Peggy Reilly Tharp – VP, Investor Relations Diane Sullivan – Chairman, President and Chief Executive Officer Ken Hannah – SVP and Chief Financial Officer Richard Ausick – Division President, Famous Footwear.

Steven Marotta – CL King & Associates Klugy Mathurin – The Buckingham Research Group Jeff Stein – Northcoast Research Laurent Vasilescu – Macquarie Research Danielle McCoy – Wunderlich Securities Christopher Svezia – Susquehanna International Group, LLP Jill Caruthers Nelson – Johnson Rice & Company LLC Ben Shamsian – Sterne Agee Jay Sole – Morgan Stanley Scott Krasik – Buckingham Research.

Good morning. My name is Jennifer and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2015 Earnings Call. All lines are placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions) Thank you.

And I would like to turn the conference over to Brown Shoe Company..

Thank you, Jennifer. Good morning and thank you for participating in the Brown Shoe Company First Quarter 2015 Earnings Call which is being made available to the public via webcast. I’m Peggy Reilly Tharp, Vice President of Investor Relations for Brown Shoe Company.

Earlier today, we distributed a press release with detailed financial tables which is available on our website at brownshoe.com. In addition, slides are available on our website for you to reference during this call. Please be aware, today’s discussion contains forward-looking statements, which are subject to a number of risks and uncertainties.

Actual results may differ materially due to various risk factors, including but not limited to the factors disclosed in the company’s Form 10-K and other filings with the U.S. Securities and Exchange Commission.

Please refer to today’s press release and our SEC filings, for more information on risk factors and other factors which could impact forward-looking statements. Copies of these reports are available online. Company undertakes no obligation to update any information discussed in this call at any time.

Joining us on the call today are Diane Sullivan, CEO, President and Chairman; Ken Hannah, Chief Financial Officer; and Rick Ausick, President, Famous Footwear. Today, we’ll begin with strategy review from Diane followed by a financial summary from Ken before turning the call back over for Q&A. And I would now turn the call over to Diane Sullivan..

delivering more from our e-commerce site; elevating and expanding our consumer engagement experience; and improving productivity at our outlet stores. In order to drive this improvement, we’ve added new talent to the team and we’re excited about the potential ahead for Naturalizer.

Other Healthy Living brands also performed well in the quarter with Dr. Scholl’s and LifeStride sales each up low-double-digit along with related operating margin improvement. For our Contemporary Fashion brand, sales of $92.4 million were up 4.9%. We saw strong double-digit growth at both Sam Edelman and at Vince.

For Franco Sarto, there was a planned decline in the quarter. However, we expect this brand to be up overall in 2015. For Sam, we’re still opening new retail doors with three planned for this year in addition to our two existing locations.

Next year, we expect to potentially add another seven doors, as we continue to realize the potential of this brand. Looking towards the remainder of 2015, I’m excited about the investments we’re making in the business.

I think you’ll recall that we have signed the Diane von Furstenberg license and we’re going to be taking a modern lifestyle approach with this brand, which is really going to mirror what’s been working for them at retail for their apparel.

At our June FFANY, we’ll be showing dress shoes, flats, casual and wedges, all of which will incorporate DVF’s distinctive style. Price points are going to range from approximately $150 for flat sandals to about $395 for booties. And we’re working very closely with Diane and our retail partners on placing this exciting new addition to the DVF brand.

Also, our new men’s business is just getting off the ground. But you can expect to get your first look at products in December at FFANY. We’re being joined in this endeavor by Gordon Thompson and are in the midst of recruiting the team for this new brand.

For our omni-channel efforts, we’re aligning our Famous Footwear and Brand Portfolio team to better address our consumer needs. We’re focusing our attention on the consumer aspects – consumer facing aspects of our omni-channel efforts and redirecting investments into digital outreach.

We are also continuing with our two-year plan to optimize our logistics network and build the foundation to meet our increasing omni-channel needs.

As you know, this year’s major investment will be for the expansion and modernization of our Lebanon, Tennessee distribution centre, and we expect these improvements will help us expand our drop-ship capabilities and grow our overall business.

Now, before I turn the call over to Ken for a review of our financials and details around our guidance for the rest of the year, I’d like to thank you very much for all of your support of our rebranding initiatives. Tomorrow, after we receive shareholder approval, we will become Caleres and our ticker symbol will be CAL, beginning May 29.

As you know, we’re very passionate about the future of this company, and our new branding helps to capture the passion behind our 137-year old success story and to set the benchmark for our future. And as of tomorrow, you can visit caleres.com to see the full story. And with that, I’ll turn the call over to Ken..

consolidated net sales of $2.61 billion to $2.63 billion; same-store sales at Famous Footwear up low-single-digits with reported sales roughly flat year-over-year due to the sale of Shoes.com at the end of 2014; net sales for the Brand Portfolio segment up mid-single-digits; SG&A at less than or equal to 35.4% of sales continuing to leverage; and interest expense of approximately $18 million; and effective tax rate of 30% to 33%, and a reminder that approximately $0.04 of our earnings per share in the first quarter was related to a one-time tax benefit mentioned earlier; depreciation and amortization of approximately $53 million; and capital expenditures of approximately $75 million with roughly $22 million allocated for expansion and modernization of our distribution centers.

And with that, I’d like to turn the call back over to the operator for questions..

And we’re holding on the operator, one moment please..

[Operator Instructions] And our first question comes from the line of Steve Marotta with CL King & Associates..

Good morning, everybody. Congratulations on the quarter and thank you for taking my question..

Good morning, Steve..

Hi, Diane. As it pertains to the cadence in the quarter, which is really at Famous, you alluded to the quarter starting a little slow, March and April getting better.

Has that spilled into the second quarter?.

It continues at about the same pace as we have for the first quarter..

Terrific. Thank you.

As it pertains to the inventory, has there been any – have you taken an inventory receipt made to-date a little faster than you had expected? Are you concerned that the inventory might be a little light and there could be some missed sales?.

Steve, it’s Rick. No, listen, we were – we allow our vendors the opportunity to have things early, to call us and talk to us about it. We received some things that were June deliveries. We received the receipt of few of those goods in May, but nothing over the top and nothing because we were worried about the sales line..

Okay. That’s helpful.

Last question as it pertains to tax holidays, is there any shift in your business based on when the second quarter ends, that tax holiday might fall in the third quarter and particular geographies where it would have been second quarter last year?.

Yes, we have the same issue that everybody would have on that based on that instance. We think it’s about $3 million or $4 million of sales, when it’s all said and done, so that’s – to factor that in, but that would be what we believe it to be. It’s a little less based on our penetration in those markets and you might have heard from other people..

Very helpful. Thank you much..

Your next question comes from Scott Krasik with Buckingham Research..

Hi, this is Klugy in for Scott Krasik.

So a question on growth in wholesale versus margin improvement, would you please dig into your expectations for growth by brand over the remainder of the year? And also, can you give some additional color on why your brand portfolio operating margins declined in 1Q? And second, I believe your debt became callable this month.

Do you have any plans to refinance?.

Why don’t I take a couple of those questions, so we’re not going to go brand-by-brand in terms of the performance.

I can tell you that overall in the quarter, virtually across the brands, all of our performance was very strong with growth virtually everywhere except for the one that I called out which was Franco Sarto, which did have a planned decline in the quarter.

And we fully expect that to be up by the end of the year, so again, good performance across all of our brands. A little bit around the operating margin with respect to the Brand Portfolio, there’s a couple of things there that were really impacted that.

First of all, there was, as both Ken and I mentioned, some investment spend in both design and marketing, the startup of DVF, as well as the investment in the Sam business. There was a bit of that certainly was going on. The second thing is that, we did accelerate markdowns in some of our brands due to late deliveries and the later spring that came.

So while we were able over all to perform very well in the quarter, we certainly did have some spots where we had to address late delivery, so there was a bit of that.

And the other thing, as a reminder now, when we report our Brand Portfolio it’s including our retail, specialty retail stores as well, so both our Naturalizer and our Sam Edelman stores are in the Brand Portfolio metric, so that’s had a little bit of an impact also on the operating margin. And Ken I guess….

Yes, I’ll take that. So, look, as of the May 15, the reduction in the call premium came through. And when we look at rates below 6% in that reduction, certainly it looks attractive. We are evaluating our overall capital structure in light of our strategic plan trying to make sure that we put the best plan forward. So, we are looking at that.

We obviously understand the potential impact that it could have on lowering our overall infrastructure and just looking to see what the best path forward is in terms of achieving our strategic plan..

Okay. Thank you for that..

Next question is from Jeff Stein with Northcoast Research..

Well, good morning, everyone..

Hi, Jeff..

So with respect to Famous Footwear and maybe this is – that’s directed at Rick. I’m kind of curious your SG&A was up pretty sharply in that division. I think you referenced some investments you’re making in digital media.

So, perhaps, you can talk to us a little bit about whether or not you think you’re getting the kind of return early on here that you expect in that type of investments, and whether or not you would expect that pressure on SG&A to continue at Famous Footwear over the balance of the year?.

Yes, Jeff, a couple of things, we also have six more stores operating, so that was another chunk of that SG&A versus increase. That will obviously – we expect that to even-out over the course of the year, so I don’t think we’ll see that piece of it being involved. We’ll continue to make investments in the D2C.

I think we’re all said and done we would expect our SG&A to be relatively in line with last year when it’s all over, but with more investment obviously directed to our D2C business. It’s a little early to say it’s a victory or we can see a huge amount. We did – that business did trend better rather significantly than our store business.

So we think there are some improvements and for the month of May it’s pretty dramatic. So we are hoping that some of that investment is now paying off and we expect it to continue. And the proof will kind of be when we get to back-to-school, if we can have the kind of trends we are having today at back-to-school, it will be pretty significant..

Okay, great. And Rick, with respect to kind of regional trends, I’m kind of curious Texas has been called out by some retailers in terms of some weakness in the oil patch. I’m wondering how your locations in that region are performing..

Well, it’s a little bit hit-and-miss. The one thing I will say is that, I’m just looking right now to make sure I got you the truth. Dallas was up, Houston was up. So where our stores are, we haven’t seen it yet. The only thing we’re actually seeing and it affects Texas a little bit, Jeff, is on these – on the tourist/border stores we might have.

We saw some – we have about 25 stores in the group if we look across the country. Those have been hit pretty hard in the first quarter. The good news is it is only 20 or 25 stores. But the difference from over the last year, it’s pretty good, starting to get pretty aggressive on the decrease in traffic in those areas. So that’s something we’re watching.

There’s not a lot we can do about it, we think it’s obviously based on the dollar and people maybe not as many people visiting those malls that there have been. So I think that’s the only thing we’re worried about, but in general Dallas and Houston look pretty good for us right now..

Perfect. And one last question with respect to Naturalizer, actually two questions. One, Diane, I’m wondering if you could talk a little bit about the Bzees brand, my understanding is that, you’ve expanded distribution in Nordstrom in that brand and how it’s performing.

And also I know there has been some discussion about expanding the Naturalizer specialty stores in terms of adding additional brands to those locations. Are you testing that yet, and if so, any read through on early results there? Thank you..

Yes. Sure, Jeff. The – with respect to Bzees, it’s going extremely well. And the one terrific thing about the quarter is really every components of our Naturalizer brand family did well, whether it was Naturalizer or Natural Soul or Bzees all of them were very strong. And right now, Bzees is basically a sellout everywhere.

It’s really hitting a very important part of where the consumer is really buying right now, so having terrific success on that. And we’re really just in the formative stages to your second part of your question about the development of the next step of our – on our Naturalizer retail business.

As I said, we did see some improvement as we got into March and April, but there’s a lot more work to do there in terms of making sure we have a solid strategy for improvement in our productivity of those stores over the near term. So more to follow on that and no new news for you really, it’s too early..

Great. Thank you very much..

Okay..

Your next question comes from the line of Laurent Vasilescu with Macquarie..

Good morning. And thank you for taking my questions..

Good morning..

Good morning. Last year during the second quarter, it was noted that May was very strong and June was more subdued, and then I think there was a rebound in July.

How should we think about the cadence for this quarter based on last year’s strength in May?.

Yes, I would think this May, obviously, we’re saying our trend is about similar to our first quarter total trends, so that gives you an idea of May since we only have about four days left. As far as June and July, I think we plan a low-single-digit increase, that’s what we’re talking about for the quarter.

So you can look at that, I would think it’d be pretty even across, so I don’t see anything. It might be a little less than July because of the shift of the sales out of July into August. So there might be a little less in July but it should be similar in June, so I would still say we’re looking about mid-single – low-single-digit increase..

Okay, great. And then with Brown Shoe Bootmakers, can you tell us what kind of price points you are envisioning for the brand, maybe the kind of points of distribution you are envisioning.

And then, is there any additional whitespace you want to tackle going forward?.

Yes. I’d rather save all of that discussion till we get much closer to the launch time. We’re in the process right now of putting our launch plans together and building a team and you name it.

And I think I’d probably, we’d all be best served if I held on some of those comments and share that with you when we have the complete strategy and all the thoughts pulled together..

Okay, great. And then lastly, my last question is, I think it was called out that you might have seven additional stores for Sam Edelman, I think for next year.

How many stores do you think you can envision over the next few years? Is there a balance between retail and wholesale that you’re envisioning for the brand?.

It’s a great question. I would say we have any specific targets in mind in terms of that balance between wholesale and retail. We certainly believe that there are easily probably 30 stores across North America.

But as we continue to expand and add the seven or three that’s scheduled for rest of 2015, we have seven for 2016 and two that are already on task for 2017.

We’ll, it’s kind of how some of those go, and if we feel that there is a real opportunity to accelerate, we will do it, but we’re really trying to be very thoughtful about the locations, and where we’re going to get the biggest bang for the buck there.

So we’re being thoughtful as we continue to move forward for that brand, and spending a lot of time on the digital side of things as well, and international expansion going into 2016 and 2017. So lots of opportunities, I don’t see any cap on that at all..

Okay. Great. Congrats again on the strong quarter..

Thank you very much. Really appreciate it..

Your next question comes from Danielle McCoy with Wunderlich..

Good morning, guys. Thanks for taking my question and congrats on a great quarter..

Thanks, Danielle..

First, I guess, I just wanted to follow up on the West Coast port situation.

It feels like that’s behind you now or is there any potential for anything aftermath kind of situation in 2Q?.

Now, we pretty much feel like it’s behind us..

All right, great. And then I was wondering if you could just give us an update on Sam Edelman apparel..

Yes, continues to be - performed very nicely, represents about 18% of our sales and the two stores that we have in SoHo and Beverly Hills, it’s really not too much new to report Danielle on that. It’s good. We’re learning. We’re trying to sharpen our focus around the right types of merchandise that’s really going to appeal to the consumers.

So I think when we have our Analyst Day sometime in October where we’ll be able to give you a really terrific update on the progress there on the Sam brand and all the accessories that are really around it as well..

Great. And then, just lastly, more of a big-picture type question.

I mean, when you look at the overall portfolio, where you see the biggest pockets for the margin expansion?.

I would tell you that I don’t think there is again too much of a limit. My expectation is around our Contemporary Fashion brand, they continue to expand their margin opportunity for sure. There are lots of opportunities still there, and also on the Healthy Living side.

We have to – we’ve been – last couple of years really trying to work our way back to some of the historical margins we had set a number of years ago. So I don’t think there is any cap on it. It’s always the balance of making sure that we are delivering product that has real integrity and real value in the consumer.

We’ve been focused on that, because we feel that’s critical part of our differentiation. So I think there is still opportunity in terms of the balance of all those things..

Great. Thanks so much, and good luck..

Thanks, Danielle..

And your next question comes from the line of Chris Svezia with Susquehanna Financial..

Good morning, everyone. So this is the last call of Brown Shoe Company....

It is Chris. No crying now..

I won’t shed a tear. Hopefully, you guys won’t shed a tear. All right, well, the name change is indicative of the result, so nice job..

Thank you..

Sure, so a couple of questions here.

So I’ll start there at Famous, product margin versus the occupancy leverage, just kind of gross margin performance really, really good, so obviously, you all expect that to continue every quarter, so, but I’m just curious, I’m joking there, but I’m just curious, what are the drivers can you just parcel through that and how we should think about that for the balance of the year?.

Yes, I think a couple of things. We were able to – the merchandise margins were actually up. It was about probably 60% of that increase was to the merchandise margins directly. So lot of that is mix. Lot of that was the opportunity that we had. Our inventories were cleaner, so we had a better, some better margins on even our clearance product.

That led to obviously a lowering of our inventory reserves as well which has been together big chunk of the margin benefit, Chris. So I think, just in general, I think it’s just better merchant management when all comes down to it.

And then we have got – obviously, we’re in a cycle where some of our key vendors and the key brands with the Canvas business and Lifestyle business are trending very strongly and those businesses have a tendency to be higher margins than some of the athletic performance businesses.

So when you see that switch happen and we’re taking advantage of it, the mix helps us a lot..

Okay.

So, given the fact that it seems like Canvas, Casual, Lifestyle will continue to kind of work here and seems like you’re managing inventories pretty well, some sustainability to that or do you begin to anniversary that momentum, because I mean, it was – Canvas was strong back-to-school last year, so I’m just kind of curious, where do you start to anniversary that or know there’s still room to expand?.

Talk to you after third quarter, because I think we’ll start – we believe we don’t see it having hit the top end of the curve yet. So, if that’s true, I think, we’ll recalibrate after back-to-school and reassess and decide that we think it’s continuing or not. I think there are lots of components to it.

It’s not been – now, we talk about Canvas, but there are lots of other products in some of our brands that are lifestyle, casual, driven but might be a leather product, right. So there’s some of that in that mix too.

I think it’s just a matter of the customer wanting that look and that trend, driven by Canvas, it’s obviously the biggest part of it, but there’s other things in there that are driving some of that business as well.

So it’s a combination of stuff, but it doesn’t look like it’s peaked, and we’re going to take full advantage of it for the next quarter or two for sure..

Okay.

So like a brand like Skechers, for example, doesn’t really fall in a specific casual or technical athletic or athletic silo, but that’s a piece of that, is that fair to say?.

Yes..

Okay. So I’m curious how you are thinking about the group business for the back-half of the year after you’ve had such strength in that category where some of the opportunities are and maybe how you are thinking about that as you are going through the back-half. I know it’s a little early, but just thoughts around it..

I think we’re probably planning this low to mid-single-digit increases. Mix and content will change pretty dramatically. I think, we’ll have more bootie type product and still carry riding boots or we’re going to mitigate how that will look and the assortment will shift a little bit versus where it has been.

We still think the shearling business still shows strength, that it has shown strength. So we don’t think that will lessen, so we still expect that to be a big part of our business. So, I think, nothing dramatically new, I think, there will be shifts in silhouettes and where we’ve invested this year versus last year, that’s the big difference..

Okay.

And then I apologize, I got on a little late on this call, but any color you mentioned on the sandal business in terms of how it performed in Q1 and sort of what’s your thoughts this season about it, how it’s doing?.

Well, we’re up mid-single – low-single-digits, I should say. In total, women’s was up mid-single, so women’s actually had a little better performance in the first quarter. This month it’s been a little spotty; we had a good early part of May, it’s been a little softer lately.

I think part of that, Chris, frankly is historic, again how the season trended last year, right.

I think, we had a much tougher first quarter weather-wise last year, so we had a harder first quarter in Sandals and a better early May, early June in Sandals in the second quarter, because that was the first time lot of people could buy it, I think that’s changed a little bit this year.

Our inventories are down in Sandals this point in time to last year. So we think we’re positioned well as far as being able to capture the right – the sales we want to capture at good margins, and I think that’s what our focus has been..

Okay, good to hear. Wholesale, I’m just – it’s nice to see the rebound in Healthy Living and again, I apologize to you guys, I got on a little late on the call but – and maybe what color did you provide about the specific brands? I know there was a question earlier and you added some color, but Healthy Living nice rebound; Contemporary, I mean, good.

Inventory seems to be much more where you want them. It came down a lot which maybe goes to your point which you cleared out inventory. But maybe walk through what happened in wholesale and maybe any color on brands specifically would be helpful..

Yes.

I’ll give you a little bit, Chris, but probably not brand-by-brand, because it takes a lot of time, but overall, I would tell you that virtually every brand in the portfolio performed better than the first quarter of last year with the exception of Franco Sarto, which was a planned decline in the first quarter, and we expect that to fully be back and to show an increase for the year.

So that was what’s the exciting thing, I think in the wholesale portfolio was that overall that all of the brands started to really click in and perform better than last year. I mean, the highlights are some of the same ones that we have been seeking about, the Sam Edelman business showed terrific performance this quarter, double-digit as did Vince.

The other businesses that we were really pleased with was our Naturalizer wholesale business did very well, Scholl’s did well, LifeStride did well. So it really was, to get the 9% or so increase in – on Healthy Living, you have to have a lot of brands performing super well there, so that was great.

And on the Contemporary Fashion side as I said, really the only one that was a little softer than we had been than last year, but we had planned it that way was Franco Sarto. So really like the overall performance in the quarter..

Via Spiga [inaudible] flat..

It’d be flat, yes..

Okay. And when you talk about some of the difficult - had to get promotional, had some port issues, how do we think, I mean, it seems like you’re pretty clean on the inventory side.

How do we think about is going to 2Q, if we get back to expanding a bit on EBIT margins after you made some investments, you cleared out some inventory, any thoughts about that?.

Yes, I mean that certainly would be our expectation. I – we’ll have to see how things continue to trend. But overall right now, we’re feeling pretty good about it, and we do not see having any port issues or any hangover there affecting our second quarter performance..

Okay. All right. That’s all I have for now. Thank you, and all the best..

All right. Thanks, Chris..

Your next question comes from Jill Caruthers Nelson with Johnson Rice..

Good morning.

Could you talk about the slight uptick in revision on gross margin for the year? You could talk about kind of what segment/division is leading the increase in that?.

Yes. This is primarily driven by the performance we saw in the first quarter at Famous..

Okay, okay.

And then overall basically second quarter through fourth is essentially – your outlook is essentially the same as it was in your initial guidance?.

I think that’s fair..

Okay. And then just could you recap kind of what your online penetration is at Famous as well as kind of the overall company and just broadly speaking some longer-term targets for that number? Thank you..

Yes, Jill, directly, true dotcom we do just under 3% of our total business. We also have a process where we fulfill customer sizes when they are in store. That goes to the store sales, but if those go through to our dotcom, that’s about another 2.5% to 3%. So in total, we would count that as about a 6% penetration on our direct-to-consumer.

We’d like to think that our true dotcom business could get to 50% to double the size of it is today. The shift from store for customer sizes we hope gets better, as we get better about having sizes in stock that would be something would mitigate that.

So we’re not sure that’s going to grow, but the true dotcom business we would hope to get to somewhere between 4% and 6% over time..

And then, Jill, it’s Diane. Total company, we’re roughly 10%..

All right. I appreciate it. Thank you..

Your next question is from Sam Poser with Sterne Agee..

Hi, it’s Ben Shamsian for Sam. Thanks for taking my call. One question for Rick, and one for Diane.

For you Rick, 3.1 comp pretty solid, can you to the extent that you can sort of parse out, how much of that is the strong product and how much of that, do you think is more willingness on the part of consumer to spend here a little bit?.

Obviously, the product mix or the product categories that are trending right now are in our wheelhouse or in places where we traditionally have been strong. But remember it’s a two-year trend, too, Ben, it’s four on a two-year basis, which I think is really good compared to what we’ve heard from other places in the marketplace.

So it’s not just this quarter, I think it’s again something that we see building and again we think that will continue.

But yes, part of it’s the consumer – our traffic has mitigated a little bit, it’s still down, but it’s down kind of in sync with what it was in fourth quarter, which was better than we have seen, but the decline was better, our conversions are still very good.

So when you actually look at customers and transactions, how many people are actually buying, that’s starting to flatten out and we’re starting to actually have right around flat to barely up or barely down and it’s all about the market actually, it’s all about what they’re buying from us, and they’re buying more from us and paying more price – higher prices for it because they see the value in the product.

So I think it’s a combination of us working with our partners to make sure that the product comes in and has properties that the customer want to pay for, all the comfort features that people are putting in shoes are important and we get more money for it.

So we converted a huge portion of our inventory into Shoes that have those comfort properties in them and that’s all I think part of how this is all translating into better average unit retails and better margins..

Got it, great. Thank you.

And then for you, Diane, can you update us on your thoughts on M&A, what you’re seeing out there in terms of multiples and anything else you want to share here?.

I probably don’t want to share too much with respect to that at this point in time. I think you know that our primary focus number one is to continue to drive the business, the existing business that we have here, which is as you can see from our first quarter results is proving out to be the right thing.

We still believe we have a significant amount of organic growth potential here in the company. We’re very busy looking at how we continue to build that against our Sam business and our Famous business, launching DVF, looking at developing new revenue stream with the Brown Bootmakers going forward.

So that really, Ben, has been our focus in the last couple of months, not to say that, again as we’ve always said that as we find – see the right thing at the right valuation, that we’d be happy to do it. But right now, our focus has been really on driving our business in front of us..

Great. And I wanted to ask you about the Zodiac brand then, and what your plans are there, if there’s any plans there..

Yeah, no, actually it’s – we still own it, but we really have not – have no plans for it at this particular time..

Okay. Great. Thank you. Good luck..

Thanks, Ben..

Thank you. Our next question comes from Jay Sole with Morgan Stanley..

Hi, good morning..

Hello, Jay..

Good morning, Jay..

Hi, I want to kind of just ask about the name change, if I can.

How much does the name change have to do with sending a message internally versus how much does it have to do with giving a message externally to your vendors and to your customers?.

the name Caleres being more about the spirit, the ambition and the attraction of talent over time; honoring our history and using it a way to fuel our future in the Star-Five-Star; and then a new revenue stream for the company and actually quite honestly returning Brown Shoe to a consumer-facing brand, which is ultimately what it originally was, it was never a holding company.

So it was a combination of all those things. And then to your point, no one is going to really know Caleres, the consumer. The consumer knows our brands. They love our brands and it’s our – our people have pride in the company and the name Caleres. So that sort of fits the thought process..

Thanks, Diane. Let me just follow-up on one, there’s – obviously an aspect where you can lose some name recognition maybe perhaps with vendors. But this is also creating opportunity to reintroduce yourself, and especially maybe in other markets overseas to reintroduce yourself to department store buyers or other partners that you might have..

Well, to that point, it’s one of the side benefits I really – I probably should have anticipated it, but I didn’t. It’s exactly what you just said. People start to talk about you again in a different way.

And they don’t think about you as that the old Brown Shoe that, are you the people that did Buster Brown or you’re the people that did - the history of it. Now – they now talk about us in a totally new way and the name Caleres also does translate globally much better than Brown Shoe did.

And it’s just looks much more contemporary and captures our spirit more so. So, quite honestly, I tell everybody, I put myself through all the cases on that on a personal level to make sure it’s the right thing. And I am so convinced of this that we really just set ourselves up for an amazing future.

So – and we’re honoring our past more frankly than we ever have and all of the combination of the new components of our vision and our brand architecture..

Got it. Excellent. Good, thanks, Diane..

Yes..

Your next question is from the line of Scott Krasik with Buckingham Research..

Hey, everyone. How are you, guys? Good quarter..

Hi, Scott.

How are you?.

Thanks, Scott..

Good. Sorry, I jumped on late. I just have one follow-up, Rick. I don’t know how deeply you got into your outlook for gross margins, but obviously, very, very strong this quarter, your inventory is clean.

How are you thinking about the gross margin at Famous, as we go throughout the year?.

Well, thanks, Scott. We believe we’re not looking for enormous growth in the margin. We still think there is some upside. We’re careful about that. We want to make sure we stay clean and current with our inventory. And we are a valued channel, so we want to make sure that we keep offering value to the customers.

So I don’t think we’re expecting it to be 80 or 90 basis points better than last year. But I think we still think we can have a little bit of an uptick, so call it 10 to 20 basis points..

Even though the comparison gets much easier next quarter versus what you have this quarter?.

Well, it’s all relative, right? So, I think, we want it again, yes..

Okay..

Even though next quarter is easier..

Okay. And then the off-price retailers, TJ and Ross, commented on – DFW commented on this morning just there’s a lot of inventory up there on the channel. You said, you try to be very clean coming out of the quarter.

Do you expect any of that to affect either your promotional cadence or the prices other people are charging in the market? Is this the most excessive time you’ve ever seen this much off-price opportunistic inventory out there?.

Well, there is a lot of facts, so probably it’s not the most..

Yes..

It probably ranks – in my rank in the top five or ten, I would guess. I don’t know, I mean, I think, first of all, they’re spring shoes and they’re sandals, they are going to have to do some with it pretty quick.

I think they are going to hold until next year, which we’ve never – we actually stopped doing that 15 years ago in trying to sell last year’s shoes this year. That never worked very well for us before.

So I don’t know how much they can actually believe they can put into the marketplace and be successful with, because at some place along the way, however, cheaply you bought it what price will it go out if there is that much inventory to do. So, I don’t see it, I don’t think, I think there will be some pressure.

I think the next 45 days could probably be kind of interesting, July 4, all those kind of things could be pretty aggressive. I think we’ll watch. We look at the selling every day. We look at the selling every Monday, and we decide what we need to price that week if we think there are signs to move goods. We assist them to help us do that.

So we’re paying attention to all that, but we haven’t seen anything to say that’s going to be dramatic. And, again, I think it’s – I don’t think this is affecting our canvas business, I don’t think this is affecting our athletic business. So remember those are probably over [15%] [ph] of our total business when we start thinking about it anyway.

So I think you are talking about a relatively small portion of our inventory or our business that will be impacted if at all..

It’s a good perspective. Okay. Thanks very much..

And we have no further questions in queue at this time..

Thank you very much for joining us on our first quarter earnings call. And look forward to seeing you in the next week or two in New York and again at our second quarter call later on in August or September. Take care..

Thank you for your participation. That does conclude today’s conference call. You may now disconnect..