Caleres Stock Strides into Earnings With Expensive Price Tag

Caleres will report Q2 earnings after the close on Tuesday, Aug. 31

Aug 26, 2021 at 11:00 AM
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The shares of Caleres, Inc. (NYSE:CAL) are down 4.1% at $23.60 at last check, after the company's board of directors yesterday declared a regular quarterly cash dividend of $0.07 per share, to be paid on Oct. 1 to shareholders of record as of Sept. 10. The news comes ahead of the footwear name's second-quarter earnings report, which is due out after the close on Tuesday, Aug. 31. Below, we will take a closer look at CAL's overall technical performance, as well some of its previous post-earnings activity. 

The equity has had a generally positive history of post-earnings reactions over the past two years. Specifically, five of these next-day sessions were higher, including an 18.3% pop in September 2020. Options traders are pricing in a 12% post-earnings swing for the security this time, which is much larger than the 9.8% move CAL averaged after its last eight reports, regardless of direction. 

Digging deeper, Caleres stock has cooled off from its June 25, two-year high of $29.35, after being in rally mode since November. The shares seems to have found a floor at the $22.50 level recently, though pressure at the 60-day moving average is keeping a tight lid on gains. Nonetheless, the equity sports an impressive 240.1% year-over-year lead.

CAL 60 Day

The company has struggled to maintain its bottom-line consistent and lacks stability in its balance sheet. Despite performing fairly well with recent earnings, CAL has experienced significant declines in annual net income during 2018 and 2020. Most notably, it reported $439 million in losses for 2020. Since then, CAL's trailing 12-month net income has increased by about $350 million, but the footwear company remains unprofitable.

Caleres stock may still have potential as a recovery play. However, its risk-reward potential is not very attractive, after it more than tripled in the past year, potentially making CAL a better sell candidate.

 

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