Footwear company Caleres (NYSE: CAL) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 8.5% year on year to $666.6 million. Its non-GAAP profit of $0.38 per share was 2.7% above analysts’ consensus estimates.

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“We were pleased to report first quarter sales at the top end and earnings ahead of our guidance, reflecting the strength of our strategic growth vectors and broad-based momentum across our Brand Portfolio,” said Jay Schmidt, president and chief executive officer.

Company Overview

The owner of Dr. Scholl's, Caleres (NYSE: CAL) is a footwear company offering a range of styles.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Caleres grew its sales at a weak 3.6% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Caleres’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

This quarter, Caleres reported year-on-year revenue growth of 8.5%, and its $666.6 million of revenue exceeded Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months. While this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Caleres’s operating margin has shrunk over the last 12 months and averaged 3.4% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

In Q1, Caleres generated an operating margin profit margin of 3.6%, up 1.5 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Caleres’s EPS grew at 14.2% compounded annual growth rate over the last five years. This performance was better than its revenue growth but doesn’t tell us much about its business quality because its operating margin improvement was less than peers.

In Q1, Caleres reported adjusted EPS of $0.38, up from $0.22 in the same quarter last year. This print beat analysts’ estimates by 2.7%. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Caleres’s Q1 Results

We enjoyed seeing Caleres beat analysts’ operating income expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this was a mixed quarter. Still, the stock traded up 3.6% to $14.62 immediately following the results.

So do we think Caleres is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).