Caleres (CAL) risk factors, FY2025 10-K

Other

1. 01FOREIGN CURRENCY EXCHANGE RATES
2. 02Management’s Report on Internal Control Over Financial Reporting
3. 03Opinion on Internal Control Over Financial Reporting
4. 04We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects
5. 05Definition and Limitations of Internal Control Over Financial Reporting
6. 06Opinion on the Financial Statements
7. 07Description of the Matter
8. 08We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's markdown reserves determination process. This included controls over the Company’s review of the significant assumptions underlying the markdown reserves estimate, as outlined above
9. 09Caleres, Inc., originally founded as Brown Shoe Company in 1878 and incorporated in 1913, is a global footwear company. The Company’s shares are traded under the “CAL” symbol on the New York Stock Exchange
10. 10Cash and Cash Equivalents
11. 11Goodwill and Intangible Assets
12. 12Advertising and Marketing Expense
13. 13Construction Allowances Received From Landlords
14. 14Straight-Line Rents and Rent Holidays
15. 15Earnings Per Common Share Attributable to Caleres, Inc. Shareholders
16. 16Foreign Currency Translation Adjustment
17. 17Pension and Other Postretirement Benefits Adjustments
18. 18Consolidated Statements of Cash Flows Supplemental Disclosures
19. 19Impact of Recently Adopted Accounting Pronouncements
20. 20Impact of Prospective Accounting Pronouncements
21. 21Disaggregation of Revenues
22. 22Allowance for Expected Credit Losses
23. 23Diluted earnings per common share attributable to Caleres, Inc. shareholders
24. 24Expense Reduction Initiatives
25. 255. RETIREMENT AND OTHER BENEFIT PLANS
26. 26Rate of compensation increase
27. 27Assets of the Canadian pension plans, which totaled approximately $4.0 million on February 1, 2025, were invested 55% in equity funds, 42% in bond funds and 3% in money market funds. The Canadian pension plans did not include any Company stock as of February 1, 2025 or February 3, 2024
28. 28statements. Following is a description of the pension plan investments measured at fair value, including the general classification of such investments pursuant to the valuation hierarchy
29. 29The over-funded status as of February 1, 2025 and February 3, 2024 for pension benefits was $64.5 million and $61.9 million, respectively. The under-funded status for other postretirement benefits was $0.9 million as of February 1, 2025 and February 3, 2024
30. 30The accumulated postretirement benefit obligation exceeds assets for all of the Company’s other postretirement benefit plans
31. 31Net Periodic Benefit Expense (Income)
32. 32Expected return on plan assets
33. 33Defined Contribution Plans
34. 34Non-Qualified Deferred Compensation Plan
35. 35Non-Qualified Restoration Deferred Compensation Plan
36. 36Deferred Compensation Plan for Non-Employee Directors
37. 37(1) The other category of income tax provision principally represents the impact of expenses that are not deductible or partially deductible for federal income tax purposes and the impact of any return-to-provision adjustments
38. 38classification, interest and penalties, accounting in interim periods, disclosure and transition. As of February 1, 2025 and February 3, 2024, the Company had no unrecognized tax benefits
39. 397. BUSINESS SEGMENT INFORMATION
40. 40Corporate assets, administrative expenses and other costs and recoveries that are not allocated to the operating units, as well as the elimination of intersegment sales and profit, are reported in the Eliminations and Other category
41. 41Products purchased for the Famous Footwear segment from three key third-party suppliers (Nike, Skechers and adidas) represented approximately 24% of consolidated net sales for 2024, 2023, and 2022
42. 42For geographic purposes, the domestic operations include the Company’s domestic retail operations, the wholesale distribution of licensed, branded and private-label footwear to a variety of retail customers, including the Famous Footwear and Brand Portfolio stores, as well as the Company’s e-commerce businesses
43. 43(1) Net of adjustment to last-in, first-out cost of $10.9 million and $10.3 million as of February 1, 2025 and February 3, 2024, respectively
44. 449. PROPERTY AND EQUIPMENT
45. 45Property and Equipment, Held for Sale
46. 4610. GOODWILL AND INTANGIBLE ASSETS
47. 47(2) The carrying amount of goodwill as of February 1, 2025 and February 3, 2024 is presented net of accumulated impairment charges of $415.7 million
48. 48Amortization expense related to intangible assets was $11.0 million in 2024 and $12.1 million in both 2023 and 2022. The Company estimates $11.0 million of amortization expense related to intangible assets in 2025 and 2026, $10.9 million in 2027 and $10.7 million in 2028
49. 49Weighted-average discount rate
50. 50Measurement of Fair Value
51. 51Non-Qualified Deferred Compensation Plan Assets and Liabilities
52. 52Non-Qualified Restoration Plan Assets and Liabilities
53. 53Restricted Stock Units for Non-Employee Directors
54. 54The Company performed its annual impairment review of intangible assets, which involves estimating the fair value using significant unobservable inputs (Level 3). The intangible asset impairment reviews performed in 2024, 2023 and 2022 resulted in no impairment charges
55. 55The 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
56. 56Stock Repurchase Programs
57. 57Repurchases Related to Employee Share-based Awards
58. 58Accumulated Other Comprehensive Loss
59. 59The Company has share-based incentive compensation plans under which certain officers, employees and members of the Board of Directors are participants and may be granted restricted stock, stock performance awards, restricted stock units and stock options
60. 60vesting term of one year, 63,614 shares have a cliff-vesting term of two years and 774,594 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years
61. 61(3) Accrued RSUs include all fully vested awards and a pro-rata portion of nonvested awards based on the elapsed portion of the vesting period
62. 62(1) Includes dividend equivalents granted on outstanding RSUs, which vest immediately
63. 63Environmental Remediation
64. 64Various 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
65. 65YEAR ENDED FEBRUARY 1, 2025
66. 66YEAR ENDED FEBRUARY 3, 2024
67. 67YEAR ENDED JANUARY 29, 2023
68. 68Evaluation of Disclosure Controls and Procedures
69. 69Internal Control Over Financial Reporting
70. 70Information regarding the Audit Committee and the Audit Committee financial expert is set forth under the caption Board Meetings and Committees in the Proxy Statement for the Annual Meeting of Shareholders to be held May 22, 2025, which information is incorporated herein by reference
71. 71ITEM 11EXECUTIVE COMPENSATION
72. 72Information regarding the Culture, Compensation and People Committee Report is set forth under the caption Culture, Compensation and People Committee Report in the Proxy Statement for the Annual Meeting of Shareholders to be held May 22, 2025, which information is incorporated herein by reference
73. 73ITEM 12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
74. 74Equity Compensation Plan Information
75. 75Information regarding Certain Relationships and Related Transactions is set forth under the caption Related Party Transactions in the Proxy Statement for the Annual Meeting of Shareholders to be held May 22, 2025, which information is incorporated herein by reference
76. 76ITEM 14PRINCIPAL ACCOUNTANT FEES AND SERVICES
77. 77ITEM 15EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
78. 78Description of the Registrant's Securities Registered Pursuant to Section 12 of The Securities Exchange Act of 1934, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 10-K for the year ended February 1, 2020, and filed March 31, 2020
79. 79See Item 15(a)(3) above. On request, copies of any exhibit will be furnished to shareholders upon payment of the Company’s reasonable expenses incurred in furnishing such exhibits