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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.04pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.06pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.03pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
volatility+6
negatively+3
challenges+3
difficulties+3
adversely+2
Positive rising
able+3
benefit+2
effective+1
greater+1
achieve+1
Risk Factors (Item 1A)
8,372 words
ITEM 1A RISK FACTORS
An investment in our common stock involves certain risks and uncertainties. In addition to other information in this Form 10-K, the following risk factors should be considered. Additional risks and uncertainties of which we are currently unaware could also have a material adverse effect on our business and financial conditions. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
MACROECONOMIC AND INDUSTRY RISKS
Changes in the United States and international trade policies, including tariffs, trade restrictions and retaliatory trade actions taken by other countries, may adversely impact our business, results of operations and financial condition.
In early 2025, the United States administration announced tariffs on products manufactured in several jurisdictions from which we import our products. We continue to actively monitor the impact of tariffs that become effective, as well as potential tariffs imposed by other countries. Throughout the year, our net sales and gross margins were impacted by tariffs. The enactment of additional tariffs and the uncertainty surrounding the future tariff policies and rates pose a significant risk to our business operations and may materially increase our costs and reduce our margins. Future trade or phases of negotiations with China could lead to the imposition of tariffs that could affect our supply chain and our business. General trade tensions between the U.S. and China continue to be . Additionally, certain tariffs are subject to legal . The tariff uncertainty also creates in our supply chain management, our pricing strategies and the management of customer orders. While we have implemented strategies to mitigate tariff impacts by optimizing production in lower tariff countries and negotiating with suppliers, there can be no assurance that these efforts will be .
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
closed+4
markdowns+2
losses+2
decline+1
volatility+1
Positive rising
effective+2
gain+2
best+1
strong+1
benefit+1
MD&A (Item 7)
8,675 words
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Business Overview
We are a global footwear company that operates retail shoe stores and e-commerce websites, and designs, develops, sources, manufactures and distributes footwear for people of all ages. Our mission is to inspire people to feel great...feet first. We offer retailers and consumers a diversified portfolio of leading footwear brands. Outfitted in our brands, customers can step confidently into every aspect of their lives. As both a retailer and a wholesaler, we have a perspective on the marketplace that enables us to serve consumers from different vantage points. We believe our diversified business model provides us with synergies by spanning consumer segments, categories and distribution channels. A combination of thoughtful planning and rigorous execution is key to our success in optimizing our business and portfolio of brands. Our business strategy is focused on accelerating growth in our Brand Portfolio segment, gaining market share and deepening connections with the millennial family in our Famous Footwear segment, leveraging our “One Caleres” capabilities to increase profitability, and delivering value for our shareholders.
On February 20, 2026, the U.S. Supreme Court invalidated tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). Following this ruling, the U.S. Administration initiated new tariffs at different rates under alternative legislative powers, which increases the uncertainty around tariffs. The current administration may continue to impose additional tariffs under U.S. trade laws. Although certain tariffs were invalidated, the potential availability, timing, and amount of any refunds associated with the ruling remains highly uncertain. Given the uncertainty regarding the scope and duration of the current and potential tariffs, as well as the potential for additional trade actions by the United States or other countries, the specific impact to our business, results of operations and financial conditions is not certain but could be material.
Consumer demand for our products may be adversely impacted by economic conditions and other factors.
Worldwide economic conditions continue to be uncertain. Consumer confidence and spending are strongly influenced by general economic conditions and other factors, including tariffs, trade restrictions, or taxes on imports from countries where we manufacture products, inflation, concerns of a recession, elevated interest rates, fiscal policy, the changing tax and regulatory environment, minimum wage rates and regulations, consumer debt levels, the availability of consumer credit, the liquidity of consumers’ assets, health care costs, currency exchange rates, taxation, energy costs, real estate values, foreclosure rates, unemployment trends, weather conditions and the economic consequences of military action or terrorist activities, such as the heightened geo-political tensions between China and Taiwan, along with angst surrounding escalated foreign policy actions taken by the United States in the Middle East and South American regions and the potential impact of sanctions on the domestic and global economy. Consumer sentiment, including a preference for products made in the United States, may be impacted by tariffs or taxes on imports from countries where we source products, which may impact demand for our products that are sourced internationally. In addition, with a significant amount of our supply originating in China, any negative development related to relations between United States and China, including additional
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tariffs imposed on imports from China, may adversely impact the cost or demand for our products sourced from China. Negative economic conditions generally decrease disposable income and, consequently, consumer purchases of discretionary items like our products. As a result, our customers may choose to purchase fewer of our products or purchase the lower priced products of our competitors, and our business, results of operations, financial condition and cash flows could be adversely affected.
Inflationary pressures and supply chain disruptions may adversely impact our business operations and financial results.
Inflationary pressures in the United States and the global economy such as elevated interest rates, higher product and transportation costs, in part driven by higher and more volatile oil prices, and wage inflation, as well as fears of a recession, are creating a complex and challenging retail environment that may impact discretionary spending. The extent and duration of these inflationary pressures are uncertain and may limit our ability to meet incremental consumer demand, potentially impacting our net sales. In addition, declines in consumer spending may result in reduced demand for our products, increased inventories, reduced orders from retailers for our products, order cancellations, lower revenues, higher discounts, pricing pressure and lower gross margins. Macroeconomic factors, including these inflationary pressures and volatility in interest rates, also impact a number of accounting estimates, such as impairment calculations, the value of inventory measured using the last-in, first out (“LIFO”) method, and other estimates that utilize fair value. These macroeconomic factors could result in incremental volatility in certain valuations and provisions required in the Company’s financial statements. In addition, a disruption within our logistics or supply chain network could adversely affect our ability to deliver inventory in a timely manner, which could impair our ability to meet customer demand for products and result in lost sales and increased supply chain costs. Vessel, container and other transportation shortages, labor shortages and port congestion have in the past delayed inventory orders and, in turn, deliveries to our wholesale customers and availability in our retail stores and e-commerce sites. In addition, the vast majority of our products pass through the United States ports and any slowdown or stoppage relating to labor agreement negotiations may further delay the receipt of inventory or increase costs.
If we are unable to anticipate and respond to consumer preferences and fashion trends and successfully apply new technology, we may not be able to maintain or increase our net sales and earnings.
The footwear industry is subject to rapidly changing consumer shopping preferences and patterns and fashion trends. Our products must appeal to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to rapid change. New footwear designs that we introduce may not resonate with consumers or our brands may fall out of favor with customers. If we are unable to react appropriately to changes in consumer preferences, our revenues may decrease, brand image may suffer, and we may not be able to execute our growth plans. Further, the value of our brands is based on evolving consumer perceptions, including as a result of shifting ethical, political or social standards, and concerns with respect to product pricing, quality, design, technical performance, components or materials, or customer service could result in negative perceptions and the loss of brand loyalty and value. In addition, as consumers increasingly embrace online and mobile shopping, retailers have been required to lower shipping costs charged to customers, improve shipping speeds and optimize mobile platforms. The trend toward online and mobile shopping has also increased the volume of smaller shipments, including single-pair shipments, from our warehouses. The increased volume of smaller shipments has resulted in higher average distribution costs, including both shipping and processing costs incurred at our distribution centers. In addition, an increase in the volume of e-commerce sales, which have higher return rates than in-store sales, may in turn lead to higher shipping and processing costs. New and emerging technology may enable new approaches or choices for how our customers procure goods and services and pay for those goods and services. We may be unable to quickly adapt to rapid change resulting from artificial intelligence and other machine learning technologies that may result in changes to our supply chain, distribution channels, and point-of-sale capabilities. The success of both our wholesale and retail operations depends largely on our ability to anticipate, understand and react to these changing consumer shopping patterns. If we fail to respond to changes in consumer shopping patterns, demands and fashion trends, develop new products and designs, and implement effective, responsive merchandising and distribution strategies and programs, we could experience lower sales, excess inventories and lower gross margins, any of which could have an adverse effect on our results of operations and financial condition .
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Certain branded suppliers are becoming more selective in their distribution channels. The loss of one or more of our major branded suppliers may adversely impact our business, results of operations, financial condition and cash flows.
Our Famous Footwear segment purchases a substantial portion of its footwear products from major branded suppliers. Products purchased from three key third-party suppliers (Nike, Skechers and adidas) represented approximately 24% of consolidated net sales in 2025. As is common in the industry, we do not have any long-term contracts with our suppliers. In addition, the success of our financial performance is dependent on the ability of our Famous Footwear segment to obtain products from our suppliers on a timely basis and on acceptable terms. While we believe we have positive working relationships with our current suppliers, the loss of any of our major suppliers or product developed exclusively for our Famous Footwear stores could have a material adverse effect on our business, financial condition and results of operations. In addition, negative trends in global economic conditions, including the impact of the wars in Iran, Israel and Eastern Europe and heightened tensions between China and Taiwan, along with unpredictable tariff volatility, may adversely impact our suppliers. If these third parties do not perform their obligations or are unable to provide us with the materials and services we need at prices and terms that are acceptable to us, our ability to meet our consumers’ demand could be adversely affected.
Customer concentration and other trends in customer behavior may lead to a reduction in or loss of sales.
Our wholesale customers include e-commerce retailers, national chains, department stores, independent retailers and mass merchandisers. Several of our customers operate multiple department store divisions. Furthermore, we often sell multiple types of branded, licensed and private-label footwear to these same customers. While we believe purchasing decisions in many cases are made independently by the buyers and merchandisers of each of the customers, a decision by a significant customer to decrease the amount of footwear products purchased from us could have a material adverse effect on our business, financial condition or results of operations. We extend credit to our wholesale customers based on an evaluation of each customer’s financial condition, usually without collateral. Various retailers, including some of our customers, have experienced financial difficulties, including bankruptcy, increasing the risk of extending credit to such retailers. If any of our customers experience a shortage of liquidity, the risk that the customer’s outstanding payables to us not being paid could cause us to assume more credit risk relating to the customer’s accounts payable.
In addition, with the growing trend toward retail trade consolidation, including store count reductions at major retail chains, and consumers’ preference for online shopping, we and our wholesale customers increasingly depend upon a reduced number of key retailers whose bargaining strength is growing. This consolidation may result in the following adverse consequences:
Our wholesale customers may seek more favorable terms for their purchases of our products, which could limit our ability to raise prices, recoup cost increases or achieve our profit goals.
The number of stores that carry our products could decline, thereby exposing us to a greater concentration of accounts receivable risk and negatively impacting our brand visibility.
We also face the following risks with respect to our customers:
Our customers could develop in-house brands or use a higher mix of private-label footwear products, which may negatively impact our sales.
As we sell our products to customers and extend credit based on an evaluation of each customer’s financial condition, the financial difficulties, including bankruptcy, of a customer could cause us to stop doing business with that customer, reduce our business with that customer or be unable to collect from that customer.
Since we transact primarily in United States dollars, our international customers could purchase from competitors who will transact business in their local currency.
If our customers experience significant downturns or disruptions in their business, or file for bankruptcy, they may reduce their purchases of our products.
Retailers are directly sourcing more of their products directly from international manufacturers and reducing their reliance on wholesalers, which could have a material adverse effect on our business and results of operations.
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We operate in a highly competitive industry, and we face significant pricing pressures from existing and new competitors.
Competition is intense in the footwear industry. There has also been consolidation of competitors in the industry, resulting in certain competitors that are larger and have greater financial, marketing and technological resources than we do. In addition, a move toward vertical integration by our competitors could create additional competitive pressures that may decrease our market share. Other competitors are able to offer footwear on a lateral basis alongside their apparel products, or have successfully branded their trademarks as lifestyle brands, resulting in greater competitive advantages. Low barriers to entry into this industry further intensify competition by allowing new companies to easily enter the markets in which we compete. Further, the fast fashion, value fashion and off-price retailers have shifted customer expectations of pricing for well-known brands and have contributed to additional promotional and pricing pressures in recent years. Some of our suppliers further compound these competitive pressures by allowing consumers to purchase their products directly through supplier-maintained e-commerce sites and retail stores. The Internet facilitates price transparency and comparison shopping, which increases the level of competition we face and puts competitive pressure on us to keep our prices low.
We believe that our ability to compete successfully in the footwear industry depends on a number of factors, including style, price, performance, quality, location and service, as well as the strength of our brand names. We remain competitive by increasing awareness of our brands, improving the efficiency of our supply chain and enhancing the style, comfort, fashion and perceived value of our products. However, our competitors may implement more effective marketing campaigns, adopt more aggressive pricing policies, make more attractive offers to potential employees, distribution partners and manufacturers, or respond more quickly to changes in consumer preferences than us. As a result, we may not be able to compete successfully in the future, and increased competition may result in price reductions, reduced gross margins, loss of market share and an inability to generate cash flows that are sufficient to maintain or expand the development and marketing of our products, which could adversely impact our financial results.
Our quarterly sales and earnings may fluctuate, which may result in volatility in, or a decline in, our stock price.
Our quarterly sales and earnings can vary due to a number of factors, many of which are beyond our control, including the following:
Our Famous Footwear retail business is seasonally weighted to the back-to-school season, which primarily falls in our third fiscal quarter. As a result, the success of our back-to-school offering, which is affected by our ability to anticipate consumer demand and fashion trends, could have a disproportionate impact on our full year results. Because of this seasonality, factors negatively affecting us during the third fiscal quarter of any year, including adverse weather or economic conditions, could have a material adverse effect on our financial condition and results of operations for the entire year.
In our wholesale business, sales of footwear are dependent on orders from our major customers, and they may change delivery schedules, change the mix of products they order or cancel orders without penalty.
Our wholesale customers have increasingly shifted toward lower initial orders and more replenishment and drop ship orders, which may result in shifts of sales between quarters.
Our estimated annual tax rate is based on projections of our domestic and international operating results for the year, which we review and revise as necessary each quarter.
Our earnings are also sensitive to a number of factors that are beyond our control, including manufacturing and transportation costs, changes in product sales mix, geographic sales trends, weather conditions, consumer sentiment and currency exchange rate fluctuations.
As a result of these specific and other general factors, our operating results will vary from quarter to quarter and the results for any particular quarter may not be indicative of results for the full year. Further, we may not be able to accurately predict our quarterly sales. Any shortfall in sales or earnings from the levels expected by investors could cause a decrease in the trading price of our common stock.
Foreign currency fluctuations may result in higher costs and decreased gross profits.
Although we purchase most of our products from international manufacturers in United States dollars and otherwise may engage in foreign currency hedging transactions from time to time, we may experience cost variations with respect to exchange rate changes. We operate on a global basis, with approximately 7% of our total net sales for the year ended
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January 31, 2026 generated from operations outside of the United States. As we continue to expand our international operations, our sales and expenditures transacted in foreign currencies could become increasingly material and be subject to greater foreign currency fluctuations. Currency exchange rate fluctuations may also adversely impact third parties who manufacture the Company’s products by making their purchases of raw materials or other production costs more expensive and more difficult to finance, resulting in higher prices and lower margins for the Company and its distributors.
Perception of the overall retail industry and other macroeconomic conditions may impact our stock price and operations.
The retail industry continues to evolve and undergo structural change. This evolution and structural change have resulted in the bankruptcy and/or reorganization of various other publicly traded retailers, including major customers. Despite our best efforts to differentiate our business model and processes, our stock price has fluctuated as a result of perceptions of the overall retail environment and investor confidence in the retail sector. The volatility in our stock price could be exacerbated by macroeconomic conditions that affect the market generally or our industry in particular.
Volatility in securities markets, interest rates and other economic factors could substantially increase defined benefit pension costs.
The Company currently has obligations under its defined benefit pension plans. The funded status of the pension plans is dependent on many factors, including returns on invested assets and the discount rates used to determine pension obligations. Unfavorable impacts from returns on plan assets, changes in discount rates, changes in plan demographics or revisions in the applicable laws or regulations could materially change the timing and amount of pension funding requirements, which could reduce the cash available for normal operations. Operating performance may be negatively impacted by the amount of expense recorded for our pension plans. In addition, pension expense is calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic and demographic conditions. Differences between estimated and actual results give rise to gains and losses that are deferred and amortized as part of future pension expense, which can create volatility that adversely impacts future operating results.
OPERATIONAL RISKS
We rely primarily on international sources of production, which subjects our business to risks associated with international trade.
We rely primarily on international sourcing for our footwear products through third-party manufacturing facilities located outside the United States. As is common in the industry, we do not have any long-term contracts with our third-party international manufacturers. International sourcing is subject to numerous risks, including trade relations, work stoppages, transportation delays (including delays at international and domestic ports) and costs (including customs duties, quotas, tariffs (including retaliatory tariffs), anti-dumping duties, safeguard measures, cargo restrictions or other trade restrictions), domestic and international political instability, foreign currency fluctuations, variable economic conditions, expropriation, nationalization, natural disasters, terrorist acts and military conflict, changes in governmental regulations (including the U.S. Foreign Corrupt Practices Act). It is also impacted by geo-political events, such as volatility and wars in the Middle East (including the ongoing war involving Iran), the current war in Ukraine and continued tensions between China and Taiwan. Certain of these events may also contribute to increased volatility in global oil prices, which could further increase transportation, manufacturing and other operating costs. Supply chain disruptions and port congestion have in the past delayed receipt of inventory and this could occur again in the future. Delayed inventory receipt could delay deliveries to our wholesale customers, and reduce availability in our stores and e-commerce websites, which could adversely impact our financial results. In addition, the imposition of tariffs or other costs on imported products may result in further increases in product prices, which may in turn continue to adversely impact our gross margins if we are unable to mitigate the impact of the costs. At the same time, potential changes in manufacturing preferences, including, but not limited to the following, pose additional risk and uncertainty:
Manufacturing capacity may shift from footwear to other industries with manufacturing margins that are perceived to be higher.
Some footwear manufacturers may face labor shortages as workers seek better wages and working conditions in other industries or locations.
As a result of these risks, there can be no assurance that we will not experience reductions in available production capacity, increases in our product costs, late deliveries or terminations of our supplier relationships. Furthermore, these sourcing
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risks are compounded by limited diversification in the geographic location of our international sourcing and manufacturing. Approximately 20% of the footwear we sourced in 2025 was from China. With a significant portion of our supply originating in China, a substantial portion of our supply could be at risk in the event of any significant negative development related to relations between United States and China, including additional tariffs imposed on products imported from China. In addition, international expansion in China may be hampered as a result of the adverse economic conditions that China is currently experiencing.
Although we believe we could find alternative manufacturing sources for the products that we currently source from third- party manufacturing facilities in China or other countries, we may not be able to locate alternative manufacturers on terms as favorable as our current terms, including pricing, payment terms, manufacturing capacity, quality standards and lead times for delivery. In addition, there is substantial competition in the footwear industry for quality footwear manufacturers. Accordingly, our future results will partly depend on our ability to maintain positive working relationships with, and offer competitive terms to, our international manufacturers. If supply issues cause us to be unable to provide products consistent with our standards or manufacture our footwear in an efficient and cost-effective manner, our customers may cancel orders, refuse to accept deliveries or demand reductions in purchase prices, any of which could have a material adverse effect on our business and results of operations.
We also sell footwear in East Asia through our joint venture, licensing and franchise partners, and our recent acquisition of Stuart Weitzman, and plan to increase international sales efforts as part of our growth strategy. Our joint venture, licensing and franchise partners may have objectives that are different than our own. In addition, we may be subject to increased legal and reputational risk associated with the joint venture if it fails to adhere to consistent levels of compliance standards as our fully-owned operations.
Transitional challenges with acquisitions and divestitures could result in unexpected expenditures of time and resources.
As part of our business strategy to expand into complementary product categories and markets, we periodically pursue acquisitions of other companies, businesses or brands, such as the acquisition of the Stuart Weitzman business in August 2025. Such acquisitions involve numerous risks, challenges and uncertainties, including the potential to expose us to risks inherent in a new market or geographic region, loss of significant customers or key personnel of the acquired business, difficulties managing and implementing acquired assets or difficulties managing geographically remote operations. Although we review the financial results and records of acquisition candidates, the review may not reveal all existing or potential problems. As a result, we may not accurately assess the value of the business and may, accordingly, ultimately assume unknown adverse operating conditions and/or unanticipated expenses and liabilities related to the acquisition. Acquisitions may also cause us to incur write-offs of goodwill or intangible assets if the business does not perform as well as expected and substantial amortization expenses associated with other intangible assets. We also face the risk that we will not be able to integrate acquisitions into our existing operations or divest our businesses effectively without substantial expense, delay or other operational or financial problems. Integration may be hindered by, among other things, differing procedures, including internal controls, business practices and technology systems. We may need to allocate more management resources to integration than we planned, which may adversely affect our ability to pursue other profitable activities. We may experience difficulty integrating acquired businesses into our operations and may not achieve anticipated synergies. The acquisition of Stuart Weitzman was funded through our revolving credit agreement and we face the risk that the return on the acquisition will not support the expenditures or indebtedness to acquire the business. We may face similar challenges with any brands or businesses we choose to divest.
We are reliant upon our information technology systems, and any major disruption of these systems could adversely impact our ability to effectively operate our business.
Our computer network and systems are essential to all aspects of our operations, including design, pricing, production, accounting, reporting, forecasting, ordering, manufacturing, transportation, marketing, sales and distribution. Our ability to manage and maintain our inventory and to deliver products in a timely manner depends on these systems. With the continued growth in e-commerce direct-to-consumer sales, any system disruption may result in an adverse impact to our operations. If any of these systems fails to operate as expected, we experience problems with transitioning to upgraded or replacement systems, we fail to realize the expected return on our technology investment, a breach in security occurs or a natural disasterinterrupts system functions, we may experience delays in product fulfillment, reduced efficiency in our
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operations, or delays in reporting our financial results to investors, or we may be required to expend significant capital to correct the problem, which may have an adverse effect on our results of operations and financial condition.
A cybersecurity breach may adversely affect our sales and reputation.
We routinely possess sensitive consumer and associate information and periodically provide it to third parties for analysis, benefit distribution or compliance purposes. Consumers are also increasingly using mobile devices and applications to shop online and do comparison shopping. Additionally, a significant portion of our Corporate employees are periodically working remotely, which may result in heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts. From time to time, we have experienced, and may continue to experience, attacks on our systems or those of our vendors. While we believe we have taken reasonable and appropriate steps to protect sensitive information, hackers and data thieves operate sophisticated, large-scale attacks that could breach our information systems, despite ongoing security measures. In addition, we are required to comply with increasingly complex regulations designed to protect our business and personal data. Any breach of our network security, a third-party’s network security or failure to comply with applicable regulations may result in (a) the loss of valuable business data and/or our consumers’ or associates’ personal information, (b) increased costs associated with implementing additional protections and processes, (c) a disruption of our business and a loss of sales, (d) negative media attention, (e) damage to our consumer and associate relationships and reputation, and (f) fines or lawsuits.
Our operating results depend on preparing accurate sales forecasts and properly managing our inventory levels.
Based on sales forecasts, we place advance orders with manufacturers for certain products before receiving all customer orders to minimize purchasing costs. We also maintain an inventory of certain products that we anticipate will be in greater demand. At the retail level, we place orders for products many months in advance of our key selling seasons. Adverse economic conditions and rapidly changing consumer preferences can make it difficult for us and our retail customers to accurately forecast product trends in order to match production with demand. If we fail to accurately assess consumer fashion tastes and the impact of economic factors on consumer spending or to effectively differentiate our retail and wholesale offerings, our inventory levels may exceed customer demand, resulting in inventory write-downs, higher carrying costs, lower gross margins or the sale of excess inventory at discounted prices, which could significantly impact our financial results. Conversely, if we underestimate consumer demand for our products or if our manufacturers fail to supply the quality products that we require in a timely manner, we may experience inventory shortages. Inventory shortages may delay shipments to customers (and possibly require us to offer discounts or costly expedited shipping), negatively impact retailer and distributor relationships, adversely impact our sales results and diminish brand awareness and loyalty.
In addition, our retail stores are inherently subject to the risk of inventory loss and theft. In recent years, the retail industry has experienced an increase in inventory shrinkage, and although we have taken steps to reduce inventory shrinkage, higher rates of shrinkage or increased costs associated with addressing inventory theft, including maintaining a safe store environment for our customers and associates, may have a material adverse impact on our results of operations.
A disruption in the effective functioning of our distribution centers could adversely affect our ability to deliver inventory on a timely basis.
We currently use several leased distribution centers, which serve as the source of replenishment of inventory for our footwear stores and e-commerce websites operated by our Famous Footwear and Brand Portfolio segments and serve the wholesale operations of our Brand Portfolio segment. Our success depends on our ability to handle the high volume of e-commerce sales and single pair shipments, which requires significant capital to operate with a greater level of sophistication and automation, as well as higher processing and distribution costs. We may be unable to successfully manage, negotiate or renew our distribution center leases, or we may experience complications with respect to our distribution centers, such as substantial damage to, or destruction of, such facilities due to natural disasters. In such an event, our other distribution centers may not be able to support the resulting additional distribution demands and we may be unable to locate alternative persons or entities capable of fulfilling our distribution needs, resulting in an adverse effect on our ability to deliver inventory on a timely basis. The effective operation of our distribution centers may also be impacted by wage inflation, labor shortages and disruptions to the supply chain. Although we believe that our receiving and distribution processes are efficient and well positioned to support our current business and potential expansions, we cannot offer assurances that we have anticipated all of the changing demands that our expanding operations will impose
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on our receiving and distribution system or that events beyond our control will not result in delays in the delivery of merchandise to our stores, e-commerce consumers or wholesale customers.
Our success depends on our ability to retain senior management and recruit and retain other key associates.
Our success depends on our ability to attract, retain and motivate qualified management, administrative, product development, marketing and sales personnel to support existing operations and future growth. In addition, our ability to successfully integrate acquired businesses often depends on our ability to retain incumbent personnel, many of whom possess valuable institutional knowledge and operating experience. Competition for qualified personnel in the footwear industry is intense and we compete for these individuals with other companies that in many cases have superior financial and other resources. The loss of the services of any member of our senior management or key associates, the inability to attract and retain other qualified personnel or the inability to effectively transition positions could adversely affect the sales, design and production of our products as well as the implementation of our strategic initiatives. Management transitions may create uncertainty, and if we do not successfully manage the transition, it could be disruptive to our daily operations or impact public or market perception, which could negatively impact our ability to operate effectively and have an adverse impact on our business.
Our retail business depends on our ability to secure affordable and desirable leased locations.
The success of the retail business within our Famous Footwear and Brand Portfolio segments depends, in part, on our ability to secure affordable, long-term leases in desirable locations for our leased retail footwear stores and to secure renewals of such leases. As consumer shopping preferences have evolved, we continue to focus on opening stores in locations with a greater penetration of high-value consumers. No assurance can be given that we will be able to successfully negotiate lease renewals for existing stores or obtain acceptable terms for new stores in desirable locations. As a result, the number of consumers and financial performance of individual stores may decline and the average sales per square foot at our stores may be reduced. Further, the Company may not be able to renew some leases in the portfolio at the same favorable lease rates during renegotiation. This may result in impairments or lease termination charges that adversely impact our financial results. Due to the changing retail landscape, we may want to reduce the number of retail store locations but may be unable to successfully exit lease agreements.
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Failure to successfully finalize our planned headquarters sale and relocation could result in unexpected expenditures and operational disruptions.
We have completed the sale of a portion of our headquarters campus in Clayton, Missouri and entered into an agreement to sell one remaining portion of the campus, while the other is being actively marketed. Should the sale of either of the remaining parcels not be completed, we may have to carry a portion of the campus property longer than intended and incur unexpected costs, or if comparable sales prices cannot be secured, we may have to recognize a loss on disposal, adversely impacting our financial results.
In addition, the build-out of our new leased headquarters could be delayed or cost more than expected, which could cause disruption to our business operations or negatively impact our financial results.
Damage to our reputation or brands may negatively impact our business .
Our ability to maintain our reputation is integral to the success of our business. Failure to maintain quality merchandise and quality customer service may damage our reputation. The consumer’s perception of us, our stores and our brands, whether justified or not, could harm our reputation. Our success depends, in part, on our ability to keep existing consumers, while also attracting new consumers, and a damaged reputation will hinder that ability .
In addition, the increased use of social media by us and our consumer has also increased the risk to our reputation. Negative commentary regarding us or the products we sell may be posted on social media at any time. Consumers value readily available information and may rely on negative commentary without regard to its accuracy. If we are unable to effectively manage social media, our reputation and consumer’s perception of our brands may be negatively impacted.
Our responsible business initiatives may result in increased scrutiny from stakeholders or regulators with respect to our responsible business goals and objectives. We may not be able to achieve those goals within the timelines established, or at all. Failure to successfullyachieve our established goals may damage our reputation, or the reputation of our brands. Our reputation may also be damaged if we do not act, or are perceived by our consumers to not act, responsibly with respect to our impact on the environment or other social or governance matters. Damage to our brands and reputation could have a material adverse effect on our business, results of operations, financial position and cash flow.
A significant portion of our Famous Footwear sales are dependent on our Famous Footwear loyalty program, Famously You Rewards ("Rewards"), and any decrease in sales from Rewards could have a material adverse impact on our sales.
Rewards is a customer loyalty program that drives sales and traffic for the Famous Footwear segment. Rewards members earn points toward certificates for qualifying purchases. Upon reaching specified point values, members are issued a Rewards certificate, which may be redeemed for purchases at Famous Footwear. Approximately 77% of our 2025 sales within the Famous Footwear segment were generated by our Rewards members. If our Rewards members do not continue to shop at Famous Footwear, our sales may be adversely affected.
TAX, LEGAL, AND REGULATORY RISKS
Changes in tax laws may result in increased volatility in our effective tax rates.
Our financial results are significantly impacted by the effective tax rates of both our domestic and international operations. Future changes in tax laws could materially impact our effective tax rate. Other factors, such as changes in the mix of earnings in countries with differing statutory tax rates, changes in permitted deductions, interpretations, policies and treaties and the outcome of income tax audits in various jurisdictions, may result in higher taxes, lower profitability and increased volatility in our financial results.
In addition, changes in the tax laws of foreign jurisdictions may arise as a result of the Pillar Two (“Pillar Two”) Global Anti-Base Erosion model rules that were released by the Organization for Economic Cooperation and Development (OECD) in 2021. The OECD continues to release guidance and many countries are implementing legislation to adopt the rules, which became effective on January 1, 2024. In January 2026, the OECD announced that the U.S. multinational regime would be considered a side-by-side regime that should prevent U.S. companies from double taxation. Although we do not anticipate a material change to our tax provision as a result of Pillar Two, there can be no assurance that our effective tax rate or tax payments will not be adversely affected as countries independently amend their tax laws to adopt
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Pillar Two. We continue to evaluate the impact of Pillar Two as additional guidance becomes available; however, uncertainty remains regarding the timing and interpretation of the rules by the jurisdictions in which we operate.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted into law. The OBBB Act includes a broad range of tax reform provisions, including allowing accelerated tax deductions for qualified property and immediate deduction of domestic research and development costs. The OBBB Act also modifies some of the international tax rules. We are in the process of evaluating the impact of certain provisions of the OBBB Act on our consolidated financial statements, but the provisions are not expected to have a material impact on the Company’s income tax provision.
Our commitments and shareholder expectations relating to responsible business initiatives may expose us to liabilities, increased costs, reputational harm, and other adverse effects on our business.
We continue to be focused on responsible business initiatives relating to our business, including greenhouse gas emissions, human and civil rights and talent management. New laws and regulations in these areas, including those passed by the State of California, will be required to be adopted, and may be passed by other states or regulatory agencies. The criteria used by regulators and other relevant stakeholders to evaluate our responsible business initiative practices, capabilities, and performance may change rapidly, which in each case could require us to undertake costly initiatives or operational changes. In addition, the requirements may not be uniform across jurisdictions, which may result in increased complexity and cost to become or remain compliant. Further, international expansion into Europe and China resulting from the Stuart Weitzman footprint in those areas present new exposure to responsible business initiative regulations. For example, collection and assurance of responsible business initiative data and developing and acting on such initiatives can be costly, difficult and time consuming and is subject to evolving reporting standards, including climate- and nature-related disclosure requirements and the EU’s disclosure regulations set forth in the Corporate Sustainability Directive (“CSRD”), and similar proposals and laws by other domestic and international regulatory bodies. Non-compliance with these rules or standards or a failure to address regulator, stakeholder and societal expectations may result in potential cost increases, litigation, fines, penalties, production and sales restrictions, brand or reputational damage, loss of customers, suppliers and commercial partners, failure to retain and attract talent, lower valuation and higher investor activism activities. Managing these considerations and implementing these goals and initiatives involves risks and uncertainties, including increased costs, and often depends on third-party performance or data that is outside our control. We cannot guarantee that we will achieve our announced responsible business initiatives, satisfy all stakeholder expectations, or that the benefits of implementing or achieving these goals and initiatives will not surpass their projected costs. Any failure, or perceived failure, to achieve responsible business initiatives, as well as to manage associated risks, adhere to public statements, comply with federal, state or international laws and regulations or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
Our business, sales and brand value could be harmed by violations of labor, trade or other laws.
We focus on doing business with those suppliers who share our commitment to responsible business practices and the principles set forth in our Production Code of Conduct (the “PCOC”). By requiring our suppliers to comply with the PCOC, we encourage our suppliers to promote best practices and work toward continual improvement throughout their production operations. The PCOC sets forth standards for working conditions and other matters, including compliance with applicable labor practices, workplace environment and compliance with laws. Although we promote ethical business practices, we do not control our suppliers or their labor practices. A failure by any of our suppliers to adhere to these standards or laws could cause us to incur additional costs for our products or cause negative publicity and harm our business and reputation. We also require our suppliers to meet our standards for product safety, including compliance with applicable laws and standards with respect to safety issues, including lead content in paint. Failure by any of our suppliers to adhere to product safety standards could lead to a product recall, which may result in critical media coverage, harm our business and reputation, and cause us to incur additional costs.
In addition, if we, or our suppliers or international manufacturers, violate United States or international trade laws or regulations, we may be subject to additional duties, significant monetary penalties, the seizure and forfeiture of the products we are attempting to import or the loss of our import privileges. Possible violations of United States or international laws or regulations could include inadequate recordkeeping of our imported products, misstatements or errors as to the origin, classification, marketing or valuation of our imported products, fraudulent visas or labor violations. The
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effects of these factors could render our conduct of business in a particular country undesirable or impractical and have a negative impact on our operating results.
Our reputation and competitive position are dependent on our ability to license well-recognized brands, license our own brands under successful licensing arrangements and protect our intellectual property rights.
Licenses - Company as Licensee
Although we own most of our wholesale brands, we also rely on our ability to attract, retain and maintain good relationships with licensors that have strong, well-recognized brands and trade names. Our license agreements are generally for an initial term of two to four years, subject to renewal, and there can be no assurance that we will be able to renew these licenses. Even our longer-term or renewable licenses are typically dependent upon our ability to market and sell the licensed products at specified levels, and the failure to meet such levels may result in the termination or non-renewal of such licenses. Furthermore, many of our license agreements require minimum royalty payments, and if we are unable to generate sufficient sales and profitability to cover these minimum royalty requirements, we may be required to make additional payments to the licensors that could have a material adverse effect on our business and results of operations. In addition, because certain of our license agreements are non-exclusive, new or existing competitors may obtain licenses with overlapping product or geographic terms, resulting in increased competition for a particular market.
Licenses - Company as Licensor
We have entered into numerous license agreements with respect to the brands and trade names that we own. While we have significant control over our licensees’ products and advertising, we generally cannot control their operational and financial issues. If our licensees are not able to meet annual sales and royalty goals, obtain financing, manage their supply chain, control quality and maintain positive relationships with their customers, our business, results of operations and financial position may be adversely affected. While we would likely have the ability to terminate an underperforming license, it may be difficult and costly to locate an acceptable substitute distributor or licensee, and we may experience a disruption in our sales and brand visibility. In addition, although many of our license agreements prohibit the licensees from entering into licensing arrangements with certain of our competitors, they are generally not prohibited from offering, under other brands, the types of products covered by their license agreements with us.
Trademarks
We believe that our trademarks and trade names are important to our success and competitive position because they create a market for our products and distinguish our products from other products. We cannot, however, guarantee that we will be able to secure protection for our intellectual property in the future or that such protection will be adequate for future operations. Furthermore, we face the risk of ineffective protection of intellectual property rights in jurisdictions where we source and distribute our products, some of which do not protect intellectual property rights to the same extent as the United States. If we are unsuccessful in challenging a party’s products on the basis of infringement of our intellectual property rights, continued sales of these products could adversely affect our sales, devalue our brands and result in a shift in consumer preference away from our products. We may face significant expenses and liability in connection with the protection of our intellectual property rights, and if we are unable to successfully protect our rights or resolve intellectual property conflicts with others, our business or financial condition could be adversely affected.
We are subject to periodic litigation and other regulatory proceedings, which could result in the unexpected expenditure of time and resources.
We are a defendant from time to time in lawsuits and regulatory actions (including environmental matters) relating to our business and to our past operations. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such proceedings. An unfavorable outcome could have a material adverse impact on our business, financial condition and results of operations. In addition, regardless of the outcome of any litigation or regulatory proceedings, such proceedings are expensive and will require that we devote substantial resources and executive time to defend, thereby diverting management’s attention and resources that are needed to successfully run our business. See Item 3, Legal Proceedings , for further discussion of pending matters.
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LIQUIDITY RISKS
Our business, results of operations, financial condition and cash flows could be adversely affected by the failure of financial institutions to fulfill their commitments under our Credit Agreement.
The Seventh Amendment to the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), which matures on June 27, 2030, is provided by a syndicate of financial institutions, with each institution agreeing severally (and not jointly) to make revolving credit loans to us in an aggregate amount of up to $700.0 million in accordance with the terms of the Credit Agreement. In addition, the Credit Agreement provides for an increase at the Company’s option by up to $250.0 million. If one or more of the financial institutions participating in the Credit Agreement were to default on its obligation to fund its commitment, the portion of the facility provided by such defaulting financial institution may not be available to us. In addition, as of January 31, 2026, total borrowing availability under the Credit Agreement was $207.7 million. Failure to meet our debt covenants under the Credit Agreement may require the Company to seek waivers or amendments of the debt covenants, alternative or additional sources of financing or reduce expenditures. In addition, borrowings under our Credit Agreement bear interest at varying rates based on either the secured overnight financing rate or the prime rate, plus a spread. As a result, increases in interest rates, such as those we have recently experienced, could require a greater portion of our cash flow to be used to pay interest, which will negatively impact our net income and cash flow from operations .
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Famous Footwear
Famous Footwear, which is one of America’s leading family – branded footwear retailers, was founded on a simple idea: that everyone deserves to feel the joy that comes from a new pair of shoes. Our Famous Footwear segment includes 821 Famous Footwear stores, famousfootwear.com and famousfootwear.ca in Canada. This North American footprint of
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mostly off-mall store locations is convenient for Famous Footwear’s target consumer, the millennial family. We seek to meet the needs of that millennial family and others by providing an assortment of trend-right, brand-name fashion, casual and athletic footwear at a great price.
During 2025, we continued to execute on our three-pronged strategy, which concentrates on merchandising, marketing and consumer experience. We remained focused on increasing the opportunity between Famous Footwear and the brands within our Brand Portfolio segment, such as Dr. Scholl’s Shoes, LifeStride, Naturalizer and Blowfish Malibu, among others. Vertical integration provides Famous Footwear with greater access to fashion products from brands that resonate with its consumer, as well as greater ability to be flexible with trends and offer better profit potential. We also have focused on offering the consumer a balanced assortment of fashion and athletic styles from well-known brands. We continued to tightly manage our inventory levels in 2025, optimizing SKU counts and amplifying key product trends and items to drive sales volume. We believe our kids category is a key competitive differentiator. With the millennial mom as our target consumer, we believe her primary purchase motivation is her kids and will prioritize these purchases, even with macroeconomic pressures. As a result, we continue to make the kids business a critical component of how our associates connect with our consumers, including ensuring every child finds the perfect style and fit.
We are leaning into our best brands from an inventory, marketing and store presence perspective. In addition, we continue to invest in enhancing our in-store shopping experience to deliver a more engaging and inspiring experience across the omnichannel. Our FLAIR (Famous Localized and Immersive Retail) store concept has been successful at driving sales growth and we plan to continue to transform stores to this enhanced consumer shopping experience in 2026. The FLAIR store concept highlights our leading assortment of trending brands and elevates those brands in an energetic and exciting manner.
Brand Portfolio
Our Brand Portfolio segment is consumer-focused and we believe our success is dependent upon our ability to strengthen consumers’ preference for our brands by offering compelling style, quality, differentiated brand promises and innovative marketing campaigns. The segment is comprised of the Sam Edelman, Vionic, Naturalizer, Allen Edmonds, Dr. Scholl’s Shoes, Stuart Weitzman, LifeStride, Franco Sarto, Rykä, Blowfish Malibu, Vince, and Veronica Beard brands. Through these brands, we offer our customers a diversified selection of footwear, each designed and targeted to a specific consumer segment within the marketplace. We are able to showcase many of our brands in our retail stores and online, leveraging our wholesale and retail platforms, sharing consumer insights across our businesses and testing new and innovative products. Our Brand Portfolio segment operates 85 retail stores in North America for our Allen Edmonds, Sam Edelman and Stuart Weitzman brands. This segment also includes our e-commerce businesses that sell our branded footwear direct to consumers. We also operate a joint venture, which expands our international presence by distributing our Sam Edelman and Naturalizer brands through e-commerce sites, 53 retail stores in East Asia with further distribution through 148 branded stores owned and operated by third parties through franchise agreements. The Brand Portfolio segment also includes 50 Stuart Weitzman retail store locations in East Asia.
Known Trends Impacting Our Business
Macroeconomic Environment
Macroeconomic factors continued to impact consumer discretionary spending and our financial results during 2025. Throughout the year, we experienced less consumer traffic in our Famous Footwear retail stores, resulting in lower net sales; however, this decline was offset by higher net sales in our Brand Portfolio segment driven by our acquisition of Stuart Weitzman in August 2025. Tariff volatility and the lack of clarity surrounding future trade policy developments also heightened uncertainty in the global economy. We source a majority of our products internationally. Following the executive orders on tariffs in early 2025, we acted quickly to adjust our country sourcing mix and took other actions to mitigate the tariff impact, such as negotiating price concessions with our factories and selectively raising prices. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). The availability of refunds related to such tariffs, as well as the potential impact of additional tariff actions, remain uncertain. Despite these actions, we continued to be subject to tariffs ranging from 19% to 50% and price increases from our vendors. While we believe that the structural changes we have implemented in the last few years, as well as our diversified model and operational discipline, enable the Company to drive value in a variety of market conditions, changes in macro-level spending trends, geopolitical conflicts and
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uncertainties and the impact of trade policy decisions may continue to adversely impact our financial results in the future. In the near-term, we are focused on the areas within our control, including optimizing our sourcing strategy. We believe our focus on cost control and our commitment to execute our clearly defined strategic initiatives have positioned us for sustainable, long-term growth.
Liquidity
Our liquidity position remains strong, with $29.8 million in cash and cash equivalents and excess availability on our revolving credit agreement of $207.7 million as of January 31, 2026. During 2025, borrowings on our revolving credit agreement increased by $77.0 million to $296.5 million, primarily driven by the acquisition of Stuart Weitzman on August 4, 2025. During 2026, we will continue to evaluate our capital allocation priorities in light of business performance and market conditions.
Financial Highlights
The following is a summary of the financial highlights for 2025 and 2024:
($ millions, except per share amounts)
Change (1)
Consolidated net sales
Famous Footwear segment net sales
Famous Footwear comparable sales % change
Brand Portfolio segment net sales
Gross profit
Gross margin
Operating earnings
Diluted (loss) earnings per share
n/m – not meaningful
The following items should be considered in evaluating the comparability of our 2025 and 2024 results:
Acquisition of Stuart Weitzman – As further discussed in Note 3 to the consolidated financial statements, on August 4, 2025, the Company completed its acquisition of the Stuart Weitzman business for $108.9 million, which was funded with borrowings under our revolving credit agreement. Stuart Weitzman contributed $102.2 million in net sales during the period from acquisition through January 31, 2026. In aggregate, we incurred costs of $27.6 million ($20.5 million on an after-tax basis, or $0.62 per diluted share) during 2025. These charges included $15.4 million of incremental cost of goods sold for the fair value step-up adjustment on the acquired Stuart Weitzman inventory and $12.2 million in acquisition and integration costs, which are presented in restructuring and other special charges on the consolidated statement of earnings. Refer to Note 5 to the consolidated financial statements for further discussion of these costs.
Expense reduction initiatives – During 2025, the Company incurred $9.6 million ($7.1 million on an after-tax basis, or $0.22 per diluted share) in connection with expense reduction initiatives announced in the second quarter of 2025. These charges primarily related to severance and other associated costs. Refer to Note 5 to the consolidated financial statements for further discussion of these costs.
Sale of corporate headquarters – On December 19, 2025, the Company completed the sale of the largest of the three parcels comprising its corporate headquarters in Clayton, Missouri. The Company recognized a gain of $2.6 million ($1.9 million on an after-tax basis, or $0.06 per diluted share). Refer to Note 5 to the consolidated financial statements for further discussion of these costs.
Organizational changes – During 2025, we incurred costs of $2.0 million ($1.5 million on an after-tax-basis, or $0.04 per diluted share) related to a CFO transition at our corporate headquarters, with no corresponding costs during 2024. Refer to Note 5 to the consolidated financial statements for further discussion.
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Restructuring costs - During 2024, we incurred costs of $9.9 million ($7.3 million on an after-tax basis, or $0.21 per diluted share) for restructuring. The costs were primarily for the exit of our Naturalizer domestic retail store operations, severance and pension settlement costs associated with the acceptance of a lump sum buyout offer for the domestic pension plan. Of the $7.2 million in charges presented in restructuring and other special charges on the consolidated statements of earnings in 2024, $6.4 million is reflected in the Brand Portfolio segment, $0.6 million is reflected in the Famous Footwear segment and $0.2 million is reflected within the Eliminations and Other category. The remaining $2.7 million of restructuring costs related to the pension settlement are presented in other (expense) income, net, and reflected in the Eliminations and Other category. Refer to Note 5 to the consolidated financial statements for further discussion of these costs.
Financial Outlook
While 2025 was a challenging year marked by the impact of tariffs and a highly volatile retail environment, we made progress executing our strategic growth initiatives. We expect 2026 to be a build-back year as we begin to restore earnings power through initiatives that are already in place. Although the current geopolitical environment presents ongoing uncertainty, we remain focused on disciplined execution to improve financial performance and drive long-term value for our shareholders.
Metrics Used in the Evaluation of Our Business
The following are a couple of key metrics by which we evaluate our business and make strategic decisions:
Comparable sales
The comparable sales metric is a metric commonly used in the retail industry to evaluate the revenue generated for stores that have been open for more than a year, though many retailers may calculate the metric differently. Management uses the comparable sales metric as a measure of an individual store’s success to determine whether its sales performance is consistent with expectations. Our comparable sales metric is a daily-weighted calculation for the period, which includes sales for stores that have been open at least 13 months. In addition, in order to be included in the comparable sales metric, a store must be open in the current period as well as the corresponding day(s) of the comparable retail calendar in the prior year. Accordingly, closed stores (including temporary store closures) are excluded from the comparable sales metric for each day of the closure. Relocated stores are treated as new stores and therefore excluded from the calculation. E-commerce sales for those websites that function as an extension of a retail chain are included in the comparable sales calculation. We believe the comparable sales metric is useful to shareholders and investors in assessing the performance of our existing retail store locations with comparable prior year sales, separate from the impact of store openings or closures.
Sales per square foot
The sales per square foot metric is commonly used in the retail industry to measure the efficiency of a store’s sales based upon the square footage in a store. Management uses the sales per square foot metric in our Famous Footwear segment as a measure of an individual store’s success to determine whether it is performing consistent with expectations. The sales per square foot metric is calculated by dividing total retail store sales, excluding e-commerce sales, by the total square footage of the retail store base at the end of each month of the respective period.
Comparison of Financial Results
The following sections discuss the consolidated and segment results of our operations for the year ended January 31, 2026 compared to the year ended February 1, 2025. For a discussion of the results for the year ended February 1, 2025 compared to the year ended February 03, 2024, refer to Part II, Item 7 " Management’s Discussion and Analysis of Financial Condition and Results of Operations " in our Annual Report on Form 10-K for the year ended February 1, 2025.
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CONSOLIDATED RESULTS
($ millions)
Net Sales
Net Sales
Net Sales
Net sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Restructuring and other special charges, net
Operating earnings
Interest expense, net
Other (expense) income, net
(Loss) earnings before income taxes
Income tax benefit (provision)
Net (loss) earnings
Net (loss) earnings attributable to noncontrolling interests
Net (loss) earnings attributable to Caleres, Inc.
Net Sales
Net sales increased $35.2 million, or 1.3%, to $2,757.9 million in 2025, compared to $2,722.7 million last year. Net sales for our Brand Portfolio segment increased $90.0 million, or 7.3%, compared to 2024. The increase in Brand Portfolio net sales reflects the impact of the Stuart Weitzman acquisition on August 4, 2025, which contributed $102.2 million of net sales. Net sales for our Famous Footwear segment decreased $56.4 million, or 3.6%, compared to 2024 net sales reflecting less traffic. On a consolidated basis, our direct-to-consumer sales represented approximately 73% of total net sales in 2025 compared to 72% last year.
Gross Profit
Gross profit decreased $37.2 million, or 3.0%, to $1,184.8 million in 2025, compared to $1,222.0 million in 2024, primarily driven by lower net sales at our Famous Footwear segment. As a percentage of net sales, our gross profit rate decreased to 43.0% in 2025, compared to 44.9% in 2024, primarily driven by lower merchandise margins associated with the impact of tariffs, higher inventory markdowns, higher sales of lower margin product and incremental cost of goods sold of $15.4 million for the Stuart Weitzman fair value inventory step-up adjustment required for purchase accounting.
We classify warehousing, distribution, sourcing and other inventory procurement costs in selling and administrative expenses. Accordingly, our gross profit and selling and administrative expenses, as a percentage of net sales, may not be comparable to other companies.
Selling and Administrative Expenses
Selling and administrative expenses increased $92.5 million, or 8.7%, to $1,157.5 million in 2025, compared to $1,065.0 million last year. The increase was primarily due to expenses associated with our acquired Stuart Weitzman brand. We also experienced higher expenses associated with growth in our international business, higher facility costs, reflecting higher depreciation associated with the investment in Famous Footwear store renovations, including the FLAIR concept and higher store rent expense as leases are renewed. As a percentage of net sales, selling and administrative expenses increased to 42.0% in 2025, from 39.1% in 2024.
Restructuring and Other Special Charges, Net
During 2025, we incurred restructuring costs of $20.9 million ($15.8 million on an after-tax basis, or $0.47 per diluted share). The costs were primarily for legal, information technology and other related costs due to the acquisition and integration of Stuart Weitzman, which closed on August 4, 2025, and severance and other related costs with our expense reduction initiatives and a CFO transition. These costs were partially offset by a gain on the sale of a portion of our corporate headquarters in the fourth quarter of 2025. During 2024, we incurred restructuring and other special charges of $7.1 million ($5.3 million on an after-tax basis, or $0.15 per diluted share) associated with our expense reduction initiatives. Refer to further discussion of these charges in the Financial Highlights section above and Note 5 to the consolidated financial statements.
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Operating Earnings
Operating earnings decreased $143.5 million to $6.4 million in 2025, compared to $149.9 million last year, reflecting the factors described above. As a percentage of net sales, operating earnings were 0.3% in 2025, compared to 5.5% in 2024.
Interest Expense, Net
Interest expense, net increased $4.5 million, or 32.1%, to $18.5 million in 2025, compared to $14.0 million in 2024, reflecting higher average borrowings on our revolving credit facility. As discussed above, we used the revolving credit facility to fund the acquisition of Stuart Weitzman that closed on August 4, 2025. Refer to Note 12 to the consolidated financial statements for additional information related to our borrowings.
Other (Expense) Income, Net
Other expense was $0.1 million in 2025, compared to $0.7 million in 2024. During the fourth quarter of 2025, we incurred a Supplemental Executive Retirement Plan settlement charge of $0.9 million. During the fourth quarter of 2024, we incurred a pension settlement charge of $2.7 million associated with a lump sum buyout for certain participants in the domestic pension plan. During 2025, we also had a lower expected return on assets. Refer to Note 6 to the consolidated financial statements for additional information related to our retirement plans. The net pension income in 2025 and 2024 was offset by non-operating expenses associated with logistics services provided to a third party.
Income Tax Benefit (Provision)
Our consolidated effective tax rate was 19.2% in 2025, compared to 21.5% in 2024. During 2025, discrete tax items affected our effective tax rate, including $5.0 million of expense from valuation allowances, offset by tax benefits of $3.0 million attributable to the Macau foreign tax rate differential and $2.5 million related to the remaining transition tax on the mandatory deemed repatriation of cumulative foreign earnings. During 2024, our effective tax rate was impacted by discrete tax benefits of $1.1 million related to share-based compensation.
In 2021, the OECD released Pillar Two Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. The OECD continues to release guidance and countries are implementing legislation to adopt the rules, which became effective on January 1, 2024. In January 2026, the OECD announced that the U.S. multinational regime would be considered a side-by-side regime that should prevent U.S. companies from double taxation. We are continuing to evaluate the Pillar Two rules and their potential impact on future periods, but we do not expect the rules to have a material impact on our tax provision or effective tax rate.
Refer to Note 7 to the consolidated financial statements for additional information regarding income taxes.
Net (Loss) Earnings Attributable to Caleres, Inc.
Consolidated net losses attributable to Caleres, Inc. were $6.7 million in 2025, compared to net earnings of $107.3 million in 2024, reflecting the factors described above.
Geographic Results
We have both domestic and international operations. Domestic operations include the operation of our Famous Footwear and other branded retail footwear stores, the wholesale distribution of footwear to numerous retail consumers and the operation of our domestic e-commerce websites. International operations primarily consist of wholesale operations in East Asia, Canada and Europe, retail operations in Canada and East and Southeast Asia and the operation of our international e-commerce websites. In addition, we license certain of our trade names to third parties who distribute and/or operate retail locations internationally. The operations in East Asia include first-cost transactions, where footwear is sold at
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international ports to customers who then import the footwear into the United States and other countries. The breakdown of domestic and international net sales and earnings before income taxes is as follows:
(Loss)
Earnings Before
Earnings Before
Earnings Before
($ millions)
Net Sales
Income Taxes
Net Sales
Income Taxes
Net Sales
Income Taxes
Domestic
International
As a percentage of sales, the pre-tax profitability on international sales is higher than on domestic sales because of a lower cost structure and the inclusion of the unallocated corporate administrative and other costs within domestic earnings.
FAMOUS FOOTWEAR
($ millions, except sales per square foot)
Net Sales
Net Sales
Net Sales
Net sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Restructuring and other special charges, net
Operating earnings
Key Metrics
Comparable sales % change
Comparable sales $ change
Sales change from 53rd week
Sales change from new and closed stores, net
Impact of changes in Canadian exchange rate on sales
Sales per square foot, excluding e-commerce (trailing twelve months)
Square footage (thousand sq. ft.)
Stores opened
Stores closed
Ending stores
Net Sales
Net sales decreased $56.4 million, or 3.6%, to $1,500.1 million in 2025, compared to $1,556.5 million last year, reflecting soft consumer demand. Comparable sales decreased 2.3% in 2025 but improved each quarter throughout the year. While we experienced a decline in consumer traffic in our retail stores, our e-commerce business grew in 2025. We also experienced higher penetration of the e-commerce channel, with growth from 14% of net sales last year to 16% of net sales in 2025. We remain focused on maximizing the vertical integration opportunity between the Brand Portfolio and Famous Footwear segments, with Dr. Scholl’s Shoes, LifeStride, Naturalizer and Blowfish Malibu representing four of Famous Footwear’s top 20 best-selling footwear brands in 2025. In the second quarter of 2025, we launched the Jordan brand, both online and in our retail stores. The brand quickly rose to one of Famous Footwear’s top brands and was in the top 10 best-selling brands for the remainder of the year.
During 2025, we closed 25 stores on a net basis as we continued to focus on optimizing our store base. During 2025, we continued to enhance the consumer experience by converting 22 stores to the FLAIR (Famous Localized and Immersive Retail) concept. These stores continue to outperform our traditionally designed retail stores. In addition, we opened one
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new store with the FLAIR concept in 2025. We ended the year with a total of 57 FLAIR stores and anticipate investing in more store conversions in 2026.
Sales to members of our customer loyalty program, Famously You Rewards ("Rewards"), continue to account for a majority of the segment’s sales, with approximately 77% of net sales to loyalty program members in 2025, compared to 75% in 2024.
Gross Profit
Gross profit decreased $38.6 million, or 5.6%, to $648.0 million in 2025, compared to $686.6 million last year, primarily driven by lower net sales. As a percentage of net sales, our gross profit rate decreased to 43.2% in 2025, compared to 44.1% in 2024 driven by higher levels of promotional activity and clearance sales.
Selling and Administrative Expenses
Selling and administrative expenses increased $1.6 million, or 0.3%, to $600.5 million during 2025, compared to $598.9 million last year. The increase primarily reflects higher facilities costs, including depreciation expense associated with the investment Famous Footwear store renovations, including the FLAIR store concept, and higher salary and benefits expenses, partially offset by lower share-based compensation expense and lower warehouse and distribution costs. As a percentage of net sales, selling and administrative expenses increased to 40.0% in 2025 from 38.5% last year, reflecting the deleveraging of expenses on lower net sales.
Restructuring and Other Special Charges, Net
Restructuring and other special charges of $0.3 million were incurred for severance costs associated with our expense reduction initiatives during 2025 . Restructuring and other special charges of $0.6 million were incurred in 2024 for severance costs . Refer to Note 5 to the consolidated financial statements for additional information related to these charges.
Operating Earnings
Operating earnings decreased $39.9 million to $47.2 million for 2025, compared to $87.1 million last year, primarily reflecting lower net sales and gross profit, as described above. As a percentage of net sales, operating earnings were 3.2% for 2025, compared to 5.6% last year.
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BRAND PORTFOLIO
($ millions)
Net Sales
Net Sales
Net Sales
Net sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Restructuring and other special charges, net
Operating earnings
Key Metrics
Direct-to-consumer (% of net sales) (1)
Change in wholesale net sales ($)
Change in retail net sales ($)
Sales change from acquired Stuart Weitzman business
Sales change from 53rd week
Unfilled order position at end of period
Company-Operated Stores:
North America
Stores opened (2)
Stores closed
Ending stores - North America
East and Southeast Asia
Ending stores - East Asia (2)
Total Company-Operated Stores
International franchise locations
Total
Direct-to-consumer includes sales of our retail stores and e-commerce sites, and sales through our customers’ websites that we fulfill on a drop-ship basis.
Includes 25 North America and 53 East Asia retail stores acquired from Stuart Weitzman.
Net Sales
Net sales increased $90.0 million, or 7.3%, to $1,316.0 million in 2025, compared to $1,226.0 million last year. The increase primarily reflects the acquisition of Stuart Weitzman on August 4, 2025, which contributed net sales of $102.2 million during 2025. During the year we saw strong growth in our company-owned e-commerce and international business.
At the end of 2025, we operated 85 stores in North America, which included 25 stores acquired as part of the Stuart Weitzman acquisition. During the year, we closed six stores and opened six new locations within the region. In East and Southeast Asia, we operated 103 stores at the end of 2025, including 50 stores acquired from Stuart Weitzman, at the end of 2025. The acquisition of Stuart Weitzman represents the Company’s continued commitment to expand its presence in East Asia. During the year, we closed 22 stores and opened 17 new stores in East and Southeast Asia. There were also 148 international branded stores owned and operated by third parties through franchise agreements at the end of 2025, compared to 120 international branded stores at the end of 2024.
The unfilled order position for our wholesale business increased $72.0 million to $332.2 million at the end of 2025, compared to $260.2 million at the end of last year.
Gross Profit
Gross profit increased $0.9 million, or 0.2%, to $537.2 million in 2025, compared to $536.3 million last year. As a percentage of sales, our gross profit rate decreased to 40.8% in 2025, compared to 43.7% last year. The decrease was driven by $15.4 million of incremental cost of goods sold related to purchase accounting inventory adjustments for Stuart Weitzman, the impact of tariffs and higher inventory markdowns.
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Selling and Administrative Expenses
Selling and administrative expenses increased $90.5 million, or 22.2%, to $498.4 during 2025, compared to $407.9 million last year. The increase primarily reflects expenses associated with the Stuart Weitzman business that we acquired in August 2025, growth in our international business and a higher provision for expected credit losses, partially offset by lower salaries and benefits expenses. As a percentage of net sales, selling and administrative expenses increased to 37.9% in 2025 from 33.2% last year.
Restructuring and Other Special Charges, Net
Restructuring and other special charges of $6.5 million were incurred during 2025. The costs were primarily associated with the integration and acquisition of Stuart Weitzman and expense reduction initiatives. Restructuring and other special charges of $6.3 million were recorded during 2024 for expenses associated with the exit of the Naturalizer retail store operations and severance . Refer to Note 5 to the consolidated financial statements for additional information related to these charges.
Operating Earnings
Operating earnings decreased $89.8 million to $32.3 million in 2025, compared to $122.1 million last year, as a result of the factors described above. As a percentage of net sales, operating earnings were 2.4% in 2025, compared to 10.0% last year.
ELIMINATIONS AND OTHER
($ millions)
Net Sales
Net Sales
Net Sales
Net sales
Cost of goods sold
Gross profit
Selling and administrative expenses
Restructuring and other special charges, net
Operating loss
The Eliminations and Other category includes the elimination of intersegment sales and profit, unallocated corporate administrative expenses, and other costs and recoveries.
The net sales elimination of $58.2 million for 2025 is $1.5 million, or 2.6%, lower than in 2024, reflecting a decrease in product sold from our Brand Portfolio segment to Famous Footwear.
Selling and administrative expenses increased $0.4 million, or 0.7%, to $58.6 million in 2025, compared to $58.2 million last year. The increase primarily reflects higher salaries and benefits expense and depreciation associated with the implementation of our cloud-based ERP platform in 2024. These higher costs were partially offset by lower expense associated with our cash and share-based incentive compensation plans.
Restructuring and other special charges of $14.1 million in 2025 were for legal, information technology and other integration-related costs associated with the acquisition of Stuart Weitzman that closed on August 4, 2025 as well as severance and other costs associated with our expense reduction initiatives. We also incurred costs related to a CFO transition at the corporate headquarters. Restructuring and other special charges of $0.2 million in 2024 were associated with severance. Refer to Note 5 to the consolidated financial statements for additional information related to these charges.
RESTRUCTURING AND OTHER INITIATIVES
Refer to the Financial Highlights section above and Note 5 to the consolidated financial statements for additional information related to these charges.
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LIQUIDITY AND CAPITAL RESOURCES
Our borrowings under the revolving credit agreement increased $77.0 million to $296.5 million at the end of 2025, compared to $219.5 million at the end of last year. We used our revolving credit facility to complete the Stuart Weitzman acquisition of $108.9 million on August 4, 2025. This increase was partially offset by cash generated from our operations in 2025. Net interest expense in 2025 was $18.5 million, compared to $14.0 million in 2024. The increase in net interest expense in 2025 reflects higher average borrowings and a lower weighted-average interest rate on our revolving credit facility.
Credit Agreement
As further discussed in Note 12 to the consolidated financial statements, the Company maintains a revolving credit facility (the “Credit Agreement”) for working capital needs and strategic initiatives. The Credit Agreement, which provides borrowing availability of up to $700.0 million, subject to borrowing base restrictions, that may be further increased by up to $250.0 million, matures on June 27, 2030. Interest on the borrowings is at variable rates based on the secured overnight financing rate (“SOFR”), or the prime rate (as defined in the Credit Agreement), plus a spread.
At January 31, 2026, we had $296.5 million of borrowings and $8.6 million in letters of credit outstanding under the Credit Agreement. Total borrowing availability was $207.7 million at January 31, 2026. We were in compliance with all covenants and restrictions under the Credit Agreement as of January 31, 2026.
Working Capital and Cash Flow
January 31, 2026
February 1, 2025
Working capital ($ millions) (1)
Current ratio (2)
Debt-to-capital ratio (3)
Working capital has been computed as total current assets less total current liabilities.
The current ratio has been computed by dividing total current assets by total current liabilities.
Debt-to-capital has been computed by dividing the borrowings under our revolving credit agreement by total capitalization. Total capitalization is defined as total debt and total equity.
Working capital at January 31, 2026 was $17.2 million, which was $61.4 million lower than at February 1, 2025. The decrease in working capital from 2024 primarily reflects higher borrowing under our revolving credit agreement and an increase in other accrued expenses, partially offset by a decrease in trade accounts payable, an increase in inventories and an increase in prepaid expenses and other current assets as of January 31, 2026. Our current ratio was 1.02 to 1 at January 31, 2026, compared to 1.10 to 1 at February 1, 2025. Our debt-to-capital ratio was 32.7% as of January 31, 2026, compared to 26.6% at February 1, 2025, primarily reflecting higher borrowings under our revolving credit agreement as a result of the Stuart Weitzman acquisition in August 2025.
(Decrease) Increase
in Cash and
($ millions)
in Cash Equivalents
Net cash provided by operating activities
Net cash used for investing activities
Net cash provided by (used for) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash provided by operating activities was $1.5 million lower in 2025 than last year, reflecting the following factors:
A loss in 2025 compared to earnings last year;
A larger decrease in trade accounts payable in 2025 compared to last year; and
A decrease in deferred income taxes in 2025, compared to an increase last year; partially offset by
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An increase in inventories, compared to a decrease last year; and
A decrease in receivables in 2025, compared to an increase last year.
Cash used for investing activities was $109.8 million higher in 2025 than last year, reflecting the acquisition of Stuart Weitzman in August 2025 and higher capital expenditures, due in part to the Famous Footwear store remodels to the FLAIR concept. We had 57 FLAIR stores as of January 31, 2026 and expect to invest in more remodels in 2026.
Cash used for financing activities was $102.9 million higher in 2025 than last year, primarily due to net borrowings on our revolving credit agreement of $77.0 million in 2025, compared to net borrowings on our revolving credit agreement of $37.5 million in 2024. This increase was partially offset by a $60.0 million decrease in repurchases of common stock under our share repurchase programs during 2025.
We paid dividends of $0.28 per share in each of 2025, 2024 and 2023. On March 12, 2026 the Board of Directors declared a quarterly dividend of $0.07 per share, payable on April 10, 2026, to shareholders of record on March 26, 2026. The declaration and payment of any future dividend is at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.
As of January 31, 2026, we had various contractual or other obligations, including the following:
Payments Due by Period
Less Than
More Than
($ millions)
Total
1 Year
Years
Years
5 Years
Borrowings under Credit Agreement (1)
Operating lease commitments, including imputed interest (2)
Purchase obligations (3)
Other (4)
Total
Refer to further discussion in Note 12 to the consolidated financial statements.
The majority of our retail operating leases contain provisions that allow us to modify amounts payable under the lease or terminate the lease in certain circumstances, such as experiencing actual sales volume below a defined threshold and/or co-tenancy provisions associated with the facility. The contractual obligations presented in the table above reflect the minimum rent obligations, irrespective of our ability to reduce or terminate rental payments in the future. Refer to Note 13 to the consolidated financial statements.
Purchase obligations include agreements to purchase assets, goods or services that specify all significant terms, including quantity and price provision.
Includes obligations of our supplemental executive retirement plan and other postretirement benefits, as discussed in Note 6 to the consolidated financial statements.
We believe our operating cash flows are sufficient to meet our material cash requirements for at least the next 12 months.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Certain accounting issues require management estimates and judgments for the preparation of financial statements. Our most significant policies requiring the use of estimates and judgments are described below.
Inventories
Inventories are one of our most significant assets, representing approximately 31% of total assets at the end of 2025. We value our inventories at the lower of cost or market for approximately 84% of our consolidated inventories, which represents the divisions using the LIFO cost method. For the remaining portion, our inventories are valued at the lower of cost or net realizable value. For inventory valued at LIFO, we regularly review the inventory for excess, obsolete or impaired inventory and write it down to the lower of cost or market. We apply judgment in determining the market value of inventory, which requires an estimate of net realizable value, including current and expected selling prices, costs to sell and normal gross profit rates. The method used to determine market value varies by business division, based on the unique operating models. At our Famous Footwear segment and certain operations within our Brand Portfolio segment, market
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value is determined based on net realizable value less an estimate of expected costs to be incurred to sell the product. Accordingly, we record markdowns when it becomes evident that inventory items will be sold at prices below cost. As a result, gross profit rates at our Famous Footwear segment and, to a lesser extent, our Brand Portfolio segment are lower than the initial markup during periods when permanent price reductions are taken to clear product. For the majority of our Brand Portfolio segment, we determine market value based upon the net realizable value of inventory less a normal gross profit rate. We believe these policies reflect the difference in operating models between our Famous Footwear segment and our Brand Portfolio segment. Famous Footwear periodically runs promotional events to drive sales to clear seasonal inventories. The Brand Portfolio segment generally relies on permanent price reductions to clear slower-moving inventory.
The determination of markdown reserves for the Brand Portfolio segment requires significant assumptions, estimates and
judgments by management, and is subject to inherent uncertainties and subjectivity. In determining markdown reserves,
management considers recent and forecasted sales prices, historical gross profit rates, the length of time the product is held in inventory and quantities of various product styles contained in inventory, as well as demand, among other factors. The ultimate amount realized from the sale of certain products could differ from management estimates.
We perform physical inventory counts or cycle counts on merchandise inventory on hand throughout the year and adjust the recorded balance to reflect the results. We record estimated shrinkage between physical inventory counts based on historical results. Inventory shrinkage is included as a component of cost of goods sold.
Store Impairment Charges
We regularly analyze the results of all stores and assess the viability of underperforming stores to determine whether events or circumstances exist that indicate the stores should be closed or whether the carrying amount of their long-lived assets may not be recoverable. After allowing for an appropriate start-up period, and consideration of any unusual nonrecurring events, property and equipment at stores and the lease right-of-use assets indicated as impaired are written down to fair value as calculated using a discounted cash flow method. The fair value of the lease right-of-use assets and property and equipment is determined utilizing projected cash flows for each store location, discounted using a risk-adjusted discount rate, subject to a market floor based on current market lease rates. The projected cash flows of the stores (including net sales projections), discount rates and current market lease rates for the remaining lease term of the related stores used to determine fair value require significant management judgment and are the assumptions to which the fair value calculations are most sensitive.
Income Tax Valuation Allowances
We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the consolidated financial statement carrying amounts and the tax bases of assets and liabilities. Valuation allowances are established if we believe that it is more-likely-than-not that some or all of our deferred tax assets will not be realized. The evaluation of the realizability of deferred tax assets requires significant assumptions, estimates and judgment by management, including estimates of future taxable income by jurisdiction. Such estimates are subject to inherent uncertainties and subjectivity. As of January 31, 2026, we have valuation allowances totaling $8.7 million, reflecting the uncertainty regarding the utilization of net operating loss carryforwards.
Impact of Prospective Accounting Pronouncements
Recent accounting pronouncements and their impact on the Company are described in Note 1 to the consolidated financial statements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FORWARD-LOOKING STATEMENTS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected as they are subject to various risks and uncertainties. These risks and uncertainties include, without limitation, the risks detailed in Item 1A, Risk Factors, and those described in other documents and reports filed from time to time with the SEC, press releases and other communications. We do not undertake any obligation or plan to update these forward-looking statements, even though our situation may change.
