Caleres (CAL) Q4 2025 earnings call transcript

Liz Dunn Thank you, Melissa. Good morning. Thank you f or joining our f ourth quarter earnings call and webcast. A press release with detailed f inancial tables, as well as our quarterly slide presentation, are available at caleres. com. Please be aware today's discussion contains f orward -looking statements, which are subject to several risks and uncertainties. Actual results may dif f er materially due to various risk f actors, including those disclosed in the Company's Form 10-K and other f ilings with the U. S. Securities and Exchange Commission. Please ref er to today's press release and our SEC f ilings f or more inf ormation on risk f actors and other f actors which could impact f orward-looking statements.

Copies of these reports are available o nline. In discussing our operational results, we will be providing and ref erring to adjusted operating earnings results, and in some cases, we will be discussing our results excluding the impact of Stuart Weitzman. Additional details on non-GAAP measures, as well as others f eatured in today's earnings release and presentation, are available in the reconciliation tables on our earnings release and on caleres. com. The Company undertakes no obligation to update any inf ormation discussed on this call at any time. Joining me today are Jay Schmidt, President and CEO, and Dan Karpel, Senior Vice President and Interim CFO and CAO. Our call will begin with prepared remarks, f ollowed by a Q&A session to address any questions you have.

With that, I'll turn the call over to Jay. Jay?

Jay Schmidt Good morning. Earlier today, Caleres reported f ourth quarter sales and earnings. Earnings per share exceeded our guidance, with sales modestly above our guidance and gross margin better than expectations. Brand Portf olio's sales perf ormance in the quarter was driven by continued strength in owned eCommerce and international perf ormance, underscoring key strategic growth f actors f or the Company. Lead brands once again outperf ormed, reinf orcing their role as Caleres' primary growth engine, and we once again gained market share. At Famous Footwear, we continue to see encouraging signs that our strategic initiatives are working. Our FLAIR remodels are consistently outperf orming the f leet and remain an important growth lever as we elevate the in-store experience.

We lean f urther into our strategy to elevate and edit the brand and product assortment, and we're seeing consumers respond to a c urated mix of premium and demanded brands. And f or the quarter, we gained market share in shoe chains. ViaVid has made considerable efforts to provide an accurate transcription. There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid. com/ We were pleased that Caleres ended 2025 with some momentum in both segments of our business. 2026 will be a build-back year where we begin to build back our earnings power driven by the strategic growth f actors and initiatives that are already in place and working.

We'll say more on that in a moment, but f irst, let me provide more detail on f ourth quarter perf ormance. Brand Portf olio sales on an organic basis increased 1.5% in the quarter and 20.3% when f actoring in Stuart Weitzman. Lead brands in total were up 2% organically and represented nearly 60% of the Brand Portf olio sales. Owned eCommerce continued to see outsized growth and our international business was strong. According to Circana, our Brand Portf olio gained signif icant market share in both women's f ashion f ootwear and total f ootwear during the quarter. Boots, particularly tall shaf t, were a standout category complemented by strength in f lats and loaf ers, solid perf ormance in dress, and continued momentum in sneakers.

Sam Edelman delivered another very strong quarter with sales growth that exceeded expectations and outperf ormed the broader premium market. Perf ormance was broad-based across categories anchored by exceptional results in dress, casuals, and boots where the brand saw success in both proven icons and new styles. Wholesale sales exceeded plan, ref lecting strong demand across core product f ranchises. Owned eCommerce saw double-digit growth and higher f ull-price selling in the quarter, closing out a record-setting year. Sam Edelman's licensing initiatives added incremental growth and visibility highlighted by a successf ul f ragrance launch with rapid sell-through and expanded national distribution. We continue seeing positive results f rom our Sam Edelman stores, which now tally 111 doors, 56 owned, and 55 f ranchised, with 107 of them international.

Stuart Weitzman delivered solid f ourth-quarter progress as we continue strengthening the f oundation of Caleres' newest lead brand. We successf ully integrated Stuart Weitzman onto Caleres platf orms as we completed the quarter, both on time and on budget. During this transition process, we implemented a new organization structure, moved teams into new headquarters in New York and Shanghai, completed the relocation of our U. S. and Canadian warehouses, and liquidated a signif icant volume of aged inventory globally. Operationally, f ourth-quarter sales were driven by core boots and booties alongside new dress and social styles. As we clear out aged inventory, we are successf ully reducing discounting and f lowing newness to support improved specialty retail and eCommerce perf ormance.

At quarter end, Stuart operated 73 retail locations worldwide, including 50 in China and 23 in North America, with the latter spanning f ull -price, outlet, and shop-in-shop f ormats. We remain committed and conf ident in our plan to bring the brand to break even in 2026. Allen Edmonds delivered a very strong f ourth quarter with broad -based growth across all channels and continued momentum with the consumer. Perf ormance was led by strength in brick-and-mortar stores, owned eCommerce, and wholesale, with particularly strong demand f or dress, loaf ers, sneakers, and boots. Wholesale momentum, driven by key national partners, strong store-level productivity, and expanded distribution continued. The Reserve Collection, the most elevated product in the Allen Edmonds brand, continued to scale meaningf ully, attracting a highly valuable customer who shops more f requently, spends more annually, and shows higher loyalty engagement.

This special collection is available at the majority of our 58 Allen Edmonds stores, including our 18 Port Washington Studio stores, which continue to outperf orm, ref lecting the power of an elevated store experience and recent enhancements to the f ormat. Naturalizer made meaningf ul progress in the f ourth quarter, with improving eCommerce sales momentum and new and retained customer growth. Owned eCommerce perf ormance was a standout, supported by strength across on-trend product categories, including boots, dress, sport, and sandals, with particular success in tall boots. Marketing ef f orts were increasingly f ocused and ef f ective, with ref ined targeting, strong inf luencer content, and compelling storytelling, driving higher quality traf f ic, higher conversion, and higher average order value.

These ef f orts translated into customer growth across both new and returning shoppers, with strong engagement f rom younger and core generations. ViaVid has made considerable efforts to provide an accurate transcription. There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid. com/ Shortly af ter quarter end, we launched our newest collaboration with tastemaker and style icon June Ambrose. June's collaboration is building awareness f or the Naturalizer brand with new consumers, and June's STYLE-LETICS collection sells at signif icantly higher retails, mostly through naturalizer. com. Vionic closed the f ourth quarter with strength in eCommerce and international channels, compelling new product launches, and growing interest in sport and perf ormance walking.

Vionic's wearable well-being positioning has high emotional resonance with consumers. We're pleased with the growing momentum in sport lif estyle and perf ormance walking categories, underscored by Vionic's f irst sport collaboration with wellness advocate Gabby Reece, which we launched in January and supported with a robust marketing campaign. International bestsellers in the quarter closely mirrored those in the U. S. , illustrating consistent global demand f or the brand's key styles. Brand awareness is growing f or Vionic, particularly with younger and more af f luent consumers.

Moving on to Famous Footwear. In the quarter, total sales decreased 1.2%, and comp sales increased 0.1%, in line with our expectations. eCommerce outperf ormed stores, but average unit retails were up in both channels. We continued to see the f amous consumer respond strongly during peak shopping periods, with more positive comps during the holiday period, f ollowed by more modest results in Ja nuary. eCommerce sales accelerated and were up double digits f or the third straight quarter. The launch of Jordan earlier in the year contributed steady momentum throughout the holiday season, remaining a top 10 brand and reinf orcing Famous' ability to launch leading brands and deliver powerf ul results. Famous continues to enhance its consumer experience through the FLAIR f ormat.

We ended f ourth quarter with 57 FLAIR locations, which generated a 4.5-point sales lif t overall and a 6-point sales lif t f or stores converted in the last year. The success of FLAIR continues to underscore Famous' ability to amplify elevated brands and products. We plan to build on that momentum with additional FLAIR openings in 2026, ending with a range of 65 to 75 locations by year end. From a divisional perspective, Men’s perf ormed best in the quarter, Kid’s perf ormed in line with the total, and Women’s unperf ormed slightly; however, f ashion boots were a standout category in total. Top growth brands f or the quarter were Skechers, Jordan, Birkenstock, Timberland, Sorel, Brooks, and Columbia, while our Caleres brands outperf ormed at Famous Footwear with sales of mid-teens and saw a higher margin rate on lower inventory.

We continue to make progress on our elevate-and-edit strategy at Famous with outperf ormance f rom premium brands. In 2026, we plan to accelerate this strategy by expanding higher demand brands and products while exiting underperf orming labels. We're also expanding immersive brand takeovers that have been driving outsized growth at key points across the seasons with multiple takeovers planned f or core brands throughout 2026.

In summary, Caleres made progress on our strategic growth objectives in the second half of 2025, including lead brands, international, direct-to-consumer, and enhanced customer experience and edit-and-elevate. Joining us today on the call is Dan Karpel. Dan returned to Caleres as Chief Accounting Of f icer in 2025 and has assumed the additional role of Interim CFO. He is well-versed in our company, and I am pleased to welcome him to the call. Dan will walk you through our guidance in detail, but I wanted to provide some color on what we are expecting f or the year. As we look f orward, 2026 is shaping up as a build -back year characterized by relatively modest organic sales growth but meaningf ul earnings recovery.

We have several encouraging green shoots leading us to a place of optimism. Our market share continues to build , our international business is up, and our owned eCommerce business is up quarter to date across the Brand Portf olio. Famous Footwear is seeing slightly down comp store sales with eCommerce up high single digits quarter to date. Our tarif f mitigation strategies have taken hold, and we successf ully completed our Stuart Weitzman systems integration, which sets the ViaVid has made considerable efforts to provide an accurate transcription. There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid.

com/ stage f or improved prof itability in the brand. We also made progress across our Centers of Excellence, which we have shif ted internally to calling Centers of Expertise. We are f inding the greatest success by deliberately leveraging Caleres' core capabilities at scale. This includes expanding our international platf orm, accelerating owned eCommerce, and establishing more disciplined planning and costing capabilities. In addition, now that three of our f ive lead brands have brick - and-mortar stores, we have launched a specialty retail operations team to elevate perf ormance and the consumer experience. We've also established a Marketing Operations Center of Expertise to enhance our data, analytics, and media buying. These Centers of Expertise are helping us move f aster and operate more consistently and ef f iciently.

And international, specialty retail, and eCommerce are where we are seeing some of our earliest improvements with Stuart Weitzman. We see a meaningf ul opportunity to build on this f oundation, not just as it relates to Stuart, but f or our whole company as we move through 2026, with more to come. So, while the market remains volatile, based on what we know today, we are providing guidance with a realistic view of the risks and the opportunities ahead of us, including geopolitical risk and tariff changes. Our sales growth is coming f rom our proven growth vectors and annualized benef it f rom our recent acquisition, and our earnings bridge is clear.

With that, I will now hand it over to Dan f or a more detailed view of Caleres' f inancial perf ormance and our outlook f or 2026. Dan?

Dan Karpel Thank you, Jay, and good morning, everyone. During today's call, I'll provide additional details on f ourth quarter results as well as our expectations for 2026. Please note that my comments will be on an adjusted basis, and I will note when they exclude Stuart Weitzman. For the f ourth quarter, sales were $695.1 million, up 8.7%. Sales on an organic basis, excluding Stuart Weitzman, decreased 0.1%. Organic sales increased in the Brand Portf olio segment and declined at Famous Footwear. Notably, both segments saw an improvement in the trend versus the f irst half of the year. Sales f or Stuart Weitzman were $56.3 million. Brand Portf olio sales were up 1.5% on an organic basis and up 20.3% including Stuart Weitzman.

Lead brands in total, excluding Stuart Weitzman, grew about 2% with growth in both North America and international. Famous sales were down 1.2% with comparable sales up 0.1%. Comparable sales increased slightly in November and December and declined low single digits in January. Consolidated gross margin was 42.9%, down 10 basis points versus last year, ref lecting lower margins in Brand Portf olio and relatively stable margins at Famous Footwear. Stuart Weitzman was modestly accretive to gross margin. Brand Portf olio gross margin, excluding Stuart Weitzman, was down 130 basis points due to tarif f s as well as markdown allowances somewhat of fset by favorable channel mix. Brand Portf olio gross margin was 41.6%, down 10 basis points to last year, including Stuart Weitzman.

Famous gross margin was 42.5%, essentially f lat to last year, with greater proportion of clearance sales to total , of fset by higher clearance margin. SG&A expenses increased $48.3 million, or 18.3%, to $310 million. The increase was primarily driven by expenses of $39 million related to Stuart Weitzman. As a percentage of sales, SG&A was 44.6% and deleveraged 370 basis points. Operating loss in the quarter was $11.6 million and operating margin was negative 1.7%. Excluding Stuart Weitzman, operating earnings were $0.5 million and operating margin was 0.1%. Operating margin at Brand Portf olio was 2.4% and was 6.8%, excluding Stuart Weitzman. Operating margin at Famous was 0.8%. Net interest expense was $4.7 million, up $0.7 million to last year due to higher average ViaVid has made considerable efforts to provide an accurate transcription.

There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid. com/ borrowings. Approximately $1.4 million was interest expense associated with the acquisition of Stuart Weitzman. The weighted average borrowing rate in the quarter was down about 25 basis points to last year. Tax rate was 25.4% f or the quarter and 28.9% f or the f ull year. Fourth quarter earnings per diluted share were a loss of $0.36 and earnings per diluted share excluding the acquisition of Stuart Weitzman were a loss of $0.06. For the f ull year, sales increased 1.3% in total and declined 2.5% on an organic basis, excluding Stuart Weitzman.

The acquisition added $102.2 million of sales during the year. Brand Portf olio sales increased 7.3% and declined 1% on an organic basis. Famous Footwear sales f or the f ull year declined 3.6%, with comp store sales down 2.3%. Gross margin f or the f ull year was 43.5%, down 135 basis points. Brand Portf olio gross margin declined 170 basis points to 42%, primarily ref lecting a 160 basis point impact f rom tarif f s. Stuart Weitzman added 40 basis points to the Brand Portf olio gross margin f or the year. Famous Footwear gross margin declined 90 basis points to 43.2%. SG&A expenses f or the f ull year increased $92.5 million, or 7.4% to $1.2 billion, primarily ref lecting $71 million of Stuart Weitzman expense.

As a result, SG&A was 42% and deleveraged 290 basis points. On an organic basis, SG&A expenses were $1.1 billion. Operating earnings f or the f ull year were $43 million, and operating margin was 1.6%. Excluding Stuart Weitzman, operating earnings were $66.3 million, and operating margin was 2.5%. Brand Portf olio operating margin declined 630 basis points as tarif f s, SG&A deleverage, and Stuart Weitzman dilution all contributed similar amounts to the decline. Famous Footwear operating margin declined 250 basis points with both gross margin climbs and SG&A deleverage on lower sales. Adjusted earnings per diluted share were $0.61 f or the f ull year, and $1.19 excluding the impact of Stuart Weitzman.

Turning to the balance sheet, we ended the f ourth quarter with $29.8 million in cash, $296.5 million in borrowings, and $238 million in liquidity. Inventory at quarter end was $610.5 million, up $45 million to last year, of which $57 million was f or Stuart Weitzman. Excluding Stuart Weitzman, organic inventory was down $12 million with Brand Portf olio inventory down 6% and Famous Footwear up 2%.

Now turning to our outlook. We continue to f ace an evolving tarif f environment. Our guidance is built on the assumption that new tarif f s will be enacted that will largely replace the prior IEEPA tarif f s. This could prove conservative, but until we have clarity on the level of additional new tarif f s, these assumptions appear prudent. We are maintaining a f lexible approach to sourcing and will continue to seek the best country matrix f or our quality and price needs. Additionally, the conf lict in the Middle East introduces risk to our outlook. As of today, we are experiencing modest business disruption with our Middle East business partners. The region is less than 1% of our total business, though an important part of our longer-term international growth opportunity.

We are caref ully monitoring the situation and working with our partners to mitigate risk. However, with oil prices on the rise, the risk of economic slowdown has increased. The low end of our guidance anticipates some slowdown related to the economic impact of the current geopolitical conflicts but does not anticipate growing issues. For the f irst quarter, we expect consolidated sales to increase mid to high single digits compared to last year. For Famous, sales are expected to be down low single digits to f lat, with comparable sales down 2% to up 1%. For Brand Portf olio, sales are expected to be up mid-teens, inclusive of low single-digit organic growth. ViaVid has made considerable efforts to provide an accurate transcription.

There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid. com/ Consolidated gross margin to improve 120 to 140 basis points compared to last year. Modest leverage of SG&A compared to last year due to the inclusion of Stuart Weitzman. With discrete items impacting the quarter, we expect a tax rate of 30% to 32%. GAAP earnings per diluted share of $0.21 to $0.26, and adjusted earnings per diluted share of $0.25 to $0.30, as we expect to incur approximately $2 million in remaining Stuart Weitzman acquisition and integration costs. For the f ull year 2026, we expect: Consolidated sales up low to mid single digits compared to last year.

Famous Footwear sales down low single digits to f lat compared to last year, with comp store sales of down 1% to up 1%. Brand Portf olio sales up low double digits compared to last year, inclusive of low to mid single-digit organic growth when excluding Stuart Weitzman. Gross margin up 140 to 100 in basis points compared to last year, driven mostly by the Brand Portf olio as our tarif f mitigation strategies improve and with f avorable customer and brand mix. SG&A rate relatively f lat compared to last year, with cost -saving measures largely of f set by increases in incentive and merit build back and other selective investments. Interest expense of approximately $18 million and a f ull year tax rate of 28% to 30%.

As a result, we expect GAAP earnings per diluted share of $1.31 to $1.61 or adjusted earnings per diluted share of $1.35 to $1.65 due to the af orementioned Stuart Weitzman acquisition and integration costs. CapEx of approximately $55 million to $60 million that we will continue to evaluate based on macroeconomic conditions and perf ormance.

With that, I'd now like to turn the call back over to the operator f or Q&A. Operator?

Liz Dunn Okay, Ashley, we're having a little bit of a hard time hearing, but your question is , we expected more sales volatility in the quarter and it didn't come through, so talk about some of the puts and takes. Is that right? ViaVid has made considerable efforts to provide an accurate transcription. There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid.

Jay Schmidt Okay, so f irst of all, we did provide an estimate mid-January and that did actually play out. We didn't ship Saks f or the balance of the month and we were f ully reserved on the bad debt. So, however, other areas of our business were strong enough to of f set the six cents that we did play out, and I think that was a key reason f or it. It just came in better. Our gross margin impact on tarif f s was 40 basis points in the Brand Portf olio on the quarter, which was also better than our expectation. Ashley Owens Okay, got it.

Liz Dunn Yes, we'll try. We'll clarif y if we can.

Dan Karpel Yes. So, on the margin, when we think about guidance in 2026, you'll see relatively f lat margins on the Famous business, and as it relates to the Brand Portf olio side, we'll see recovery around the tarif f side of the business. Also, with mix, we think about Stuart Weitzman is incremental margin accretion, because of the margin levels that they play, as well as other mix in our lead brands driving that up.

Jay Schmidt Thanks, Ashley.

Jay Schmidt Dana, I'll start, and then we'll f ill in along the way. So, f irst of all, we are seeing our—key points of our business on the Brand Portf olio continue to point toward support our guidance. We've said our order book is in line with that guidance right now. Our owned eCommerce trend line right now looks very good f or the Brand Portf olio, and we're seeing international up on it as well. So, that's been quite good. And we're seeing those key drivers coming through with our lead brand, so we continue to see that come through. But otherwise, we f eel pretty good all the way around. With Stuart, as you've noticed, we f eel like all of the work that was done in the back half of ’26 leads us to a place where they can start to build back their business , and that really goes straight across all of their channels and geography and everywhere.

So, while we're not guiding specif ically by brand, we will see good, I think, momentum coming through there, which is great. And then, f inally, on the Saks piece right now, we don't have anything new to report on that, but we're prepared to go f orward at this moment with the wholesale book that we have and then actually that does support at least our guide f or the quarter. So, we'll tell you more when we have more to say. But otherwise, it looks pretty good. And then you also mentioned about Famous Footwear, what drove that market share gain back, and that was—as you had suggested, the lead brands coming through in Famous Footwear was actually the big driver f or that.

And as we had said earlier, Famous had a nice lif t in holiday, really going af ter that more gif t- giving piece, and we f elt very good about it. And it's all the brands that I did mention. We had good momentum f rom Skechers, Birkenstock, Sorel, Timberland, and others. Obviously, the big Jordan piece proved very powerf ul during holiday, so that was obviously a big win f or us, too. So, again, it just supports, I think, our guidance going f orward and the momentum we're seeing.

Dan Karpel And, Dana, you had asked a little bit about the spread of margin during the quarter. Just to reinf orce the guidance, we said consolidated in the f irst quarter was going to go up 120 to 140, and then f or the f ull year, 140 to 180. And so, you'll see results kind of throughout each of those quarters as we look at the year.

Liz Dunn And then, Dana, one more thing. On market share, you mentioned new brands on the Brand Portf olio side. While Stuart Weitzman did add to our market share, we gained market share in women's f ashion f ootwear on an organic basis as well.

Jay Schmidt Thank you. ViaVid has made considerable efforts to provide an accurate transcription. There may be material errors, omissions, or inaccu racies in the reporting of the substance of the conference call. This transcript is being made available for information purposes o nly. 1-888-562-0262 1-604-929-1352 https://viavid.

Jay Schmidt Yes, so just to characterize right now, we did see on our Brand Portf olio strong owned eComm perf ormance coming through, which supports our guide. The good news is that they're f rom all the key brands . We've seen it now on all f our of our lead brands, Sam Edelman, Allen Edmonds, Naturalizer, and Vionic. We're also starting to see a nice turnaround at Stuart Weitzman on their eCommerce business where that was not something that we saw in the back half of this year. So, it looks like a lot of the team's work there coming through is working. As it goes over to the Famous side, it’s kind of a little dif ferent story.

We had a good February, I would say, and that was through some good perf ormance on some of the big brands there that continued. Sketchers being one of them where we did have a brand takeover there and that worked very well. We also did sell through on some clearance there too, which did support the business there. So, we walk into March. It's a little bit of a mixed story here right now, and we're monitoring it day by day, week by week. In addition to the geopolitical situation, we did have some weather impact , and we do have an Easter shif t timing. So, right now, as I said, what we're looking at supports our current guide and we'll report more when we know it, but we are managing it week to week.

Jay Schmidt Yes. So, on the f amous side, I mean, we continue to see a very strong Birkenstock business, and you know it well. So, I mean, it's clogs and sandals. That's where we are, and we're seeing strength on both of them f rom that. And that continues every single week. We're also seeing some good selling on sandals f rom Crocs, which I think is very good and does—I think we'll overall support that business trend as we look f orward. On the BP, we are seeing some good sandal business, particularly in the thong category coming through on a kitten heels, and that's been a key winner. But we're seeing it a little bit more on the f ashion side.

And even in Vionic, we're seeing a very nice sandals strength as of very recently with now that all the inventory is here with both casual thongs, and then we're also seeing casual f ootbeds work well in that business. So, I think it's it certainly wasn't supported by weather, Mitch, so we really think it's driven by newness right now. But that does at least give us optimism as we look f orward.

Liz Dunn Yeah, I'll start, and then Dan can cut in. We have completed most of the cost savings work. So, getting it onto our systems was a big piece of that, moving the headquarters, getting of f of the TSA, getting it into our distribution center. As we think about the Stuart Weitzman SG&A piece of the puzzle, we've got some big buckets, I would say. Distribution and logistics being one. Facilities being one. We did complete in January a restructuring, so that was a big piece of it. And so, those are the big pieces of the puzzle. And then, moving to the gross margin side of things, we moved through a signif icant amount of aged inventory.

We talked about that last quarter. It was $25 million in inventory. I think you could see it on the balance sheet. That's where we are, so that positions us a lot stronger place. But if you think about Stuart Weitzman's business, it is a seasonal business. And so, there'll be some movement there. But in total, we f eel very conf ident that that we've positioned the business to return to break even. And longer term, as we've said, we don't think that there's anything we see with the business that wouldn't suggest it can operate at the prof it margins. We're quite comf ortable earning f or the rest of our Brand Portf olio. I don't know, Dan, if you would have anything to add there.

Dan Karpel No, I think to your point, if you look at our Q3 and Q4, we lay out in kind of the with and without the clarity there. And so, you could see the impact of Stuart Weitzman on that business. And to Liz's point, a lot of these signif icant changes have been made were on our systems now and structurally we're there. So, certainly not seeing those types of results that we saw in Q3 and Q4, and as we walk back to kind of break even here in the f ull year ’26.

I'll turn the f loor back to Mr. Schmidt f or any f inal comments. Jay Schmidt Okay. Thank you f or your continued interest in Caleres. Bef ore we close, I'd like to recognize the dedication of our teams across the Company and across the globe who've shown tremendous determination and resilience this year. We are encouraged by the early momentum building in our business through all of our strategic initiatives, and we look f orward to an improved, more prof itable 2026. Thank you.