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Acquisition
 9 Months Ended
Nov. 01, 2025
Acquisition  
Acquisition

Note 3    Acquisition

On February 16, 2025, the Company entered into a Sale and Purchase Agreement with Tapestry, Inc. (“Tapestry”) to acquire the Stuart Weitzman business (the “Acquisition”).  On August 4, 2025, the Company completed the Acquisition pursuant to the terms and conditions of that Sale and Purchase Agreement, as amended.  The aggregate purchase price for the Acquisition was $108.9 million, net of the cash received at the closing.  The purchase price is subject to final adjustments for net working capital.  

Stuart Weitzman, which includes both wholesale and direct-to-consumer channels, has been an iconic global luxury women’s footwear brand for over 35 years.  The Acquisition strengthens the Company’s position in the global footwear market and adds an iconic name in luxury footwear to the Brand Portfolio segment.  Stuart Weitzman maintains a strong presence in North America, Europe and Asia across both wholesale and direct-to-consumer channels.  The acquisition was funded with borrowings from the revolving credit agreement.  

Preliminary Purchase Price Allocation

The acquisition was accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations.  Accordingly, the assets and liabilities of Stuart Weitzman were recorded at their estimated fair values, and the excess of the purchase price over the fair value of the assets acquired and liabilities assumed, including identified intangible assets, was recorded as goodwill.  The following table summarizes the Company’s preliminary allocation of the purchase price as of the acquisition date:

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($ thousands)

    

August 4, 2025

Assets

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Current assets:

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Cash and cash equivalents

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$

10,683

Receivables

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14,220

Inventories

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86,801

Prepaid expenses and other current assets

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10,776

Total current assets

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122,480

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​

​

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Lease right-of-use assets

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21,670

Property and equipment

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7,899

Goodwill

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6,616

Intangible assets

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12,700

Other assets

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1,988

Total assets

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$

173,353

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Liabilities and Equity

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Current liabilities:

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Trade accounts payable

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5,458

Lease obligations

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10,279

Other accrued expenses

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20,453

Total current liabilities

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36,190

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Other liabilities:

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Noncurrent lease obligations

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16,496

Other liabilities

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1,126

Total other liabilities

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17,622

Net assets

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$

119,541

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The allocation of the purchase price was based on certain preliminary valuations and analyses. Any subsequent changes in the estimated fair values assumed upon the finalization of more detailed analyses within the measurement period will change the allocation of the purchase price and will be adjusted during the period in which the amounts are determined. The Company’s purchase price allocation required management to make assumptions and to apply judgment to estimate the fair value of the acquired assets and liabilities. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The judgments the Company used in estimating the fair values assigned to each class of the acquired assets and assumed liabilities could materially affect the results of its operations. Management estimated the fair value of the assets and liabilities based upon quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows (Level 3 fair value measurements). A third-party valuation specialist assisted the Company with its preliminary fair value estimates for inventory, right-of-use lease assets and intangible assets. The Company used all available information to make its best estimate of fair values at the acquisition date and is still in the process of finalizing the fair value of certain assets acquired and liabilities assumed, including inventories, property

and equipment, certain intangibles and leases at the acquisition date.  The Company expects to obtain the information necessary to finalize the purchase price allocation during the measurement period, not to exceed one year from the acquisition date as permitted under ASC 805.

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Goodwill and intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill recognized, which is deductible for tax purposes, is primarily attributable to synergies and an assembled workforce.  Refer to Note 9 to the condensed consolidated financial statements for additional information regarding goodwill and intangible assets.

The financial results of Stuart Weitzman are included in the Brand Portfolio segment beginning in the third quarter of 2025.  Stuart Weitzman contributed net sales of $45.8 million and reported an operating loss of $18.9 million for the thirteen and thirty-nine weeks ended November 1, 2025.  The operating loss is due in part to $7.7 million in incremental cost of goods sold during the thirteen and thirty-nine weeks ended November 1, 2025 related to the inventory fair value adjustment required for purchase accounting.  The operating loss does not include $3.8 million ($2.8 million on an after-tax basis, or $0.09 per diluted share) and $6.7 million ($5.0 million on an after-tax basis, or $0.15 per diluted share) in acquisition and integration-related costs during the thirteen and thirty-nine weeks ended November 1, 2025, respectively,  and the incremental interest expense associated with the transaction.  Refer to Note 6 to the condensed consolidated financial statements for additional information related to the acquisition and integration costs and Note 9 for discussion of the intangible assets acquired.

Pro Forma Financial Information

The following unaudited pro forma financial information for the thirteen and thirty-nine weeks ended November 1, 2025 and November 2, 2024 combines the historical results of Caleres, Inc. and Stuart Weitzman, assuming the acquisition had been completed as of February 4, 2024.  The pro forma financial information includes various adjustments to reflect business combination accounting effects, including the incremental cost of goods sold related to the fair value step-up adjustment on inventory, acquisition and integration-related costs, interest expense on the incremental borrowings on the revolving credit agreement to fund the acquisition and amortization on the acquired intangible assets, and tax-related effects of the adjustments.

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Thirteen Weeks Ended

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Thirty-Nine Weeks Ended

($ thousands)

    

November 1, 2025

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November 2, 2024

    

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November 1, 2025

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November 2, 2024

Net sales

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$

790,051

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$

804,370

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$

2,153,702

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$

2,245,986

Net earnings attributable to Caleres, Inc.

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$

11,339

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$

37,092

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$

18,707

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$

55,028

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The above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the results of operations would have been had the Company completed the acquisition on the date assumed, nor is it necessarily indicative of the results of operations that may be expected in future periods.