CAL cALERES Investor Day 2015

8/17/2019 CAL cALERES Investor Day 2015

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Investor DayOctober 29, 2015


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Under the private securities litigation reform act of 1995This presentation contains certain forward-looking statements andexpectations regarding the company’s future performance and brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These riskconsumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general ecorapidly changing fashion trends and purchasing patterns; (iii) intense competitionwithin the footwear industry; (iv) political andecother threats to the continued and uninterrupted flow of inventory from China and other countries, where the Company relies hmanufacturing facilities for a significant amount of its inventory; (v) the ability to accurately forecast sales and managecybersecurity threats or other major disruption to the Company’s information technology systems; (vii) customer concentconsolidation in the retail industry; (viii) a disruption in the Company’s distributioncenters; (ix) the ability to recruit and retain seother key associates; (x) foreign currency fluctuations; (xi) compliance with applicable laws and standards with respect to labsafety issues; (xii) the ability to secure/exit leases on favorable terms; (xiii) the ability to attract, retain, andmaintain goodrelationshprotect intellectual property rights; and (xiv) the ability to maintain relationships with current suppliers. The company's reports

Exchange Commissioncontain detailed information relating to such factors, including, without limitation, the information under thin Item 1A of the company’s Annual Report on Form 10-K for the year ended January 31, 2015, which information is incorporatedbyupdated by the company’s Quarterly Reports on Form 10-Q. The company does not undertake any obligation or plan to update tstatements, even though its situation may change. In this presentation, the company’s financial results are provided both in accoaccepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the company provides hfuture, operating earnings and earnings per diluted share adjusted to exclude certain gains, charges and recoveries, which aremeasures. These results are included as a complement to results provided in accordance with GAAP because management belifinancial measures help identify underlying trends in the company’s business and provide useful information to both managemexcluding certain items that may not be indicative of the company’s core operating results. These measures should not be considesuperior to GAAP results. Reconciliations to the applicable GAAP financial measures have been included in this presentation.document, unless otherwise noted, relatedto diluted earnings per common share attributable to Caleres, Inc. shareholders, are presdiluted share, respectively.

Safe harbor statement


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Agenda

Opening Remarks

Financials

Famous Footwear

Brand Portfolio

Sam Edelman

Q&A

Diane SullivanCEO, President and

Ken HannahSenior Vice Presiden

Rick AusickPresident

Jay Schmidt

President

Sam EdelmanPresident

Executive Team


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1) Excludes Shoes.com; 2) FY’15 adjusted diluted EPS assumes 3Q’15 at $0.78 Street estimate

$1.24B

$0.94

~$2.61B

$1.95to $2.00

FY’15 expectations

Sales1

3%Adj. EPS

24%Sales1

+3%Adj. EPS2

+13% to 16%

1H’15 FY’15


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Established in

18782014 Revenue

$2.6BMore Than

1,200Retail Stores

+20Brand Portfolio

Brands

3 TARGETED PLATFOR

Who we are


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Our transition

Fit to Feet Fit to Gender Fit to Personality Fit to Lifesty

18791878


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MISSIONInspire people to

Feel good… Feet First!

VALUESPassion

AccountabilityCuriosityCreativity

Caring

BRAND ETHOBe ferocious about

BUSINESS STRATEGYWe build a diverse portfolio

of global brandswith broad appeal

REASON TO BELIEVWe leverage over 135 years of e

to provide the right fit for thetimes, personality and lifes

Our vision


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Our brand identity


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Drive material change in company’s financial performanceFocused on consistent, profitable and sustainable adjusted EPS growth

LEANER, STRONGER AND MORE PROFITABLE COMPANY

INVEST FOR ORGANIC

2011 2012 2013 2014

$0.70

$1.13$1.41

$1.72$1.

$2.29B $2.39B $2.45B $2.53BNet Sales2

1) FY’15 adjusted diluted EPS assumes 3Q’15 at $0.78 Street estimate; 2) Excludes discontinued operations, exited brands and businesses


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Drive material change in company’s financial performanceFocused on consistent, profitable and sustainable adjusted EPS growth


2011 2012 2013 2014

$0.70

$1.13$1.41

$1.72

Net Sales1

Sold AND 1

Closed Sun Prairie DC

Licensed and exitedunaligned brands

Closed Sikeston DC

Accelerated closure ofunderperforming

stores

Exited Etienne Aigner

Sold Avia and Nevados

Sold China factories

Exited Vera Wang

Sold Shoes.com

1) Excludes discontinued operations, exited brands and businesses

$2.29B $2.39B $2.45B $2.53B


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• Incubators/new brands:Launched and/or developingDVF, George Brown, Bzeesand Vince Men’s

• Acquisition: AcquiredFranco Sarto brand

• Stores: Opened 100 Famous

Footwear, four Sam Edelmanand nine Naturalizer stores

• Brand development:Engaged brand developmentconsultants on key growthopportunities

• Global supply chain: Identifiedopportunities to drive efficienciesand reduce COGs

• Omi-channel: Utilized technologyto interact with consumers on theirterms, delivering a seamlessconsumer experience regardless ofchannel

• Consumer fulfillment: Working toimprove speed, flexibility andcapacity, to meet evolvingconsumer needs

• Cyber-security: Improvedcapabilities of protecting, detectingand recovering

• Key competenCreated two dteams and elevand innovation

• Elevated talenpositions: Retatalent

• Performance m

• Corporate rebmind-shift in aculture, and coamplify perfor

Simultaneously invested for organic growthKey strategic investments in 2014 and 2015

Investments in Brands Investments in Infrastructure Investmen


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Higher ambitionRefining our strategic approach and investing in our next phase of growth

Brown Shoe Company(2011 to 2015)

Focus on three consumer platformsKeep our portfolio relevant

Invest in avenues of growthRefocusing resources

Drive profit growth Achieve financial targets

Consumer centric cultureListen with intent, respond with speed

CALERES(2015 to 2020)

Portfolio managementKeep our portfolio and brands re

Dial-up growthFocus on financial performance and m

Consumer engagementBecome great brand storytelle

Elevate culture and talenBe a magnet for talent

FOCUSED ON CONSISTENT, PROFITABLE AND SUSTAINABLE GRO


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Higher ambitionRefining our strategic approach and investing in our next phase of growth

• Continuously manage portfolio toimprove relevance and maximize both performance and profit outcome

• Align and focus brand efforts todeliver the promise of brands andconsumer platforms

• Operate a scalable, efficient and cost-effective infrastructure

•Fulfill our

★

5★

promise to consumers by assuring consistent fit, feel anddesign of the products

• Continuously invest in strategicpriorities

• Proactively pursue strategic,financially accretive acquisitions toadd distinctive brands

1) Portfolio

ManagementKeep portfolio and brands relevant

• Accelerate growth of key brandassets

• Increase e-commerce businessacross the portfolio

• Grow share of wallet throughproduct adjacencies and extensions

• Increase speed to market andresponsiveness to consumer needs

•Simplify processes and provideleadership timely information (andanalysis) that drives efficient andeffective decision-making

• Manage real estate portfolio to better connect with consumersegments resulting in improvedproductivity and profitability

2) Dial-Up GrowthFocus on financial performance

and macro trends

• Create, curate and distributecompelling brand content toeffectively communicate withcustomers in the online marketplace

• Re-energize and reinvent existingloyalty frameworks to buildenhanced interactions and drivegreater brand affinity

• Identify and target with highestprofitability consumer groups

• Move from product design marketingmessage to brand stories andstorytelling

• Incorporate ★5★ consumer reviewsand net promoter surveys forconsumer feedback

3) Consumer

EngagementBecome great brand storytellers

• Unite,towar

• Implemprocesconne

• Develreallocgrowth

•Elevatcompeevolvi

4)

B


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~$2.61B

$1.95to $2.00

Focused on consistent, profitableand sustainable adjusted EPS growth

INVEST TO GROW

20152

DRIVE GROWTH AND D

Sales

3% to 4%CAGR

2

$2.29B

$0.70

Sales EPSSales EPS

20111


1) FY’11 sales exclude discontinued operations, exited brands and businesses; 2) FY’15 adjusted diluted EPS assumes 3Q’15 at $0.78 Street estimate


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KenSenioand C


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FY’Gu

Metric FY’15

Consolidated net sales ~$2.61B

Famous Footwear same-store-salesFamous Footwear reported sales

Up low-single digitsFlat, due to sale of Shoes.com

Brand Portfolio net sales Up mid-single digits

Gross margin Up 15 to 20 bps

SG&A Less than or equal to 35.4% of sales

Net interest expense ~$16M

Effective tax rate 28% to 30%Adjusted diluted EPS $1.95 to $2.00

Depreciation and amortization ~$53M

Capital expenditures ~$75M


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Delivering consistent, profitable, sustainable growth

Maintaining financial flexibility to execute plans

Investing in infrastructure to enhance performance

Creating a compelling consumer experience

Offering differentiated product and distinctive brands

BusMo

1.

2.3.4.

5.


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BusMo

1.


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Focused on three platforms a

with market trends− Family

−Healthy Living

−Contemporary Fashion

Total sales growing at +3% Cexcluding exited brands

− Famous Footwear growing a

−Brand Portfolio growing at +

Healthy Living growing at +

Contemporary Fashion grow

1) FY’11 sales exclude discontinued operations, exited brands and businesses

Increasing sales trends

$2.29B~$2.61B

20111 2015

LEANER, STRONGER ANDMORE PROFITABLE COMPANY

INVEST FORORGANIC GROWTH

Sales Sales


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1) FY’11 sales exclude discontinued operations, exited brands and businesses

$2.29B~$2.61B

3% to 4%CAGR

Increasing sales trends

2015 2020


INVEST FOR ORGANIC GROWTH

20111

Sales Sales Sales

Famous Footwe

grow at 2% to 3% Brand Portfolio

grow at 4% to 6%

−Healthy Livinglow-single dig

−Contemporarymid-single to l

digit rate


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2.5%

+5%

Increasing operating earnings


INVEST FORORGANIC GROWTH

20111 2015 Gross margin expansion

Improvement in SG&A lever Exited ~$150M of unaligned

and businesses

Invested in brands, infrastruand people

−Developed new incubator brlicenses and acquired Franco

− Identified global supply initenhanced omni-channel capmeet consumer needs

− Improving key competencietalent to drive performanceOperating

MarginOperating

Margin

1) Excludes restructuring and other special charges – see non-GAAP reconciliation


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8%

Increasing operating earnings


INVEST FOR ORGANIC GROWTH

2015 2020

OperatingMargin

OperatingMargin

OperatingMargin

Portfolio manag

−

Keep our portf brands relevan

Dial-up growth

− Focus on finanperformance amacro trends

Consumer engag

−Become great bstorytellers

Elevate culture a

−Be a magnet fo

2.5%

+5%

1) Excludes restructuring and other special charges – see non-GAAP reconciliation

20111

d f bl


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Focused on consistent, profitableand sustainable EPS growth

SalesSales EPSSales EPS

$2.29B~$2.61B

3% toCA

$0.70

$1.95

to $2.00

INVEST TO GROW

20152

DRIVE GROWTH AND D

220111

LEANER, STRONGER, AND MORE PROFITABLE COMPANY



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BusMo

1.

2.


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$344M

+$680M

Debt-to-capital ratio do−

Refinanced senior no Lowered rate and

−Credit upgrades S&P to BB and Mo

Liquidity doubled sinc

−No current borrowincredit facility

−Generating operating

Priorities for cash− Invest to drive organ

−Opportunistic M&A

−Continuation of divid

− Share repurchases to

49%

~25%

2011 20112015 2015

Maintaining financial flexibility

Liquidity Debt-to-Capital

Ratio


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Investing in infrastructure to enhance performanceBusMo

1.

2.3.


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MaterialManagement

GlobalSourcing

Design and

DevelopmentProcesses

AcceleratedCalendars

Purc

OrdDeli

Optimize cost, speed and flexibility

Investing in future growthGlobal supply chain initiative

Enhance materialsmanagement

Implement rapidreplenishment

Consolidate factory baseacross brand families

Streamline costingand pricing

Standardize planningacross brands


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Before Aft

Direct to consumer in 6 days Speed Direct to consu

Separate facilitiesfor retail and wholesale

Flexibility Business agno

Meet volume projections Capacity Support gr

2015 20162014

Tejon Modernization

Lebanon Expansion andPeChino Modernization

Investing in future growthConsumer fulfillment initiative

Modernize aging equipment indistribution centers

Improve throughput to meet everchanging consumer expectations

Increase capacity across distributionnetwork to support growth

Focused on consistent profitable


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Focused on consistent, profitableand sustainable EPS growth

SalesSales EPSSales EPS

$2.29B~$2.61B

3% toCA

$0.70

$1.95

to $2.00

INVEST TO GROW

20152

DRIVE GROWTH AND D

220111




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Investing in infrastructure to enhance performance

Creating a compelling consumer experience

Offering differentiated product and distinctive brands

BusMo

1.

2.3.4.

5.


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RicPresiFamo

S i f d


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Staying focused

Working to find high-value consum

Raising the bar on successful storFinding accretion opportunities when

Developing e-commerce and omni-channel capabour consumers however they choose to shop

Consistent,profitable and

sustainablegrowth

ConsumerEngagement

Real Estate

Omni-Channel

C


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Identified high-value consumer segment...

has strong emotional connection to footwearand is predisposed to shop with us

Shop more

often

Buy morepairs

Spend more

per pair

More loyal

Greater

lifetime value

Consumer engagement

C t


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Identified 1M in our existing• We know who they are

• We know what they buy

• We know how they shop

• And we’re going to grow our shar

+30M targeted high-value con

Consumer engagementIdentified high-value consumers

R l t t tf li


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Direct correlation between stowith greater concentrations ohigh-value consumers and...

• Higher volume

• Higher sales per sq. ft.

• Higher gross margin

• Higher operating profit

• Better traffic trends

Real estate portfolioIdentified stores with greater concentrations of high-value consumers

R l t t tf li


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Scoring new locations for potenhigh-value consumers

• Represent ~25% of stores opening in

• On track to have ~50% of new storewith greater penetration of high-va

Proactively looked at top 50 DMAlocations with more high-value c

• Seeking space in these locations

Adding 15 to 25 net new stores aover next five years

• Expect 50% of new stores in marketgreater penetration of high-value co

Real estate portfolio Adding new stores and amplifying sales productivity

E o e e a d o i ha el


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Installed WiFiin all doors

Developed mobilecheckout capability

Communicate viamobile in-store

More meaningfulsocial mediarelationship

Improve mobilee-commerce

E-commerce and omni-channelInvesting to reach digitally savvy and dependent consumers

Consumer engagement


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Strong positions in covetedcategories and brands

Adjusting assortments to providemore comprehensive offering

Engaging highdigital environ

Messaging tailemotion

Revamping program to providemore meaningful interaction for

earning and using points

Continued robust and successfule-mail program

Making more conducive to drive high-valueconsumers’ emotional triggers

New selling model encourages Associates to make aconnection, with stronger interaction

Investing in endless aisle opportunity and moreentertaining experience

Know how to reach these

Testing variety of marketing initiintensifying digital market

Aggressively deploying initiativeprofitable sales and gain m

ASSORTMENT DIREWARDS

STORES REACH

Consumer engagementTaking aggressive efforts to acquire and retain high-value consumers

Famous Footwear growth expectations


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Famous Footwear growth expectations

$1.5B~$1.6B

+2% to 3%


INVEST FOR ORGANIC

2011 2015 2020

Sales Sales Sales


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JayPresiBrand

Delivered consistent profitable and sustainable sales g


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Contemporary Fashion Sales Healthy Living Sales

Delivered consistent, profitable and sustainable sales g

$0.90B$0.83B$0.92B $0.98B

~

Sales exclude discontinued operations, exited brands and businesses


INVEST FOR ORGANIC

2011 2012 2013 2014

While editing to an aligned Brand Portfolio


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While editing to an aligned Brand Portfolio

HEALTHY LIVING CONTEMPORARY

Across channels and price points


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$65 (sandals) to $200 (boots)

$150 (shoes) to $595 (boo

$155 (shoes) to $425 (boo

$175 to $595

$79 (shoes) to $225 (boots)

$175 to $595

Specialty &Independent High-

Mid-TierDepartment

Store

E-commerce



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DepartmentStore

SpecialIndepe




$50 to $85

Mass Mid-Tier

E-commerce


$59 (sandals) to $199 (boots)

As we amplify our brand storytelling


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As we amplify our brand storytelling

And move forward


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NEW

BRANDS

Diane von FurstenbergGeorge Brown

IMPROVE

RELEVANCY

Naturalizer, Franco Sarto

Ongoing branding agency work

INCREA

S

Analyzin

Target ne

DIGITAL

COMPETENCY

E-commerce, brandstorytelling, consumer

engagement

MAINTAIN

ENTREPRENEURIAL SPIRIT

Unique position: diverse portfolio

Brand dedicated leaders

LEV

RELAT

Strengthekey

CONNECTING

Driving retail, fueling wholesaleand improving speed,

flexibility and cost structure

And move forward


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SamPresid


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Power of six core styles


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Power of six core styles


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Retail


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World Trade Center renderings


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g


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Investor DayOctober 29, 2015

Non-GAAP reconciliation


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Diluted Earnings Per Share 2015 Guidance

2011 2012 2013 2014 Low High

GAAP earnings $0.56 $0.64 $0.88 $1.89 $1.80 $1.85

Charges/Other Items

ASG acquisition and integration-related costs 0.16 0.01 0.00 0.00 0.00 0.00Loss on debt extinguishment 0.02 0.00 0.00 0.01 0.15 0.15

Organizational changes 0.00 0.03 0.00 0.03 0.00 0.00

Portfolio realignment

Brand exits and cost reductions 0.28 0.37 0.15 0.00 0.00 0.00

Non-cash impairments/dispositions 0.00 0.08 0.38 0.00 0.00 0.00

Gain on sale of subsidiary (0.32) 0.00 0.00 (0.23) 0.00 0.00

Tax on dividend of international subsidiary 0.00 0.00 0.00 0.02 0.00 0.00

Total charges/other items 0.14 0.49 0.53 (0.17) 0.15 0.15

Adjusted earnings $0.70 $1.13 $1.41 $1.72 $1.95 $2.00

Net Sales($ Thousands) 2011 2012 2013 2014 1H '14 1H '15GAAP net sales $2,434,766 $2,477,796 $2,513,113 $2,571,709 $1,227,039 $1,240,117Exited brands (145,312) (86,379) (64,767) (45,841) (23,094) 0

Adjusted net sales $2,289,454 $2,391,417 $2,448,346 $2,525,868 $1,203,945 $1,240,117

Operating Earnings($ Thousands) 2011GAAP operating earnings $30,532Restructuring and other special charges 29,800

Adjusted operating earnings $60,332

CAL cALERES Investor Day 2015

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