimis amount; provided, however, that such distribution will be made only where the QualifyingDistributionEventisa SeparationfromService,death,Disability,orChangein Control Event. In addition, the Employer maydistributeaParticipant'svestedbalanceinalloftheParticipant’sDeferredCompensation AccountsatanytimeifthebalancedoesnotexceedthelimitinSection402(g)(1)(B)oftheCode and results in the termination of the Participant's entire interest in the Plan as provided under Section 409A of the Code.

7.5Subsequent Elections. With the consent of the Committee, a Participant may delay or change the method of payment of the Deferred Compensation Account subject to the following requirements:

7.5.1The new election may not take effect until at least 12 months after the date on which the new election is made.

7.5.2IfthenewelectionrelatestoapaymentforaQualifyingDistribution Event other than the death of the Participant, the Participant becoming Disabled, or an Unforeseeable Emergency, the new election must provide for the deferral of the payment for a period of at least five years from the date such payment would otherwise have been made.

7.5.3If the new election relates to a payment from the In-Service Account, the newelectionmustbemadeatleast12monthspriortothedateofthefirstscheduled payment from such account.

ForpurposesofthisSection7.5andSection7.6,apaymentiseachseparatelyidentifiedamount to which the Participant is entitled under the Plan; provided, that entitlement to a series of installment payments is treated as the entitlement to a single payment.

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7.6AccelerationProhibited.Theaccelerationofthetimeorscheduleofanypayment due under the Plan is prohibited except as expressly provided in regulations and administrative guidance promulgated under Section 409A of the Code (such as accelerations for domestic relations orders and employment taxes). It is not an acceleration of the time or schedule of payment if the Employer waives or accelerates the vesting requirements applicable to a benefit under the Plan.

7.7ResidualDistributions.IfcalculationoftheamountofanycredittoaParticipant’s DeferredCompensationAccountisnotadministrativelypracticableduetoeventsbeyondthe control of the Employer, payments may be made to the Participant for residual amounts contributed to or remaining in a Deferred Compensation Account after payments under the provisions of this Section 7 have commenced or been completed. The residual amount shall be credited to the Deferred Compensation Account when the calculation of the amount becomes administratively practicable. Examples of residual amounts include, but are not limited to, additional investment returns credited after payment (due to dividends or pricing changes) or additional contributions made after payment (such as an annual bonus deferral or an Employer Credit). Payments that would have been made had the residual amount been calculable at the benefit commencement date shall be made up as soon as practicable after crediting to the Deferred Compensation Account, in no case later than the end of the year in which calculation of the amount becomes administratively practicable.

7.8IneffectiveDeferrals. IfaParticipantdeferralelectionunderSection4tocontribute to an In-Service Account carries over to a subsequent year (an evergreen election) and the deferralelectionisineffective(i.e.,the distributionelectionwouldcausepaymentinthecurrent orprioryears),theamountdeferredwillbecreditedtoaDeferredCompensationAccountthatis not an In-Service Account. If the Participant only has one account of this type, the amount deferredwillbecreditedtothataccount.IftheParticipanthasmultipleaccountsofthistype,and oneoftheaccountshasalumpsumatSeparationfromServicedistributionelection,theamount deferredwillbecreditedtothataccount.IftheParticipanthasmultipleaccountsofthistypeand does not havean account withalumpsumatSeparation fromServicedistributionelection,one will be established with a lump sum at Separation from Service distribution election and the amount deferred will be credited to this account.

Section 8. Accounts; Deemed Investment; Adjustments to Account

8.1Accounts. The Committee shall establish a book reserve account, entitled the "Deferred Compensation Account," on behalf of each Participant. The Committee shall also establish an In-Service Account as a part of the Deferred Compensation Account of each Participant, if applicable. The amount credited to the Deferred Compensation Account shall be adjusted pursuant to the provisions of Section

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8.3.

8.2Deemed Investments. The Deferred Compensation Account of a Participant shall becreditedwithaninvestmentreturndeterminedasiftheaccountwereinvestedinoneormore investment funds made available by the Committee. The Participant shall elect the investment fundsinwhichtheParticipant’sDeferredCompensationAccountshallbedeemedtobeinvested. Such election shall be made in the manner prescribed by the Committee and shall take effect upon the entry of the Participant into the Plan. The investment election of the Participant shall remainin effectuntil anewelection ismadeby theParticipant.IntheeventtheParticipantfails foranyreasontomakeaneffectiveelectionoftheinvestmentreturntobecreditedtotheaccount, the investment return shall be determined by the Committee.

8.3AdjustmentstoDeferredCompensationAccount.WithrespecttoeachParticipant whohasaDeferredCompensationAccountunderthePlan,theamountcredited to such account shall be adjusted by the following debits and credits, at the times and in the order stated:

8.3.1TheDeferredCompensationAccountshallbedebitedeachbusiness day with thetotalamountofanypaymentsmadefromsuchaccountsincethelastpreceding businessday. Unless otherwise specified bythe Employer,eachdeemedinvestment fundwillbedebitedpro-ratabasedonthevalue of the investment funds as of the end of the preceding business day.

8.3.2The Deferred Compensation Account shall be credited on each Crediting Date with the total amount of any Participant Deferral Credits and Employer Credits to such account since the last preceding CreditingDate.

8.3.3TheDeferredCompensationAccountshallbecreditedordebitedoneach day securities are traded on a national stock exchange with the amount of deemed investment gain orloss resulting from the performanceofthe deemed investment funds elected by the Participant in accordance with Section 8.2. The amount of such deemed investment gain or loss shall be determined by the Committee and such determination shall be final and conclusive upon all concerned.

Section 9. Administration by Committee

9.1MembershipofCommittee.IftheCommitteeconsistsofindividualsappointedby the Board, they will serve at the pleasure of the Board. Any member of the Committee may resign, and any successor shall be appointed by theBoard.

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9.2GeneralAdministration.TheCommitteeshallberesponsiblefortheoperationand administrationofthePlanandforcarryingoutitsprovisions.TheCommittee shall have the full authority and discretion to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide or resolve any and all questions, includinginterpretationsofthisPlan,asmayariseinconnectionwiththisPlan.Anysuchaction takenbytheCommitteeshallbefinalandconclusiveonanyparty.TotheextenttheCommittee hasbeengranteddiscretionaryauthority underthePlan,theCommittee’spriorexerciseofsuch authorityshallnotobligateittoexerciseitsauthorityinalikefashionthereafter.TheCommittee shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reportsfurnishedbyanyactuary, accountant,controller,counselorotherpersonemployedor engaged by the Employer with respect to the Plan. The Committee may, from time to time, employ agents and delegate to such agents, including Employees of the Employer, such administrative or other duties as it sees fit.

9.3Indemnification. To the extent not covered by insurance, the Employer shall indemnifytheCommittee,eachEmployee,officer,director,andagentoftheEmployer,andall personsformerlyservinginsuchcapacities,againstanyandallliabilities orexpenses,including all legal fees relating thereto, arising in connection with the exercise of their duties and responsibilities with respect to the Plan, provided however that the Employer shall not indemnify any person for liabilities or expenses due to that person’s own gross negligence or willful misconduct.

Section 10. Contractual Liability, Trust

10.1Contractual Liability. Unless otherwise elected in the Adoption Agreement, the Company shall be obligated to make all payments hereunder. This obligation shall constitute a contractual liability of the Company to the Participants, and such payments shall be made from thegeneral funds of the Company. The Companyshall not be required to establish or maintain any special orseparatefund, orotherwiseto segregateassets to assurethat such payments shall bemade,andtheParticipantsshallnothaveanyinterestinanyparticularassetsoftheCompany by reason of its obligations hereunder. To the extent that any person acquires a right to receive payment from the Company under the Plan, such right shall be no greater than the right of an unsecured creditor of the Company.

10.2Trust. The Employer may establish a trust to assist it in meeting its obligations underthePlan.AnysuchtrustshallconformtotherequirementsofagrantortrustunderRevenue Procedures92-64and92-65andatalltimesduringthecontinuanceofthetrusttheprincipaland incomeofthetrust shallbesubject to claims ofgeneral creditorsoftheEmployerunderfederal and state law. The establishment of such a trust would not be intended to cause Participants to realizecurrentincomeonamounts

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contributedthereto,andthetrustwouldbesointerpretedand administered.

Section 11. Allocation of Responsibilities

The persons responsible for the Plan and the duties and responsibilities allocated to each are as follows:

11.1 Board.

(i)ToamendthePlan;

(ii)Toappointandremove membersoftheCommittee;and

(iii)ToterminatethePlanaspermittedinSection14.

11.2 Committee.

(i)TodesignateParticipants;

(ii)To interpret the provisions of the Plan and to determine the rights of the Participants under the Plan, except to the extent otherwise provided in Section 16 relating to claims procedure;

(iii)ToadministerthePlaninaccordancewithitsterms,excepttotheextentpowersto administer the Plan are specifically delegated to another person or persons as provided in the Plan;

(iv)To account for the amount credited to the DeferredCompensation Account of a Participant;

(v)Todirect theEmployer inthe payment ofbenefits;

(vi)To file such reports as may be required with the United States Department of Labor,theInternalRevenueServiceandanyothergovernmentagencytowhichreports may be required to be submittedfrom time to time; and

(vii)ToadministertheclaimsproceduretotheextentprovidedinSection 16.

Section 12. Benefits Not Assignable; Facility of Payments

12.1BenefitsNotAssignable.NoportionofanybenefitcreditedorpaidunderthePlan withrespecttoanyParticipantshallbesubjectinanymannertoanticipation,alienation,sale, transfer,assignment, pledge, encumbranceorcharge, and any attempt so to anticipate, alienate, sell,transfer,assign,pledge,encumberorchargethesameshallbevoid,norshallanyportionof such benefit be in any manner payable to any assignee, receiver or any one trustee, or be liable for any debts, contracts,

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liabilities, engagements or torts.

12.2Plan-Approved Domestic Relations Orders. The Committee shall establish procedures fordeterminingwhetheran orderdirectedtothePlanis aPlan-Approved Domestic Relations Order. If the Committee determines that an order is a Plan- Approved Domestic Relations Order, the Committee shall cause the payment of amounts pursuant to or segregate a separateaccountasprovidedby(andtopreventanypaymentoractwhichmightbeinconsistent with) the Plan-Approved Domestic Relations Order notwithstanding Section 12.1.

12.3Payments to Minors and Others. If any individual entitled to receive a payment underthe Planshall be physically, mentally orlegally incapable of receiving oracknowledging receipt ofsuch payment, theCommittee, upon the receipt ofsatisfactoryevidenceofincapacity andsatisfactoryevidencethatanotherpersonorinstitutionismaintainingcustodyofthatperson andthatnoguardianorcommitteehasbeenappointed,maycause anypaymentotherwisepayable tothatpersontobemadetosuchpersonorinstitution somaintaining custody.Paymenttosuch personorinstitutionshallbeinfullsatisfactionofallclaimsbyorthroughtheParticipanttothe extent of the amount thereof.

Section 13. Beneficiary

TheParticipant'sBeneficiaryshallbetheperson,persons,entityorentitiesdesignatedby theParticipantontheBeneficiarydesignationformprovidedbyandfiledwiththeCommitteeor its designee. If the Participant does not designate a Beneficiary, the Beneficiary shall be the Surviving Spouse. If the Participant does not designate a Beneficiary and has no Surviving Spouse, the Beneficiary shall be the Participant's estate. The designation of a Beneficiary may bechangedorrevokedonlybyfilinganewBeneficiarydesignationformwiththeCommitteeor its designee. If a Beneficiary (the "primary Beneficiary") is receiving or is entitled to receive paymentsunderthePlananddiesbeforereceivingallofthepaymentsdue,thebalancetowhich heisentitledshallbepaidtothecontingentBeneficiary,ifany,namedintheParticipant'scurrent Beneficiary designation form. If thereis no contingent Beneficiary, the balance shall be paid to theestateoftheprimaryBeneficiary.AnyBeneficiarymaydisclaimalloranypartofanybenefit to which such Beneficiary shall be entitled hereunder by filing a written disclaimer with the Committee before payment of such benefit is to be made. Such a disclaimer shall be made in a formsatisfactorytothe Committeeandshallbe irrevocable when filed.Anybenefit disclaimed shallbepayablefromthePlaninthesamemannerasiftheBeneficiarywhofiledthedisclaimer had predeceased the Participant.

Section 14. Amendment and Termination of Plan

The Employer may amend any provision of the Plan or terminate the Plan at any time;

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provided, that in no event shall such amendment or termination reduce the balance in any Participant's Deferred Compensation Account, including reduction in vesting percentage, as of thedateofsuchamendmentortermination,norshallanysuchamendmentmateriallyadversely affect the Participant relating to the payment of such Deferred Compensation Account. Notwithstanding the foregoing, the following special provisions shall apply:

14.1TerminationintheDiscretionoftheEmployer.Exceptasotherwiseprovidedin Sections14.2,theEmployerinitsdiscretionmayterminatethePlananddistributevestedbenefits in a single lump sum to Participants subject to the following requirements and any others specified under Section 409A of the Code:

14.1.1All arrangements sponsored by the Employer that would be aggregated withthePlanunderSection1.409A-l(c)oftheTreasuryRegulationsareterminated.

14.1.2No payments other than payments that would be payable under the terms of the Plan if the termination had not occurred are made within 12 months of the termination date.

14.1.3All benefits under the Plan are paid within 24 months of the termination date.

14.1.4TheEmployerdoesnotadoptanewarrangementthatwouldbeaggregated withthePlanunderSection1.409A-1(c)oftheTreasuryRegulationsprovidingfor the deferral of compensation at any time within 3 years following the date of termination of the Plan.

14.1.5The termination does not occur proximate to a downturn in the financial health of the Employer.

Distributionofbenefits shalloccurinthesametax yearforall Participants.

14.2TerminationUponChangeinControlEvent. IftheEmployerterminatesthePlan within thirty days preceding or twelve months following a Change in Control Event, the vested Deferred Compensation Account of each Participant shall become payable to the Participant in alumpsumwithintwelvemonthsfollowingthedateoftermination,subjecttotherequirements of Section 409A of the Code. Distribution of benefits shall occur in the same tax year for all Participants.

Section 15. Communication to Participants

TheEmployershallmakea copyofthePlanavailableforinspectionbyParticipantsand their beneficiaries duringreasonablehoursattheprincipalofficeof theEmployer.

Section 16. Claims Procedure

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Thefollowing claimsprocedureshall applywith respectto the Plan:

16.1Filing of a Claim for Benefits. If a Participant or Beneficiary (the "claimant") believes that he is entitled to benefits under the Plan which are not being paid orbeingaccrued forthe claimant’sbenefit, the claimantshall file a writtenclaimtherefore with the Committee.

16.2Notification to Claimant of Decision. Within 90 days after receipt of a claim by the Committee (or within 180 days if special circumstances require an extension of time), the Committeeshallnotifytheclaimantofthedecisionwithregardtotheclaim.Intheeventofsuch special circumstances requiring an extension of time, there shall be furnished to the claimant priortoexpirationoftheinitial90-dayperiodwrittennoticeoftheextension,whichnoticeshall setforththespecialcircumstancesandthedatebywhichthedecisionshallbefurnished.Ifsuch claim shall be wholly or partially denied, notice thereof shall be in writing and worded in a mannercalculatedtobeunderstoodbytheclaimant,andshallsetforth:(i)thespecificreasonor reasonsforthedenial;(ii)specificreferencetopertinentprovisionsofthePlanonwhichthedenial isbased;(iii)adescription of any additional material or information necessary for the claimant toperfecttheclaimandanexplanationofwhysuchmaterialorinformationisnecessary;and (iv) anexplanationoftheprocedureforreviewofthedenialandthetimelimitsapplicabletosuch procedures, includingastatementof the claimant'srighttobringa civilactionunder ERISA following an adverse benefit determination on review.

16.3ProcedureforReview.Within60daysfollowingreceiptbytheclaimantofnotice denyingtheclaim,inwholeorinpart,or,ifsuchnoticeshallnotbegiven,within60days following the latest date on which such notice could have been timely given, the claimant may appeal denial of the claim by filing a written application for review with the Committee. Following such request for review, the Committee shall fully and fairly review the decision denying the claim. Prior to the decision of the Committee, the claimant shall be given an opportunityto review pertinent documents and to submit issuesand comments in writing.

16.4DecisiononReview.Thedecisiononreviewofaclaimdeniedinwholeorinpart by the Committee shall be made in the following manner:

16.4.1Within 60 days following receipt by the Committee of the request for review(orwithin120daysifspecialcircumstancesrequireanextensionoftime), theCommitteeshallnotifytheclaimantinwritingofitsdecisionwithregardtothe claim. In the event of such special circumstances requiring an extension of time, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension.

16.4.2With respect to a claim that is denied in whole or in part, the decision on review

21

shallsetforthspecificreasonsforthedecision,shallbewritteninamanner calculated to be understood by the claimant, and shall setforth:

(i)thespecificreason or reasons forthe adversedetermination;

(ii)specific reference to pertinent Plan provisions on which the adverse determination is based;

(iii)a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevantto the claimant’s claim for benefits; and

(iv)astatementdescribinganyvoluntaryappealproceduresofferedbythePlanand the claimant’s right to obtainthe information about suchprocedures, as well as a statement of the claimant’s right to bring an action under ERISA section 502(a).

16.4.3Thedecisionof the Committeeshall befinalandconclusive.

16.5Action by Authorized Representative of Claimant.All actions set forth in this Section 16 to be taken by the claimant may likewise be taken by a representative of the claimant duly authorized by the claimant to act on the claimant’s behalf on such matters. The Committee mayrequiresuchevidenceoftheauthoritytoactofanysuchrepresentativeasitmayreasonably deem necessary or advisable.

16.6Disability Claims.Notwithstanding anyprovision of the Plan to the contrary, if a claim for benefits is based on Disability, the following claims procedures shall apply: The CommitteeshallmaintainaprocedureunderwhichanyParticipantorBeneficiarycanfileaclaim for benefits under this Plan based on Disability.

16.6.1After receiving a claim for benefits, the Committee will notify the Participant orBeneficiary ofits claim determination within 45 days of the receipt oftheclaim.Thisperiod maybeextendedby 30daysifan extensionisnecessary toprocesstheclaimduetomattersbeyondthecontroloftheCommittee.Awritten notice of the extension, the reason for the extension and when the Committee expects to decide the claim, will be furnished to the Participant or Beneficiary withintheinitial45-dayperiod.Thisperiodmaybeextendedforanadditional30 days beyond the original extension. A written notice of the additional extension, thereasonfortheadditionalextensionandwhentheCommitteeexpectstodecide theclaim,willbefurnishedtotheParticipantorBeneficiarywithinthefirst30-day extensionperiodifanadditionalextensionoftimeisneeded.However,ifa

22

period of time is extended due to a Participant or Beneficiary’s failure to submit information necessary to decide a claim, the period for making the benefit determination by the Committee will be tolled from the date on which the notification oftheextension is sent to theParticipant orBeneficiaryuntil thedate on which the Participant or Beneficiary responds to the request for additional information.

16.6.2If a claim for benefits is denied, in whole or in part, a Participant or Beneficiary or an authorized representative, will receive a written notice of the denial. The notice will follow the rules of 29 C.F.R. § 2560.503-1(o) forculturallyandlinguisticallyappropriatenoticesandwillbewritteninamannercalculated to be understood by the Participant or Beneficiary. The notice will include:

(i)thespecificreason(s)for thedenial,

(ii)references to the specific Plan provisions on which the benefit determination was based,

(iii)a description of any additional material or information necessary to perfect a claim and an explanation of whysuch information is necessary,

(iv)a description of the Committee’s appeals procedures and applicable time limits, including, to the extent applicable, a statement of the right to bring a civil action under section 502(a)ofERISAfollowinganadversebenefitdetermination onreview,

(v)a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (i) the views presented by the claimant to the Committee of health care professionals treating the claimant and vocational professionals who evaluated the claimant; (ii) the views of medical orvocational expertswhoseadvicewasobtainedonbehalfoftheCommitteeinconnectionwith a claimant’s adverse benefit determination, without regard to whetherthe advice was relied upon in making the benefit determination; and (iii) a disability determination regarding the claimant presented by the claimant to the Committee made by the Social Security Administration,

(vi)if the determination is based on medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the

23

relevant medicalcircumstances, ora statementthat such explanationwillbeprovidedfree of charge upon request,

(vii)either the specific internal rules, guidelines, protocols, standards or other similarcriteriaofthePlanrelieduponinmakingtheadversebenefitdetermination, or a statement that such rules, guidelines, protocols, standards, or other similar criteria of the Plan do not exist, and

(viii)a statement that the Participant or Beneficiary is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits.

16.6.3If a claim for benefits is denied, a Participant, Beneficiary, or representative, may appeal the denied claim in writing within 180 days of receipt of the written notice of denial. The Participant or Beneficiary may submit any written comments, documents, records and any other information relating to the claim.Uponrequest,theParticipantorBeneficiarywillalsohaveaccessto,andthe right to obtain copies of, all documents, records and information relevant to the claim free of charge.

16.6.4Afullreviewoftheinformationintheclaimfileandanynewinformation submittedtosupporttheappealwillbeconducted.Theclaimdecisionwillbemade bya first review appeals committee appointed by the Employer.This committee will consist of individuals who were not involved in the initial benefit determination, nor will such individuals be subordinate to any person involved in the initial benefit determination. This review will not afford any deference to the initial benefit determination.

16.6.5If the initial adverse decision was based in whole or in part on a medical judgment, the first review appeals committee will consult with a healthcare professional who has appropriate training and experience in the field of medicine involved in themedical judgment, was not consulted in theinitialadversebenefit determination and is not a subordinate of the healthcare professional who was consulted in the initial adverse benefit determination.

16.6.6Beforeanadversebenefit determinationonreviewisissued,thefirstreview appealscommitteewillprovidetheParticipantorBeneficiary,freeofcharge,with any new or additional evidence considered, relied upon, or generated by the committeeorotherpersonmakingthebenefitdetermination(oratthedirectionof thecommittee or such other person) in connection with the claim. Such evidence will be provided as soon as

24

possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be providedtogivetheParticipantorBeneficiaryareasonableopportunitytorespond prior to that date.

16.6.7Before the first review appeals committee issues an adverse benefit determinationonreviewbasedonaneworadditionalrationale,thecommitteewill provide the Participant or Beneficiary, free of charge, with the rationale. The rationalewillbeprovidedassoonaspossibleandsufficientlyinadvanceofthedate on which the notice of adverse benefit determination on review is required to be providedtogivetheParticipantorBeneficiaryareasonableopportunitytorespond prior to that date.

16.6.8The first review appeals committee will make a determination on an appealedclaimwithin45daysofthereceiptofanappealrequest.Thisperiodmay be extended for an additional 45 days if the committee determines that special circumstances require an extension of time. A written notice of the extension, the reasonfortheextensionandthedatethatthecommitteeexpectstorenderadecision willbefurnishedtotheParticipantorBeneficiarywithintheinitial45-dayperiod. However, if the period of time is extended due to a Participant’s or Beneficiary’s failuretosubmitinformationnecessarytodecidetheappeal,theperiodformaking thebenefit determination will betolled from the dateon which the notification of theextensionissentuntilthedateonwhichtheParticipantorBeneficiaryresponds to the request for additional information.

16.6.9If the claim on appeal is denied in whole or in part, a Participant or Beneficiarywillreceiveawrittennotificationofthedenial.Thenoticewillfollow therulesof29C.F.R.§2560.503-1(o)forculturallyandlinguisticallyappropriate noticesandwillbewritteninamannercalculatedtobeunderstoodbytheclaimant. The notice will include:

(i)thespecificreason(s)for theadversedetermination,

(ii)references to the specific Plan provisions on which the determination was based,

(iii)a statement regarding the right to receive upon request and free of charge reasonable access to, and copies of, all records, documents and other information relevant to the benefit claim,

(iv)a description of the first review appeals committee’s review procedures and applicable time limits, including astatement of the right to bring a civil

25

action under section 502(a) of ERISA following an adverse benefit determination on review,

(v)a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (i) the views presented by the claimant to the committee of health care professionals treating the claimant and vocational professionals who evaluated the claimant; (ii) the views of medical orvocational expertswhoseadvicewasobtainedbyoronbehalfofthecommitteeinconnection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; and (iii) a disability determination regarding the claimant presented by the claimant to the committee made by the Social Security Administration,

(vi)ifthedeterminationisbasedonmedicalnecessityorexperimentaltreatmentor similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to therelevant medicalcircumstances, ora statementthat such explanationwillbeprovidedfree of charge upon request, and

(vii)either the specific internal rules, guidelines, protocols, standards or other similarcriteriaofthePlanrelieduponinmakingtheadversebenefitdetermination, or a statement that such rules, guidelines, protocols, standards, or other similar criteria of the Plan do not exist.

16.6.10If the appeal of the benefit claim denial is denied, a Participant, Beneficiary, or representative, may make a second appeal of the denial in writing totheCommitteewithin180daysofthereceiptofthewrittennoticeofdenial.The Participant or Beneficiary may submit with the second appeal any written comments, documents, records and any other information relating to the claim. Uponrequest,theParticipantorBeneficiarywillalsohaveaccessto,andthe right to obtain copies of, all documents, records and information relevant to the claim free of charge.

16.6.11Uponreceiptofthesecondappeal,afullreviewoftheinformationinthe claim file and any new information submitted to support the appeal will be conducted.Theclaimdecisionwillbemadebyasecondreviewappealscommittee appointed by the Employer. This committee will consist of individuals who were not involved in the initial benefit determination or the first review appeals committee,norwillsuchindividualsbe

26

subordinatetoanypersoninvolvedinthe initial benefit or first appeal determination.

16.6.12If the first appeal was based in whole or in part on a medical judgment, the second appeals review committee will consult with a healthcare professional who has appropriate training and experience in the field of medicine involved in themedicaljudgment,wasnotconsultedintheinitialadversebenefit determination nor in the first appeal and is not a subordinate of the healthcare professional(s) consulted in the initial adverse benefit determination and first appeal.

16.6.13Beforethesecondappealsreviewcommitteeissuesadenialofthesecond claim appeal, the committee will provide the Participant or Beneficiary, free of charge,withanyneworadditionalevidenceconsidered,reliedupon,orgenerated by the committee or other person making the benefit determination (or at the directionofthecommitteeorsuchotherperson)inconnectionwiththeclaim.Such evidence will be provided as soon as possible and sufficiently in advance of the dateonwhichthenoticeofadversebenefitdeterminationonreviewisrequired to be provided to give the Participant or Beneficiary a reasonable opportunity to respond prior to that date.

16.6.14Beforethesecondreviewappealscommitteeissuesadenialofthesecond claim appeal based on a new or additional rationale, the committee will provide theParticipantorBeneficiary,freeofcharge,withtherationale.Therationalewill beprovidedassoonaspossibleandsufficientlyinadvanceofthedateonwhichthe noticeofadversebenefitdeterminationonreviewisrequiredtobeprovidedtogive theParticipantorBeneficiaryareasonableopportunitytorespondpriortothatdate.

16.6.15The second appeals review committee will make a determination on the secondclaimappealwithin45daysofthereceiptoftheappealrequest.Thisperiod maybeextendedforanadditional45daysifthecommitteedeterminesthatspecial circumstances require an extension of time. A written notice of the extension, the reason for the extension and the date that the committee expects to render a decisionwillbefurnishedtotheParticipantorBeneficiarywithintheinitial45-day period. However, if the period of time is extended due to the Participant’s or Beneficiary’s failure to submit information necessary to decide the appeal, the periodformaking thebenefit determination will betolledfrom thedateon which the notification of the extension is sent until the date on which the Participant or Beneficiary responds to the request for additional information.

16.6.16Iftheclaimonappealis deniedinwholeorinpartforasecondtime,the

27

Participant or Beneficiary will receive a written notification of the denial. The notice will follow the rules of 29 C.F.R. § 2560.503-1(o) for culturally and linguistically appropriate notices and will be written in a manner calculated to be understoodbytheapplicant.Thenoticewillincludethesameinformationthatwas included in the first adverse determination letter and will identify the contractual limitationsperiodthatappliestotheParticipant’sorBeneficiary’srighttobringan action under section 502(a) of ERISA including the calendar date on which the contractual limitations period expires for the claim.

16.6.17A claimant may not commence a judicial proceeding against any person, including the Committee, the Employer, the Board, the first or second appeals reviewcommittee(s),oranyotherpersonorcommittee,withrespecttoaclaimfor benefits without first exhausting the claims procedures set forth in the preceding paragraphs. No suit or legal action contesting in whole or in part any denial of benefits under the Plan shall be commenced later than the earlier of (i) the first anniversary of (A) the date of the notice of the Committee’s final decision on appeal, or (B) if the claimant fails to request any level of administrative review withinthetimeframepermittedunderthisSection16.6,thedeadlineforrequesting the next level of administrative review, and (ii) the last date on which such legal actioncouldbecommencedundertheapplicablestatuteoflimitationsunderERISA (including, forthis purpose, any applicablestatestatuteoflimitations that applies under ERISA to such legal action).

16.6.18Aclaimanthastherighttorequestawrittenexplanationofanyviolation oftheseclaimsprocedures.TheCommitteewillprovideanexplanationwithin10 days of the request.

Section 17. Miscellaneous Provisions

17.1Set off. The Employer may at any time offset a Participant's Deferred Compensation Account by an amount up to $5,000 to collect the amount of any loan, cash advance, extension of other credit or other obligation of the Participant to the Employer that is then due and payable in accordance with the requirements of Section 409A of the Code.

17.2Notices. Each Participant who is not in Service and each Beneficiary shall be responsible for furnishing the Committee or its designee with the current address, and direct deposit information if desired, for the mailing of notices and benefit payments. Any notice required or permitted to be given to such Participant or Beneficiary shall be deemed given if directedtosuchaddressandmailedbyregular

28

UnitedStatesmail,firstclass,postageprepaid.If any benefit distribution is rejected or returned to the Employer, benefit payments will be suspended until the Participant or Beneficiary furnishes the proper information. This provision shallnotbeconstruedas requiringthemailingofanynotice ornotification otherwisepermitted to be given by posting or by otherpublication.

17.3LostDistributees.AbenefitshallbedeemedforfeitediftheCommitteeisunable tolocatetheParticipantorBeneficiarytowhompaymentisduebythefifthanniversaryofthe date payment is to be made or commence; provided, that the deemed investment rate of return pursuant to Section 8.2 shall cease to be applied to the Participant's account following the first anniversary of such date; provided further, however, that such benefit shall be reinstated if a valid claimismadebyoronbehalfoftheParticipantorBeneficiaryforallorpartoftheforfeitedbenefit.The EmployerandCommitteewillberesponsiblefordetermining whetherunclaimedpropertylaws are applicable to forfeited benefits.

17.4RelianceonData.TheEmployerandtheCommitteeshallhavetherighttorelyon anydataprovidedbytheParticipantorbyanyBeneficiary.Representationsofsuchdatashallbe binding upon any party seeking to claim a benefit through a Participant, and the Employer and the Committee shall have no obligation toinquireinto the accuracy of any representation made at any time by a Participant orBeneficiary.

17.5Headings. The headings and subheadings of the Plan have been inserted for convenienceof referenceandaretobeignoredin anyconstructionoftheprovisions hereof.

17.6ContinuationofEmployment.TheestablishmentofthePlanshallnotbeconstrued as conferring any legal or other rights upon any Employee or any persons for continuation of employment, nor shall it interfere with the right of the Employer to discharge any Employee without regard to the effect thereof under the Plan.

17.7Merger or Consolidation; Assumption of Plan. No Employer shall consolidate or mergeintoorwithanothercorporationorentity,ortransferallorsubstantiallyallofitsassetsto another corporation, partnership, trust or other entity (a "Successor Entity") unless such Successor Entity shall assume the rights, obligations and liabilities of the Employer under the Plananduponsuch assumption,theSuccessorEntityshallbecomeobligatedtoperformtheterms andconditionsofthePlan.Nothinghereinshallprohibittheassumptionoftheobligationsand liabilitiesofthe EmployerunderthePlanby anySuccessorEntity.

17.8Construction. The Employer shall designate in the Adoption Agreement the state or commonwealth according to whose laws the provisions of the Plan shall be construed and enforced,

29

except to the extent that such laws are superseded by ERISA and the applicable requirements of the Code.

17.9Taxes.TheEmployerorotherpayormaywithholdabenefitpaymentunderthePlan or a Participant's wages, or the Employer may reduce a Participant's Deferred Compensation Account balance, in order to meet any federal, state, or local or employment tax withholding obligations with respect to Plan benefits, as permitted under Section 409A of the Code. The Employer or other payor shall report Plan payments and other Plan-related information to the appropriate governmental agencies as required under applicablelaws.

17.10Administration Fees.Any Plan or Plan related fees related to the administration of the Plan shall be paid by the Employer.

17.11SavingsClause.TotheextentthatanyoftheprovisionsofthePlanarefoundby a court of competent jurisdiction to be illegal, invalid, or unenforceable for any reason, such provision shall be deleted, and the balance of the Plan shall not be affected.

30

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John W. Schmidt, 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/ John W. Schmidt

John W. Schmidt

President, Chief Executive Officer and Director

Caleres, Inc.

December 5, 2023

EX-31.2

Exhibit 31.2

CERTIFICATIONS 

I, Jack P. Calandra, 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/ Jack P. Calandra

Jack P. Calandra

Senior Vice President and Chief Financial Officer

Caleres, Inc.

December 5, 2023

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 October 28, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, John W. Schmidt, President, Chief Executive Officer and Director of the Registrant, and Jack P. Calandra, 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/ John W. Schmidt

John W. Schmidt

President, Chief Executive Officer and Director

Caleres, Inc.

December 5, 2023

/s/ Jack P. Calandra

Jack P. Calandra

Senior Vice President and Chief Financial Officer

Caleres, Inc.

December 5, 2023

XML

Document And Entity Information - shares	9 Months Ended
	Oct. 28, 2023	Nov. 24, 2023
Document And Entity Information
Entity Central Index Key	0000014707
Entity Registrant Name	CALERES, INC
Amendment Flag	false
Current Fiscal Year End Date	--02-03
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 28, 2023
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	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		35,502,200

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 28, 2023	Jan. 28, 2023	Oct. 29, 2022
Current assets:
Cash and cash equivalents	$ 34,031	$ 33,700	$ 32,773
Receivables, net	161,544	132,802	161,367
Inventories, net	556,034	580,215	649,257
Income taxes	5,065	17,527	12,046
Property and equipment, held for sale	16,777	16,777	16,777
Prepaid expenses and other current assets	49,422	50,434	48,864
Total current assets	822,873	831,455	921,084
Prepaid pension costs	87,541	83,396	106,781
Lease right-of-use assets	508,736	518,196	523,011
Property and equipment, net	167,681	160,883	151,798
Goodwill and intangible assets, net	206,275	215,392	218,420
Other assets	33,787	27,150	27,219
Total assets	1,826,893	1,836,472	1,948,313
Current liabilities:
Borrowings under revolving credit agreement	222,000	307,500	364,500
Trade accounts payable	257,224	229,908	279,704
Income taxes	21,269	7,650	31,106
Lease obligations	132,461	136,051	133,227
Other accrued expenses	194,967	230,087	230,377
Total current liabilities	827,921	911,196	1,038,914
Other liabilities:
Noncurrent lease obligations	431,474	444,074	453,718
Income taxes	2,464	7,786	7,786
Deferred income taxes	19,502	19,001	15,044
Other liabilities	25,360	28,302	27,440
Total other liabilities	478,800	499,163	503,988
Equity:
Common stock	355	357	356
Additional paid-in capital	181,630	180,747	177,269
Accumulated other comprehensive loss	(25,596)	(26,750)	(7,187)
Retained earnings	356,993	266,329	228,006
Total Caleres, Inc. shareholders' equity	513,382	420,683	398,444
Noncontrolling interests	6,790	5,430	6,967
Total equity	520,172	426,113	405,411
Total liabilities and equity	$ 1,826,893	$ 1,836,472	$ 1,948,313

XML

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Net sales	$ 761,904	$ 798,258	$ 2,120,171	$ 2,271,704
Cost of goods sold	421,530	458,382	1,162,942	1,268,019
Gross profit	340,374	339,876	957,229	1,003,685
Selling and administrative expenses	273,652	283,119	789,570	812,313
Restructuring and other special charges, net	2,304	2,910	3,951	2,910
Operating earnings	64,418	53,847	163,708	188,462
Interest expense, net	(4,488)	(4,003)	(15,240)	(8,886)
Other income, net	1,552	2,997	4,660	9,636
Earnings before income taxes	61,482	52,841	153,128	189,212
Income tax provision	(14,467)	(13,849)	(36,956)	(48,683)
Net earnings	47,015	38,992	116,172	140,529
Net earnings (loss) attributable to noncontrolling interests	101	(254)	588	(404)
Net earnings attributable to Caleres, Inc.	$ 46,914	$ 39,246	$ 115,584	$ 140,933
Basic earnings per common share attributable to Caleres, Inc. shareholders	$ 1.32	$ 1.09	$ 3.23	$ 3.83
Diluted earnings per common share attributable to Caleres, Inc. shareholders	$ 1.32	$ 1.08	$ 3.23	$ 3.79

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net earnings	$ 47,015	$ 38,992	$ 116,172	$ 140,529
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment	(626)	(980)	(1,054)	(1,100)
Pension and other postretirement benefits adjustments	660	908	1,980	1,931
Other comprehensive income (loss), net of tax	34	(72)	926	831
Comprehensive income	47,049	38,920	117,098	141,360
Comprehensive income (loss) attributable to noncontrolling interests	201	(419)	360	(992)
Comprehensive income attributable to Caleres, Inc.	$ 46,848	$ 39,339	$ 116,738	$ 142,352

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022
Operating Activities
Net earnings	$ 116,172	$ 140,529
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	25,575	23,945
Amortization of capitalized software	3,713	3,669
Amortization of intangible assets	9,117	9,080
Amortization of debt issuance costs and debt discount	305	305
Share-based compensation expense	10,924	13,249
Loss on disposal of property and equipment	1,121	1,167
Impairment charges for property, equipment, and lease right-of-use assets	589	1,979
Adjustment to expected credit losses	1,053	(303)
Deferred income taxes	501	313
Changes in operating assets and liabilities:
Receivables	(29,794)	(38,826)
Inventories	23,769	(53,025)
Prepaid expenses and other current and noncurrent assets	(8,414)	(4,496)
Trade accounts payable	27,491	(51,547)
Accrued expenses and other liabilities	(45,727)	(33,667)
Income taxes, net	20,759	34,833
Other, net	29	(939)
Net cash provided by operating activities	157,183	46,266
Investing Activities
Purchases of property and equipment	(33,976)	(40,056)
Capitalized software	(3,404)	(5,350)
Net cash used for investing activities	(37,380)	(45,406)
Financing Activities
Borrowings under revolving credit agreement	365,000	708,500
Repayments under revolving credit agreement	(450,500)	(634,000)
Dividends paid	(7,483)	(7,698)
Acquisition of treasury stock	(17,445)	(63,225)
Issuance of common stock under share-based plans, net	(10,035)	(4,804)
Contributions by noncontrolling interests	1,000	3,142
Net cash (used for) provided by financing activities	(119,463)	1,915
Effect of exchange rate changes on cash and cash equivalents	(9)	(117)
Increase in cash and cash equivalents	331	2,658
Cash and cash equivalents at beginning of period	33,700	30,115
Cash and cash equivalents at end of period	$ 34,031	$ 32,773

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Caleres, Inc.	Noncontrolling Interest	Total
BALANCE at Jan. 29, 2022	$ 376	$ 168,830	$ (8,606)	$ 157,970	$ 318,570	$ 4,817	$ 323,387
BALANCE (in shares) at Jan. 29, 2022	37,635,145
Net earnings (loss)				140,933	140,933	(404)	140,529
Foreign currency translation adjustment			(512)		(512)	(588)	(1,100)
Pension and other postretirement benefits adjustments, net of tax			1,931		1,931		1,931
Comprehensive income (loss)			1,419	140,933	142,352	(992)	141,360
Contributions by noncontrolling interests, net						3,142	3,142
Dividends				(7,698)	(7,698)		(7,698)
Acquisition of treasury stock	$ (26)			(63,199)	(63,225)		(63,225)
Acquisition of treasury stock (in shares)	(2,622,845)
Issuance of common stock under share-based plans, net	$ 6	(4,810)			(4,804)		(4,804)
Issuance of common stock under share-based plans, net (in shares)	621,154
Share-based compensation expense		13,249			13,249		13,249
BALANCE at Oct. 29, 2022	$ 356	177,269	(7,187)	228,006	398,444	6,967	405,411
BALANCE (in shares) at Oct. 29, 2022	35,633,454
BALANCE at Jul. 30, 2022	$ 364	173,246	(7,280)	212,803	379,133	5,744	384,877
BALANCE (in shares) at Jul. 30, 2022	36,450,780
Net earnings (loss)				39,246	39,246	(254)	38,992
Foreign currency translation adjustment			(815)		(815)	(165)	(980)
Pension and other postretirement benefits adjustments, net of tax			908		908		908
Comprehensive income (loss)			93	39,246	39,339	(419)	38,920
Contributions by noncontrolling interests, net						1,642	1,642
Dividends				(2,498)	(2,498)		(2,498)
Acquisition of treasury stock	$ (8)			(21,545)	(21,553)		(21,553)
Acquisition of treasury stock (in shares)	(838,025)
Issuance of common stock under share-based plans, net	$ 0	(990)			(990)		(990)
Issuance of common stock under share-based plans, net (in shares)	20,699
Share-based compensation expense		5,013			5,013		5,013
BALANCE at Oct. 29, 2022	$ 356	177,269	(7,187)	228,006	398,444	6,967	405,411
BALANCE (in shares) at Oct. 29, 2022	35,633,454
BALANCE at Jan. 28, 2023	$ 357	180,747	(26,750)	266,329	420,683	5,430	426,113
BALANCE (in shares) at Jan. 28, 2023	35,715,752
Net earnings (loss)				115,584	115,584	588	116,172
Foreign currency translation adjustment			(826)		(826)	(228)	(1,054)
Pension and other postretirement benefits adjustments, net of tax			1,980		1,980		1,980
Comprehensive income (loss)			1,154	115,584	116,738	360	117,098
Contributions by noncontrolling interests, net						1,000	1,000
Dividends				(7,483)	(7,483)		(7,483)
Acquisition of treasury stock	$ (8)			(17,437)	(17,445)		(17,445)
Acquisition of treasury stock (in shares)	(763,000)
Issuance of common stock under share-based plans, net	$ 6	(10,041)			(10,035)		(10,035)
Issuance of common stock under share-based plans, net (in shares)	590,706
Share-based compensation expense		10,924			10,924		10,924
BALANCE at Oct. 28, 2023	$ 355	181,630	(25,596)	356,993	513,382	6,790	520,172
BALANCE (in shares) at Oct. 28, 2023	35,543,458
BALANCE at Jul. 29, 2023	$ 355	177,602	(25,530)	312,565	464,992	6,589	471,581
BALANCE (in shares) at Jul. 29, 2023	35,540,093
Net earnings (loss)				46,914	46,914	101	47,015
Foreign currency translation adjustment			(726)		(726)	100	(626)
Pension and other postretirement benefits adjustments, net of tax			660		660		660
Comprehensive income (loss)			(66)	46,914	46,848	201	47,049
Dividends				(2,486)	(2,486)		(2,486)
Issuance of common stock under share-based plans, net	$ 0	(25)			(25)		(25)
Issuance of common stock under share-based plans, net (in shares)	3,365
Share-based compensation expense		4,053			4,053		4,053
BALANCE at Oct. 28, 2023	$ 355	$ 181,630	$ (25,596)	$ 356,993	$ 513,382	$ 6,790	$ 520,172
BALANCE (in shares) at Oct. 28, 2023	35,543,458

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Pension and other postretirement benefits adjustments, tax	$ 228	$ 86	$ 684	$ 417
Dividends, per share (in dollars per share)	$ 0.07	$ 0.07	$ 0.21	$ 0.21

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Basis of Presentation and General

9 Months Ended

Oct. 28, 2023

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.  Although the third fiscal quarter has historically accounted for a substantial portion of the Company’s earnings for the year, the Company has experienced more equal distribution among the quarters in recent years.  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.

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 28, 2023.

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 condensed consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

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, to sell Sam Edelman, Naturalizer and other branded footwear in China.  The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”).  During the thirty-nine weeks ended October 28, 2023, capital contributions of $2.0 million were made to CLT, including $1.0 million received from Brand Investment Holding.  During the thirty-nine weeks ended October 29, 2022, capital contributions of $6.3 million were made to CLT, including $3.1 million received from Brand Investment Holding.  

Net sales and operating earnings (loss) of CLT for the periods ended October 28, 2023 and October 29, 2022 were as follows:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	6,810	$	5,418	$	19,675	$	13,167
Operating earnings (loss)		229		(302)		1,327		(631)

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

Supplier Finance Program

The Company facilitates a voluntary supplier finance program (“the Program”) that provides certain of the Company’s suppliers the opportunity to sell receivables related to products that the Company has purchased to participating financial institutions at a rate that leverages the Company’s credit rating, which may be more beneficial to the suppliers than the rate they can obtain based upon their own credit rating. The Company negotiates payment and other terms directly with the suppliers, regardless of whether the supplier participates in the Program, and the Company’s responsibility is limited to making payment based on the terms originally negotiated with the supplier.  The suppliers that participate in the Program have discretion to determine which invoices, if any, are sold to the participating financing institutions.  The liabilities to the suppliers that participate in the Program are presented as accounts payable in the Company’s condensed

consolidated balance sheets, with changes reflected within cash flows from operating activities when settled.  As of October 28, 2023 and October 29, 2022, the Company had $25.0 million and $17.8 million, respectively, of accounts payable subject to the Program arrangements.

Property and Equipment, Held for Sale

The Company continues to actively market for sale its nine-acre corporate headquarters campus (the “Campus”) located in Clayton, Missouri and, as of October 28, 2023, was engaged in discussions with multiple potential buyers.  The Company expects the Campus to qualify as a completed sale within the next year.  Accordingly, the Campus, primarily consisting of land and buildings, has been classified as property and equipment, held for sale on the condensed consolidated balance sheets as of October 28, 2023 within the Eliminations and Other category.  The Company evaluated the Campus asset group for impairment and determined that no indicators were present as of October 28, 2023.

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Impact of New Accounting Pronouncements

9 Months Ended

Oct. 28, 2023

Impact of New Accounting Pronouncements

Impact of New Accounting Pronouncements

Note 2    Impact of New Accounting Pronouncements

Impact of Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities – Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations.  The guidance requires qualitative and quantitative disclosures about supplier finance programs in annual financial statements, including key terms of the programs, amounts outstanding, balance sheet presentation and a rollforward of amounts outstanding during the year.  For interim periods, the ASU requires disclosure of total obligations outstanding that have been confirmed as valid.  The ASU is effective for the Company in fiscal year 2023, except for the rollforward requirement, which is effective in fiscal year 2024.  The Company adopted the amendments on a retrospective basis during the first quarter of 2023, with the exception of the annual rollforward requirement, which will be adopted on a prospective basis by the effective date.  Refer to Note 1 to the condensed consolidated financial statements for additional information regarding the Company’s supplier finance program.

Impact of Recently Issued Accounting Pronouncements

The Company has evaluated all recently issued ASUs and they were determined to be either not applicable or not expected to have a material impact on the consolidated financial statements.  

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Revenues

9 Months Ended

Oct. 28, 2023

Revenues

Revenues

Note 3    Revenues

Disaggregation of Revenues

The following table disaggregates revenue by segment and major source for the periods ended October 28, 2023 and October 29, 2022:

	Thirteen Weeks Ended October 28, 2023
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	388,764	$	17,126	$	—	$	405,890
E-commerce - Company websites (1)		60,276		56,204		—		116,480
E-commerce - wholesale drop-ship (1)		—		34,151		(1,720)		32,431
Total direct-to-consumer sales		449,040		107,481		(1,720)		554,801
Wholesale - e-commerce (1)		—		72,424		—		72,424
Wholesale - landed		—		121,893		(6,924)		114,969
Wholesale - first cost		—		16,332		—		16,332
Licensing and royalty		612		2,627		—		3,239
Other (2)		121		18		—		139
Net sales	$	449,773	$	320,775	$	(8,644)	$	761,904

	Thirteen Weeks Ended October 29, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	415,678	$	14,810	$	—	$	430,488
E-commerce - Company websites (1)		65,549		53,673		—		119,222
E-commerce - wholesale drop-ship (1)		—		40,672		(1,854)		38,818
Total direct-to-consumer sales		481,227		109,155		(1,854)		588,528
Wholesale - e-commerce (1)		—		59,035		—		59,035
Wholesale - landed		—		135,161		(5,081)		130,080
Wholesale - first cost		—		16,424		—		16,424
Licensing and royalty		601		3,454		—		4,055
Other (2)		123		13		—		136
Net sales	$	481,951	$	323,242	$	(6,935)	$	798,258

	Thirty-Nine Weeks Ended October 28, 2023
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	1,065,448	$	50,323	$	—	$	1,115,771
E-commerce - Company websites (1)		145,585		163,088		—		308,673
E-commerce - wholesale drop-ship (1)		—		97,565		(4,119)		93,446
Total direct-to-consumer sales		1,211,033		310,976		(4,119)		1,517,890
Wholesale - e-commerce (1)		—		181,980		—		181,980
Wholesale - landed		—		377,033		(36,043)		340,990
Wholesale - first cost		—		67,940		—		67,940
Licensing and royalty		1,775		9,193		—		10,968
Other (2)		361		42		—		403
Net sales	$	1,213,169	$	947,164	$	(40,162)	$	2,120,171

	Thirty-Nine Weeks Ended October 29, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	1,133,276	$	43,371	$	—	$	1,176,647
E-commerce - Company websites (1)		167,604		155,698		—		323,302
E-commerce - wholesale drop-ship (1)		—		106,348		(3,759)		102,589
Total direct-to-consumer sales		1,300,880		305,417		(3,759)		1,602,538
Wholesale - e-commerce (1)		—		167,494		—		167,494
Wholesale - landed		—		441,544		(40,408)		401,136
Wholesale - first cost		—		88,205		—		88,205
Licensing and royalty		1,538		10,329		—		11,867
Other (2)		410		54		—		464
Net sales	$	1,302,828	$	1,013,043	$	(44,167)	$	2,271,704

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

(2) Includes breakage revenue from unredeemed gift cards

Retail stores

The Company generates revenue 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 converted to savings certificates and 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.

E-commerce

The Company 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, or picked up directly by the consumer from the Company’s stores (“e-commerce – Company websites”); sales from the Company’s wholesale customers’ websites that are fulfilled on a drop-ship basis (“e-commerce – wholesale drop ship”); and other e-commerce sales (“wholesale – e-commerce”), 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.

Landed wholesale

Landed sales are wholesale sales in which the Company obtains title to the footwear from the overseas suppliers and maintains title until the merchandise clears United States customs.  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.  Landed sales generally carry a higher profit rate than first-cost wholesale sales as a result of the brand equity associated with the product along with the additional customs, warehousing and logistics services provided to customers and the risks associated with inventory ownership.

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. Many of the customers then import this product into the United States.  Revenue is recognized at the time the merchandise is delivered to the customer’s designated freight forwarder and control is transferred to the customer.

Licensing and royalty

The Company has license agreements with third parties allowing them to sell the Company’s branded product, or other merchandise that uses the Company’s owned or licensed brand names. These license agreements provide the licensee access to the Company’s symbolic

intellectual property, and revenue is therefore recognized over the license term. For royalty contracts that do not have guaranteed minimums, the Company recognizes revenue as the licensee’s sales occur. For royalty contracts that have guaranteed minimums, revenue for the guaranteed minimum is recognized on a straight-line basis during the term, until such time that the cumulative royalties exceed the total minimum guarantee. Up-front payments are recognized over the contractual term to which the guaranteed minimum relates.

The Company also licenses its Famous Footwear trade name and logo to a third-party financial institution to offer Famous Footwear-branded credit cards to its consumers.  The Company receives royalties based upon cardholder spending, which is recognized as licensing revenue at the time the credit card is used.    

Contract Balances

Revenue is recorded at the transaction price, net of estimates for variable consideration for which reserves are established, including returns, allowances and discounts. Variable consideration is estimated using the expected value method and given the large number of contracts with similar characteristics, the 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)	October 28, 2023		October 29, 2022		January 28, 2023
Customer allowances and discounts	$	23,849	$	23,164	$	21,917
Loyalty programs liability		13,770		17,690		17,732
Returns reserve		14,609		16,619		12,038
Gift card liability		5,664		5,718		6,659

Changes in contract balances with customers generally reflect differences in relative sales volume for the periods presented.  In addition, during the thirty-nine weeks ended October 28, 2023, the loyalty programs liability increased $41.9 million due to points and material rights earned on purchases and decreased $45.9 million due to expirations and redemptions.  During the thirty-nine weeks ended October 29, 2022, the loyalty programs liability increased $32.5 million due to points and material rights earned on purchases and decreased $33.6 million due to expirations and redemptions.  The liability for loyalty programs is presented within other accrued expenses when earned and is generally expected to be recognized as revenue within one year.  The gift card liability is established upon the sale of a gift card and revenue is recognized either upon redemption of the gift card by the consumer or based upon the gift card breakage rate, which is generally within the 24-month period following the sale of the gift card.

The Company estimates and records an expected lifetime credit loss on accounts receivable by utilizing credit ratings and other customer-related information, as well as historical loss experience.  The following table summarizes the activity in the Company’s allowance for expected credit losses during the thirty-nine weeks ended October 28, 2023 and October 29, 2022:

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Balance, beginning of period	$	8,903	$	9,601
Adjustment to expected credit losses		1,053		(303)
Uncollectible accounts written off, net of recoveries		18		(300)
Balance, end of period	$	9,974	$	8,998

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Earnings Per Share

9 Months Ended

Oct. 28, 2023

Earnings Per Share

Earnings Per Share

Note 4    Earnings Per Share

The Company uses the two-class method to compute basic and diluted earnings per common share attributable to Caleres, Inc. shareholders.  In periods of net loss, no effect is given to the Company’s participating securities since they do not contractually participate in the losses of

the Company.  The following table sets forth the computation of basic and diluted earnings per common share attributable to Caleres, Inc. shareholders for the periods ended October 28, 2023 and October 29, 2022:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands, except per share amounts)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
NUMERATOR
Net earnings	$	47,015	$	38,992	$	116,172	$	140,529
Net (earnings) loss attributable to noncontrolling interests		(101)		254		(588)		404
Net earnings attributable to Caleres, Inc.	$	46,914	$	39,246	$	115,584	$	140,933
Net earnings allocated to participating securities		(2,121)		(1,723)		(5,103)		(5,951)
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities	$	44,793	$	37,523	$	110,481	$	134,982
DENOMINATOR
Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders		33,933		34,379		34,206		35,207
Dilutive effect of share-based awards		—		507		—		450
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders		33,933		34,886		34,206		35,657
Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.09	$	3.23	$	3.83
Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.08	$	3.23	$	3.79

There were no outstanding options to purchase shares of common stock for the thirty-nine weeks ended October 28, 2023.  Options to purchase 16,667 shares of common stock for both the thirteen and thirty-nine weeks ended October 29, 2022 were not included in the denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders because the effect would be anti-dilutive.  

As further discussed in Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, the Company has two publicly announced share repurchase programs.  The Company did not repurchase any shares under these programs during the thirteen weeks ended October 28, 2023 and repurchased 763,000 shares during the thirty-nine weeks ended October 28, 2023.  During the thirteen and thirty-nine weeks ended October 29, 2022, the Company repurchased 838,025 and 2,622,845 shares, respectively, under the share repurchase programs.  No excise taxes were due on the Company’s share repurchases during the thirty-nine weeks ended October 28, 2023 under the provisions of the Inflation Reduction Act of 2022.

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Restructuring and Other Special Charges

9 Months Ended

Oct. 28, 2023

Restructuring and Other Special Charges

Restructuring and Other Special Charges

Note 5    Restructuring and Other Special Charges

The Company incurred costs of $2.3 million ($1.7 million on an after-tax basis, or $0.05 per diluted share) and $3.9 million ($2.9 million on an after-tax basis, or $0.08 per diluted share) during the thirteen and thirty-nine weeks ended October 28, 2023, respectively, associated with its expense reduction initiatives.  The costs were primarily severance related to organizational changes in the Famous Footwear segment and the Company’s corporate office, as well as severance and other costs to integrate the Blowfish Malibu office and information systems into the St. Louis infrastructure.  Of the $2.3 million in charges presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirteen weeks ended October 28, 2023, $1.2 million is reflected in the Famous Footwear segment, $0.8 million is reflected in the Brand Portfolio segment and $0.3 million is reflected within the Eliminations and Other category.  Of the  $3.9 million in charges presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirty-nine weeks ended October 28, 2023, $1.7 million is reflected in the Brand Portfolio segment, $1.3 million is reflected in the Famous Footwear segment and $0.9 million is reflected within the Eliminations and Other category.  As of October 28, 2023, restructuring reserves of $2.6 million were included in other accrued expenses on the condensed consolidated balance sheet.

During the thirteen and thirty-nine weeks ended October 29, 2022, the Company incurred costs of $2.9 million ($2.7 million on an after-tax basis, or $0.07 per diluted share) related to the CFO transition at the corporate headquarters.  These costs were recognized as restructuring and other special charges in the condensed consolidated statement of earnings within the Eliminations and Other category.  

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Business Segment Information

9 Months Ended

Oct. 28, 2023

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 October 28, 2023 and October 29, 2022:

	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
Thirteen Weeks Ended October 28, 2023
Net sales	$	449,773	$	320,775	$	(8,644)	$	761,904
Intersegment sales (1)		—		8,644		—		8,644
Operating earnings (loss)		46,600		38,211		(20,393)		64,418
Segment assets		828,691		834,645		163,557		1,826,893
Thirteen Weeks Ended October 29, 2022
Net sales	$	481,951	$	323,242	$	(6,935)	$	798,258
Intersegment sales (1)		—		6,935		—		6,935
Operating earnings (loss)		59,267		22,304		(27,724)		53,847
Segment assets		833,268		955,712		159,333		1,948,313
Thirty-Nine Weeks Ended October 28, 2023
Net sales	$	1,213,169	$	947,164	$	(40,162)	$	2,120,171
Intersegment sales (1)		—		40,162		—		40,162
Operating earnings (loss)		104,286		107,708		(48,286)		163,708
Thirty-Nine Weeks Ended October 29, 2022
Net sales	$	1,302,828	$	1,013,043	$	(44,167)	$	2,271,704
Intersegment sales (1)		—		44,167		—		44,167
Operating earnings (loss)		171,451		93,063		(76,052)		188,462

(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 to earnings before income taxes:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Operating earnings	$	64,418	$	53,847	$	163,708	$	188,462
Interest expense, net		(4,488)		(4,003)		(15,240)		(8,886)
Other income, net		1,552		2,997		4,660		9,636
Earnings before income taxes	$	61,482	$	52,841	$	153,128	$	189,212

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Inventories

9 Months Ended

Oct. 28, 2023

Inventories

Inventories

Note 7    Inventories

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

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Raw materials	$	14,381	$	21,044	$	21,172
Work-in-process		628		629		569
Finished goods		541,025		627,584		558,474
Inventories, net	$	556,034	$	649,257	$	580,215

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Goodwill and Intangible Assets

9 Months Ended

Oct. 28, 2023

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 8    Goodwill and Intangible Assets

Goodwill and intangible assets were as follows:

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Intangible Assets
Famous Footwear	$	2,800	$	2,800	$	2,800
Brand Portfolio (1)		342,083		342,083		342,083
Total intangible assets		344,883		344,883		344,883
Accumulated amortization		(143,564)		(131,419)		(134,447)
Total intangible assets, net		201,319		213,464		210,436
Goodwill
Brand Portfolio (2)		4,956		4,956		4,956
Total goodwill		4,956		4,956		4,956
Goodwill and intangible assets, net	$	206,275	$	218,420	$	215,392

(1) The carrying amount of intangible assets as of October 28, 2023, October 29, 2022  and January 28, 2023 is presented net of accumulated impairment charges of $106.2 million.

(2) The carrying amount of goodwill as of October 28, 2023, October 29, 2022 and January 28, 2023 is presented net of accumulated impairment charges of $415.7 million.

The Company’s intangible assets as of October 28, 2023, October 29, 2022 and January 28, 2023 were as follows:

($ thousands)	October 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	128,592	$	10,200	$	160,696
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		14,972		4,005		25,223
		$	451,088	$	143,564	$	106,205	$	201,319
	October 29, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	119,461	$	10,200	$	169,827
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		11,958		4,005		28,237
		$	451,088	$	131,419	$	106,205	$	213,464
	January 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	121,928	$	10,200	$	167,360
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		12,519		4,005		27,676
		$	451,088	$	134,447	$	106,205	$	210,436

Amortization expense related to intangible assets was $3.0 million for both the thirteen weeks ended October 28, 2023 and October 29, 2022,  and $9.1 million for both the thirty-nine weeks ended October 28, 2023 and October 29, 2022.  The Company estimates that amortization expense related to intangible assets will be approximately $11.9 million in 2023, $11.0 million in 2024, 2025 and 2026, and $10.9 million in 2027.

Goodwill is tested for impairment as of the first day of the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate it might be impaired, using either the qualitative assessment or a quantitative fair value-based test.  The Company recorded no goodwill impairment charges during the thirty-nine weeks ended October 28, 2023 or October 29, 2022.

Indefinite-lived intangible assets are tested for impairment as of the first day of the fourth quarter of each fiscal year unless events or circumstances indicate an interim test is required.  The Company recorded no impairment charges for indefinite-lived intangible assets during the thirty-nine weeks ended October 28, 2023 or October 29, 2022.

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Leases

9 Months Ended

Oct. 28, 2023

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.  For operating leases, 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.  Refer to Note 14 to the condensed consolidated financial statements for further discussion of impairment charges on the Company’s operating lease right-of-use assets and property and equipment in retail stores.

During the thirty-nine weeks ended October 28, 2023, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $94.3 million on the condensed consolidated balance sheets.  As of October 28, 2023, the Company has entered into lease commitments for 11 retail locations for which the leases have not yet commenced.  The Company anticipates that six leases will begin in the current fiscal year, four leases will begin in fiscal 2024 and one lease will begin in fiscal 2025.  Upon commencement, right-of-use assets and lease liabilities of approximately $5.2 million, $3.1 million and $0.3 million will be recorded on the condensed consolidated balance sheets in 2023, 2024 and 2025, respectively.

The components of lease expense for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022 were as follows:

	Thirteen Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating lease expense	$	39,308	$	38,116
Variable lease expense		10,404		10,679
Short-term lease expense		727		970
Total lease expense	$	50,439	$	49,765

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating lease expense	$	117,241	$	109,810
Variable lease expense		32,154		29,567
Short-term lease expense		2,157		3,340
Sublease income		—		(59)
Total lease expense	$	151,552	$	142,658

​
Supplemental cash flow information related to leases is as follows:

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Cash paid for lease liabilities	$	124,691	$	125,967
Cash received from sublease income		—		59

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Financing Arrangements

9 Months Ended

Oct. 28, 2023

Financing Arrangements

Financing Arrangements

Note 10  Financing Arrangements

Credit Agreement

The Company maintains a revolving credit facility for working capital needs.  The Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC, Allen Edmonds LLC, Vionic Group LLC, Vionic International LLC and Blowfish, LLC are each co-borrowers and guarantors.    

On October 5, 2021, the Company entered into a Fifth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the "Credit Agreement") which, among other modifications, decreased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $500.0 million, subject to borrowing base restrictions, and may be increased by up to $250.0 million.  The Credit Agreement also decreased the spread applied to the London Interbank Offered Rate (“LIBOR”) or prime rate by a total of 75 basis points.   On April 27, 2023, the Company entered into a Sixth Amendment to Fourth Amended and Restated Credit agreement to transition the borrowings on the revolving credit facility from bearing interest based on LIBOR to a term secured overnight financing rate (“SOFR”).

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 SOFR, 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 Loan Cap and $40.0 million for three consecutive business days, and the fixed charge coverage ratio is less than 1.25 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 October 28, 2023.

At October 28, 2023, the Company had $222.0 million of borrowings outstanding and $10.6 million in letters of credit outstanding under the Credit Agreement.  Total additional borrowing availability was $267.4 million at October 28, 2023.

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Shareholders' Equity

9 Months Ended

Oct. 28, 2023

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 October 28, 2023 and October 29, 2022:

			Pension and		Accumulated
	Foreign		Other		Other
	Currency		Postretirement		Comprehensive
($ thousands)	Translation		Transactions (1)		(Loss) Income
Balance at July 29, 2023	$	(1,313)	$	(24,217)	$	(25,530)
Other comprehensive loss before reclassifications		(726)		—		(726)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		888		888
Tax benefit		—		(228)		(228)
Net reclassifications		—		660		660
Other comprehensive (loss) income		(726)		660		(66)
Balance at October 28, 2023	$	(2,039)	$	(23,557)	$	(25,596)
Balance at July 30, 2022	$	(485)	$	(6,795)	$	(7,280)
Other comprehensive loss before reclassifications		(815)		—		(815)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		994		994
Tax benefit		—		(86)		(86)
Net reclassifications		—		908		908
Other comprehensive (loss) income		(815)		908		93
Balance at October 29, 2022	$	(1,300)	$	(5,887)	$	(7,187)
Balance at January 28, 2023	$	(1,213)	$	(25,537)	$	(26,750)
Other comprehensive loss before reclassifications		(826)		—		(826)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		2,664		2,664
Tax benefit		—		(684)		(684)
Net reclassifications		—		1,980		1,980
Other comprehensive (loss) income		(826)		1,980		1,154
Balance at October 28, 2023	$	(2,039)	$	(23,557)	$	(25,596)
Balance at January 29, 2022	$	(788)	$	(7,818)	$	(8,606)
Other loss income before reclassifications		(512)		—		(512)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		2,348		2,348
Tax benefit		—		(417)		(417)
Net reclassifications		—		1,931		1,931
Other comprehensive (loss) income		(512)		1,931		1,419
Balance at October 29, 2022	$	(1,300)	$	(5,887)	$	(7,187)

(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.

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Share-Based Compensation

9 Months Ended

Oct. 28, 2023

Share-Based Compensation

Share-Based Compensation

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $4.1 million and $5.0 million during the thirteen weeks and $10.9 million and $13.2 million during the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively.

The Company had net issuances of 3,365 and 20,699 shares of common stock during the thirteen weeks ended October 28, 2023 and October 29, 2022, 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.  During the thirty-nine weeks ended October 28, 2023 and October 29, 2022, the Company had net issuances of 590,706 and 621,154 shares of common stock, respectively, related to share-based plans.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended October 28, 2023 and October 29, 2022:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	October 28, 2023				October 29, 2022
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
July 29, 2023	1,608,057	$	21.55	July 30, 2022	1,579,202	$	17.53
Granted	10,906		28.35	Granted	45,050		26.65
Forfeited	(6,650)		21.48	Forfeited	(15,500)		21.00
Vested	(3,000)		9.76	Vested	(58,000)		13.16
October 28, 2023	1,609,313	$	21.62	October 29, 2022	1,550,752	$	17.92

	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023				October 29, 2022
		Weighted-				Weighted-
	Total Number	Average			Total Number	Average
	of Restricted	Grant Date			of Restricted	Grant Date
	Shares		Fair Value		Shares	Fair Value
January 28, 2023	1,603,960	$	18.57	January 29, 2022	1,390,397	$	14.24
Granted	590,900		22.97	Granted	726,720		21.45
Forfeited	(150,823)		18.68	Forfeited	(95,716)		15.35
Vested	(434,724)		13.24	Vested	(470,649)		13.02
October 28, 2023	1,609,313	$	21.62	October 29, 2022	1,550,752	$	17.92

The Company granted 10,906 restricted shares during the thirteen weeks ended October 28, 2023, which have a graded vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 590,900 restricted shares granted during the thirty-nine weeks ended October 28, 2023, 554,832 shares have a graded vesting term of three years, with 50% vesting after two years and 50% after three years, 23,268 shares have a cliff-vesting term of one year, 7,000 shares have a graded vesting term of three years, with 50% vesting after eighteen months and 50% after three years, and 5,800 shares have a cliff-vesting term of two years.  The Company granted 45,050 restricted shares during the thirteen weeks ended October 29, 2022, which have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 726,720 restricted shares the Company granted during the thirty-nine weeks ended October 29, 2022, 716,250 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years and 10,470 shares have a cliff-vesting term of one year.  

Performance Awards

During the thirty-nine weeks ended October 28, 2023, the Company granted performance share awards for a targeted 276,434 shares, with a weighted-average grant date fair value of $23.12 in connection with the 2023 performance award (2023 – 2025 performance period).  During the thirty-nine weeks ended October 29, 2022, the Company granted performance share awards for a targeted 87,750 shares, with a weighted-average grant date fair value of $20.99 in connection with the 2020 performance award.  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 attainment of certain financial goals for the service period and individual achievement of strategic initiatives over the cumulative period of the award.  The 2023 performance award is payable in common stock for up to 100% of the targeted award and the remainder in cash if any portion exceeds the targeted award.  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.  

In connection with the Company’s CFO transition during the thirteen weeks ended October 29, 2022, the Company approved the accelerated vesting of 30,000 performance-based share awards, representing two of the four award tranches from the 2020 performance award.  The performance conditions had been satisfied for the two award tranches based on the achievement of financial goals for the 2020 and 2021 fiscal periods.  The modification to accelerate vesting eliminated the remaining service requirement.  These awards had a weighted-average grant date fair value of $13.05 per share, but were revalued using a fair value on the date of modification of $24.31 per share.  The modification of these awards resulted in incremental compensation expense of $0.4 million, which is presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirteen and thirty-nine weeks ended October 29, 2022.

During the thirty-nine weeks ended October 29, 2022, the Company granted long-term incentive awards payable in cash for the 2022-2024 performance period, with a target value of $8.3 million and a maximum value of $16.6 million.  This award, which vests after a three-year period, is 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 expensed ratably 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 are subject to a vesting requirement (usually one year) and earn dividend equivalents at the same rate as dividends on the Company’s common stock.  The dividend equivalents, which vest immediately, are automatically reinvested in additional RSUs.  Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs.  The RSUs payable in cash are remeasured at the end of each period.  Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted.  Gains and losses resulting from changes in the fair value of the RSUs payable in cash subsequent to the vesting period and through the settlement date are recognized in the Company’s condensed consolidated statements of earnings.  The Company granted 1,081 and 1,314 RSUs for dividend equivalents, during the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively, with weighted-average grant date fair values of $28.80 and $24.30, respectively.  The Company granted 50,376 and 41,325 RSUs to non-employee directors, including 3,840 and 4,680 and for dividend equivalents, during the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively, with weighted-average grant date fair values of $19.72 and $27.23, respectively.

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Retirement and Other Benefit Plans

9 Months Ended

Oct. 28, 2023

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 the domestic and Canadian plans:

	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	1,256	$	1,786	$	—	$	—
Interest cost		3,635		2,997		12		9
Expected return on assets		(6,087)		(6,997)		—		—
Amortization of:
Actuarial loss (gain)		946		779		(27)		(26)
Prior service income		(31)		(79)		—		—
Settlement cost		—		320		—		—
Total net periodic benefit income	$	(281)	$	(1,194)	$	(15)	$	(17)

	Pension Benefits				Other Postretirement Benefits
	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	3,767	$	5,358	$	—	$	—
Interest cost		10,905		8,994		36		27
Expected return on assets		(18,265)		(21,005)		—		—
Amortization of:
Actuarial loss (gain)		2,840		2,343		(82)		(78)
Prior service income		(94)		(237)		—		—
Settlement cost		—		320		—		—
Total net periodic benefit income	$	(847)	$	(4,227)	$	(46)	$	(51)

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

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Fair Value Measurements

9 Months Ended

Oct. 28, 2023

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;
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● 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.

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 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).  

Non-Qualified Restoration Plan Liabilities

In 2023, the Company adopted a non-qualified restoration deferred compensation plan (the “Restoration Plan”) for the benefit of certain members of executive management.  The Restoration Plan provides an incremental retirement benefit to key executives whose contributions to qualified retirement plans are limited by Internal Revenue Service annual compensation maximums.  The investment funds offered to the participants generally correspond to the funds offered in the Company’s 401(k) plan.  Upon the initial contribution to the Restoration Plan, which is expected to be in January 2024, the plan assets and liabilities will fluctuate with the returns on the investment funds.  The deferrals will be held in a separate trust, which will be established by the Company to administer the Restoration Plan.  The assets of the trust will be subject to the claims of the Company’s creditors in the event that the Company becomes insolvent.  The liabilities of the Restoration Plan are presented in other accrued expenses in the condensed consolidated balance sheet as of October 28, 2023.    

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 reinvested 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 condensed consolidated balance sheets.  Gains and losses resulting from changes in the fair value of the PSUs are presented in selling and administrative expenses in the Company’s condensed consolidated statements of earnings.  The fair value of each PSU is based on an unadjusted quoted market price for the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1).

Restricted Stock Units for Non-Employee Directors

Under the Company’s incentive compensation plans, cash-equivalent restricted stock units (“RSUs”) of the Company 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.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at October 28, 2023, October 29, 2022 and January 28, 2023.  During the thirty-nine weeks ended October 28, 2023 and October 29, 2022, there were no transfers into or out of Level 3.

	Fair Value Measurements
($ thousands)	Total		Level 1		Level 2		Level 3
Asset (Liability)
October 28, 2023:
Non-qualified deferred compensation plan assets	$	8,908	$	8,908	$	—	$	—
Non-qualified deferred compensation plan liabilities		(8,908)		(8,908)		—		—
Non-qualified restoration plan liabilities		(173)		(173)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,547)		(1,547)		—		—
Restricted stock units for non-employee directors		(2,057)		(2,057)		—		—
October 29, 2022:
Non-qualified deferred compensation plan assets		7,769		7,769		—		—
Non-qualified deferred compensation plan liabilities		(7,769)		(7,769)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,805)		(1,805)		—		—
Restricted stock units for non-employee directors		(2,220)		(2,220)		—		—
January 28, 2023:
Non-qualified deferred compensation plan assets		7,890		7,890		—		—
Non-qualified deferred compensation plan liabilities		(7,890)		(7,890)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,662)		(1,662)		—		—
Restricted stock units for non-employee directors		(2,028)		(2,028)		—		—

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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 $559.0 million and $564.6 million at October 28, 2023 and October 29, 2022, respectively, were assessed for indicators of impairment.  This assessment resulted

in impairment charges for operating lease right-of-use assets, leasehold improvements and furniture and fixtures in the Company’s retail stores, and in the thirty-nine weeks ended October 29, 2022, capitalized software.  

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Long-Lived Asset Impairment Charges
Famous Footwear	$	175	$	—	$	589	$	419
Brand Portfolio		—		—		—		1,560
Total long-lived asset impairment charges	$	175	$	—	$	589	$	1,979

Fair Value of the Company’s Other Financial Instruments

The fair values of cash and cash equivalents, receivables and trade accounts payable approximate their carrying values due to the short-term nature of these instruments.

The fair values of the borrowings under revolving credit agreement of $222.0 million and $364.5 million as of October 28, 2023 and October 29, 2022, respectively, approximate their carrying values due to the short-term nature of the borrowings (Level 1).  

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Income Taxes

9 Months Ended

Oct. 28, 2023

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 23.5% and 26.2% for the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively.  The higher effective tax rate for the third quarter of 2022 was driven by an increase in permanent adjustments, primarily the non-deductible portion of executive compensation.

The Company’s consolidated effective tax rates were 24.1% and 25.7% for the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively.  The lower effective tax rate for the thirty-nine weeks ended October 28, 2023 was driven by discrete tax benefits of $0.9 million, primarily related to the Company’s share-based compensation.

As of October 28, 2023, 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 international earnings, as required by the Tax Cuts and Jobs Act.  The Company periodically evaluates its international investment opportunities and plans, as well as its international working capital needs, to determine the level of investment required and, accordingly, determines the level of international earnings that is considered indefinitely reinvested.  Based upon that evaluation, earnings of the Company’s international 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 international earnings.

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Commitments and Contingencies

9 Months Ended

Oct. 28, 2023

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.  The Company

received permission from the oversight authorities to convert the pump and treat system to a passive treatment barrier system and completed the conversion during the second quarter of 2023.

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 and to work with the oversight authorities on the off-site work plan.

The cumulative expenditures for both on-site and off-site remediation through October 28, 2023 were $34.0 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 October 28, 2023 is $9.4 million, of which $8.4 million is recorded within other liabilities and $1.0 million is recorded within other accrued expenses.  Of the total $9.4 million reserve, $4.8 million is for off-site remediation and $4.6 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 $13.2 million as of October 28, 2023.  The Company expects to spend approximately $0.6 million in 2023, $0.1 million in each of the following four years and $12.2 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 expensed as incurred.

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Basis of Presentation and General (Policies)

9 Months Ended

Oct. 28, 2023

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.  Although the third fiscal quarter has historically accounted for a substantial portion of the Company’s earnings for the year, the Company has experienced more equal distribution among the quarters in recent years.  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.

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 28, 2023.

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 condensed consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

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, to sell Sam Edelman, Naturalizer and other branded footwear in China.  The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”).  During the thirty-nine weeks ended October 28, 2023, capital contributions of $2.0 million were made to CLT, including $1.0 million received from Brand Investment Holding.  During the thirty-nine weeks ended October 29, 2022, capital contributions of $6.3 million were made to CLT, including $3.1 million received from Brand Investment Holding.  

Net sales and operating earnings (loss) of CLT for the periods ended October 28, 2023 and October 29, 2022 were as follows:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	6,810	$	5,418	$	19,675	$	13,167
Operating earnings (loss)		229		(302)		1,327		(631)

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

Supplier Finance Program

Supplier Finance Program

The Company facilitates a voluntary supplier finance program (“the Program”) that provides certain of the Company’s suppliers the opportunity to sell receivables related to products that the Company has purchased to participating financial institutions at a rate that leverages the Company’s credit rating, which may be more beneficial to the suppliers than the rate they can obtain based upon their own credit rating. The Company negotiates payment and other terms directly with the suppliers, regardless of whether the supplier participates in the Program, and the Company’s responsibility is limited to making payment based on the terms originally negotiated with the supplier.  The suppliers that participate in the Program have discretion to determine which invoices, if any, are sold to the participating financing institutions.  The liabilities to the suppliers that participate in the Program are presented as accounts payable in the Company’s condensed

consolidated balance sheets, with changes reflected within cash flows from operating activities when settled.  As of October 28, 2023 and October 29, 2022, the Company had $25.0 million and $17.8 million, respectively, of accounts payable subject to the Program arrangements.

Property and Equipment, Held for Sale

Property and Equipment, Held for Sale

The Company continues to actively market for sale its nine-acre corporate headquarters campus (the “Campus”) located in Clayton, Missouri and, as of October 28, 2023, was engaged in discussions with multiple potential buyers.  The Company expects the Campus to qualify as a completed sale within the next year.  Accordingly, the Campus, primarily consisting of land and buildings, has been classified as property and equipment, held for sale on the condensed consolidated balance sheets as of October 28, 2023 within the Eliminations and Other category.  The Company evaluated the Campus asset group for impairment and determined that no indicators were present as of October 28, 2023.

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Basis of Presentation and General (Tables)

9 Months Ended

Oct. 28, 2023

CLT Brand Solutions

Basis of Presentation and General

Schedule of net sales and operating earnings (loss) in noncontrolling interests

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	6,810	$	5,418	$	19,675	$	13,167
Operating earnings (loss)		229		(302)		1,327		(631)

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Revenues (Tables)

9 Months Ended

Oct. 28, 2023

Revenues

Schedule of disaggregated revenue by segment and major source

	Thirteen Weeks Ended October 28, 2023
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	388,764	$	17,126	$	—	$	405,890
E-commerce - Company websites (1)		60,276		56,204		—		116,480
E-commerce - wholesale drop-ship (1)		—		34,151		(1,720)		32,431
Total direct-to-consumer sales		449,040		107,481		(1,720)		554,801
Wholesale - e-commerce (1)		—		72,424		—		72,424
Wholesale - landed		—		121,893		(6,924)		114,969
Wholesale - first cost		—		16,332		—		16,332
Licensing and royalty		612		2,627		—		3,239
Other (2)		121		18		—		139
Net sales	$	449,773	$	320,775	$	(8,644)	$	761,904

	Thirteen Weeks Ended October 29, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	415,678	$	14,810	$	—	$	430,488
E-commerce - Company websites (1)		65,549		53,673		—		119,222
E-commerce - wholesale drop-ship (1)		—		40,672		(1,854)		38,818
Total direct-to-consumer sales		481,227		109,155		(1,854)		588,528
Wholesale - e-commerce (1)		—		59,035		—		59,035
Wholesale - landed		—		135,161		(5,081)		130,080
Wholesale - first cost		—		16,424		—		16,424
Licensing and royalty		601		3,454		—		4,055
Other (2)		123		13		—		136
Net sales	$	481,951	$	323,242	$	(6,935)	$	798,258

	Thirty-Nine Weeks Ended October 28, 2023
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	1,065,448	$	50,323	$	—	$	1,115,771
E-commerce - Company websites (1)		145,585		163,088		—		308,673
E-commerce - wholesale drop-ship (1)		—		97,565		(4,119)		93,446
Total direct-to-consumer sales		1,211,033		310,976		(4,119)		1,517,890
Wholesale - e-commerce (1)		—		181,980		—		181,980
Wholesale - landed		—		377,033		(36,043)		340,990
Wholesale - first cost		—		67,940		—		67,940
Licensing and royalty		1,775		9,193		—		10,968
Other (2)		361		42		—		403
Net sales	$	1,213,169	$	947,164	$	(40,162)	$	2,120,171

	Thirty-Nine Weeks Ended October 29, 2022
					Eliminations and
($ thousands)	Famous Footwear		Brand Portfolio		Other		Total
Retail stores	$	1,133,276	$	43,371	$	—	$	1,176,647
E-commerce - Company websites (1)		167,604		155,698		—		323,302
E-commerce - wholesale drop-ship (1)		—		106,348		(3,759)		102,589
Total direct-to-consumer sales		1,300,880		305,417		(3,759)		1,602,538
Wholesale - e-commerce (1)		—		167,494		—		167,494
Wholesale - landed		—		441,544		(40,408)		401,136
Wholesale - first cost		—		88,205		—		88,205
Licensing and royalty		1,538		10,329		—		11,867
Other (2)		410		54		—		464
Net sales	$	1,302,828	$	1,013,043	$	(44,167)	$	2,271,704

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

(2) Includes breakage revenue from unredeemed gift cards

Schedule of significant contract balances from contracts with customers

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Customer allowances and discounts	$	23,849	$	23,164	$	21,917
Loyalty programs liability		13,770		17,690		17,732
Returns reserve		14,609		16,619		12,038
Gift card liability		5,664		5,718		6,659

Schedule of allowance for expected credit losses

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Balance, beginning of period	$	8,903	$	9,601
Adjustment to expected credit losses		1,053		(303)
Uncollectible accounts written off, net of recoveries		18		(300)
Balance, end of period	$	9,974	$	8,998

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Earnings Per Share (Tables)

9 Months Ended

Oct. 28, 2023

Earnings Per Share

Schedule of earnings per share, basic and diluted

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands, except per share amounts)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
NUMERATOR
Net earnings	$	47,015	$	38,992	$	116,172	$	140,529
Net (earnings) loss attributable to noncontrolling interests		(101)		254		(588)		404
Net earnings attributable to Caleres, Inc.	$	46,914	$	39,246	$	115,584	$	140,933
Net earnings allocated to participating securities		(2,121)		(1,723)		(5,103)		(5,951)
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities	$	44,793	$	37,523	$	110,481	$	134,982
DENOMINATOR
Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders		33,933		34,379		34,206		35,207
Dilutive effect of share-based awards		—		507		—		450
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders		33,933		34,886		34,206		35,657
Basic earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.09	$	3.23	$	3.83
Diluted earnings per common share attributable to Caleres, Inc. shareholders	$	1.32	$	1.08	$	3.23	$	3.79

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Business Segment Information (Tables)

9 Months Ended

Oct. 28, 2023

Business Segment Information

Schedule of segment reporting information, by segment

	Famous		Brand		Eliminations
($ thousands)	Footwear		Portfolio		and Other		Total
Thirteen Weeks Ended October 28, 2023
Net sales	$	449,773	$	320,775	$	(8,644)	$	761,904
Intersegment sales (1)		—		8,644		—		8,644
Operating earnings (loss)		46,600		38,211		(20,393)		64,418
Segment assets		828,691		834,645		163,557		1,826,893
Thirteen Weeks Ended October 29, 2022
Net sales	$	481,951	$	323,242	$	(6,935)	$	798,258
Intersegment sales (1)		—		6,935		—		6,935
Operating earnings (loss)		59,267		22,304		(27,724)		53,847
Segment assets		833,268		955,712		159,333		1,948,313
Thirty-Nine Weeks Ended October 28, 2023
Net sales	$	1,213,169	$	947,164	$	(40,162)	$	2,120,171
Intersegment sales (1)		—		40,162		—		40,162
Operating earnings (loss)		104,286		107,708		(48,286)		163,708
Thirty-Nine Weeks Ended October 29, 2022
Net sales	$	1,302,828	$	1,013,043	$	(44,167)	$	2,271,704
Intersegment sales (1)		—		44,167		—		44,167
Operating earnings (loss)		171,451		93,063		(76,052)		188,462

(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				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Operating earnings	$	64,418	$	53,847	$	163,708	$	188,462
Interest expense, net		(4,488)		(4,003)		(15,240)		(8,886)
Other income, net		1,552		2,997		4,660		9,636
Earnings before income taxes	$	61,482	$	52,841	$	153,128	$	189,212

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Inventories (Tables)

9 Months Ended

Oct. 28, 2023

Inventories

Schedule of inventory, current

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Raw materials	$	14,381	$	21,044	$	21,172
Work-in-process		628		629		569
Finished goods		541,025		627,584		558,474
Inventories, net	$	556,034	$	649,257	$	580,215

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Oct. 28, 2023

Goodwill and Intangible Assets

Schedule of intangible assets and goodwill

($ thousands)	October 28, 2023		October 29, 2022		January 28, 2023
Intangible Assets
Famous Footwear	$	2,800	$	2,800	$	2,800
Brand Portfolio (1)		342,083		342,083		342,083
Total intangible assets		344,883		344,883		344,883
Accumulated amortization		(143,564)		(131,419)		(134,447)
Total intangible assets, net		201,319		213,464		210,436
Goodwill
Brand Portfolio (2)		4,956		4,956		4,956
Total goodwill		4,956		4,956		4,956
Goodwill and intangible assets, net	$	206,275	$	218,420	$	215,392

(1) The carrying amount of intangible assets as of October 28, 2023, October 29, 2022  and January 28, 2023 is presented net of accumulated impairment charges of $106.2 million.

(2) The carrying amount of goodwill as of October 28, 2023, October 29, 2022 and January 28, 2023 is presented net of accumulated impairment charges of $415.7 million.

Schedule of finite-lived and indefinite lived intangible assets

($ thousands)	October 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	128,592	$	10,200	$	160,696
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		14,972		4,005		25,223
		$	451,088	$	143,564	$	106,205	$	201,319
	October 29, 2022
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	119,461	$	10,200	$	169,827
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		11,958		4,005		28,237
		$	451,088	$	131,419	$	106,205	$	213,464
	January 28, 2023
	Estimated Useful Lives			Accumulated		Accumulated
	(In Years)	Cost Basis		Amortization		Impairment		Net Carrying Value
Trade names	2 - 40	$	299,488	$	121,928	$	10,200	$	167,360
Trade names	Indefinite		107,400		—		92,000		15,400
Customer relationships	15 - 16		44,200		12,519		4,005		27,676
		$	451,088	$	134,447	$	106,205	$	210,436

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Leases (Tables)

9 Months Ended

Oct. 28, 2023

Leases

Schedule of components of lease expenses

	Thirteen Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating lease expense	$	39,308	$	38,116
Variable lease expense		10,404		10,679
Short-term lease expense		727		970
Total lease expense	$	50,439	$	49,765

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Operating lease expense	$	117,241	$	109,810
Variable lease expense		32,154		29,567
Short-term lease expense		2,157		3,340
Sublease income		—		(59)
Total lease expense	$	151,552	$	142,658

​
Supplemental cash flow information related to leases is as follows:

	Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022
Cash paid for lease liabilities	$	124,691	$	125,967
Cash received from sublease income		—		59

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Shareholders' Equity (Tables)

9 Months Ended

Oct. 28, 2023

Shareholders' Equity

Schedule of accumulated other comprehensive loss

			Pension and		Accumulated
	Foreign		Other		Other
	Currency		Postretirement		Comprehensive
($ thousands)	Translation		Transactions (1)		(Loss) Income
Balance at July 29, 2023	$	(1,313)	$	(24,217)	$	(25,530)
Other comprehensive loss before reclassifications		(726)		—		(726)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		888		888
Tax benefit		—		(228)		(228)
Net reclassifications		—		660		660
Other comprehensive (loss) income		(726)		660		(66)
Balance at October 28, 2023	$	(2,039)	$	(23,557)	$	(25,596)
Balance at July 30, 2022	$	(485)	$	(6,795)	$	(7,280)
Other comprehensive loss before reclassifications		(815)		—		(815)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		994		994
Tax benefit		—		(86)		(86)
Net reclassifications		—		908		908
Other comprehensive (loss) income		(815)		908		93
Balance at October 29, 2022	$	(1,300)	$	(5,887)	$	(7,187)
Balance at January 28, 2023	$	(1,213)	$	(25,537)	$	(26,750)
Other comprehensive loss before reclassifications		(826)		—		(826)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		2,664		2,664
Tax benefit		—		(684)		(684)
Net reclassifications		—		1,980		1,980
Other comprehensive (loss) income		(826)		1,980		1,154
Balance at October 28, 2023	$	(2,039)	$	(23,557)	$	(25,596)
Balance at January 29, 2022	$	(788)	$	(7,818)	$	(8,606)
Other loss income before reclassifications		(512)		—		(512)
Reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—		2,348		2,348
Tax benefit		—		(417)		(417)
Net reclassifications		—		1,931		1,931
Other comprehensive (loss) income		(512)		1,931		1,419
Balance at October 29, 2022	$	(1,300)	$	(5,887)	$	(7,187)

(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.

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Share-Based Compensation (Tables)

9 Months Ended

Oct. 28, 2023

Share-Based Compensation

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

	Thirteen Weeks Ended				Thirteen Weeks Ended
	October 28, 2023				October 29, 2022
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
July 29, 2023	1,608,057	$	21.55	July 30, 2022	1,579,202	$	17.53
Granted	10,906		28.35	Granted	45,050		26.65
Forfeited	(6,650)		21.48	Forfeited	(15,500)		21.00
Vested	(3,000)		9.76	Vested	(58,000)		13.16
October 28, 2023	1,609,313	$	21.62	October 29, 2022	1,550,752	$	17.92

	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023				October 29, 2022
		Weighted-				Weighted-
	Total Number	Average			Total Number	Average
	of Restricted	Grant Date			of Restricted	Grant Date
	Shares		Fair Value		Shares	Fair Value
January 28, 2023	1,603,960	$	18.57	January 29, 2022	1,390,397	$	14.24
Granted	590,900		22.97	Granted	726,720		21.45
Forfeited	(150,823)		18.68	Forfeited	(95,716)		15.35
Vested	(434,724)		13.24	Vested	(470,649)		13.02
October 28, 2023	1,609,313	$	21.62	October 29, 2022	1,550,752	$	17.92

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Retirement and Other Benefit Plans (Tables)

9 Months Ended

Oct. 28, 2023

Notes Tables

Schedule of net benefit costs

	Pension Benefits				Other Postretirement Benefits
	Thirteen Weeks Ended				Thirteen Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	1,256	$	1,786	$	—	$	—
Interest cost		3,635		2,997		12		9
Expected return on assets		(6,087)		(6,997)		—		—
Amortization of:
Actuarial loss (gain)		946		779		(27)		(26)
Prior service income		(31)		(79)		—		—
Settlement cost		—		320		—		—
Total net periodic benefit income	$	(281)	$	(1,194)	$	(15)	$	(17)

	Pension Benefits				Other Postretirement Benefits
	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	3,767	$	5,358	$	—	$	—
Interest cost		10,905		8,994		36		27
Expected return on assets		(18,265)		(21,005)		—		—
Amortization of:
Actuarial loss (gain)		2,840		2,343		(82)		(78)
Prior service income		(94)		(237)		—		—
Settlement cost		—		320		—		—
Total net periodic benefit income	$	(847)	$	(4,227)	$	(46)	$	(51)

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Fair Value Measurements (Tables)

9 Months Ended

Oct. 28, 2023

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)
October 28, 2023:
Non-qualified deferred compensation plan assets	$	8,908	$	8,908	$	—	$	—
Non-qualified deferred compensation plan liabilities		(8,908)		(8,908)		—		—
Non-qualified restoration plan liabilities		(173)		(173)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,547)		(1,547)		—		—
Restricted stock units for non-employee directors		(2,057)		(2,057)		—		—
October 29, 2022:
Non-qualified deferred compensation plan assets		7,769		7,769		—		—
Non-qualified deferred compensation plan liabilities		(7,769)		(7,769)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,805)		(1,805)		—		—
Restricted stock units for non-employee directors		(2,220)		(2,220)		—		—
January 28, 2023:
Non-qualified deferred compensation plan assets		7,890		7,890		—		—
Non-qualified deferred compensation plan liabilities		(7,890)		(7,890)		—		—
Deferred compensation plan liabilities for non-employee directors		(1,662)		(1,662)		—		—
Restricted stock units for non-employee directors		(2,028)		(2,028)		—		—

Details of long-lived asset impairment charges

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
($ thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Long-Lived Asset Impairment Charges
Famous Footwear	$	175	$	—	$	589	$	419
Brand Portfolio		—		—		—		1,560
Total long-lived asset impairment charges	$	175	$	—	$	589	$	1,979

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Basis of Presentation and General (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023 USD ($) a	Oct. 29, 2022 USD ($)	Oct. 28, 2023 USD ($) a	Oct. 29, 2022 USD ($)
Basis of Presentation and General
Net sales	$ 761,904	$ 798,258	$ 2,120,171	$ 2,271,704
Operating earnings (loss)	64,418	53,847	163,708	188,462
Accounts payable subject to supply chain financing arrangements	$ 25,000	17,800	$ 25,000	17,800
Disposal Group, Held-for-sale, Not Discontinued Operations | Corporate Headquarters, Clayton, Missouri
Basis of Presentation and General
Number of acres | a	9		9
CLT Brand Solutions
Basis of Presentation and General
Percentage of joint venture	50.00%		50.00%
Brand Investment Holding Ltd | Related Party
Basis of Presentation and General
Capital Contributions			$ 1,000	3,100
CLT Brand Solutions
Basis of Presentation and General
Net sales	$ 6,810	5,418	19,675	13,167
Operating earnings (loss)	$ 229	$ (302)	1,327	(631)
CLT Brand Solutions | Related Party
Basis of Presentation and General
Capital Contributions			$ 2,000	$ 6,300

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Revenues
Net sales	$ 761,904	$ 798,258	$ 2,120,171	$ 2,271,704
Retail stores
Revenues
Net sales	405,890	430,488	1,115,771	1,176,647
E-commerce - Company websites
Revenues
Net sales	116,480	119,222	308,673	323,302
E-commerce - wholesale drop ship
Revenues
Net sales	32,431	38,818	93,446	102,589
Direct to consumer
Revenues
Net sales	554,801	588,528	1,517,890	1,602,538
Wholesale - e-commerce
Revenues
Net sales	72,424	59,035	181,980	167,494
Wholesale - landed
Revenues
Net sales	114,969	130,080	340,990	401,136
Wholesale - first cost
Revenues
Net sales	16,332	16,424	67,940	88,205
Licensing and royalty
Revenues
Net sales	3,239	4,055	10,968	11,867
Other.
Revenues
Net sales	139	136	403	464
Operating Segments | Famous Footwear
Revenues
Net sales	449,773	481,951	1,213,169	1,302,828
Operating Segments | Famous Footwear | Retail stores
Revenues
Net sales	388,764	415,678	1,065,448	1,133,276
Operating Segments | Famous Footwear | E-commerce - Company websites
Revenues
Net sales	60,276	65,549	145,585	167,604
Operating Segments | Famous Footwear | E-commerce - wholesale drop ship
Revenues
Net sales	0	0	0	0
Operating Segments | Famous Footwear | Direct to consumer
Revenues
Net sales	449,040	481,227	1,211,033	1,300,880
Operating Segments | Famous Footwear | Wholesale - e-commerce
Revenues
Net sales	0	0	0	0
Operating Segments | Famous Footwear | Wholesale - landed
Revenues
Net sales	0	0	0	0
Operating Segments | Famous Footwear | Wholesale - first cost
Revenues
Net sales	0	0	0	0
Operating Segments | Famous Footwear | Licensing and royalty
Revenues
Net sales	612	601	1,775	1,538
Operating Segments | Famous Footwear | Other.
Revenues
Net sales	121	123	361	410
Operating Segments | Brand Portfolio
Revenues
Net sales	320,775	323,242	947,164	1,013,043
Operating Segments | Brand Portfolio | Retail stores
Revenues
Net sales	17,126	14,810	50,323	43,371
Operating Segments | Brand Portfolio | E-commerce - Company websites
Revenues
Net sales	56,204	53,673	163,088	155,698
Operating Segments | Brand Portfolio | E-commerce - wholesale drop ship
Revenues
Net sales	34,151	40,672	97,565	106,348
Operating Segments | Brand Portfolio | Direct to consumer
Revenues
Net sales	107,481	109,155	310,976	305,417
Operating Segments | Brand Portfolio | Wholesale - e-commerce
Revenues
Net sales	72,424	59,035	181,980	167,494
Operating Segments | Brand Portfolio | Wholesale - landed
Revenues
Net sales	121,893	135,161	377,033	441,544
Operating Segments | Brand Portfolio | Wholesale - first cost
Revenues
Net sales	16,332	16,424	67,940	88,205
Operating Segments | Brand Portfolio | Licensing and royalty
Revenues
Net sales	2,627	3,454	9,193	10,329
Operating Segments | Brand Portfolio | Other.
Revenues
Net sales	18	13	42	54
Eliminations and Other
Revenues
Net sales	(8,644)	(6,935)	(40,162)	(44,167)
Eliminations and Other | Retail stores
Revenues
Net sales	0	0	0	0
Eliminations and Other | E-commerce - Company websites
Revenues
Net sales	0	0	0	0
Eliminations and Other | E-commerce - wholesale drop ship
Revenues
Net sales	(1,720)	(1,854)	(4,119)	(3,759)
Eliminations and Other | Direct to consumer
Revenues
Net sales	(1,720)	(1,854)	(4,119)	(3,759)
Eliminations and Other | Wholesale - e-commerce
Revenues
Net sales	0	0	0	0
Eliminations and Other | Wholesale - landed
Revenues
Net sales	(6,924)	(5,081)	(36,043)	(40,408)
Eliminations and Other | Wholesale - first cost
Revenues
Net sales	0	0	0	0
Eliminations and Other | Licensing and royalty
Revenues
Net sales	0	0	0	0
Eliminations and Other | Other.
Revenues
Net sales	$ 0	$ 0	$ 0	$ 0

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Revenues (Details) $ in Millions	9 Months Ended
	Oct. 28, 2023 USD ($) item	Oct. 29, 2022 USD ($)
Revenues
Number of performance obligations | item	2
Gift Card Breakage Term	24 months
Loyalty Program
Revenues
Contract with customer, liability, increase due to points and material rights earned on purchases	$ 41.9	$ 32.5
Contract with customer, liability, decrease due to expirations and redemptions	$ 45.9	$ 33.6

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Revenues - Contract Balances (Details) - USD ($) $ in Thousands	Oct. 28, 2023	Jan. 28, 2023	Oct. 29, 2022
Revenues
Customer allowances and discounts	$ 23,849	$ 21,917	$ 23,164
Loyalty programs liability	13,770	17,732	17,690
Returns reserve	14,609	12,038	16,619
Gift card liability	$ 5,664	$ 6,659	$ 5,718

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Revenues - Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022
Revenues
Balance, beginning of period	$ 8,903	$ 9,601
Adjustment to expected credit losses	1,053	(303)
Uncollectible accounts written off, net of recoveries	18	(300)
Balance, end of period	$ 9,974	$ 8,998

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Earnings Per Share - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Earnings Per Share
Net earnings	$ 47,015	$ 38,992	$ 116,172	$ 140,529
Net (earnings) loss attributable to noncontrolling interests	(101)	254	(588)	404
Net earnings attributable to Caleres, Inc.	46,914	39,246	115,584	140,933
Net earnings allocated to participating securities	(2,121)	(1,723)	(5,103)	(5,951)
Net earnings attributable to Caleres, Inc. after allocation of earnings to participating securities	$ 44,793	$ 37,523	$ 110,481	$ 134,982
Denominator for basic earnings per common share attributable to Caleres, Inc. shareholders	33,933	34,379	34,206	35,207
Dilutive effect of share-based awards (in shares)		507		450
Denominator for diluted earnings per common share attributable to Caleres, Inc. shareholders	33,933	34,886	34,206	35,657
Basic earnings per common share attributable to Caleres, Inc. shareholders	$ 1.32	$ 1.09	$ 3.23	$ 3.83
Diluted earnings per common share attributable to Caleres, Inc. shareholders	$ 1.32	$ 1.08	$ 3.23	$ 3.79

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Earnings Per Share (Details)	3 Months Ended		9 Months Ended
	Oct. 28, 2023 USD ($) item shares	Oct. 29, 2022 shares	Oct. 28, 2023 USD ($) item shares	Oct. 29, 2022 shares
Earnings (Loss) Per Share
Antidilutive securities excluded from computation of earnings per share, amount		16,667	0	16,667
Number of publicly announced share repurchase programs | item	2		2
Shares repurchased, exercise tax payable | $	$ 0		$ 0
Stock Repurchase Program, 2022
Earnings (Loss) Per Share
Treasury stock, shares, acquired (in shares)	763,000		763,000
Stock Repurchase Programs, 2019 and 2022
Earnings (Loss) Per Share
Treasury stock, shares, acquired (in shares)		838,025		2,622,845

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Restructuring and Other Special Charges (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Restructuring and Other Special Charges
Restructuring Charges, Total	$ 2,304	$ 2,910	$ 3,951	$ 2,910
Restructuring and Other Special Charges. | Restructuring and Other Special Charges.
Restructuring and Other Special Charges
Total restructuring costs	$ 2,300		$ 3,900
Restructuring and related cost, incurred cost, per diluted share	$ 0.05		$ 0.08
Restructuring and related cost, incurred cost, after tax	$ 1,700		$ 2,900
Other Accrued Expenses | Restructuring and Other Special Charges.
Restructuring and Other Special Charges
Restructuring reserve	2,600		2,600
Brand Portfolio | Restructuring and Other Special Charges. | Restructuring and Other Special Charges.
Restructuring and Other Special Charges
Total restructuring costs	800		1,700
Famous Footwear | Restructuring and Other Special Charges. | Restructuring and Other Special Charges.
Restructuring and Other Special Charges
Total restructuring costs	1,200		1,300
Eliminations and Other | Restructuring and Other Special Charges. | Restructuring and Other Special Charges.
Restructuring and Other Special Charges
Total restructuring costs	$ 300	$ 2,900	$ 900	$ 2,900
Restructuring and related cost, incurred cost, per diluted share		$ 0.07		$ 0.07
Restructuring and related cost, incurred cost, after tax		$ 2,700		$ 2,700

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Business Segment Information - Key Financial Measures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022	Jan. 28, 2023
Business Segment Information - Key Financial Measures
Net sales	$ 761,904	$ 798,258	$ 2,120,171	$ 2,271,704
Intersegment sales	8,644	6,935	40,162	44,167
Operating earnings (loss)	64,418	53,847	163,708	188,462
Segment assets	1,826,893	1,948,313	1,826,893	1,948,313	$ 1,836,472
Operating Segments | Famous Footwear
Business Segment Information - Key Financial Measures
Net sales	449,773	481,951	1,213,169	1,302,828
Operating earnings (loss)	46,600	59,267	104,286	171,451
Segment assets	828,691	833,268	828,691	833,268
Operating Segments | Brand Portfolio
Business Segment Information - Key Financial Measures
Net sales	320,775	323,242	947,164	1,013,043
Intersegment sales	8,644	6,935	40,162	44,167
Operating earnings (loss)	38,211	22,304	107,708	93,063
Segment assets	834,645	955,712	834,645	955,712
Eliminations and Other
Business Segment Information - Key Financial Measures
Net sales	(8,644)	(6,935)	(40,162)	(44,167)
Operating earnings (loss)	(20,393)	(27,724)	(48,286)	(76,052)
Segment assets	$ 163,557	$ 159,333	$ 163,557	$ 159,333

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Business Segment Information - Reconciliation of Operating Earnings Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Business Segment Information
Operating earnings	$ 64,418	$ 53,847	$ 163,708	$ 188,462
Interest expense, net	(4,488)	(4,003)	(15,240)	(8,886)
Other income, net	1,552	2,997	4,660	9,636
Earnings before income taxes	$ 61,482	$ 52,841	$ 153,128	$ 189,212

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Oct. 28, 2023	Jan. 28, 2023	Oct. 29, 2022
Inventories
Raw materials	$ 14,381	$ 21,172	$ 21,044
Work-in-process	628	569	629
Finished goods	541,025	558,474	627,584
Inventories, net	$ 556,034	$ 580,215	$ 649,257

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Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Oct. 28, 2023	Jan. 28, 2023	Oct. 29, 2022
Goodwill and Intangible Assets
Intangible assets	$ 344,883	$ 344,883	$ 344,883
Accumulated amortization	(143,564)	(134,447)	(131,419)
Total intangible assets, net	201,319	210,436	213,464
Goodwill	4,956	4,956	4,956
Goodwill and intangible assets, net	206,275	215,392	218,420
Finite-Lived Intangible Assets, Accumulated Impairment	106,205	106,205	106,205
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	342,083
Goodwill	4,956	4,956	4,956
Finite-Lived Intangible Assets, Accumulated Impairment	106,200	106,200	106,200
Goodwill, accumulated impairment charges	$ 415,700	$ 415,700	$ 415,700

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Goodwill and Intangible Assets - Finite and Infinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Jan. 28, 2023
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Accumulated Amortization	$ 143,564	$ 131,419	$ 134,447
Finite-Lived Intangible Assets, Accumulated Impairment	106,205	106,205	106,205
Indefinite-Lived Intangible Assets, Impairment	0	0
Intangible assets, cost basis	451,088	451,088	451,088
Intangible Assets, Net Carrying Value	201,319	213,464	210,436
Indefinite-lived Trade names
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Accumulated Impairment	92,000	92,000	92,000
Indefinite-Lived Intangible Assets, Cost Basis	107,400	107,400	107,400
Indefinite-Lived Intangible Assets, Net Carrying Value	15,400	15,400	15,400
Trade names
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Cost Basis	299,488	299,488	299,488
Finite-Lived Intangible Assets, Accumulated Amortization	128,592	119,461	121,928
Finite-Lived Intangible Assets, Accumulated Impairment	10,200	10,200	10,200
Finite-Lived Intangible Assets, Net Carrying Value	$ 160,696	$ 169,827	$ 167,360
Trade names | Minimum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (In Years)	2 years	2 years	2 years
Trade names | Maximum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (In Years)	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	14,972	11,958	12,519
Finite-Lived Intangible Assets, Accumulated Impairment	4,005	4,005	4,005
Finite-Lived Intangible Assets, Net Carrying Value	$ 25,223	$ 28,237	$ 27,676
Customer relationships | Minimum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (In Years)	15 years	15 years	15 years
Customer relationships | Maximum
Goodwill and Intangible Assets
Finite-Lived Intangible Assets, Estimated Useful Life (In Years)	16 years	16 years	16 years

XML

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Goodwill and Intangible Assets
Amortization of intangible assets	$ 3,000	$ 3,000	$ 9,117	$ 9,080
2023	11,900		11,900
2024	11,000		11,000
2025	11,000		11,000
2026	11,000		11,000
2027	$ 10,900		10,900
Goodwill, impairment loss			0	0
Indefinite-Lived Intangible Assets, Impairment			$ 0	$ 0

XML

Leases (Details) $ in Thousands	9 Months Ended
	Oct. 28, 2023 USD ($) lease location	Jan. 28, 2023 USD ($)	Oct. 29, 2022 USD ($)
Leases
Right-of-use asset obtained in exchange for operating lease liability	$ 94,300
Number of locations of Lease commitments not yet commenced in current fiscal year | location	11
Operating lease, right-of-use asset	$ 508,736	$ 518,196	$ 523,011
Fiscal Year 2023
Leases
Number of anticipated leases in current fiscal year | lease	6
Total operating lease liability	$ 5,200
Operating lease, right-of-use asset	$ 5,200
Fiscal Year 2024
Leases
Number of anticipated leases in fiscal year 2024 | lease	4
Total operating lease liability	$ 3,100
Operating lease, right-of-use asset	$ 3,100
Fiscal Year 2025
Leases
Number of anticipated leases in fiscal year 2025 | lease	1
Total operating lease liability	$ 300
Operating lease, right-of-use asset	$ 300

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Leases
Operating lease expense	$ 39,308	$ 38,116	$ 117,241	$ 109,810
Variable lease expense	10,404	10,679	32,154	29,567
Short-term lease expense	727	970	2,157	3,340
Sublease income				(59)
Total lease expense	$ 50,439	$ 49,765	$ 151,552	$ 142,658

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022
Leases
Cash paid for lease liabilities	$ 124,691	$ 125,967
Cash received from sublease income		$ 59

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Financing Arrangements (Details) - Revolving Credit Facility - USD ($) $ in Millions	Oct. 05, 2021	Oct. 28, 2023
Long-term and Short-term Financing Arrangements
Total long-term line of credit		$ 222.0
Letters of credit outstanding, amount		10.6
Line of credit facility, remaining borrowing capacity		$ 267.4
Fifth Amendment to Fourth Amended and Restated Credit Agreement
Long-term and Short-term Financing Arrangements
Line of credit facility, decrease in maximum borrowing capacity	$ 100.0
Line of credit facility, maximum borrowing capacity	500.0
Line of credit facility, option to increase, amount	$ 250.0
Debt instrument, decrease in basis spread on variable rate	0.75%
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	1.25

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Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Balance			$ (26,750)
Other comprehensive income (loss), net of tax	$ 34	$ (72)	926	$ 831
Balance	(25,596)	(7,187)	(25,596)	(7,187)
Foreign Currency Translation
Balance	(1,313)	(485)	(1,213)	(788)
Other comprehensive income (loss) before reclassifications	(726)	(815)	(826)	(512)
Other comprehensive income (loss), net of tax	(726)	(815)	(826)	(512)
Balance	(2,039)	(1,300)	(2,039)	(1,300)
Pension and Other Postretirement Transactions
Balance	(24,217)	(6,795)	(25,537)	(7,818)
Amounts reclassified from accumulated other comprehensive loss	888	994	2,664	2,348
Tax benefit	(228)	(86)	(684)	(417)
Net reclassifications	660	908	1,980	1,931
Other comprehensive income (loss), net of tax	660	908	1,980	1,931
Balance	(23,557)	(5,887)	(23,557)	(5,887)
Accumulated Other Comprehensive (Loss) Income
Balance	(25,530)	(7,280)	(26,750)	(8,606)
Other comprehensive income (loss) before reclassifications	(726)	(815)	(826)	(512)
Amounts reclassified from accumulated other comprehensive loss	888	994	2,664	2,348
Tax benefit	(228)	(86)	(684)	(417)
Net reclassifications	660	908	1,980	1,931
Other comprehensive income (loss), net of tax	(66)	93	1,154	1,419
Balance	$ (25,596)	$ (7,187)	$ (25,596)	$ (7,187)

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Share-Based Compensation (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended	9 Months Ended
	Oct. 28, 2023 USD ($) $ / shares shares	Oct. 29, 2022 USD ($) tranche $ / shares shares	Jul. 30, 2022 $ / shares	Oct. 28, 2023 USD ($) $ / shares shares	Oct. 29, 2022 USD ($) tranche $ / shares shares
Share-based Compensation
Share-based payment arrangement, expense | $	$ 4.1	$ 5.0		$ 10.9	$ 13.2
Share-based compensation arrangement by share-based payment award shares issued in period	3,365	20,699		590,706	621,154
Restricted Stock
Share-based Compensation
Granted, total number of restricted shares (in shares)	10,906	45,050		590,900	726,720
Granted (in dollars per share) | $ / shares	$ 28.35	$ 26.65		$ 22.97	$ 21.45
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				1 year	1 year
Granted, total number of restricted shares (in shares)		45,050		23,268	10,470
Restricted Stock | Share-based Compensation Award, Cliff-vesting, Tranche Two
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)				5,800
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		3 years	3 years
Granted, total number of restricted shares (in shares)				554,832	716,250
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		2 years	2 years
Share-based Compensation Arrangement By Share-based Payment Award Award Performance Percentage Earned	50.00%	50.00%		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	3 years
Granted, total number of restricted shares (in shares)				7,000
Share-based Compensation Arrangement By Share-based Payment Award Award Performance Percentage Earned	50.00%	50.00%		50.00%	50.00%
Restricted Stock | Share-based Compensation Award Graded Vesting Tranche Two | Maximum
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period				18 months
Performance Awards
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)				276,434	87,750
Granted (in dollars per share) | $ / shares				$ 23.12	$ 20.99
Number of tranches | tranche		4			4
Performance Awards | CFO
Share-based Compensation
Granted (in dollars per share) | $ / shares			$ 13.05		$ 24.31
Number of shares approved for accelerated vesting		30,000
Number of tranches of award accelerated under share based payment awards | tranche		2			2
Performance Awards | Minimum
Share-based Compensation
Share-based Compensation Arrangement By Share-based Payment Award Award Performance Percentage Earned				0.00%
Performance Awards | Maximum
Share-based Compensation
Share-based Compensation Arrangement By Share-based Payment Award Award Performance Percentage Earned				200.00%
Percentage of targeted award under share-based payment arrangement				100.00%
Performance Awards | Share-based Compensation Award Accelerated Vesting | CFO
Share-based Compensation
Incremental expense related to accelerated award vesting | $		$ 0.4			$ 0.4
Performance Awards | 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
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, total number of restricted shares (in shares)				50,376	41,325
Granted (in dollars per share) | $ / shares	$ 28.80	$ 24.30		$ 19.72	$ 27.23
Share-based Compensation Arrangement By Share-based Payment Award Equity Instruments Other Than Options Grants In Period Dividend Equivalent	1,081	1,314		3,840	4,680
Long-term incentive award
Share-based Compensation
Share-based compensation arrangement by share-based payment award, award vesting period					3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Value | $					$ 8.3
Share Based Compensation Arrangement By Share Based Payment Award Award, Performance Period					3 years
Long-term incentive award | Maximum
Share-based Compensation
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Value | $					$ 16.6

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Share-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock - $ / shares	3 Months Ended		6 Months Ended	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Jul. 30, 2022	Oct. 28, 2023	Oct. 29, 2022
Share-based Compensation
Number of Nonvested Shares (in shares)	1,608,057	1,579,202	1,390,397	1,603,960	1,390,397
Granted (in shares)	10,906	45,050		590,900	726,720
Forfeited (in shares)	(6,650)	(15,500)		(150,823)	(95,716)
Vested (in shares)	(3,000)	(58,000)		(434,724)	(470,649)
Number of Nonvested Shares (in shares)	1,609,313	1,550,752	1,579,202	1,609,313	1,550,752
Nonvested, weighted-average grant date fair value (in dollars per share)	$ 21.55	$ 17.53	$ 14.24	$ 18.57	$ 14.24
Granted (in dollars per share)	28.35	26.65		22.97	21.45
Forfeited (in dollars per share)	21.48	21.00		18.68	15.35
Vested (in dollars per share)	9.76	13.16		13.24	13.02
Nonvested, weighted-average grant date fair value (in dollars per share)	$ 21.62	$ 17.92	$ 17.53	$ 21.62	$ 17.92

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Retirement and Other Benefit Plans - Net Periodic Benefit Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Retirement and Other Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration]	Other income, net	Other income, net	Other income, net	Other income, net
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other income, net	Other income, net	Other income, net	Other income, net
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other income, net	Other income, net	Other income, net	Other income, net
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other income, net	Other income, net	Other income, net	Other income, net
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other income, net	Other income, net	Other income, net	Other income, net
Pension Plan
Retirement and Other Benefit Plans
Service cost	$ 1,256	$ 1,786	$ 3,767	$ 5,358
Interest cost	3,635	2,997	10,905	8,994
Expected return on assets	(6,087)	(6,997)	(18,265)	(21,005)
Actuarial loss (gain)	946	779	2,840	2,343
Prior service income	(31)	(79)	(94)	(237)
Settlement cost		320		320
Total net periodic benefit income	(281)	(1,194)	(847)	(4,227)
Other Postretirement Benefits Plan
Retirement and Other Benefit Plans
Service cost	0	0
Interest cost	12	9	36	27
Expected return on assets	0	0
Actuarial loss (gain)	(27)	(26)	(82)	(78)
Prior service income	0	0
Settlement cost	0	0
Total net periodic benefit income	$ (15)	$ (17)	$ (46)	$ (51)

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Fair Value Measurements (Details) - USD ($) $ in Millions	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022
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	$ 559.0	$ 564.6
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	9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Jan. 28, 2023
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
Non-qualified deferred compensation plan assets	8,908	7,769	$ 7,890
Non-qualified deferred compensation plan liabilities	(8,908)	(7,769)	(7,890)
Non-qualified restoration plan liabilities	(173)
Deferred compensation plan liabilities for non-employee directors	(1,547)	(1,805)	(1,662)
Restricted stock units for non-employee directors	(2,057)	(2,220)	(2,028)
Fair Value, Recurring | Fair Value, Inputs, Level 1
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Non-qualified deferred compensation plan assets	8,908	7,769	7,890
Non-qualified deferred compensation plan liabilities	(8,908)	(7,769)	(7,890)
Non-qualified restoration plan liabilities	(173)
Deferred compensation plan liabilities for non-employee directors	(1,547)	(1,805)	(1,662)
Restricted stock units for non-employee directors	(2,057)	(2,220)	(2,028)
Fair Value, Recurring | Fair Value, Inputs, Level 2
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Non-qualified deferred compensation plan assets	0	0	0
Non-qualified deferred compensation plan liabilities	0	0	0
Non-qualified restoration plan liabilities	0
Deferred compensation plan liabilities for non-employee directors	0	0	0
Restricted stock units for non-employee directors	0	0	0
Fair Value, Recurring | Fair Value, Inputs, Level 3
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Non-qualified deferred compensation plan assets	0	0	0
Non-qualified deferred compensation plan liabilities	0	0	0
Non-qualified restoration plan liabilities	0
Deferred compensation plan liabilities for non-employee directors	0	0	0
Restricted stock units for non-employee directors	$ 0	$ 0	$ 0

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Fair Value Measurements - Impairment Charges (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Oct. 28, 2023	Oct. 28, 2023	Oct. 29, 2022
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Total long-lived asset impairment charges	$ 175	$ 589	$ 1,979
Famous Footwear
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Total long-lived asset impairment charges	$ 175	$ 589	419
Brand Portfolio
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis
Total long-lived asset impairment charges			$ 1,560

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Fair Value Measurements - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Oct. 28, 2023	Oct. 29, 2022
Revolving Credit Facility | Fair Value, Inputs, Level 1
Fair Value of Financial Instruments
Borrowings under revolving credit agreement	$ 222.0	$ 364.5

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Income Taxes
Effective income tax rate reconciliation percent	23.50%	26.20%	24.10%	25.70%
Discrete tax adjustments			$ 0.9
Deferred taxes			$ 0.0

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Commitments and Contingencies (Details) - Redfield Site $ in Thousands	9 Months Ended
	Oct. 28, 2023 USD ($)
COMMITMENTS AND CONTINGENCIES
Cumulative environmental remediation expense	$ 34,000
Environmental exit costs, assets previously disposed, liability for remediation	9,400
Reserve for anticipated future remediation activities for off site remediation	4,800
Reserve for anticipated future remediation activities for on site remediation	$ 4,600
Accrual for environmental loss contingencies, discount rate	4.80%
Accrual for environmental loss contingencies, gross, total	$ 13,200
Accrual for environmental loss contingencies, undiscounted, remainder of current fiscal year	600
Accrual for environmental loss contingencies, undiscounted, first year	100
Accrual for environmental loss contingencies, undiscounted, second year	100
Accrual for environmental loss contingencies, undiscounted, third year	100
Accrual for environmental loss contingencies, undiscounted, fourth year	100
Accrual for environmental loss contingencies, undiscounted, after fourth year	12,200
Other Noncurrent Liabilities
COMMITMENTS AND CONTINGENCIES
Environmental exit costs, assets previously disposed, liability for remediation	8,400
Other Accrued Expenses
COMMITMENTS AND CONTINGENCIES
Environmental exit costs, assets previously disposed, liability for remediation	$ 1,000

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2023	Oct. 29, 2022	Oct. 28, 2023	Oct. 29, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 46,914	$ 39,246	$ 115,584	$ 140,933

XML

Insider Trading Arrangements

3 Months Ended

Oct. 28, 2023

shares

John W. Schmidt

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

On October 11, 2023, John W. Schmidt, President, Chief Executive Officer and Director, adopted a Rule 10b5-1 plan (“Rule 10b5-1 Plan”) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act of 1934.  Mr. Schmidt’s Rule 10b5-1 Plan provides for the sale of up to 76,000 shares of the Company’s common stock, pursuant to the terms of the Rule 10b5-1 Plan.  The Rule 10b5-1 Plan expires on July 12, 2024, or upon the earlier completion of all authorized transactions under such Rule 10b5-1 Plan.

Name

John W. Schmidt

Title

President, Chief Executive Officer and Director

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

October 11, 2023

Aggregate Available

76,000

Expiration Date

July 12, 2024

Other directors or Section 16 officers

Trading Arrangements, by Individual

Rule 10b5-1 Arrangement Adopted

false

Non-Rule 10b5-1 Arrangement Adopted

false

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false