Investment Thesis
Caleres faces fundamental operational challenges despite anomalous revenue growth: negative operating cash flow (-$27.8M) and negative free cash flow (-$39.0M) indicate the core business cannot generate cash. Severe liquidity constraints (Quick Ratio 0.34x, only $37.7M cash) combined with razor-thin margins (Operating: 3.6%, Net: 2.1%) and weak prior-year earnings pose near-term solvency risks.
Strengths
- Zero long-term debt provides financial flexibility and no refinancing risk
- Gross margin of 47.3% indicates reasonable cost control and product positioning
- Current ratio above 1.0x suggests near-term working capital adequacy
Risks
- Negative operating cash flow (-$27.8M) reveals inability to generate cash from core operations
- Severe liquidity crisis with Quick Ratio of only 0.34x threatens short-term obligations
- Marginal profitability with declining earnings (Net Income -109.3% YoY) and sub-4% operating margins
- Free cash flow of -$39.0M unsustainable without asset sales or equity raises
- Anomalous 15,036% YoY revenue growth requires clarification on sustainability and acquisition integration
Key Metrics to Watch
- Operating cash flow return to positive territory and sustainability
- Quick ratio improvement toward 1.0x minimum through inventory reduction or liquidity enhancement
- Operating margin expansion beyond 3.6% through operational efficiency
- Free cash flow path to breakeven or positive generation within 2-3 quarters
Financial Metrics
Revenue
666.6M
Net Income
14.3M
EPS (Diluted)
$0.42
Free Cash Flow
-39.0M
Total Assets
2.0B
Cash
37.7M
Profitability Ratios
Gross Margin
47.3%
Operating Margin
3.6%
Net Margin
2.1%
ROE
2.3%
ROA
0.7%
FCF Margin
-5.8%
Balance Sheet & Liquidity
Current Ratio
1.03x
Quick Ratio
0.34x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
1.31x
Long-term Debt
0.0
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-06-10T07:32:22.210675 |
Data as of: 2026-05-02 |
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