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2 0 1 5 A N N U A L R E P O RT

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Dear Shareholders

For the fourth year in a row, CALERES reported double-digit adjusted earnings growth – up 16% to $2.00 per diluted share in 2015.

This rock solid performance exceeded both our internal plan and Street estimates. We also delivered improved sales of $2,577 million and ended the year with $118 million of cash and equivalents. Throughout 2015, we focused on inventory productivity, and our agility in this area enabled us to deliver strong margin growth for the year. Both gross and adjusted operating margin improved 21 basis points year-over-year to 40.7% and 5.2%, respectively.

Famous Footwear also delivered strong margin expansion in 2015, as gross margin improved

51 basis points to 44.9%. Adjusted operating margin improved 30 basis points to 6.9%, as Famous Footwear delivered record operating earnings of $109 million. For the year, sales were $1,573 million, with same-store sales up 1.9%, and we reported improved revenue per square foot of $217, as we benefitted from our proven real estate strategy.

At Famous Footwear, we continued to provide our consumers with trend-right footwear across our omni-channel and, as a result, drove improved conversion rates for all channels: in-store, online and mobile.

2015 caleres AnnuAl reporT 1

We saw growth in key retail metrics, with pairs-per-transaction and average unit retail up both in-store and online. Famous.com also delivered improvement in traffic, which was up double-digits, as consumers continued to both browse and shop online.

In total, Famous.com sales were up more than 30 percent in 2015, with the strongest growth coming from our mobile app. Famous.com accounted for approximately 4% of Famous Footwear sales for the year, up 100 basis points over 2014. We also saw sales growth related to our ship-from-store program in 2015, which was tested in the first quarter and expanded to 900 doors in october. As part of this initiative, we shipped more than 800,000 pairs of shoes from our brick-and-mortar stores, driving nearly $40 million of additional sales in 2015.

For our Brand Portfolio, we delivered more than $1 billion in sales for the first time in 2015, with growth of 2.3% for the year. The realignment work we began in 2011 helped us to develop our solid and varied portfolio of brands, which spans many different channels, retailers and price points. The breadth of our Brand portfolio reduces our reliance on any brand, channel or retailer and gives us the flexibility to embrace opportunities and to address challenges across the marketplace.

The strength of our portfolio enabled us to deftly navigate industry-related challenges in 2015, while continuing to grow our sales. our diverse brand teams shared resources, best-practices and industry insights, while the newer brands in our portfolio benefitted from the experiences of our more-established brands.

In 2015, our revenue was well distributed across our entire Brand portfolio, with naturalizer, Sam edelman, Dr. Scholl’s, Franco Sarto and lifeStride each delivering sales of more than $100 million in 2015. our smaller, niche brands – Vince, Fergie, Via Spiga, Carlos and ryka – each reported sales under $100 million for the year.

2 2015 caleres AnnuAl reporT

FAmouS FootwEAR DELivERED RECoRD opERAting EARningS

$109 million {

BRAnD poRtFoLio crossed major milestone { $1 billion in sales

In 2015, we added two new names to our Brand portfolio: Diane Von Furstenberg (DVF) and George Brown. For DVF, we aligned with the luxury lifestyle brand to develop a women’s contemporary shoe line, which launched to consumers in spring of 2016. With George Brown, we expanded our reach into men’s footwear by creating a new shoe line, which honors our heritage while focusing on the modern man. This exciting, new brand will be available at high-end retail doors, beginning in fall of 2016.

not only did we continue to invest in our brands in 2015, we also invested in our infrastructure and our people. We executed against our plan and, as a result, achieved a number of significant accomplishments:

— We added depth to our executive ranks and consolidated our Brand portfolio under a single leader, as we continued to invest in our people.

— We strengthened our balance sheet and received credit rating upgrades from both Moody’s and Standard & poor’s.

— We continued to invest in our future, with the expansion and modernization of our distribution centers, our Famous Footwear consumer targeting efforts, the addition of new Sam edelman retail stores, and our company-wide commitment to digital.

— We successfully rebranded the company and still maintained ties to our heritage.

It’s been nearly a year, since we announced the official launch of our rebranding initiative and became CAlereS. As expected, this new identity helped to position us as a company with both a proud legacy and an ambitious global vision. Our passion for fit, our dedication to craftsmanship, and our business savvy are part of both our past and our future.

looking forward to 2016, we will remain true to both our legacy and our vision. We will continue to invest in our brands, our infrastructure and our people, as we deliver consistent, profitable and sustainable growth.

Diane M. Sullivan CEO, President and Chairman of the Board

2015 caleres AnnuAl reporT 3

BRAND PORTFOLIOBRAND PORTFOLIO

2015 Net Sales dollars in millions

FAMOUS FOOTWEAR

FamousFootwear

Average StoreRevenue PerSquare Foot

$217$207

$215

CONTEMPORARY FASHION

HEALTHY LIVING $1,005$982

$925

20152013 2014

OperatingMargin

5.2%

3.9%

dollars in millions

20152013 2014

20152013 2014

4.9%

Non-GAAP financial measure

12.6%

9.1%

20152013 2014

11.6%

dollars

Brand Portfolio Mix

Net Sales

Return on Invested

Capital

dollars in millions

$2,577

$2,513

20152013 2014

$2,572

Net Sales

$2.00$0.28

$1.41$0.28

20152013 2014dollars per share

Non-GAAP financial measure

$1.72$0.28

Dividends and

Adjusted Diluted

Earnings Per Share

ADJUSTED DILUTED EPS

DIVIDENDS

$1,57361%

$1,005

39%

2015 { financial Trends and HigHligHTs

4 2015 caleres AnnuAl reporT

2015 caleres form 10-k 5

UNITeD sTaTes secUrITIes aND eXcHaNGe cOMMIssIONWashington, D.C. 20549

FOrM 10-K(mark one) Q ANNUAL rEPorT PUrSUANT To SECTIoN 13 or 15(d) of THE SECUrITIES EXCHANGE ACT of 1934 ForthefiscalyearendedJanuary30,2016 or h TrANSITIoN rEPorT PUrSUANT To SECTIoN 13 or 15(d) of THE SECUrITIES EXCHANGE ACT of 1934 for the transition period from ____________ to ______________

Commissionfilenumber1-2191

caleres, INc.(Exact name of registrant as specified in its charter)

New York 43-0197190 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 8300MarylandAvenue 63105 St.Louis,Missouri (Zip Code) (Address of principal executive offices)

(314) 854-4000(Registrant’s telephone number, including area code)

SecuritiesRegisteredPursuanttoSection12(b)oftheAct:

Title of each class Name of each exchange on which registered CommonStock—parvalue$0.01pershare NewYorkStockExchange

SecuritiesRegisteredPursuanttoSection12(g)oftheAct:None

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesQ No h

IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.Yesh No Q

Indicatebycheckmarkwhethertheregistrant:(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesQ No h

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).YesQ No h

IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-Kisnotcontainedherein,andwill notbecontained,tothebestofregistrant’sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.Q

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler”and“smallerreportingcompany”inRule12b-2oftheExchangeAct:

LargeacceleratedfilerQ Acceleratedfilerh Non-acceleratedfilerh Smallerreportingcompanyh

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).Yesh No Q Theaggregatemarketvalueofthestockheldbynon-affiliatesoftheregistrantasofJuly31,2015,thelastbusinessdayoftheregistrant’smostrecentlycompletedsecondfiscalquarter,wasapproximately$1,421.3million.

AsofFebruary26,2016,43,659,252commonshareswereoutstanding.

DoCUmENTS INCorPorATED bY rEfErENCE

PortionsoftheProxyStatementforthe2016AnnualMeetingofShareholdersareincorporatedbyreferenceintoPartIII.

6 2015 caleres form 10-k

INTRODUCTION

ThisAnnualReportonForm10-KisadocumentthatU.S.publiccompaniesfilewiththeSecuritiesandExchangeCommission(“SEC”)onanannualbasis.PartIIoftheForm10-Kcontainsthebusinessinformationandfinancialstatementsthatmanycompaniesincludeinthefinancialsectionsoftheirannualreports.TheothersectionsofthisForm10-Kincludefurtherinformationaboutourbusinessthatwebelievewillbeofinteresttoinvestors.Wehopeinvestorswillfinditusefultohaveallofthisinformationinasingledocument.

TheSECallowsustoreportinformationintheForm10-Kby“incorporatingbyreference”fromanotherpartoftheForm10-Korfromtheproxystatement.Youwillseethatinformationis“incorporatedbyreference”invariouspartsofourForm10-K.TheproxystatementwillbeavailableonourwebsiteafteritisfiledwiththeSECinApril2016.

Unlessthecontextotherwiserequires,“we,”“us,”“our,”“theCompany”or“Caleres”referstoCaleres,Inc.anditssubsidiaries.

InformationinthisForm10-KiscurrentasofMarch29,2016,unlessotherwisespecified.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Inthisreport,andfromtimetotimethroughouttheyear,weshareourexpectationsfortheCompany’sfutureperformance.Theseforward-lookingstatementsincludestatementsaboutourbusinessplans;thepotentialdevelopment,regulatoryapprovalandpublicacceptanceofourproducts;ourexpectedfinancialperformance,includingsalesperformance,andtheanticipatedeffectofourstrategicactions;theanticipatedbenefitsofacquisitions;theoutcomeofcontingencies,suchaslitigation;domesticorinternationaleconomic,politicalandmarketconditions;andotherfactorsthatcouldaffectourfutureresultsofoperationsorfinancialposition,including,withoutlimitation,statementsunderthecaptions“Business,”“LegalProceedings”and“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations.”Anystatementswemakethatarenotmattersofcurrentdisclosuresorhistoricalfactshouldbeconsideredforward-looking.Suchstatementsoftenincludewordssuchas“believe,”“expect,”“anticipate,”“intend,”“plan,”“estimate,”“will”andsimilarexpressions.Bytheirnature,thesetypesofstatementsareuncertainandarenotguaranteesofourfutureperformance.

Ourforward-lookingstatementsrepresentourestimatesandexpectationsatthetimethatwemakethem.However,circumstanceschangeconstantly,oftenunpredictably,andinvestorsshouldnotplaceunduerelianceonthesestatements.Manyeventsbeyondourcontrolwilldeterminewhetherourexpectationswillberealized.Wedisclaimanycurrentintentionorobligationtoreviseorupdateanyforward-lookingstatements,orthefactorsthatmayaffecttheirrealization,whetherinlightofnewinformation,futureeventsorotherwise,andinvestorsshouldnotrelyonustodoso.Intheinterestsofourinvestors,andinaccordancewiththe“safeharbor”provisionsofthePrivateSecuritiesLitigationReformActof1995,PartI.Item1A.Risk Factorsexplainssomeoftheimportantreasonsthatactualresultsmaybemateriallydifferentfromthosethatweanticipate.


CALERES

2015 FORM 10-K

INDEX

PART I Page

Item1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Item1A RiskFactors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Item1B UnresolvedStaffComments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Item3 LegalProceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Item4 MineSafetyDisclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

PART II

Item5 MarketforRegistrant’sCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities . . 21Item6 SelectedFinancialData . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Item7 Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations . . . . . . . . . . . . . . . . . . . . 24Item7A QuantitativeandQualitativeDisclosuresAboutMarketRisk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Item8 FinancialStatementsandSupplementaryData. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Management’sReportonInternalControlOverFinancialReporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 ReportofIndependentRegisteredPublicAccountingFirm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 ReportofIndependentRegisteredPublicAccountingFirm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 ConsolidatedBalanceSheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ConsolidatedStatementsofEarnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 ConsolidatedStatementsofComprehensiveIncome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 ConsolidatedStatementsofCashFlows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 ConsolidatedStatementsofShareholders’Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 NotestoConsolidatedFinancialStatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 ScheduleII–ValuationandQualifyingAccounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Item9 ChangesinandDisagreementsWithAccountantsonAccountingandFinancialDisclosure . . . . . . . . . . . . . . . . . . . . 82Item9A ControlsandProcedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 EvaluationofDisclosureControlsandProcedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 InternalControlOverFinancialReporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Item 9b other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 PART III

Item10 Directors,ExecutiveOfficersandCorporateGovernance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Item11 ExecutiveCompensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Item12 SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters . . . . . . . . . . 84Item13 CertainRelationshipsandRelatedTransactions,andDirectorIndependence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Item14 PrincipalAccountingFeesandServices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 PART IV

Item15 ExhibitsandFinancialStatementSchedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85


PART I

ITEM 1 BUSINESS

Caleres,Inc.,originallyfoundedasBrownShoeCompany,Inc.in1878andincorporatedin1913,isaglobalfootwearretailerandwholesalerwithannualnetsalesof$2.6billion.InMay2015,theshareholdersofBrownShoeCompany,Inc.approvedarebrandinginitiativethatchangedthenameofthecompanytoCaleres,Inc.(the“Company”).Currentactivitiesincludetheoperationofretailshoestoresande-commercewebsitesaswellasthedesign,sourcingandmarketingoffootwearforwomenandmen.Ourbusinessisseasonalinnatureduetoconsumerspendingpatterns,withhigherback-to-schoolandChristmasseasonsales.Traditionally,thethirdfiscalquarteraccountsforasubstantialportionofourearningsfortheyear.

During2015,categoriesofourconsolidatednetsaleswereapproximately63%women’sfootwear,23%men’sfootwear,9%children’sfootwearand5%accessories.Thiscompositionhasremainedrelativelyconstantoverthepastfewyears.Approximately66%offootwearsalesin2015wereretailsales,includingsalesthroughoure-commercewebsites,comparedto67%in2014and70%in2013,whiletheremaining34%,33%and30%intherespectiveyearsrepresentedwholesalesales.

EmployeesWehadapproximately11,000full-timeandpart-timeemployeesasofJanuary30,2016.IntheUnitedStates,therearenoemployeessubjecttounioncontracts.InCanada,weemployapproximately20warehouseemployeesunderaunioncontract,whichexpiresinOctober2016.

CompetitionWithmanycompaniesoperatingretailshoestoresandshoedepartments,wecompeteinahighlyfragmentedmarket.Competitorsincludelocal,regionalandnationalshoestorechains,departmentstores,discountstores,massmerchandisers,numerousindependentretailoperatorsofvarioussizesande-commercebusinesses.Qualityofproductsandservices,storelocation,trend-rightmerchandiseselectionandavailabilityofbrands,pricing,advertisingandconsumerserviceareallfactorsthatimpactretailcompetition.

Inaddition,ourwholesalecustomersalsosellshoespurchasedfromcompetingfootwearsuppliers.Thosecompetingfootwearsuppliersownandlicensebrands,manyofwhicharewell-knownandmarketedaggressively.Manyretailers,whoareourwholesalecustomers,sourcedirectlyfromfactoriesorthroughagents.Thewholesalefootwearbusinesshaslowbarrierstoentry,whichfurtherintensifiescompetition.

FAMOUS FOOTWEAR

OurFamousFootwearsegmentincludesourFamousFootwearstoresandFamous.com,andincludedourShoes.comsubsidiarypriortoitssaleinDecember2014,asfurtherdiscussedinNote2totheconsolidatedfinancialstatements.FamousFootwearisoneofAmerica’sleadingfamily-brandedfootwearretailerswith1,046storesattheendof2015andnetsalesof$1.6billionin2015.Ourcoreconsumersarewomenwhoseekleadingnationalbrandsofcasual,athleticandfashionablefootwearatavalueforthemselvesandtheirfamilies.

FamousFootwearstoresfeatureawideselectionofbrand-nameathletic,casualanddressshoesfortheentirefamily.Brandscarriedinclude,amongothers,Nike,Skechers,Converse,Vans,adidas,Sperry,NewBalance,Asics,BearpawandSofSole,aswellascompany-ownedandlicensedbrandsincluding,amongothers,LifeStride,Dr.Scholl’s,Naturalizer,FergaliciousandCarlosbyCarlosSantana.Ourcompany-ownedandlicensedproductsaresoldtoourFamousFootwearsegmentbyourBrandPortfoliosegmentataprofitandrepresentapproximately9%oftheFamousFootwearsegment’snetsales.Weworkcloselywithourvendorstoprovideourconsumerswithfreshproductand,insomecases,productexclusivelydesignedforandavailableonlyinourstores.FamousFootwear’saverageretailpriceisapproximately$45forfootwearwithretailpricepointstypicallyrangingfrom$25forshoesupto$210forboots.

FamousFootwearstoresarelocatedinstripshoppingcentersaswellasoutletandregionalmallsinall50states,GuamandCanada.Thebreakdownbyvenueattheendofeachofthelastthreefiscalyearsisasfollows:

2015 2014 2013 Stripcenters . . . . . . . . . . . . . . . . . . . . . . . . . . 697 696 711Outletmalls. . . . . . . . . . . . . . . . . . . . . . . . . . . 189 183 172Regionalmalls . . . . . . . . . . . . . . . . . . . . . . . . . 160 159 161 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,046 1,038 1,044


Storesopenattheendof2015and2014averagedapproximately6,700squarefeet.Totalsquarefootageattheendof2015decreased0.1%to6.9millionsquarefeetcomparedto7.0millionattheendof2014.Weexpecttoopenapproximately55newstoresandcloseapproximately40storesin2016.Newstorestypicallyexperienceaninitialstart-upperiodcharacterizedbylowersalesandoperatingearningsthanwhatisgenerallyachievedbymorematurestores.Whilethedurationofthisstart-upperiodmayvarybytypeofstore,economicenvironmentandgeographiclocation,newstorestypicallyreachanormallevelofprofitabilitywithinapproximatelyfouryears.

Salespersquarefootwere$217in2015,upfrom$215in2014.Same-storesalesincreased1.9%during2015.Same-storesaleschangesarecalculatedbycomparingthesalesinstoresthathavebeenopenatleast13months.Relocatedstoresaretreatedasnewstoresandclosedstoresareexcludedfromthecalculation.Saleschangefromnewandclosedstores,net,reflectsthechangeinnetsalesduetostoresthathavebeenopenedorclosedduringtheperiodandaretherebyexcludedfromthesame-storesalescalculation.E-commercesalesforthosee-commercewebsitesthatfunctionasanextensionofaretailchainareincludedinthesame-storesalescalculation.

FamousFootwearreliesonmerchandiseallocationsystemsandprocessesthatuseallocationcriteria,consumersegmentationandinventorydatainanefforttoensurestoresareadequatelystockedwithproductandtodifferentiatetheneedsofeachstorebasedonlocation,consumersegmentationandotherfactors.FamousFootwear’sdistributionsystemsallowformerchandisetobedeliveredtoeachstoreweekly,oronamorefrequentbasis,asneeded.FamousFootwearalsousesregionalthird-partypooleddistributionsitesacrossthecountry.FamousFootwear’sin-storepoint-of-salesystemsprovidedetailedsalestransactiondatatoourcorporateofficefordailyupdateandanalysisintheperpetualinventoryandmerchandiseallocationsystems.Certainofthesesystemsalsoareusedfortrainingemployeesandcommunicationbetweenthestoresandthecorporateoffice.

FamousFootwear’smarketingprogramsincludedigitalmarketingandsocialnetworking,nationaltelevision,print,e-commerceadvertising,cinemaandin-storeadvertisements,allofwhicharedesignedtofurtherdevelopandreinforcetheFamousFootwearconceptandstrengthenourconnectionwithconsumers.Webelievethesuccessofourcampaignsisattributabletohighlightingkeycategoriesandtailoringthetimingofsuchmessagingtoadapttoseasonalshoppingpatterns.In2015,wespentapproximately$52.6milliontoadvertiseandmarketFamousFootweartoourtargetconsumers,aportionofwhichwasrecoveredfromsuppliers.FamousFootwearhasarobustloyaltyprogram(“Rewards”),whichinformsandrewardsfrequentconsumerswithproductpreviews,earnedincentivesbaseduponpurchasecontinuityandotherperiodicpromotionaloffers.In2015,approximately74%ofourFamousFootwearnetsalesweregeneratedbyourRewardsmemberscomparedto73%in2014.Duringtheyear,weexpandedoureffortstoconnectwithandengageourconsumerstobuildastrongbrandpreferenceforFamousFootwearthroughbothourloyaltyprogramandsocialmedia. In2015,wegrewourmobileapplicationandhadmorethan794,000membersenrolledbytheendoftheyear.In2016,wewillcontinuetointensifyourdigitalmarketingpresencetoacquireandretainhighlyvaluableconsumers.

Aspartofouromni-channelapproachtoreachconsumers,wealsooperateFamous.com.Famous.comoffersanexpandedproductassortmentbeyondwhatissoldinFamousFootwearstores.Accessibleviadesktop,tabletandmobiledevices,Famous.comhelpsconsumersexploreproductassortments,includingitemsavailableinlocalstores,andmakedirect-to-consumerpurchases.During2015,wereducedtheaveragedeliverytimefordirect-to-consumerpurchasesbyexpandingourin-storefulfillmentinitiativetoapproximately900stores.Famous.comalsoallowsRewardsmemberstoseetheirpointsstatusandpurchasehistory,manageprofilesettingsandengagefurtherwiththebrand.FamousFootwear’smobileappfurtherservesasahubforRewardsmemberstoshop,findlocalstores,redeemRewardscertificates,andlearnaboutthenewestproducts,latesttrendsandhottestdeals.

Weareinvestinginourlogisticsnetworktomeettheomni-channeldemandsoftoday,includingfasterorderprocessingandfasterdeliverytoourcustomers,aswellastoprepareforongoinggrowthinourbusiness.Theexpansionandmodernizationprojectsatourdistributioncentersareintendedtoprovideadditionalshippingflexibility,operationalefficienciesandanexpansionofourlogisticsinfrastructurecapacity.Theseprojectsareanticipatedtobecompleteduringthefallof2016.

UntilDecember2014,weownedandoperatedShoes.com,Inc.,apure-playInternetretailingcompany.Shoes.comofferedadiverseselectionoffootwearandaccessoriesforwomen,menandchildren,includingfootwearpurchasedfromthird-partysuppliersandtheCompany’sotherbrands.AsfurtherdiscussedinNote2totheconsolidatedfinancialstatements,wesoldShoes.cominDecember2014andrecognizedagainonsaleof$4.7million.

BRAND PORTFOLIO

OurBrandPortfoliosegmentoffersretailersandconsumersaportfolioofleadingbrandsfromourHealthyLivingandContemporaryFashionplatformsbydesigning,sourcingandmarketingbrandedfootwearforwomenandmenatavarietyofpricepoints.CertainofourbrandedfootwearproductsaresoldunderbrandnamesthatareownedbytheCompanyandothersaredevelopedpursuanttolicensingagreements.OurBrandPortfoliosegmentsellsfootwearonawholesalebasistoretailers.Thesegmentalsosellsfootwearthroughourbrandedretailstoresande-commercebusinesses.


Portfolio of BrandsThefollowingisalistingofourprincipalbrandsandlicensedproducts:

Healthy LivingNaturalizer:Introducedin1927,Naturalizerhasbecomeaglobalfamilyofcomfortlifestylefootwearbrandsmeetingtheneedsofwomenacrossthemarketplacewithuncompromisingcomfort,fitandstyle.OurflagshipNaturalizerbrandissoldthroughouttheUnitedStatesandCanada,primarilyatNaturalizerretailstores,nationalchains,onlineretailers,departmentstores,catalogretailersandindependentretailers.Attheendof2015,weoperated159NaturalizerstoresintheUnitedStates,GuamandCanada.Naturalizerfootwearisalsodistributedthroughapproximately40retailandwholesalepartnersin57countriesaroundtheworld.Inaddition,NaturalizerfootwearisdistributedinChinathroughstoresoperatedbyourjointventurepartner,C.bannerInternationalHoldingsLimited(“CBI”).CBIoperated94storesattheendof2015andexpectsnetstoreopeningsofapproximately10storesin2016.Throughourmajority-ownedsubsidiary,B&HFootwearCompanyLimited(“B&HFootwear”),wesellfootweartoCBIonawholesalebasis,asfurtherdiscussedinNote16totheconsolidatedfinancialstatements.Suggestedretailpricepointsrangefrom$79forshoesto$209forboots.

Dr. scholl’s:Dr.Scholl’sisanauthenticbrandofinnovativefootweardesignedwithanuncomplicated,playfulstyleforahealthierlife.Dr.Scholl’sdeliversproprietarycomforttechnologyacrossalldistributiontiers.Dr.Scholl’scraftsuniquestylesthatoffermenandwomenthefreedomtoliveactivelives.Thisfootwearreachesconsumersatawiderangeofdistributionchannels:massmerchandisers,nationalchains,onlineandcatalogs,specialtyandindependentretailers,departmentstoresandourFamousFootwearretailstores.Suggestedpricepointsrangefrom$25forshoesto$200forboots.Wehavealong-termlicenseagreementwithBayerHealthCare,LLCtosellDr.Scholl’s,whichisrenewablethroughDecember2026fortheUnitedStatesandCanadaandDecember2017forLatinAmerica.

lifestride:Formorethan70years,LifeStridehascreatedqualityfootwearforwomenwhovaluestyleandcomfort.Offeringwork-to-weekendstyles,LifeStrideisbothversatileandcomfortableforall-daywear.LifeStrideofferscomfortablefootwearthatdressesupordownattherightvalue.Thebrandissoldinnationalchains,ourFamousFootwearretailstores,onlineanddepartmentstoresatsuggestedretailpricepointsrangingfrom$45forshoesto $100forboots.

ryka:Forover25years,Rykahasbeeninnovatingathleticfootwearexclusivelyforwomenbyprovidingwomenwithmorethanjustadownsizedversionofamen’sathleticshoe.Thebrand’scommitmentgoesbeyondfootweardesigntoincludefitnessandotherapparel.Thebrandisdistributedthroughdepartmentstores,nationalchains,onlineretailersandourFamousFootwearretailstoresatsuggestedretailpricepointsfrom$35to$85.

Bzees:Bzeesisthebrandofwomen’ssportyfootwearthatenergizesthemindandbodyfromthefeetup.Playfulandversatile,BzeesdeliversaweightlessandenergizedfeelingthroughitsproprietaryCloudTechnologysystem.Thebrandisdistributedthroughnationalchains,ourretailstores,onlineretailers,departmentstoresandBzees.comatsuggestedretailpricepointsfrom$59to$129.

Contemporary Fashionsam edelman:Sinceitsinceptionin2004,designerSamEdelman’sbrandhasquicklyemergedasafavoriteamongcelebritiesandfashionistasaroundtheglobe.SamEdelmancapturestheimaginationofwomenwithon-trendstylinganduniquematerials.SamEdelmancontinuestoexpanditsretailpresencebyopeningadditionalstores. Attheendof2015,weoperatedsixSamEdelmanstoresintheUnitedStates,andexpecttoopensixstoresin2016.SamEdelmanfootwearissoldprimarilythroughdepartmentstores,independentretailersandonlineatsuggestedretailpricepointsof$100forshoesto$200forboots.

Franco sarto:TheFrancoSartobrandservesaloyal,career-focusedconsumerwhoispassionateaboutthebrand’smodernItalian-inspiredstyle,fitandquality.Thebrandissoldinmajornationalchains,departmentstoresandindependentretailersatsuggestedretailpricepointsfrom$79forshoesto$275forboots.Wepreviouslyoperatedthisbrandunderalicenseagreementwhichwastoexpirein2019.InFebruary2014,wepurchasedtheFrancoSartotrademarksfor$65.0millionandterminatedthelicenseagreement,asfurtherdiscussedinNote9totheconsolidatedfinancialstatements.

Vince:TheVincewomen’sshoecollectionlaunchedinthefallof2012andwasexpandedin2014toincludetheVincemen’sfootwearcollection.Vincedeliverscontemporarycasualfootwearthatsophisticated,modernwomenandmenweareffortlessly,servingasaluxurystapleintheirshoecloset.Thecollectionisdistinguishedbycleanlines,richfabricsandintricatedetails.Thebrandisprimarilysoldinpremierdepartmentstores,onlineandindependentretailersatsuggestedpricepointsrangingfrom$225forshoesto$495forboots.WehavealicenseagreementwithVince,LLCtosellVincefootwearthatexpiresinDecember2018.


Diane von Furstenberg:TheDianevonFurstenberg(DVF)brandisastapleofAmericanluxurydesign.TheDVFcollectionexemplifiesfeminine,effortlessandclassicstylesthataresoldinmorethan55countriesworldwide.Suggestedpricepointsrangefrom$178forshoesto$648forboots.InDecember2014,weenteredintoalicenseagreementwithDVFStudio,LLCtoproduceanddistributetheDVFwomen’sshoecollection,whichexpiresinDecember2020,withanextensionoptionthroughDecember2023.

Via spiga:ViaSpigaisnamedafterthemainstreetinoneofthemostfamedshoppingdistrictsinMilan,Italy.Forover25years,ViaSpigahasmaintaineditsrichItalianheritagethroughitsuseofluxuriousmaterialsandbeautifuldetailing,providingchic,sophisticatedfootwearforthecosmopolitanwomanwhowantstomakeafashionstatementeveryday.Thebrandisprimarilysoldinpremierdepartmentstores,nationalchainsandonlineatsuggestedretailpricepointsfrom$150forshoesto$595forboots.

Fergie and Fergalicious by Fergie:WehavecreatedtwonamesakefootwearlinesincollaborationwithentertainmentsuperstarFergie(FergieDuhamel,formerlyStacyFerguson)tofullycapturetheartist’sconfident,individualstyleinalineofsophisticated,sexyfootwearwithaglamrockinfluence.TheFergiebrandiscurrentlybeingsoldatdepartmentstores,boutiques,independentretailersandonlineatsuggestedretailpricepointsof$70forshoesto$225forboots.FergaliciousbyFergieisavailableatFamousFootwearandothernationalchainsatsuggestedretailpricepointsof$45forshoesto$100forboots.WehavealicenseagreementwithKrystalBallProductionstosellFergie/FergaliciousfootwearthatexpiresinDecember2016.

carlos by carlos santana:TheCarlosbyCarlosSantanacollectionofwomen’sfootwearissoldatmajordepartmentstores,nationalchains,ourFamousFootwearstoresandonline.MarketedunderalicenseagreementwithlegendarymusicianCarlosSantana,thisbrandtargetstrend-consciousconsumerswithhot,fashionableshoesinspiredbythepassionandenergyofSantana’smusic.Suggestedretailpricepointsrangefrom$80forshoesto$225forboots.WehavealicenseagreementwithSantanaTesoro,LLCtosellCarlosbyCarlosSantanafootwearthatexpiresinDecember2017withextensionoptionsthroughDecember2020.

George Brown:GeorgeBrown,thenewestmen’sfootwearbrandinourportfolio,willdebutinthefallof2016.ThelinetakesinspirationfromtwokeymomentsinGeorgeBrown’slegacy-thebootshebuiltfortheUnitedStatesArmyduringWorldWarIandhisfarmingandhuntingboots.Theshoesareforthemodernmanwhoisnowembracingthereturnofcleandressing.Suggestedretailpricepointswillrangefrom$295forshoesto $595forboots,andwillsellattraditionalbrickandmortarstoresandonlineretailersaswellasitsowne-commercesitethatisanticipatedtolaunchinthesummerof2016.

WholesaleWithinourBrandPortfoliosegment,footwearisdistributedonawholesalebasistoover1,700retailers,includingnationalchains,departmentstores,onlineretailers,massmerchandisers,independentretailersandcatalogsthroughouttheUnitedStatesandCanada,aswellasapproximately65othercountries(includingsalestoourretailoperations).OurmostsignificantwholesalecustomersincludeFamousFootwearandmanyofthenation’slargestretailersincludingnationalchainssuchasDSW,TJXCorporation(includingTJMaxxandMarshalls),NordstromRackandRoss;departmentstoressuchasNordstrom,Macy’s,Bloomingdale’sandDillard’s;onlineretailerssuchasNordstrom.com,Zappos.comandAmazon;massmerchandiserssuchasWalmartandTarget;andindependentretailerssuchasQVCandHomeShoppingNetwork.Wealsosellproducttoavarietyofinternationalretailcustomersanddistributors.ThelossofanyoneormoreofoursignificantcustomerscouldhaveamaterialnegativeimpactonourBrandPortfoliosegmentandtheCompany.

OurBrandPortfoliosegmentsoldapproximately48millionpairsofshoesonawholesalebasisduring2015.Wesellfootweartowholesalecustomersonbothalandedandafirst-costbasis.LandedsalesarethoseinwhichweobtaintitletothefootwearfromouroverseassuppliersandmaintaintitleuntilthefootwearclearsUnitedStatescustomsandisshippedtoourwholesalecustomers.Landedsalesgenerallycarryahigherprofitratethanfirst-costsalesasaresultofthebrandequityassociatedwiththeproductalongwiththeadditionalcustoms,warehousingandlogisticsservicesprovidedtocustomersandtherisksassociatedwithinventoryownership.Toallowforthepromptshipmentonreorders,wecarryinventoriesofcertainstyles.First-costsalesarethoseinwhichweobtaintitletofootwearfromouroverseassuppliersandtypicallyrelinquishtitletocustomersatadesignatedoverseasport.Manyofthesecustomersthenimportthisproductinto the United States.

Productssoldunderlicenseagreementsaccountedforapproximately27%,26%and38%ofthesalesoftheBrandPortfoliosegmentin2015,2014and2013,respectively.Caleresalsoreceivesroyaltyrevenuesforlicensingownedbrands,includingcertainbrandslistedabove,tothirdparties.


retailOurBrandPortfoliosegmentalsoincludesretailstoresforcertainbrands,includingNaturalizerandSamEdelman.ThenumberofourBrandPortfolioretailstoresattheendofthelastthreefiscalyearswasasfollows:

2015 2014 2013 Naturalizer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 169 174SamEdelman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2 1Dr.Scholl’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 4 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 171 179

Attheendof2015,weoperated74NaturalizerstoresintheUnitedStates(includingastoreinGuam)and 85NaturalizerstoresinCanada.Ofthe159Naturalizerstores,approximately50%areconceptstoreslocatedinregionalmalls,withacouplestoreslocatedinstripcenters,andaverageapproximately1,200squarefeetinsize. Theother50%ofstoresarelocatedinoutletmallsandaverageapproximately2,300squarefeetinsize.TotalNaturalizerstoresquarefootageattheendof2015was280,000comparedto297,000in2014.During2016,weexpecttoopenoneNaturalizerstoreandclosefivestores.Attheendof2015weoperatedsixSamEdelmanstores.During2016,weplantoopensixSamEdelmanstores,asweexpandourretailpresenceforthisbrand.OurfourDr.Scholl’sstoreswereclosedin2014,asweshiftedourbrandfocustowardwholesaledistributionande-commercesales.

Inconnectionwithouromni-channelapproachtoreachconsumers,wealsooperateNaturalizer.com,Naturalizer.ca,Ryka.com,DrSchollsShoes.com,LifeStride.com,ViaSpiga.com,SamEdelman.com,CarlosShoes.com,Bzees.comandFergieShoes.com,whichoffersubstantiallythesameproductselectiontoconsumersasweselltoourretailpartners.Vince.comandDVF.comcomplementourdistributionofthosebrands,andwehaveplanstobeginsellingproduct onFrancoSarto.cominthesecondquarterof2016.

Referencestoourwebsiteaddressesdonotconstituteincorporationbyreferenceoftheinformationcontainedonthewebsitesandtheinformationcontainedonthewebsitesisnotpartofthisreport.

MarketingWecontinuetobuildontherecognitionofourportfolioofbrandstocreatedifferentiationandconsumerloyalty.Ourmarketingteamsareresponsibleforthedevelopmentandimplementationofmarketingprogramsforeachbrand,bothforusandforourretailpartners.In2015,wespentapproximately$24.1millioninadvertisingandmarketingsupportforourBrandPortfoliosegment,includingprint,tradeshows,consumermediaadvertising,production,digitalmarketingandsocialmedia,publicrelationsandin-storedisplaysandfixtures.Themarketingteamsarealsoresponsiblefordrivingthedevelopmentofbrandingandcontentforourbrandwebsites.Wecontinuallyfocusonenhancingtheeffectivenessofthesemarketingeffortsthroughmarketresearch,productdevelopmentandmarketingcommunicationsthatcollectivelyaddresstheever-changinglivesandneedsofourconsumers.In2015,themarketingteamswereinstrumentalinthedevelopmentandexecutionofnewproductlaunches,includingbranding,positioningandmarketingtoboththeconsumerandtradeaudiences.In2016,wewillcontinuetoleveragerelationshipsbystrengtheningbusinesswithourkeycustomersandincreasemarketsharebytargetingnewgrowthareas.

sourcing and Product Development OperationsOursourcingandproductdevelopmentoperationssourceanddevelopfootwearforourBrandPortfoliosegmentandalsoaportionofthefootwearsoldbyourFamousFootwearsegment.WehavesourcingandproductdevelopmentofficesinChina,HongKong,Vietnam,Italy,Macau,Ethiopia,St.LouisandNewYork.

Sourcing OperationsIn2015,thesourcingoperationssourcedapproximately47millionpairsofshoesthroughaglobalnetworkofthird-partyindependentfootwearmanufacturers.Themajorityofourfootwearsourcedisprovidedbyapproximately60manufacturersoperatingapproximately87manufacturingfacilities.Incertaincountries,weuseagentstofacilitateandmanagethedevelopment,productionandshipmentofproduct.Weattributeourabilitytoachieveconsistentquality,competitivepricesandon-timedeliverytothebreadthoftheseestablishedrelationships.Whilewegenerallydonothavesignificantcontractualcommitmentswithoursuppliers,wedoenterintosourcingagreementswithcertainindependentsourcingagents.Priortoproduction,wemonitorthequalityofallofourfootwearcomponentsandalsoinspecttheprototypesofeachfootwearstyle.WehavealeadinglabtestingfacilityinourPutian,Chinaoffice,andwealsoperformqualitycontrolchecksduringproductionandbeforeanyfootwearleavesthemanufacturingfacilities.


In2015,approximately76%ofthefootwearwesourcedwasfrommanufacturingfacilitiesinChina.Thefollowingtableprovidesanoverviewofourforeignsourcingin2015:

country Millions of Pairs China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.8Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1Ethiopia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.3

Product Development OperationsInourDongguan,Chinaoffice,weoperateasample-makingfacilitythatallowsustohavegreatercontroloverourproductdevelopmentintermsofaccuracy,executionandtimetomarket.WemaintaindesignandproductdevelopmentteamsforourbrandsinSt.Louis,NewYorkandChinaaswellasotherselectfashionlocations,includingItaly.Theseteams,whichincludeindependentdesigners,areresponsibleforthecreationanddevelopmentofnewproductstyles.Ourdesignersmonitortrendsinfashionfootwearandapparelandworkcloselywithretailerstoidentifyconsumerfootwearpreferences.Ourdesignteamscreatecollectionsoffootwearandworkcloselywithourproductdevelopmentandsourcingofficestoconvertourdesignsintonewfootwearstyles.

Ourlong-rangeplansincludefurtherexpansionintonewmarketsoutsideofChina,developingmoreprogressiveprocessestoimprovefactorycapacityandmaterialplanning,andcontinuingtounderstandwaystodriveexcellenceinproductvalueandexecutioninacontinuallyevolvingmanufacturinglandscape.

BacklogAtJanuary30,2016,ourBrandPortfoliosegmenthadabacklogofunfilledwholesaleordersofapproximately$274.4millioncomparedto$284.6milliononJanuary31,2015.Mostordersarefordeliverywithinthenext90to120days,andalthoughordersaresubjecttocancellation,wehavenotexperiencedsignificantcancellationsinthepast.Thebacklogatanyparticulartimeisaffectedbyanumberoffactors,includingseasonality,thecontinuingtrendamongcustomerstoreducetheleadtimeontheirorders,capacityshiftsatforeignmanufacturersandthevolumeofe-commercedropshipordersthatarereceivedimmediatelyratherthaninadvance.Accordingly,acomparisonofbacklogfromperiodtoperiodisnotnecessarilymeaningfulandmaynotbeindicativeofeventualactualshipmentsorthegrowthrateofsalesfromoneperiodtothenext.

AVAILABLE INFORMATION

OurInternetaddressiswww.caleres.com.OurInternetaddressisincludedinthisannualreportonForm10-Kasaninactivetextualreferenceonly.TheinformationcontainedonourwebsiteisnotincorporatedbyreferenceintothisannualreportonForm10-Kandshouldnotbeconsideredpartofthisreport.Wefileannual,quarterlyandcurrentreports,proxystatementsandotherinformationwiththeSEC.WemakeavailablefreeofchargeourannualreportonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-Kandamendmentstothosereportsfiledorfurnished,asrequiredbySection13(a)or15(d)oftheSecuritiesExchangeActof1934,throughourInternetwebsiteassoonasreasonablypracticableafterweelectronicallyfilesuchmaterialwithorfurnishittotheSEC.YoumayaccesstheseSECfilingsviathehyperlinktoathird-partySECfilingswebsitethatweprovideonourwebsite.

EXECUTIVE OFFICERS OF THE REGISTRANT

ThefollowingisalistofthenamesandagesoftheexecutiveofficersoftheCompanyandoftheofficesheldbyeachperson.Thereisnofamilyrelationshipbetweenanyofthenamedpersons.ThetermsofthefollowingexecutiveofficerswillexpireinMay2016orupontheirrespectivesuccessorsbeingchosenandqualified.

Name age current Position

DianeM.Sullivan 60 ChiefExecutiveOfficer,PresidentandChairmanoftheBoardofDirectorsRichardM.Ausick 62 DivisionPresident–FamousFootwearDanielR.Friedman 55 DivisionPresident–GlobalSupplyChainKennethH.Hannah 47 SeniorVicePresidentandChiefFinancialOfficerDouglasW.Koch 64 SeniorVicePresidentandChiefHumanResourcesOfficerJohnW.Schmidt 55 DivisionPresident–BrandPortfolioMarkA.Schmitt 52 SeniorVicePresident,ChiefInformationOfficer,LogisticsandCustomerCare


Theperiodofserviceofeachofficerinthepositionslistedandotherbusinessexperiencearesetforthbelow.

Diane M. Sullivan,ChairmanoftheBoardofDirectorssinceFebruary2014.ChiefExecutiveOfficerandPresidentsinceMay2011.PresidentandChiefOperatingOfficerfromMarch2006toMay2011.PresidentfromJanuary2004toMarch2006.

Richard M. Ausick,DivisionPresident–FamousFootwearsinceJanuary2010.DivisionPresident,CaleresWholesalefromJuly2006toJanuary2010.SeniorVicePresidentandChiefMerchandisingOfficerofFamousFootwearfromJanuary2002toJuly2006.

Daniel R. Friedman,DivisionPresident–GlobalSupplyChainsinceJanuary2010.SeniorVicePresident,ProductDevelopmentandSourcingfromJuly2006toJanuary2010.ManagingDirectoratCamutoGroup,Inc.from2002toJuly2006.

Kenneth H. Hannah,SeniorVicePresidentandChiefFinancialOfficersinceFebruary2015.ExecutiveVicePresidentandChiefFinancialOfficerofJCPenneyCompany,Inc.fromMay2012toMarch2014.ExecutiveVicePresidentandPresident–SolarEnergyofMEMCElectronicMaterials,Inc.andhadpreviouslyserved asExecutiveVicePresidentandPresident–SolarMaterialsfrom2009to2012.SeniorVicePresidentand ChiefFinancialOfficerofMEMCElectronicMaterials,Inc.from2006to2009.

Douglas W. Koch,SeniorVicePresidentandChiefHumanResourcesOfficersinceJanuary2016.SeniorVicePresidentandChiefTalentandStrategyOfficerfromJanuary2011toJanuary2016.SeniorVicePresidentandChiefTalentOfficerfromMay2005toJanuary2011.SeniorVicePresident,HumanResourcesfromMarch2002toMay2005.

John W. Schmidt,DivisionPresident-BrandPortfoliosinceOctober2015.DivisionPresident–ContemporaryFashionBrandsfromJanuary2011toSeptember2015.SeniorVicePresident,BetterandImageBrandsfromJanuary2010toJanuary2011.SeniorVicePresidentandGeneralManager,BetterandImageBrandsfromMarch2008untilJanuary2010.Variouspositions,includingVicePresident,President,GroupPresidentofWholesaleFootwearforNineWestGroupfromSeptember1998toFebruary2008.

Mark A. Schmitt,SeniorVicePresident,ChiefInformationOfficer,LogisticsandCustomerCaresinceFebruary2013.SeniorVicePresidentandChiefInformationOfficerfromJanuary2012throughFebruary2013.SeniorDirectorofManagementInformationSystemsforExpressScriptsfrom2010through2011.VariousmanagementinformationsystemspositionsincludingGroupDirectorwithAnheuser-BuschInBevfrom1996to2009.

ITEM 1A RISK FACTORS

Consumer demand for our products may be adversely impacted by economic conditions and other factors.Worldwideeconomicconditionscontinuetobeuncertain.Consumerconfidenceandspendingarestronglyinfluencedbygeneraleconomicconditionsandotherfactors,includingfiscalpolicy,changingtaxandregulatoryenvironment,interestrates,minimumwagerates,inflation,consumerdebtlevels,theavailabilityofconsumercredit,theliquidityofconsumers’assets,healthcarecosts,currencyexchangerates,taxation,energycosts,realestatevalues,foreclosurerates,unemploymenttrends,weatherconditions,andtheeconomicconsequencesofmilitaryactionorterroristactivities.Negativeeconomicconditionsgenerallydecreasedisposableincomeand,consequently,consumerpurchasesofdiscretionaryitemslikeourproducts.Negativetrendsineconomicconditionscouldalsodriveupthecostofourproducts,whichmayrequireustoincreaseourproductprices.Theseincreasesinourproductcosts,andpossiblyprices,maynotbeoffsetbycomparableincreasesinconsumerdisposableincome.Asaresult,ourcustomersmaychoosetopurchasefewerofourproductsorpurchasethelower-pricedproductsofourcompetitors,andourbusiness,resultsofoperations,financialconditionandcashflowscouldbeadverselyaffected.

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.Thefootwearindustryissubjecttorapidlychangingconsumerdemandsandfashiontrends.Ourproductsmustappealtoabroadrangeofconsumerswhosepreferencescannotbepredictedwithcertaintyandaresubjecttorapidchange.Accordingly,thesuccessofbothourwholesaleandretailoperations,includingtheexpansionofoure-commercebusiness,dependslargelyonourabilitytoanticipate,understandandreacttochangingconsumerdemandsandpreferences.Ifwefailtosuccessfullyanticipateandrespondtochangesinconsumerdemandandfashiontrends,developnewproductsanddesigns,andimplementeffective,responsivemerchandisingandmarketingstrategiesandprograms,wecouldexperiencelowersales,excessinventoriesandlowergrossmargins,anyofwhichcouldhaveanadverseeffectonourresultsofoperationsandfinancialcondition.


We operate in a highly competitive industry.Competitionisintenseinthefootwearindustry.Certainofourcompetitorsarelargerandhavegreaterfinancial,marketingandtechnologicalresourcesthanwedo;othersareabletoofferfootwearonalateralbasisalongsidetheirapparelproducts;andothershavesuccessfullybrandedtheirtrademarksaslifestylebrands,resultingingreatercompetitiveadvantages.Lowbarrierstoentryintothisindustryfurtherintensifycompetitionbyallowingnewcompaniestoeasilyenterthemarketsinwhichwecompete.Someofoursuppliersfurthercompoundthesecompetitivepressuresbyallowingconsumerstopurchasetheirproductsdirectlythroughsupplier-maintainedInternetsitesandretailstores.Inaddition,retailersaggressivelycompeteonthebasisofprice,whichputscompetitivepressureonustokeepourpriceslow.

Webelievethatourabilitytocompetesuccessfullyinthefootwearindustrydependsonanumberoffactors,includingstyle,price,performance,quality,locationandservice,aswellasthestrengthofourbrandnames.Weremaincompetitivebyincreasingawarenessofourbrands,improvingtheefficiencyofoursupplychainandenhancingthestyle,comfort,fashionandperceivedvalueofourproducts.However,ourcompetitorsmayimplementmoreeffectivemarketingcampaigns,adoptmoreaggressivepricingpolicies,makemoreattractiveofferstopotentialemployees,distributionpartnersandmanufacturers,orrespondmorequicklytochangesinconsumerpreferencesthanus.Asaresult,wemaynotbeabletocompetesuccessfullyinthefuture,andincreasedcompetitionmayresultinpricereductions,reducedgrossmargins,lossofmarketshareandaninabilitytogeneratecashflowsthataresufficienttomaintainorexpandthedevelopmentandmarketingofourproducts,whichcouldadverselyimpactourfinancialresults.

We rely on foreign sources of production, which subjects our business to risks associated with international trade.Werelyonforeignsourcingforourfootwearproductsthroughthird-partymanufacturingfacilitieslocatedoutsidetheUnitedStates.Asiscommonintheindustry,wedonothaveanylong-termcontractswithourthird-partyforeignmanufacturers.Foreignsourcingissubjecttonumerousrisks,includingtraderelations,workstoppages,transportationdelays(includingdelaysatforeignanddomesticports)andcosts(includingcustomsduties,quotas,tariffs,anti-dumpingduties,safeguardmeasures,cargorestrictionsorothertraderestrictions),politicalinstability,foreigncurrencyfluctuations,variableeconomicconditions,expropriation,nationalization,naturaldisasters,terroristactsandmilitaryconflictandchangesingovernmentalregulations(includingtheU.S.ForeignCorruptPracticesAct).Atthesametime,potentialchangesinmanufacturingpreferences,including,butnotlimitedtothefollowing,poseadditionalriskanduncertainty:• Manufacturingcapacitymayshiftfromfootweartootherindustrieswithmanufacturingmarginsthat

areperceivedtobehigher.• Somefootwearmanufacturersmayfacelaborshortagesasworkersseekbetterwagesandworking

conditionsinotherindustriesandlocations.

Asaresultoftheserisks,therecanbenoassurancethatwewillnotexperiencereductionsinavailableproductioncapacity,increasesinourmanufacturingcosts,latedeliveriesorterminationsofoursupplierrelationships.Furthermore,thesesourcingrisksarecompoundedbythelackofdiversificationinthegeographiclocationofourforeignsourcingandmanufacturing.WiththemajorityofoursupplyoriginatinginChina,asubstantialportionofoursupplycouldbeatriskintheeventofanysignificantnegativedevelopmentrelatedtoChina.

Althoughwebelievewecouldfindalternativemanufacturingsourcesfortheproductsthatwecurrentlysourcefromthird-partymanufacturingfacilitiesinChinaorothercountries,wemaynotbeabletolocatealternativemanufacturersontermsasfavorableasourcurrentterms,includingpricing,paymentterms,manufacturingcapacity,qualitystandardsandleadtimesfordelivery.Inaddition,thereissubstantialcompetitioninthefootwearindustryforqualityfootwearmanufacturers.Accordingly,ourfutureresultswillpartlydependonourabilitytomaintainpositiveworkingrelationshipswith,andoffercompetitivetermsto,ourforeignmanufacturers.Ifsupplyissuescauseustobeunabletoprovideproductsconsistentwithourstandardsormanufactureourfootwearinacostandtimeefficientmanner,ourcustomersmaycancelorders,refusetoacceptdeliveriesordemandreductionsinpurchaseprices,anyofwhichcouldhaveamaterialadverseeffectonourbusinessandresultsofoperations.

Our operating results depend on preparing accurate sales forecasts and properly managing our inventory levels.Usingsalesforecasts,weplaceorderswithmanufacturersforsomeofourproductspriortothetimewereceiveallofourcustomers’orderstominimizepurchasingcosts,thetimenecessarytofillcustomerordersandtheriskofnon-delivery.Wealsomaintainaninventoryofcertainproductsthatweanticipatewillbeingreaterdemand.Attheretaillevel,weplaceordersforproductmanymonthsinadvanceofourkeysellingseasons.Adverseeconomicconditionsandrapidlychangingconsumerpreferencescanmakeitdifficultforusandourretailcustomerstoaccuratelyforecastproducttrendsinordertomatchproductionwithdemand.Ifwefailtoaccuratelyassessconsumerfashiontastesandtheimpactofeconomicfactorsonconsumerspendingortoeffectivelydifferentiateourretailandwholesaleofferings,ourinventorylevelsmayexceedcustomerdemand,resultingininventorywrite-downs,highercarryingcosts,lowergrossmarginsorthesaleofexcessinventoryatdiscountedprices,whichcould


significantlyimpactourfinancialresults.Conversely,ifweunderestimateconsumerdemandforourproductsorifourmanufacturersfailtosupplythequalityproductsthatwerequireinatimelymanner,wemayexperienceinventoryshortages.Inventoryshortagesmaydelayshipmentstocustomers(andpossiblyrequireustoofferdiscountsorcostlyexpeditedshipping),negativelyimpactretaileranddistributorrelationships,adverselyimpactoursalesresultsanddiminishbrandawarenessandloyalty.

A cybersecurity breach may adversely affect our sales and reputation.Weroutinelypossesssensitiveconsumerandassociateinformation.Wealsoprovidecertaincustomerandemployeedatatothirdpartiesforanalysis,benefitdistributionorcompliancepurposes.Whilewebelievewehavetakenreasonableandappropriatestepstoprotectthatinformation,hackersanddatathievesoperatesophisticated,large-scaleattacksthatcouldbreachourinformationsystems,despiteongoingsecuritymeasures.Inaddition,wearerequiredtocomplywithincreasinglycomplexregulationsdesignedtoprotectourbusinessandpersonaldata. Anybreachofournetworksecurity,athird-party’snetworksecurityorfailuretocomplywithapplicableregulationsmayresultin(a)thelossofvaluablebusinessdataand/orourconsumers’orassociates’personalinformation, (b)increasedcostsassociatedwithimplementingadditionalprotectionsandprocesses,(c)adisruptionofourbusinessandalossofsales,(d)negativemediaattention,(e)damagetoourconsumerandassociaterelationshipsandreputation,and(f)finesorlawsuits.

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.Ourcomputernetworkandsystemsareessentialtoallaspectsofouroperations,includingdesign,pricing,production,forecasting,ordering,manufacturing,transportation,salesanddistribution.Ourabilitytomanageandmaintainourinventoryandtodeliverproductsinatimelymannerdependsonthesesystems.Ifanyofthesesystemsfailstooperateasexpected,weexperienceproblemswithtransitioningtoupgradedorreplacementsystems,abreachinsecurityoccursoranaturaldisasterinterruptssystemfunctions,wemayexperiencedelaysinproductfulfillmentandreducedefficiencyinouroperationsorberequiredtoexpendsignificantcapitaltocorrecttheproblem,whichmayhaveanadverseeffectonourresultsofoperationsandfinancialcondition.

Customer concentration and other trends in customer behavior may lead to a reduction in or loss of sales.Ourwholesalecustomersincludenationalchains,departmentstores,onlineretailers,massmerchandisers,independentretailersandcatalogs.Severalofourcustomersoperatemultipledepartmentstoredivisions.Furthermore,weoftensellmultipletypesofbranded,licensedandprivate-labelfootweartothesesamecustomers.Whilewebelievepurchasingdecisionsinmanycasesaremadeindependentlybythebuyersandmerchandisersofeachofthecustomers,adecisionbyasignificantcustomertodecreasetheamountoffootwearproductspurchasedfromuscouldhaveamaterialadverseeffectonourbusiness,financialconditionorresultsofoperations.

Inaddition,withthegrowingtrendtowardretailtradeconsolidation,weandourwholesalecustomersincreasinglydependuponareducednumberofkeyretailerswhosebargainingstrengthisgrowing. Thisconsolidationmayresultinthefollowingadverseconsequences:

• Ourwholesalecustomersmayseekmorefavorabletermsfortheirpurchasesofourproducts,whichcouldlimitourabilitytoraiseprices,recoupcostincreasesorachieveourprofitgoals.

• Thenumberofstoresthatcarryourproductscoulddecline,therebyexposingustoagreaterconcentrationofaccountsreceivableriskandnegativelyimpactingourbrandvisibility.

Wealsofacethefollowingriskswithrespecttoourcustomers:

• Ourcustomerscoulddevelopin-housebrandsoruseahighermixofprivate-labelfootwearproducts,whichwouldnegativelyimpactoursales.

• Aswesellourproductstocustomersandextendcreditbasedonanevaluationofeachcustomer’sfinancialcondition,thefinancialdifficultiesofacustomercouldcauseustostopdoingbusinesswiththatcustomer,reduceourbusinesswiththatcustomerorbeunabletocollectfromthatcustomer.

• SincewetransactprimarilyinUnitedStatesdollars,ourinternationalcustomerscouldpurchasefromcompetitorswhowilltransactbusinessintheirlocalcurrency.

• Ifanyofourmajorwholesalecustomersexperiencesasignificantdownturninitsbusinessorfailstoremaincommittedtoourproductsorbrands,thenthesecustomersmayreduceordiscontinuepurchasesfromus.

• Retailersaredirectlysourcingmoreoftheirproductsdirectlyfromforeignmanufacturersandreducingtheirrelianceonwholesalers,whichcouldhaveamaterialadverseeffectonourbusinessandresultsofoperations.


A disruption in the effective functioning of our distribution centers could adversely affect our ability to deliver inventory on a timely basis.Wecurrentlyuseseveraldistributioncenters,whichareleasedorthird-partymanaged.Thesedistributioncentersserveasthesourceofreplenishmentofinventoryforourfootwearstoresande-commercewebsitesoperatedbyourFamousFootwearandBrandPortfoliosegmentsandservethewholesaleoperationsofourBrandPortfoliosegment.Wemaybeunabletosuccessfullymanage,negotiateorrenewourthird-partydistributioncenteragreements,orwemayexperiencecomplicationswithrespecttoourdistributioncenters,suchassubstantialdamageto,ordestructionof,suchfacilitiesduetonaturaldisastersorineffectiveinformationtechnologysystems.Insuchanevent,ourotherdistributioncentersmaynotbeabletosupporttheresultingadditionaldistributiondemandsandwemaybeunabletolocatealternativepersonsorentitiescapableoffulfillingourdistributionneeds,resultinginanadverseeffectonourabilitytodeliverinventoryonatimelybasis.

Our success depends on our ability to retain senior management and recruit and retain other key associates.Oursuccessdependsonourabilitytoattract,retainandmotivatequalifiedmanagement,administrative,productdevelopmentandsalespersonneltosupportexistingoperationsandfuturegrowth.Inaddition,ourabilitytosuccessfullyintegrateacquiredbusinessesoftendependsonourabilitytoretainincumbentpersonnel,manyofwhompossessvaluableinstitutionalknowledgeandoperatingexperience.Competitionforqualifiedpersonnelinthefootwearindustryisintenseandwecompetefortheseindividualswithothercompaniesthatinmanycaseshavesuperiorfinancialandotherresources.Thelossoftheservicesofanymemberofourseniormanagementorkeyassociates,theinabilitytoattractandretainotherqualifiedpersonnelortheinabilitytoeffectivelytransitionpositionscouldadverselyaffectthesales,designandproductionofourproductsaswellastheimplementationofourstrategicinitiatives.

Foreign currency fluctuations may result in higher costs and decreased gross profits.AlthoughwepurchasemostofourproductsfromforeignmanufacturersinUnitedStatesdollarsandotherwiseengageinforeigncurrencyhedgingtransactions,wecannotensurethatwewillnotexperiencecostvariationswithrespecttoexchangeratechanges.CurrencyexchangeratefluctuationsmayalsoadverselyimpactthirdpartieswhomanufacturetheCompany’sproductsbymakingtheirpurchasesofrawmaterialsorotherproductioncostsmoreexpensiveandmoredifficulttofinance,resultinginhigherpricesandlowermarginsfortheCompany,itsdistributorsandlicensees.

Our business, sales and brand value could be harmed by violations of labor, trade or other laws.WefocusondoingbusinesswiththosesupplierswhoshareourcommitmenttoresponsiblebusinesspracticesandtheprinciplessetforthinourProductionCodeofConduct(the“PCOC”).ByrequiringoursupplierstocomplywiththePCOC,weencourageoursupplierstopromotebestpracticesandworktowardcontinualimprovementthroughouttheirproductionoperations.ThePCOCsetsforthstandardsforworkingconditionsandothermatters,includingcompliancewithapplicablelaborpractices,workplaceenvironmentandcompliancewithlaws.Althoughwepromoteethicalbusinesspractices,wedonotcontroloursuppliersortheirlaborpractices.Afailurebyanyofoursupplierstoadheretothesestandardsorlawscouldcauseustoincuradditionalcostsforourproducts,couldcausenegativepublicityandharmourbusinessandreputation.Wealsorequireoursupplierstomeetourstandardsforproductsafety,includingcompliancewithapplicablelawsandstandardswithrespecttosafetyissues,includingleadcontentinpaint.Failurebyanyofoursupplierstoadheretoproductsafetystandardscouldleadtoaproductrecall,whichmayresultincriticalmediacoverage,harmourbusinessandreputation,andcauseustoincuradditionalcosts.

Inaddition,ifwe,oroursuppliersorforeignmanufacturers,violateUnitedStatesorforeigntradelawsorregulations,wemaybesubjecttoadditionalduties,significantmonetarypenalties,theseizureandforfeitureoftheproductsweareattemptingtoimportorthelossofourimportprivileges.PossibleviolationsofUnitedStatesorforeignlawsorregulationscouldincludeinadequaterecordkeepingofourimportedproducts,misstatementsorerrorsastotheorigin,classification,marketingorvaluationofourimportedproducts,fraudulentvisasorlaborviolations.Theeffectsofthesefactorscouldrenderourconductofbusinessinaparticularcountryundesirableorimpracticalandhaveanegativeimpactonouroperatingresults.

Our retail business depends on our ability to secure affordable and desirable leased locations without creating a competitive concentration of stores.ThesuccessoftheretailbusinesswithinourFamousFootwearandBrandPortfoliosegmentsdepends,inpart,onourabilitytosecureaffordable,long-termleasesindesirablelocationsforourleasedretailfootwearstoresandtosecurerenewalsofsuchleases.Noassurancecanbegiventhatwewillbeabletosuccessfullynegotiateleaserenewalsforexistingstoresorobtainacceptabletermsfornewstoresindesirablelocations.Inaddition,openingnewFamousFootwearstoresinourexistingmarketsmayresultinreducednetsalesinexistingstoresasourstoresbecomemoreconcentratedinthemarketsweserve.Asaresult,thenumberofconsumersandfinancialperformanceofindividualstoresmaydeclineandtheaveragesalespersquarefootatourstoresmaybereduced.


If we are unable to maintain working relationships with our major branded suppliers, our business, results of operations, financial condition and cash flows may be adversely impacted.OurFamousFootwearsegmentpurchasesasubstantialportionofitsfootwearproductsfrommajorbrandedsuppliers.Purchasesfromtwomajorbrandedsuppliers,Nike,Inc.andSkechersUSA,Inc.,collectivelycompriseapproximately23%and13%,respectively,ofsalesfortheFamousFootwearsegment.Asiscommonintheindustry,wedonothaveanylong-termcontractswithoursuppliers.Inaddition,thesuccessofourfinancialperformanceisdependentontheabilityofourFamousFootwearsegmenttoobtainproductsfromoursuppliersonatimelybasisandonacceptableterms.Whilewebelieveourrelationshipswithourcurrentsuppliersaregood,thelossofanyofourmajorsuppliersorproductdevelopedexclusivelyforourFamousFootwearstorescouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.Inaddition,negativetrendsinglobaleconomicconditionsmayadverselyimpactoursuppliers.Ifthesethirdpartiesdonotperformtheirobligationsorareunabletoprovideuswiththematerialsandservicesweneedatpricesandtermsthatareacceptabletous,ourabilitytomeetourconsumers’demandcouldbeadverselyaffected.

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 LicenseeAlthoughweownmostofourwholesalebrands,wealsorelyonourabilitytoattract,retainandmaintaingoodrelationshipswithlicensorsthathavestrong,well-recognizedbrandsandtrademarks.Ourlicenseagreementsaregenerallyforaninitialtermoftwotofouryears,subjecttorenewal,andtherecanbenoassurancethatwewillbeabletorenewtheselicenses.Evenourlonger-termorrenewablelicensesaretypicallydependentuponourabilitytomarketandsellthelicensedproductsatspecifiedlevels,andthefailuretomeetsuchlevelsmayresultintheterminationornon-renewalofsuchlicenses.Furthermore,manyofourlicenseagreementsrequireminimumroyaltypayments,andifweareunabletogeneratesufficientsalesandprofitabilitytocovertheseminimumroyaltyrequirements,wemayberequiredtomakeadditionalpaymentstothelicensorsthatcouldhaveamaterialadverseeffectonourbusinessandresultsofoperations.Inaddition,becausecertainofourlicenseagreementsarenon-exclusive,neworexistingcompetitorsmayobtainlicenseswithoverlappingproductorgeographicterms,resultinginincreasedcompetitionforaparticularmarket.

Licenses - Company as LicensorWehaveenteredintonumerouslicenseagreementswithrespecttothebrandsandtrademarksthatweown.Whilewehavesignificantcontroloverourlicensees’productsandadvertising,wegenerallycannotcontroltheiroperationalandfinancialissues.Ifourlicenseesarenotabletomeetannualsalesandroyaltygoals,obtainfinancing,managetheirsupplychain,controlqualityandmaintainpositiverelationshipswiththeircustomers,ourbusiness,resultsofoperationsandfinancialpositionmaybeadverselyaffected.Whilewewouldlikelyhavetheabilitytoterminateanunderperforminglicense,itmaybedifficultandcostlytolocateanacceptablesubstitutedistributororlicensee,andwemayexperienceadisruptioninoursalesandbrandvisibility.Inaddition,althoughmanyofourlicenseagreementsprohibitthelicenseesfromenteringintolicensingarrangementswithcertainofourcompetitors,theyaregenerallynotprohibitedfromoffering,underotherbrands,thetypesofproductscoveredbytheirlicenseagreementswithus.

TrademarksWebelievethatourtrademarksandtradenamesareimportanttooursuccessandcompetitivepositionbecauseourdistinctivemarkscreateamarketforourproductsanddistinguishourproductsfromotherproducts. Wecannot,however,guaranteethatwewillbeabletosecureprotectionforourintellectualpropertyinthefutureorthatsuchprotectionwillbeadequateforfutureoperations.Furthermore,wefacetheriskofineffectiveprotectionofintellectualpropertyrightsinjurisdictionswherewesourceanddistributeourproducts,someofwhichdonotprotectintellectualpropertyrightstothesameextentastheUnitedStates.Ifweareunsuccessfulinchallengingaparty’sproductsonthebasisofinfringementofourintellectualpropertyrights,continuedsalesoftheseproductscouldadverselyaffectoursales,devalueourbrandsandresultinashiftinconsumerpreferenceawayfromourproducts.Wemayfacesignificantexpensesandliabilityinconnectionwiththeprotectionofourintellectualpropertyrights,andifweareunabletosuccessfullyprotectourrightsorresolveintellectualpropertyconflictswithothers,ourbusinessorfinancialconditioncouldbeadverselyaffected.

Changes in tax laws, policies and treaties could result in higher taxes, lower profitability, and increased volatility in our financial results.Ourfinancialresultsaresignificantlyimpactedbyoureffectivetaxrates,forbothdomesticandinternationaloperations.Oureffectiveincometaxratecouldbeadverselyaffectedbyfactorssuchaschangesinthemixofearningsincountrieswithdifferingstatutorytaxrates,changesinthevaluationofdeferredtaxassetsandliabilities,changesinpermitteddeductions,changesintaxlaws,interpretations,policiesandtreaties,theoutcomeofincometaxauditsinvariousjurisdictionsandanyrepatriationofearningsfromourinternationaloperations.Theoccurrenceofsucheventsmayresultinhighertaxes,lowerprofitabilityandincreasedvolatilityinourfinancialresults.


Our quarterly sales and earnings may fluctuate, which may result in volatility in, or a decline in, our stock price.Ourquarterlysalesandearningscanvaryduetoanumberoffactors,manyofwhicharebeyondourcontrol,includingthefollowing:• OurFamousFootwearretailbusinessisseasonallyweightedtotheback-to-schoolseason,whichfallsinour

thirdfiscalquarter.Asaresult,thesuccessofourback-to-schooloffering,whichisaffectedbyourabilitytoanticipateconsumerdemandandfashiontrends,couldhaveadisproportionateimpactonourfullyearresults.

• Inourwholesalebusiness,salesoffootweararedependentonordersfromourmajorcustomers,andtheymaychangedeliveryschedules,changethemixofproductstheyorderorcancelorderswithoutpenalty.

• Ourwholesalecustomerssetthedeliveryscheduleforshipmentsofourproducts,whichcouldcauseshiftsofsalesbetweenquarters.

• Ourestimatedannualtaxrateisbasedonprojectionsofourdomesticandinternationaloperatingresultsfortheyear,whichwereviewandreviseasnecessaryeachquarter.

• Ourearningsarealsosensitivetoanumberoffactorsthatarebeyondourcontrol,includingmanufacturingandtransportationcosts,changesinproductsalesmix,geographicsalestrends,weatherconditions,consumersentimentandcurrencyexchangeratefluctuations.

Asaresultofthesespecificandothergeneralfactors,ouroperatingresultswillvaryfromquartertoquarterandtheresultsforanyparticularquartermaynotbeindicativeofresultsforthefullyear.Anyshortfallinsalesorearningsfromthelevelsexpectedbyinvestorscouldcauseadecreaseinthetradingpriceofourcommonstock.

Transitional challenges with business acquisitions or divestitures could result in the inability to achieve our strategic and operating goals.Periodically,wepursueacquisitionsofothercompaniesorbusinessesanddivestituresofbusinesses.Ineithercase,wemaynotachieveourstrategicandoperatinggoalsthroughsuchactivity.Forexample,althoughwecompleteduediligenceonacquisitioncandidates,theduediligencemaynotrevealallexistingorpotentialproblems.Asaresult,wemaynotaccuratelyassessthevalueofthebusinessandmay,accordingly,ultimatelyassumeunknownadverseoperatingconditionsand/orunanticipatedliabilities.Inaddition,theacquiredbusinessmaynotperformaswellasexpected. Wefacetheriskthatthereturnsonacquisitionswillnotsupporttheexpendituresorindebtednessincurredtoacquireorlaunchsuchbusinesses.Wealsofacetheriskthatwewillnotbeabletointegrateacquisitionsintoourexistingoperationseffectively.Integrationofnewbusinessesmaybehinderedby,amongotherthings,differingprocedures,includinginternalcontrols,businesspracticesandtechnologysystems.Wemayneedtoallocatemoremanagementresourcestointegrationthanweplanned,whichmayadverselyaffectourabilitytopursueotherprofitableactivities.Inaddition,divestingabusinessmayimpedeprogresstowardstrategicandoperatinggoals.Inconnectionwithadivestiture,wemaynotsuccessfullydivestabusinesswithoutsubstantialinterruption,expense,delayorotheroperationalorfinancialproblems,whichmayadverselyaffectourfinancialconditionandresultsofoperations.

We are subject to periodic litigation and other regulatory proceedings, which could result in the unexpected expenditure of time and resources.Weareadefendantfromtimetotimeinlawsuitsandregulatoryactions(includingenvironmentalmatters)relatingtoourbusinessandtoourpastoperations.Duetotheinherentuncertaintiesoflitigationandregulatoryproceedings,wecannotaccuratelypredicttheultimateoutcomeofanysuchproceedings.Anunfavorableoutcomecouldhaveamaterialadverseimpactonourbusiness,financialconditionandresultsofoperations.Inaddition,regardlessoftheoutcomeofanylitigationorregulatoryproceedings,suchproceedingsareexpensiveandwillrequirethatwedevotesubstantialresourcesandexecutivetimetodefend,therebydivertingmanagement’sattentionandresourcesthatareneededtosuccessfullyrunourbusiness.SeeItem3,LegalProceedings,forfurtherdiscussionofpendingmatters.

A significant portion of our Famous Footwear sales are dependent on our Famous Footwear loyalty program, Rewards, and any decrease in sales from Rewards could have a material adverse impact on our sales.RewardsisacustomerloyaltyprogramthatdrivessalesandtrafficfortheFamousFootwearsegment.Rewardsmembersearnpointstowardsavingscertificatesforqualifyingpurchases.Uponreachingspecifiedpointvalues,membersareissuedasavingscertificate,whichtheymayredeemforpurchasesatFamousFootwear.Approximately74%ofourfiscal2015saleswithintheFamousFootwearsegmentweregeneratedbyourRewardsmembers.IfourRewardsmembersdonotcontinuetoshopatFamousFootwear,oursalesmaybeadverselyaffected

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.TheFirstAmendmenttoourFourthAmendedandRestatedCreditAgreement(the“CreditAgreement”),whichmaturesonDecember18,2019,isprovidedbyasyndicateoffinancialinstitutions,witheachinstitutionagreeingseverally(andnotjointly)tomakerevolvingcreditloanstousinanaggregateamountofupto$600.0millioninaccordancewiththetermsoftheCreditAgreement.Inaddition,theCreditAgreementprovidesforanincrease attheCompany’soptionbyupto$150.0million.Ifoneormoreofthefinancialinstitutionsparticipatinginthe Credit Agreementweretodefaultonitsobligationtofunditscommitment,theportionofthefacilityprovided bysuchdefaultingfinancialinstitutionmightnotbeavailabletous.


If we are unable to maintain our credit rating, our ability to access capital and interest rates may be negatively impacted.Thecreditratingagenciesperiodicallyreviewourcapitalstructureandthequalityandstabilityofourearnings.Anynegativeratingsactionscouldconstrainthecapitalavailabletousorourindustryandcouldlimitouraccesstolong-termfundingorcausesuchaccesstobeavailableatahigherborrowingcostforouroperations.Wearedependentuponourabilitytoaccesscapitalatratesandontermswedeterminetobeattractive.Ifourabilitytoaccesscapitalbecomesconstrained,ourinterestexpensewilllikelyincrease,whichcouldadverselyaffectourfinancialconditionandresultsofoperations.

ITEM 1B UNRESOLVED STAFF COMMENTS

TherearenounresolvedwrittencommentsthatwerereceivedfromtheSECstaff180daysormorebeforetheendofourfiscalyearrelatingtoourperiodicorcurrentreportsundertheSecuritiesExchangeActof1934,asamended.

ITEM 2 PROPERTIES

Weownourprincipalexecutive,salesandadministrativeofficeslocatedinClayton(“St.Louis”),Missouri.Ourretailoperations,includedinbothourFamousFootwearandBrandPortfoliosegments,areconductedthroughouttheUnitedStates,CanadaandGuamandinvolvetheoperationof1,211shoestores,including94inCanada.Allstorelocationsareleased,withapproximately51%ofthemhavingrenewaloptions.Thefootwearsoldthroughourdomesticwholesalebusinessisprocessedthroughthird-partyfacilitiesineitherChino,CaliforniaorClifton,NewJersey.

ThefollowingtablesummarizesthegenerallocationanduseoftheCompany’sprimaryproperties:

location Owned/leased segment Use Clayton,Missouri Owned FamousFootwear, Principalexecutive, brand PortfolioandOther salesandadministrativeofficesUnitedStates,CanadaandGuam Leased FamousFootwear Retailoperations andBrandPortfolioLebanon,Tennessee(1) Leased FamousFootwear DistributioncenterBakersfield,California (2) Leased FamousFootwear DistributioncenterNewYork,NewYork Leased BrandPortfolio OfficespaceandshowroomsBentonville,Arkansas Leased BrandPortfolio ShowroomsDallas,Texas Leased BrandPortfolio ShowroomsPerth,Ontario Owned BrandPortfolio PrimaryCanadianoperationsLaval,Quebec Leased BrandPortfolio OfficespaceChina,HongKong,Vietnam,EthiopiaandItaly Leased BrandPortfolio Officespace Dongguan,China Leased BrandPortfolio Sample-makingfacility

(1) Thisdistributioncenterisapproximately540,000squarefeet,up210,000squarefeetfrom2014duetotheexpansionandmodernizationofourdistributioncenter.

(2) Thisdistributioncenterisapproximately350,000squarefeet.

WealsoownabuildinginDenver,Colorado,whichisleasedtoathirdparty;andundevelopedlandinColoradoandNew York. See Item 3, Legal Proceedings,forfurtherdiscussionofcertainoftheseproperties.

ITEM 3 LEGAL PROCEEDINGS

Weareinvolvedinlegalproceedingsandlitigationarisingintheordinarycourseofbusiness.Intheopinionofmanagement,theoutcomeofsuchordinarycoursebusinessproceedingsandlitigationcurrentlypendingwillnothaveamaterialadverseeffectonourresultsofoperationsorfinancialposition.

Ourprioroperationsincludednumerousmanufacturingandotherfacilitiesforwhichwemayhaveresponsibilityundervariousenvironmentallawstoaddressconditionsthatmaybeidentifiedinthefuture.Weareinvolvedinenvironmentalremediationandongoingcomplianceactivitiesatseveralsitesandhavebeennotifiedthatweareormaybeapotentiallyresponsiblepartyatseveralothersites.Weareremediating,undertheoversightofColoradoauthorities,contaminationatandbeneathourownedfacilityinColorado(alsoknownasthe“Redfield”site)andgroundwaterandindoorairinresidentialneighborhoodsadjacenttoandneartheproperty,whichhavebeenaffectedbysolventspreviouslyusedatthesiteandsurroundingfacilities.


During2014,wesignedasettlementagreementtoresolveaputativeclassactionlawsuitinvolvingwageandhourclaimsinCaliforniaforanamountnottoexceed$1.5million.In2015,thecourtgrantedfinalapprovalofthesettlement,pursuanttowhichtheCompanywasrequiredtopay$1.0millioninattorneys’fees,costsofadministeringthesettlementandsettlementpaymentstoclassmemberswhosubmittedclaims.Allpaymentsrequiredunderthesettlementagreementweremadeinthefourthquarterof2015andthismatterisfullyresolved.

RefertoNote17totheconsolidatedfinancialstatementsforadditionalinformationrelatedtotheRedfieldmatterandotherlegalproceedings.

ITEM 4 MINE SAFETY DISCLOSURES

Notapplicable.

ParT II

ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

OurcommonstockislistedontheNewYorkStockExchange(“NYSE”)underthetradingsymbol“CAL.”AsofJanuary30,2016,wehadapproximately3,807shareholdersofrecord.ThefollowingtablesetsforththehighandlowsalespricespershareofourcommonstockasreportedontheNYSEandthedividendspaidpershareforeachfiscalquarterduring2015and2014. 2015 2014 Dividend Dividend low High Paid Low High Paid 1stQuarter . . . . . . . . . . . . . . . . . $27.22 $33.33 $0.07 $22.30 $28.73 $0.072ndQuarter . . . . . . . . . . . . . . . . 28.91 33.83 0.07 23.14 29.65 0.073rdQuarter . . . . . . . . . . . . . . . . 27.90 33.73 0.07 25.30 32.31 0.074thQuarter. . . . . . . . . . . . . . . . . 23.22 31.75 0.07 26.39 33.67 0.07

restrictions on the Payment of DividendsTheFirstAmendmenttoourFourthAmendedandRestatedCreditAgreement(the“CreditAgreement”)andtheindenturegoverningour6.25%seniornotesduein2023(the“2023SeniorNotes”)limittheamountofdividendsthatcanbedeclaredandpaid.However,wedonotbelievethislimitationmateriallyrestrictstheBoardofDirectors’abilitytodeclareorourabilitytopayregularquarterlydividendstoourcommonstockholders.

Inadditiontothislimitation,thedeclarationandpaymentofdividendsandtheamountofdividendswilldependonourresultsofoperations,financialcondition,futureprospectsandotherfactorsdeemedrelevantbyourBoardofDirectors.

Issuer Purchases of equity securitiesThefollowingtablerepresentsissuerpurchasesofequitysecurities. Total Number of Maximum Number Total Number shares Purchased of shares that May of shares average Price as Part of Publicly Yet Be PurchasedFiscal Period Purchased Paid per share announced Program Under the Program (1)

November1,2015-November28,2015 . 823 (2) $30.50 – 2,348,500November29,2015-January2,2016 . . . 25,985 (2) $27.44 – 2,348,500January3,2016-January30,2016 . . . . . 6,557(2) $26.43 – 2,348,500Total . . . . . . . . . . . . . . . . . . . . . . 33,365(2) $27.32 – 2,348,500

(1) OnAugust25,2011,theBoardofDirectorsapprovedastockrepurchaseprogramauthorizingtherepurchaseofupto2.5millionsharesofouroutstandingcommonstock.Wecanusetherepurchaseprogramtorepurchasesharesontheopenmarketorinprivatetransactionsfromtimetotime,dependingonmarketconditions.Therepurchaseprogramdoesnothaveanexpirationdate.Underthisplan,151,500shareswererepurchasedduringthefirstquarterof2015.Therefore,therewere2.3millionsharesauthorizedtoberepurchasedundertheprogramasofJanuary30,2016.Repurchasesofcommonstockarelimitedunderourdebtagreements,asfurtherdiscussedinNote10totheconsolidatedfinancialstatements.

(2) Reflectssharesthatweretenderedbyemployeesrelatedtocertainshare-basedawards.Thesesharesweretenderedinsatisfactionoftheexercisepriceofstockoptionsand/ortosatisfyminimumtaxwithholdingamountsfornon-qualifiedstockoptions,restrictedstockandstockperformanceawards.Accordingly,thesesharepurchasesarenotconsideredapartofourpubliclyannouncedstockrepurchaseprogram.


stock Performance Graph Thefollowingperformancegraphcomparesthecumulativetotalreturnonourcommonstockwiththecumulativetotalreturnofthefollowingindices:(i)theS&P©SmallCap600StockIndexand(ii)apeergroupofcompaniesbelievedtobeengagedinsimilarbusinesses.OurpeergroupconsistsofDSW,Inc.,Genesco,Inc.,ShoeCarnival,Inc.,SkechersU.S.A.,Inc.,StevenMadden,Ltd.andWolverineWorldWide,Inc.

OurfiscalyearendsontheSaturdaynearesttoeachJanuary31.Accordingly,sharepricesareasofthelastbusinessdayineachfiscalyear.Thegraphassumesthatthevalueoftheinvestmentinourcommonstockandeachindexwas$100atJanuary29,2011.ThegraphalsoassumesthatalldividendswerereinvestedandthatinvestmentswereheldthroughJanuary30,2016.Theseindicesareincludedforcomparativepurposesonlyanddonotnecessarilyreflectmanagement’sopinionthatsuchindicesareanappropriatemeasureoftherelativeperformanceofthestockinvolvedandarenotintendedtoforecastorbeindicativeofpossiblefutureperformanceofthecommonstock.

1/29/2011 1/28/2012 2/2/2013 2/1/2014 1/31/2015 1/30/2016 Caleres,Inc.. . . . . . . . . . . . . . $100.00 $78.63 $142.15 $198.75 $240.64 $229.92PeerGroup . . . . . . . . . . . . . . 100.00 132.67 162.79 193.35 219.86 202.01S&P©SmallCap600StockIndex . . 100.00 108.87 126.32 160.47 170.34 162.36

ITEM 6 SELECTED FINANCIAL DATA

Theselectedfinancialdatasetforthbelowshouldbereadinconjunctionwiththeconsolidatedfinancialstatementsandnotestheretoandtheotherinformationcontainedelsewhereinthisreport.Ouraccountingperiodisbaseduponatraditionalretailcalendar,whichendsontheSaturdaynearestJanuary31.Periodically,thisresultsinafiscalyearthatincludes53weekswhichcanaffectannualcomparisons.Our2015,2014,2013and2011fiscalyearseachincluded52weeks,whileour2012fiscalyearincluded53weeks.

$50

$200

$150

$100

$250

$300

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

* $100 invested on January 29, 2011 in stock or index, including reinvestment of dividends. Index calculated on month-end basis.

Peer GroupCaleres, Inc. S&P SmallCap 600

1/29/2011 1/28/2012 2/2/2013 2/1/2014 1/31/2015 1/30/2016


ITEM 6 SELECTED FINANCIAL DATA (continued)

2015 2014 2013 2012 2011($ thousands, except per share amounts) (52 Weeks) (52 Weeks) (52 Weeks) (53 Weeks) (52 Weeks) Operations: Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,577,430 $2,571,709 $2,513,113 $2,477,796 $2,434,766Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,529,627 1,531,609 1,498,825 1,489,221 1,470,270Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,047,803 1,040,100 1,014,288 988,575 964,496Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . . . 912,696 910,682 909,749 891,666 910,293Restructuringandotherspecialcharges,net . . . . . . . . . . . . . – 3,484 1,262 22,431 23,671Impairmentofassetsheldforsale . . . . . . . . . . . . . . . . . . . – – 4,660 – –operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,107 125,934 98,617 74,478 30,532Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,589) (20,445) (21,254) (22,973) (25,428)Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . . . (10,651) (420) – – (1,003)Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899 379 377 322 569Gainonsaleofsubsidiary. . . . . . . . . . . . . . . . . . . . . . . . – 4,679 – – –Earningsbeforeincometaxesfromcontinuingoperations . . . . . 108,766 110,127 77,740 51,827 4,670Incometax(provision)benefit . . . . . . . . . . . . . . . . . . . . . (26,942) (27,184) (23,758) (16,656) 1,421Netearningsfromcontinuingoperations . . . . . . . . . . . . . . . 81,824 82,943 53,982 35,171 6,091Discontinuedoperations:(Loss)earningsfromdiscontinuedoperations,netoftax . . . . . . – – (4,574) (4,437) 4,334Disposition/impairmentofdiscontinuedoperations,netoftax . . – – (11,512) (3,530) 13,965Net(loss)earningsfromdiscontinuedoperations . . . . . . . . . . – – (16,086) (7,967) 18,299Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,824 82,943 37,896 27,204 24,390Netearnings(loss)attributabletononcontrollinginterests . . . . . 345 93 (177) (287) (199) NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . . . $ 81,479 $ 82,850 $ 38,073 $ 27,491 $ 24,589Operations:Returnonnetsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2% 3.2% 1.5% 1.1% 1.0%ReturnonbeginningCaleres,Inc.shareholders’equity . . . . . . . 15.1% 17.4% 9.0% 6.7% 5.9%Returnonaverageinvestedcapital(1) . . . . . . . . . . . . . . . . . 12.6% 11.6% 9.1% 6.5% 2.6%Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,253 $ 12,237 $ 12,105 $ 12,011 $ 12,076Purchasesofpropertyandequipment. . . . . . . . . . . . . . . . . $ 73,479 $ 44,952 $ 43,968 $ 55,801 $ 27,857Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,735 $ 5,086 $ 5,235 $ 7,928 $ 10,707Depreciationandamortization(2). . . . . . . . . . . . . . . . . . . . $ 52,606 $ 54,015 $ 57,842 $ 57,344 $ 61,449Per common share:Basicearnings(loss)percommonshare: Fromcontinuingoperations . . . . . . . . . . . . . . . . . . . . $ 1.86 $ 1.90 $ 1.25 $ 0.83 $ 0.15 Fromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . – – (0.37) (0.19) 0.42Basicearningspercommonshareattributableto Caleres,Inc.shareholders . . . . . . . . . . . . . . . . . . . . . 1.86 1.90 0.88 0.64 0.57Dilutedearnings(loss)percommonshare: . . . . . . . . . . . . . . Fromcontinuingoperations . . . . . . . . . . . . . . . . . . . . 1.85 1.89 1.25 0.83 0.14 Fromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . – – (0.37) (0.19) 0.42Dilutedearningspercommonshareattributableto Caleres,Inc.shareholders . . . . . . . . . . . . . . . . . . . . . 1.85 1.89 0.88 0.64 0.56Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.28 0.28 0.28 0.28 EndingCaleres,Inc.shareholders’equity . . . . . . . . . . . . . . . 13.78 12.36 10.99 9.91 9.83Financial Position:Receivables,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 153,664 $ 136,646 $ 129,217 $ 111,392 $ 130,485Inventories,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546,745 543,103 547,531 503,688 518,893Workingcapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484,766 420,609 420,735 306,781 231,514Propertyandequipment,net . . . . . . . . . . . . . . . . . . . . . . 179,010 149,743 143,560 144,856 130,244Totalassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,303,323 1,214,327 1,146,340 1,170,332 1,227,476Borrowingsunderourrevolvingcreditagreement . . . . . . . . . – – 7,000 105,000 201,000Long-termdebt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,544 196,712 195,947 195,182 198,633Caleres,Inc.shareholders’equity . . . . . . . . . . . . . . . . . . . 601,484 540,910 476,699 425,129 412,669Averagecommonsharesoutstanding–basic . . . . . . . . . . . . . 42,455 42,071 41,356 40,659 41,126Averagecommonsharesoutstanding–diluted . . . . . . . . . . . 42,656 42,274 41,653 40,794 41,668

AlldatapresentedreflectsthefiscalyearendedontheSaturdaynearesttoJanuary31.Certainpriorperiodamountshavebeenreclassifiedtoconformtocurrentperiodpresentation.ThesereclassificationsdidnotaffectnetearningsattributabletoCaleres,Inc.RefertoItem7,Management’s Discussion and Analysis of Financial Condition and Results of Operations,foradditionalinformationrelatedtotheselectedfinancialdataabove.

(1) Returnonaverageinvestedcapitaliscalculatedbydividingoperatingearningsfortheperiod,adjustedforincometaxesattheapplicableeffectiverate,bytheaverageofeachmonth-endinvestedcapitalbalanceduringtheyear.InvestedcapitalisdefinedasCaleres,Inc.shareholders’equitypluslong-termdebtandborrowingsundertheCreditAgreement.

(2) Depreciationandamortizationincludesdepreciationofpropertyandequipmentandamortizationofcapitalizedsoftware,intangiblesanddebtissuancecostsanddebtdiscount.Theamortizationofdebtissuancecostsanddebtdiscountisreflectedwithininterestexpenseinourconsolidatedstatementofearningsandtotaled$1.2millionin2015,$2.4millionin2014,$2.5millionin2013,$2.6millionin2012and$2.3millionin2011.


ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Business OverviewWeareaglobalfootwearcompany,withannualnetsalesof$2.6billionwhoseshoesarewornbypeopleofallages,fromallwalksoflife.Ourmissionistocontinuetoinspirepeopletofeelbetterfeetfirst.Weoffertheconsumerapowerfulportfoliooffootwearstoresandglobalfootwearbrands.Asbotharetailerandawholesaler,wehaveaperspectiveonthemarketplacethatenablesustoserveconsumersfromdifferentvantagepoints.Webelieveourdiversifiedbusinessmodelprovidesuswithsynergiesbyspanningconsumersegments,categoriesanddistributionchannels.Acombinationoftalentacquisition,thoughtfulplanningandrigorousexecutioniskeytooursuccessinoptimizingourbusinessandportfolioofbrands.Ourbusinessstrategyisfocusedoncontinuingtoevolveourportfolioofbrands,drivingprofitgrowthtoachieveourfinancialtargets,investinginavenuesofgrowthwhilerefocusingourresources,andremainingconsumercentric.Famous FootwearOurFamousFootwearsegmentincludesourFamousFootwearstoresaswellasFamous.com.AsfurtherdiscussedinNote2totheconsolidatedfinancialstatements,Shoes.com,whichwaspreviouslyincludedinourFamousFootwearsegment,wassoldinDecemberof2014.FamousFootwearisoneofAmerica’sleadingfamily–brandedfootwearretailerswith1,046storesattheendof2015andnetsalesof$1.6billionin2015.OurfocusfortheFamousFootwearsegmentisonmeetingtheneedsofawell-definedconsumerbyprovidinganassortmentoftrend-right,brand-namefashionandathleticfootwearatagreatprice,coupledwithexclusiveproductsandengagingmarketingprograms.Brand PortfolioOurBrandPortfoliosegmentisconsumer-focusedandwebelieveoursuccessisdependentuponourabilitytostrengthenconsumers’preferenceforourbrandsbyofferingcompellingstyle,quality,differentiatedbrandpromisesandinnovativemarketingcampaigns.ThesegmentiscomprisedoftheNaturalizer,SamEdelman,Dr.Scholl’s,FrancoSarto,LifeStride,Vince,ViaSpiga,Ryka,Fergie,Carlos,Bzees,DianevonFurstenbergandGeorgeBrownbrands.Throughthesebrands,andbrandfamilies,weofferourcustomersadiversifiedselectionoffootwear,eachdesignedandtargetedtoaspecificconsumersegmentwithinthemarketplace.Weareabletoshowcasemanyofourbrandsinourretailstoresandonline,leveragingourwholesaleandretailplatforms,sharingconsumerinsightsacrossourbusinessesandtestingnewandinnovativeproducts.OurBrandPortfoliosegmentoperates165retailstoresintheUnitedStates,CanadaandGuam,primarilyforourNaturalizerbrand.Thissegmentalsoincludesoure-commercebusinessesthatsellourbrandedfootwear.

Financial HighlightsWecontinuedtoexecuteourstrategicinitiativesanddeliverconsistent,profitableandsustainablegrowthin2015,withoperatingearningsof$135.1million.Theoperatingearningsincreaseof7.3%wasdrivenbyourFamousFootwearsegment,whichalsoreportedahighergrossprofitrateof44.9%,comparedto44.4%in2014.OurBrandPortfoliosegmentreportedanincreaseinnetsalesof2.3%,reflectingstrongperformancefrommanyofourbrands.Thefollowingisasummaryofthefinancialhighlightsfor2015:• Consolidatednetsalesincreased$5.7million,or0.2%,to$2,577.4millionin2015,comparedto$2,571.7million

lastyear.ThegrowthwasprimarilydrivenbyourBrandPortfoliosegment,whichreportedanetsalesincreaseof$22.3million,partiallyoffsetbyadecreaseinourFamousFootwearsegment,drivenbythedispositionofShoes.comin2014.ExcludingShoes.com,whichcontributed$45.7millionofnetsalesin2014,ournetsaleswere$51.4million,or2.0%higherthanin2014.

• Consolidatedoperatingearningswere$135.1millionin2015,comparedto$125.9millionlastyear.• ConsolidatednetearningsattributabletoCaleres,Inc.were$81.5million,or$1.85perdilutedshare,in2015,

comparedto$82.8million,or$1.89perdilutedshare,lastyear.

Thefollowingitemsshouldbeconsideredinevaluatingthecomparabilityofour2015and2014results:• Lossonearlyextinguishmentofdebt–During2015,weincurredalossof$10.7million($6.5milliononan

after-taxbasis,or$0.15perdilutedshare)relatedtotheredemptionofourseniornotesduein2019priortomaturity,asfurtherdiscussedinNote10totheconsolidatedfinancialstatements.During2014,weincurredalossof$0.4millionreflectingtheearlyextinguishmentofourrevolvingcreditagreementpriortomaturity.

• SaleofShoes.comandrelatedrestructuring–During2014,wesoldoure-commercesubsidiary,Shoes.com, forapre-taxgainof$4.7million.Inaddition,weincurredrelatedseveranceandotherrestructuringchargesof$1.5millionin2014.Wealsorecognizedtaxbenefitsof$6.6millionassociatedwiththedispositionofShoes.com.Thesetaxbenefitsweredriveninpartbytheutilizationofoperatingandcapitallosscarryforwardsthatpreviouslywerenotanticipatedtobeutilized,andtherefore,fullyreservedonourconsolidatedbalancesheets.Intotal,thedispositionofShoes.com,inclusiveoftherelatedseveranceandotherrestructuringcharges,improvednetearningsby$9.8million(or$0.23perdilutedshare)in2014. RefertoNote2totheconsolidatedfinancialstatementsforfurtherdiscussion.


Ourdebt-to-capitalratio,asdefinedintheLiquidity and Capital Resources – Working Capital and Cash Flowsection,improvedto24.6%asofJanuary30,2016,comparedto26.6%atJanuary31,2015,reflectinghighershareholders’equityduetotheimpactofour2015netearnings.Ourcurrentratio,asdefinedintheLiquidity and Capital Resources – Working Capital and Cash Flowsection,improvedto2.24to1atJanuary30,2016,from2.14to1atJanuary31,2015.

Outlook for 2016Thechallengingretailenvironmentdidnotderailusfromsteadyimprovementtowardsourlong-termfinancialgoals.Weareplanningadditionalgrowthin2016,asweexpandourpresenceinmarketswithgreaterconcentrationsofhighlyvaluableconsumers.Weexpectsame-storesalesatFamousFootwearwillgrowinthelowsingle-digitpercentagerangein2016andourBrandPortfolionetsalesareexpectedtoincreaseinthemid-single-digitpercentagerange. Followingaretheconsolidatedresultsandtheresultsbysegmentfor2015,2014and2013: CONSOLIDATED RESULTS

2015 2014 2013 % of %of %of ($ millions) Net sales NetSales NetSalesNetsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,577.4 100.0% $2,571.7 100.0% $2,513.1 100.0%Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,529.6 59.3% 1,531.6 59.6% 1,498.8 59.6%Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,047.8 40.7% 1,040.1 40.4% 1,014.3 40.4%Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . . 912.7 35.4% 910.7 35.4% 909.7 36.2%Restructuringandotherspecialcharges,net . . . . . . . . . . . . – – 3.5 0.1% 1.3 0.1%Impairmentofassetsheldforsale . . . . . . . . . . . . . . . . . . – – – – 4.7 0.2%operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 135.1 5.2% 125.9 4.9% 98.6 3.9%Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.5) (0.6)% (20.5) (0.8)% (21.3) (0.8)%Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . . (10.7) (0.4)% (0.4) (0.0)% – –Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.0% 0.4 0.0% 0.4 0.0%Gainonsaleofsubsidiary. . . . . . . . . . . . . . . . . . . . . . . – – 4.7 0.2% – –Earningsbeforeincometaxesfromcontinuingoperations . . . . 108.8 4.2% 110.1 4.3% 77.7 3.1%Incometaxprovision . . . . . . . . . . . . . . . . . . . . . . . . . (27.0) (1.0)% (27.2) (1.1)% (23.7) (0.9)%Netearningsfromcontinuingoperations . . . . . . . . . . . . . . 81.8 3.2% 82.9 3.2% 54.0 2.2%

Discontinuedoperations:Lossfromdiscontinuedoperations,netoftax . . . . . . . . . . . – – – – (4.6) (0.2)%Disposition/impairmentofdiscontinuedoperations,netoftax . – – – – (11.5) (0.5)%Netlossfromdiscontinuedoperations . . . . . . . . . . . . . . . – – – – (16.1) (0.7)%Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81.8 3.2% 82.9 3.2% 37.9 1.5%Netearnings(loss)attributabletononcontrollinginterests . . . . 0.3 0.0% 0.1 0.0% (0.2) (0.0)%NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . . $ 81.5 3.2% $ 82.8 3.2% $ 38.1 1.5%

Net salesNetsalesincreased$5.7million,or0.2%,to$2,577.4millionin2015,comparedto$2,571.7millionlastyear,primarilydrivenbyourBrandPortfoliosegment,whichreporteda$22.3million,or2.3%,increaseinnetsales.Theincreaseinnetsalesreflectsstrongperformancefrommanyofourbrands.OurBrandPortfolioretailnetsaleswereimpactedbyalowerCanadiandollarexchangerate,alowerstorecountanda0.7%decreaseinsame-storesales.OurFamousFootwearsegmentreporteda$16.6milliondecreaseinnetsales,primarilydrivenbythedispositionofShoes.cominDecemberof2014,partiallyoffsetbya1.9%increaseinsame-storesalesatourretailstores.ExcludingShoes.com,whichcontributed$45.7millionofnetsalesin2014,ourFamousFootwearsegmentnetsaleswere$29.1million,or1.9%higherthanlastyear.ExcludingShoes.com,ourconsolidatednetsaleswere$51.4million,or2.0%higherthanlastyear.

Netsalesincreased$58.6million,or2.3%,to$2,571.7millionin2014,comparedto$2,513.1millionin2013,primarilydrivenbyourBrandPortfoliosegment,whichreporteda$57.9million,or6.3%,increaseinnetsales.Theincreasereflectsstrongperformancefrommanyofourbrands,despitea3.6%decreaseinsame-storesalesatourbrandedretailstores.OurBrandPortfolionetsaleswerealsoimpactedbyalowerstorecountandalowerCanadiandollarexchangerate.OurFamousFootwearsegmentreporteda$0.7millionincreaseinnetsales,reflectinga1.5%increaseinsame-storesalesatourFamousFootwearretailstores,partiallyoffsetbythedispositionofShoes.comandalowerstorecount.

Same-storesaleschangesarecalculatedbycomparingthesalesinstoresthathavebeenopenatleast13months.Relocatedstoresaretreatedasnewstores,andclosedstoresareexcludedfromthecalculation.Saleschangefromnewandclosedstores,net,reflectsthechangeinnetsalesduetostoresthathavebeenopenedorclosedduringtheperiodandaretherebyexcludedfromthesame-storesalescalculation.E-commercesalesforthosewebsitesthatfunctionasanextensionofaretailchainareincludedinthesame-storesalescalculation.


Gross ProfitGrossprofitincreased$7.7million,or0.7%,to$1,047.8millionin2015,comparedto$1,040.1millionlastyear.Asapercentageofnetsales,ourgrossprofitrateincreasedto40.7%in2015,comparedto40.4%in2014,drivenbyourFamousFootwearsegment,whichreportedagrossprofitrateof44.9%for2015,comparedto44.4%in2014driveninpartbythedispositionofShoes.com.OurShoes.combusinessachievedlowermarginsthantherestoftheFamousFootwearsegmentduetothehigherexpensesforfreightandcustomerreturnsinherentinthee-commercebusiness.Thisimpactwaspartiallyoffsetbyahigherconsolidatedmixofwholesaleversusretailsales.Grossprofitratesonretailsalesarehigherthanwholesalesales.Inaggregate,retailandwholesalenetsaleswere66%and34%,respectively,in2015comparedto67%and33%in2014.

Grossprofitincreased$25.8million,or2.5%,to$1,040.1millionin2014,comparedto$1,014.3millionin2013.Asapercentageofnetsales,ourgrossprofitrateremainedconsistentat40.4%.ThegrossprofitratereflectsimprovementinbothourBrandPortfolioandFamousFootwearsegments,partiallyoffsetbyahigherconsolidatedmixofwholesaleversusretailsalesandalowervolumeofbrandedsalesthroughourbrandedretailstores.Inaggregate,retailandwholesalenetsaleswere67%and33%,respectively,in2014comparedto70%and30%in2013.

Weclassifywarehousing,distribution,sourcingandotherinventoryprocurementcostsinsellingandadministrativeexpenses.Accordingly,ourgrossprofitandsellingandadministrativeexpensesrates,asapercentageofnetsales,maynotbecomparabletoothercompanies.

selling and administrative expensesSellingandadministrativeexpensesincreased$2.0million,or0.2%,to$912.7millionin2015,comparedto$910.7millionlastyear,drivenbya$14.2millionincreaseinourBrandPortfoliosegmentexpensesduetotheexpansionofseveralofourbrandsandanewwarehouseserviceproviderinChina.Thiswaspartiallyoffsetbyan$11.6milliondecreaseinunallocatedcorporateadministrativeandothercostsduetolowerpensionexpense,lowervariablecompensationexpensefordirectorsandcertainemployeesandagainonthesaleofavacantbuildingatourCorporateheadquarters.Asapercentageofnetsales,sellingandadministrativeexpenseswere35.4%in2015,consistentwith2014.

Sellingandadministrativeexpensesincreased$1.0million,or0.1%,to$910.7millionin2014,comparedto$909.7millionin2013.Asapercentageofnetsales,sellingandadministrativeexpensesdecreasedto35.4%in2014from36.2%in2013,reflectingbetterleveragingofourexpensebaseoverhighernetsales.

restructuring and Other special charges, NetTherewerenorestructuringandotherspecialchargesin2015.Restructuringandotherspecialcharges,netincreased$2.2millionto$3.5millionduring2014,comparedto$1.3millionin2013asaresultofcostsof$1.9millionrelatedtoorganizationalchangesin2014andchargesof$1.5millionrelatedtothedispositionofShoes.com,asfurtherdiscussedinNote4totheconsolidatedfinancialstatements.Inaddition,therewereportfoliorealignmentcostsincurredin2013,withnocorrespondingcostsin2014.Asapercentageofnetsales,restructuringandotherspecialcharges,were0.1%in2014,consistentwith2013.

Impairment of assets Held for saleTherewerenochargesforimpairmentofassetsheldforsalein2015or2014.In2013,wesoldcertainofoursupplychainandsourcingassetsaspartofourportfoliorealignmentefforts.Inanticipationofthesale,werecognizedanimpairmentchargeof$4.7millionin2013toadjusttheassetstotheirestimatedfairvalue.RefertoNote4totheconsolidatedfinancialstatementsforadditionalinformation.

Operating earningsOperatingearningsincreased$9.2million,or7.3%,to$135.1millionin2015,comparedto$125.9millionlastyear,primarilydrivenbyahighergrossprofitrate.Inaddition,operatingearningsbenefitedfromtheimpactofnorestructuringandotherspecialchargesin2015,partiallyoffsetbyhighersellingandadministrativeexpenses, asdiscussedabove.

Operatingearningsincreased$27.3million,or27.7%,to$125.9millionin2014,comparedto$98.6millionin2013,drivenbyhighersalesandresultinggrossprofit.Inaddition,operatingearningsin2014benefitedfromtheimpactofnoimpairmentofassetsheldforsalein2014,partiallyoffsetbyhigherrestructuringandotherspecialchargesandhighersellingandadministrativeexpenses,asdiscussedabove.


Interest expenseInterestexpensedecreased$4.0million,or18.9%,to$16.5millionin2015comparedto$20.5millionlastyear,anddecreased$0.8million,or3.8%,in2014comparedto$21.3millionin2013.Thedecreasein2015reflectsloweraverageborrowingsunderourrevolvingcreditagreementandlowerinterestonourseniornotes,asaresultoftheredemptionofourseniornotesduein2019andtheissuanceofseniornotesduein2023reducingourinterestratefrom7.125%to6.25%,asfurtherdiscussedinLiquidityandCapitalResources.Thedecreaseininterestexpensein2014wasprimarilyduetoloweraverageborrowingsunderourrevolvingcreditagreement.In2015,wecapitalizedinterestof$0.3millionassociatedwiththeexpansionandmodernizationofourLebanon,Tennesseedistributioncenter,withnocorrespondingamountscapitalizedin2014or2013.

loss on early extinguishment of DebtDuring2015,weincurredalossof$10.7millionrelatedtotheredemptionofour2019seniornotespriortomaturity,asfurtherdiscussedinNote10totheconsolidatedfinancialstatements.During2014,weincurredalossof$0.4millionreflectingtheearlyextinguishmentoftheformerrevolvingcreditagreementpriortomaturity. Wedidnotincursuchcostsin2013.

Gain on sale of subsidiaryIn2014,wesoldoure-commercesubsidiary,Shoes.com.Werecognizedapre-taxgainupononthesaleofthesubsidiaryof$4.7million,representingthedifferenceinthenetproceedslesscoststosell,ascomparedtothecarryingvalueofthenetassets.RefertoNote2totheconsolidatedfinancialstatementsforfurtherdiscussion.

Income Tax ProvisionOurconsolidatedeffectivetaxrateoncontinuingoperationswasaprovisionof24.8%in2015comparedto24.7%in2014and30.6%in2013.In2015,2014and2013,werecognizedpre-taxearningsinbothourdomesticoperationsandforeignjurisdictions.Ourconsolidatedeffectivetaxrateisgenerallybelowthefederalstatutoryrateof35%becauseourforeignearningsaresubjecttolowerstatutorytaxrates.

In2014,oureffectivetaxratewasimpactedbyseveralfactors.InconnectionwiththedispositionofShoes.com,werecognizedapre-taxgain,netofrelatedrestructuringcosts,of$3.1million,whilerecognizinganassociatedtaxbenefitof$6.6million.Thistaxbenefitwasdriveninpartbytheutilizationofoperatingandcapitallosscarryforwardsthatwerepreviouslynotanticipatedtobeutilizedandwerethereforefullyreservedonourconsolidatedbalancesheets.Inaddition,werecognizedataxexpenseof$1.0millionrelatedtoadividendreceivedfromaninternationalsubsidiary.IftheimpactsoftheShoes.comdispositionandthetaxonthedividendhadbeenexcluded,ourfullfiscalyear2014effectivetaxratewouldhavebeen30.6%,consistentwith2013.

In2015,oureffectivetaxratewasimpactedbyseveraldiscretetaxbenefitswhichtotaled$5.1millionfortheyear.Thesediscretetaxbenefitsprimarilyreflectedtheutilizationofoperatingloss,capitallossandothercarryforwardsthatwerepreviouslynotanticipatedtobeutilizedandwerethereforefullyreservedontheconsolidatedbalancesheet.AportionofthesecarryforwardsbecameutilizableuponconversionofourprimaryretailentitytoanLLCearlyin2015.Inaddition,certainadditionaltaxcarryforwardswereabletobeutilizeduponsettlementofthetaxattributesassociatedwiththesaleofourShoes.comsubsidiary.Ifthesediscretetaxbenefitshadnotbeenrecognized,ourfullfiscalyear2015effectivetaxratewouldhavebeen29.5%,whichis1.1%lowerthan2014,drivenbyalowerstatetaxrateandahighermixofearningsininternationaljurisdictions.

RefertoNote6totheconsolidatedfinancialstatementsforadditionalinformationregardingourtaxrates.

Net earnings from continuing OperationsWereportednetearningsfromcontinuingoperationsof$81.8millionin2015,comparedto$82.9millionin2014and$54.0millionin2013,asaresultofthefactorsdescribedabove.

Net loss from Discontinued OperationsOurdiscontinuedoperationsin2013includedtheoperationsandsaleofourAviaandNevadosbrandsacquiredduringthe2011acquisitionofAmericanSportingGoodsCorporation,aswellastheoperationsandimpairmentofourVeraWangbrand.During2013,wesoldtheAviaandNevadosbrandsandreportedanetlossfromdiscontinuedoperationsof$16.1million.Inconjunctionwiththesale,werecordedanetchargerelatedtotheimpairmentanddispositionofthosebrandsof$11.5million,representingthedifferenceinthefairvalue,lesscoststosell,ascomparedtothecarryingvalueofthenetassetssold.During2013,wealsodecidednottorenewtheVeraWanglicenseagreementandreflectedtheoperationsofthisbrandasdiscontinuedoperations.RefertoNote2totheconsolidatedfinancialstatementsforfurtherdiscussionregardingdiscontinuedoperations.


Net earnings attributable to caleres, Inc.WereportednetearningsattributabletoCaleres,Inc.of$81.5millionin2015,comparedto$82.8millionlastyearand$38.1millionin2013.

Geographic resultsWehavebothdomesticandforeignoperations.DomesticoperationsincludethenationwideoperationofourFamousFootwearandotherbrandedretailfootwearstores,thewholesaledistributionoffootweartonumerousretailcustomersandtheoperationofoure-commercewebsites.ForeignoperationsprimarilyconsistofwholesaleoperationsintheFarEastandCanada,retailingoperationsinCanadaandtheoperationofourinternationale-commercewebsites.Inaddition,welicensecertainofourtrademarkstothirdpartieswhodistributeand/oroperateretaillocationsinternationally.TheFarEastoperationsincludefirst-costtransactions,wherefootwear issoldatforeignportstocustomerswhothenimportthefootwearintotheUnitedStatesandothercountries. Thebreakdownofdomesticandforeignnetsalesandearningsbeforeincometaxeswasasfollows:

2015 2014 2013 earnings Before Earnings before Earnings before ($ millions) Net sales Income Taxes NetSales IncomeTaxes NetSales IncomeTaxes

Domestic . . . . . . . . . . . . . . . $2,342.6 $ 68.2 $2,318.5 $ 70.8 $2,258.6 $40.9foreign . . . . . . . . . . . . . . . . 234.8 40.6 253.2 39.3 254.5 36.8 $2,577.4 $108.8 $2,571.7 $110.1 $2,513.1 $77.7

Thepre-taxprofitabilityonforeignsalesishigherthanondomesticsalesbecauseofalowercoststructureandtheinclusionindomesticearningsoftheunallocatedcorporateadministrativeandothercosts.

FAMOUS FOOTWEAR

2015 2014 2013 % of %of %of ($ millions) Net sales NetSales NetSales

Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,572.7 100.0% $1,589.3 100.0% $1,588.6 100.0%Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 866.0 55.1% 883.2 55.6% 887.4 55.9%Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 706.7 44.9% 706.1 44.4% 701.2 44.1%Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . . . 597.7 38.0% 600.7 37.7% 595.8 37.5%Restructuringandotherspecialcharges,net . . . . . . . . . . . . . – – 0.8 0.1% – –operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109.0 6.9% $ 104.6 6.6% $ 105.4 6.6%

Key MetricsSame-storesales%change(ona52-weekbasis) . . . . . . . . . . . 1.9% 1.5% 2.9%Same-storesales$change(ona52-weekbasis) . . . . . . . . . . . $ 27.9 $ 22.4 $ 41.1 Saleschangefrom53rdweek . . . . . . . . . . . . . . . . . . . . . . $ – $ – $ (19.1)Saleschangefromnewandclosedstores, net(ona52-weekbasis) . . . . . . . . . . . . . . . . . . . . . . $ 2.9 $ (6.1) $ (9.8)ImpactofchangesinCanadianexchangerateonsales . . . . . . . $ (1.7) $ (0.3) $ –SaleschangeofShoes.com(soldinDecember2014) . . . . . . . . . $ (45.7) $ (15.3) $ (6.8)

Salespersquarefoot,excludinge-commerce (ona52-weekbasis) . . . . . . . . . . . . . . . . . . . . . . . . . $ 217 $ 215 $ 207 Squarefootage(thousandssq.ft.) . . . . . . . . . . . . . . . . . . . 6,949 6,958 7,059

Stores opened. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 50 51 Storesclosed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 56 62 Ending stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,046 1,038 1,044

Net salesNetsalesdecreased$16.6millionto$1,572.7millionin2015comparedto$1,589.3millionlastyear.During2015,thedecreasewasprimarilyduetothedispositionofShoes.com,asfurtherdiscussedinNote2totheconsolidatedfinancialstatements,whichcontributed$45.7millionofnetsalesin2014,partiallyoffsetbya1.9%,or$27.9million,increaseinsame-storesales.Thesame-storesalesincreasewasdrivenbycontinuedstrengthinkeysellingcategories,includingathleticshoesandbooties,whichdroveouraverageretailpriceshigher.Wealsosawgrowthinoure-commercesalesasmorecustomersshiftedfromvisitingourstorestothemoreconvenientonlineshoppingexperience.During2015,weexpandedourin-storefulfillmentinitiativetoapproximately900stores,whichhasreducedtheaveragenumberofbusinessdaysforshoesorderedonlineor


inourFamousFootwearstorestobedeliveredtoourcustomers.Asaresultofthesame-storesalesincrease,salespersquarefoot,excludinge-commerce,increased1.2%to$217,comparedto$215lastyear.NetsaleswerealsoimpactedbyahigherstorecountandalowerCanadiandollarexchangerate.MembersofRewards,ourcustomerloyaltyprogram,continuetoaccountforamajorityofthesegment’ssales,withapproximately74%ofournetsalestoRewardsmembersin2015,comparedto73%in2014and70%in2013.

Netsalesincreased$0.7millionto$1,589.3millionin2014comparedto$1,588.6millionin2013.During2014,same-storesalesincreased1.5%,or$22.4million,reflectinganimprovedconversionrateandhigheraverageretailprices,partiallyoffsetbyadecreaseincustomertraffic.Inaddition,wesawstronggrowthfromcanvasandathleticshoesandboots.Asaresultofthesame-storesalesincreases,salespersquarefoot,excludinge-commerce,increased3.5%to$215,comparedto$207in2013.NetsalesofShoes.comdecreased$15.3million,or25.2%,to$45.7millionin2014comparedto$61.0millionin2013.Thedecreasewasdue,inpart,tothedisposalofthissubsidiaryinDecember2014.NetsaleswerealsoimpactedbyalowerstorecountandalowerCanadiandollarexchangerate.

Gross ProfitGrossprofitincreased$0.6million,or0.1%,to$706.7millionin2015comparedto$706.1millionlastyearduetoahighergrossprofitrate,partiallyoffsetbylowersales.Asapercentageofnetsales,ourgrossprofitrateincreasedto44.9%in2015comparedto44.4%lastyear.TheincreaseinourgrossprofitratereflectsthedispositionofShoes.comlatein2014,andacontinuedshiftinmixtowardhighermarginproducts.OurShoes.combusinessachievedlowermarginsthantherestoftheFamousFootwearsegmentduetothehigherexpensesforfreightandcustomerreturnsinherentinthee-commercebusiness.

Grossprofitincreased$4.9million,or0.7%,to$706.1millionin2014comparedto$701.2millionin2013duetohighernetsalesandgrossprofitrate.Asapercentageofnetsales,ourgrossprofitrateincreasedto44.4%in2014comparedto44.1%in2013.Theincreaseinourgrossprofitratewasdrivenbytheabovenamedfactors.

selling and administrative expensesSellingandadministrativeexpensesdecreased$3.0million,or0.5%,to$597.7millionduring2015comparedto$600.7millionlastyear.ThedecreasewasprimarilyattributabletolowerexpensesduetothedispositionofShoes.cominlate2014,partiallyoffsetbyhigherstorerentandfacilitiescostsandanincreaseinexpectedpayoutsunderourcashandstock-basedincentiveplans.Asapercentageofnetsales,sellingandadministrativeexpensesincreasedto38.0%in2015from37.7%lastyear.

Sellingandadministrativeexpensesincreased$4.9million,or0.8%,to$600.7millionduring2014comparedto$595.8millionin2013.Theincreasewasprimarilyattributabletohigherstorerent,depreciationexpenseandotherfacilitiescostsandhighervariablestoreemployeeandbenefitcosts,partiallyoffsetbylowermarketingexpensesandadecreaseinexpectedpayoutsunderourcashandstock-basedincentiveplans.Asapercentageofnetsales,sellingandadministrativeexpensesincreasedto37.7%in2014from37.5%in2013.

restructuring and Other special charges, NetWeincurredrestructuringandotherspecialchargesof$0.8millionin2014relatedtothedispositionofShoes.com,asfurtherdiscussedinNote2totheconsolidatedfinancialstatements,withnocorrespondingcostsin2015or2013.

Operating earningsOperatingearningsincreased$4.4million,or4.3%to$109.0millionfor2015,comparedto$104.6millionlastyear.Asapercentageofnetsales,ouroperatingearningsincreasedto6.9%for2015,comparedto6.6%for2014.

Operatingearningsdecreased$0.8million,or0.8%,to$104.6millionfor2014,comparedto$105.4millionin2013.Asapercentageofnetsales,ouroperatingearningsof6.6%wereconsistentwith2013.


BRAND PORTFOLIO

2015 2014 2013 % of %of %of ($ millions) Net sales NetSales NetSales

Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,004.8 100.0% $982.5 100.0% $924.6 100.0%Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . . 663.7 66.1% 648.5 66.0% 611.5 66.1%Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341.1 33.9% 334.0 34.0% 313.1 33.9%Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . . 274.5 27.3% 260.3 26.5% 267.3 29.0%Restructuringandotherspecialcharges,net . . . . . . . . . . . . – – 0.3 0.0% 1.2 0.1%Impairmentofassetsheldforsale . . . . . . . . . . . . . . . . . . – – – – 4.7 0.5%operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . $ 66.6 6.6% $ 73.4 7.5% $ 39.9 4.3%

Key MetricWholesale/retailsalesmix(%) . . . . . . . . . . . . . . . . . . . . 87%/13% 86%/14% 83%/17%Changeinwholesalenetsales($) . . . . . . . . . . . . . . . . . . $ 32.5 $ 77.8 $ 38.9 Unfilledorderpositionatyear-end . . . . . . . . . . . . . . . . . $ 274.4 $284.6 $273.9

Same-storesales%change(ona52-weekbasis) . . . . . . . . . . (0.7)% (3.6)% 1.6%Same-storesales$change(ona52-weekbasis) . . . . . . . . . . $ (0.8) $ (4.8) $ 2.2 Saleschangefrom53rdweek . . . . . . . . . . . . . . . . . . . . . $ – $ – $ (2.1)Saleschangefromnewandclosedstores, net(ona52-weekbasis) . . . . . . . . . . . . . . . . . . . . . $ (1.8) $ (11.3) $ (6.6)ImpactofchangesinCanadianexchangerateonretailsales . . . $ (7.6) $ (3.8) $ (2.4)

Salespersquarefoot,excludinge-commerce (ona52-weekbasis) . . . . . . . . . . . . . . . . . . . . . . . . $ 343 $ 377 $ 397 Squarefootage(thousandssq.ft.) . . . . . . . . . . . . . . . . . . 294 302 319

Stores opened. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 11 Storesclosed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 15 54 Ending stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 171 179

Net salesNetsalesincreased$22.3million,or2.3%,to$1,004.8millionin2015comparedto$982.5millionlastyear.Theincreasereflectsstrongperformancefrommanyofourbrands,includingSamEdelman,LifeStride,VinceandCarlos,partiallyoffsetbydecreasesinourNaturalizerandViaSpigabrands.NetsalesatourbrandedretailstoreswereimpactedbyalowerCanadiandollarexchangerate,alowerstorecountandadeclineinsame-storesalesof0.7%.Weopenedsevenstoresandclosed13storesduring2015,resultinginatotalof165storesattheendof2015,comparedto171stores attheendoflastyear.Salespersquarefoot,excludinge-commerce,decreased8.9%to$343comparedto$377lastyear.Ourunfilledorderpositionforourwholesalesalesdecreased$10.2million,or3.6%,to$274.4millionattheendof 2015,ascomparedto$284.6millionattheendoflastyearprimarilyduetodeclinesinourNaturalizer,LifeStrideand Dr.Scholl’sbrands,partiallyoffsetbyanincreaseinourFrancoSartobrand.Thoughnotsignificanttonetsalesfor 2015,werecentlylaunchedourDianevonFurstenbergbrandduringthefourthquarter.WealsoareexcitedtolaunchourGeorgeBrownlineofmen’sfootwearin2016.

Netsalesincreased$57.9million,or6.3%,to$982.5millionin2014comparedto$924.6millionin2013.Theincreasereflectsstrongperformancefrommanyofourbrands,includingSamEdelman,Vince,ViaSpigaandFrancoSarto,partiallyoffsetbyadecreaseinourNaturalizerbrand.Ourbrandedretailstoresexperiencedadeclineinsame-storesalesof3.6%.Inaddition,ourretailsaleswereimpactedbylowerstorecountandalowerCanadiandollarexchangerate.Weopenedsevenstoresandclosed15storesduring2014,resultinginatotalof171storesattheendof2014comparedto179storesattheendof2013.Salespersquarefoot,excludinge-commerce,decreased5.1%to$377comparedto$397in2013.Ourunfilledorderpositionforourwholesalesalesincreased$10.7million,or3.9%,to$284.6millionattheendof2014,ascomparedto$273.9millionattheendof2013.

Gross ProfitGrossprofitincreased$7.1million,or2.1%,to$341.1millionin2015comparedto$334.0millionlastyeardrivenbyhighernetsales,partiallyoffsetbyalowergrossprofitrate.Ourgrossprofitratedecreasedslightlyto33.9%in2015ascomparedto34.0%lastyearprimarilyresultingfromhigherinventorymarkdownstoclearinventoryatourbrandedretailstoresandalowermixofretailversuswholesalesales.Ourretailoperationshaveahighergrossprofitratethanourwholesalebusiness.


Grossprofitincreased$20.9million,or6.7%,to$334.0millionin2014comparedto$313.1millionin2013reflectinghighersalesandahighergrossprofitrate.Ourgrossprofitrateincreasedslightlyto34.0%in2014comparedto33.9%in2013primarilyresultingfromhigherwholesalemarginsformanyofourbrands,includingtheimpactoflowerroyaltyexpensefromtheacquisitionoftheFrancoSartotrademarksinthefirstquarterof2014,andanimprovedsalesmixofhighermarginfootwear,partiallyoffsetbyhigherinventorymarkdownstoclearinventoryatourbrandedretailstores.

selling and administrative expensesSellingandadministrativeexpensesincreased$14.2million,or5.5%,to$274.5millionduring2015comparedto$260.3millionlastyear,primarilydrivenbyadditionalcostsassociatedwithourneworexpandedbrands,includingSamEdelman,VinceMen’sandDianevonFurstenberg,andhigherexpensesforanewwarehouseserviceproviderinChinatodistributeproducttoourinternationalcustomers,partiallyoffsetbyadecreaseinanticipatedpaymentsunderourcash-basedincentiveplans.Asapercentageofnetsales,sellingandadministrativeexpensesincreasedto27.3%in2015from26.5%lastyear,reflectingtheabovenamedfactors.

Sellingandadministrativeexpensesdecreased$7.0million,or2.6%,to$260.3millionduring2014comparedto$267.3millionin2013,primarilyduetolowerwarehouseexpenses,ourlowerbrandedretailstorecountandalowerCanadiandollarexchangerate,partiallyoffsetbyanincreaseinanticipatedpaymentsunderourcashandstock-basedincentiveplansandhighermarketingexpenses.Asapercentageofnetsales,sellingandadministrativeexpensesdecreasedto26.5%in2014from29.0%in2013,reflectingtheabovenamedfactors.

restructuring and Other special charges, NetTherewerenorestructuringandotherspecialchargesduring2015.Restructuringandotherspecialchargesdecreased$0.9million,or77.3%,to$0.3millionin2014,comparedto$1.2millionin2013asaresultofourportfoliorealignmentinitiatives,whichweresubstantiallycompleteinearly2013.RefertoNotes2and4totheconsolidatedfinancialstatementsforadditionalinformationrelatedtothesecharges.

Impairment of assets Held for saleTherewerenochargesforimpairmentofassetsheldforsaleduring2015or2014.During2013,wesoldcertainofoursupplychainandsourcingassets.Inconjunctionwiththesale,werecognizedanimpairmentchargeof$4.7million,representingthedifferencebetweenthefairvalueoftheassets,lesscoststosell,andthecarryingvalueoftheassets.

Operating earningsOperatingearningsdecreased$6.8million,or9.3%,to$66.6millionin2015comparedto$73.4millionlastyear.Thedecreasewasprimarilydrivenbyhighersellingandadministrativeexpensesandalowergrossprofitrate,partiallyoffsetbyhighernetsales.Asapercentageofnetsales,operatingearningsdecreasedto6.6%in2015comparedto7.5%lastyear.

Operatingearningsincreased$33.5million,or83.9%,to$73.4millionin2014,comparedto$39.9millionin2013.Theincreasewasprimarilydrivenbyhighernetsalesandlowersellingandadministrativeexpenses.Asapercentageofnetsales,operatingearningsincreasedto7.5%in2014comparedto4.3%in2013.

OTHER

TheOthercategoryincludesunallocatedcorporateadministrativeandothercostsandrecoveries. Costsof$40.5million,$52.1million,and$46.7millionwereincurredin2015,2014and2013,respectively.The$11.6milliondecreaseincostsin2015comparedto2014wasprimarilyaresultofthefollowingfactors:• Lowerpensionexpensedrivenbyplanprovisionchangeswhichloweredourprojectedbenefitobligation;• Lowerexpensesrelatedtoourvariablecompensationplansforourdirectorsandcertainemployeeswith

awardsthatutilizemark-to-marketaccountingbasedontheCompany’sclosingstockprice;and• Againonsaleofavacantbuildingatourcorporateheadquarters.The$5.4millionincreaseincostsin2014comparedto2013wasprimarilyaresultofhigheranticipatedpaymentsunderourcashandstock-basedincentiveplansandhigherconsultingfees.

RESTRUCTURING AND OTHER INITIATIVES

During2014,weincurredcostsassociatedwiththedisposalofShoes.comof$1.5millionandcostsof$1.9millionrelatedtomanagementchangesatourcorporateheadquarters,withnocorrespondingcostsin2015or2013.During2013,werecordedportfoliorealignmentinitiativecostsof$30.7million,withnocorrespondingcostsin 2015 or 2014. See the financial HighlightssectionaboveandNote2andNote4totheconsolidatedfinancialstatementsforadditionalinformationrelatedtothesecharges.


IMPACT OF INFLATION AND CHANGING PRICES

Whilewehavefelttheeffectsofinflationonourbusinessandresultsofoperations,ithasnothadasignificantimpactonourbusinessoverthelastthreeyears.Inflationcanhavealong-termimpactonourbusinessbecauseincreasingcostsofmaterialsandlabormayimpactourabilitytomaintainsatisfactoryprofitrates.Forexample,ourproductsaremanufacturedinothercountries,andadeclineinthevalueoftheU.S.dollarandtheimpactoflaborshortagesinChinaorothercountriesmayresultinhighermanufacturingcosts.Similarly,anypotentialsignificantshortageofquantitiesorincreasesinthecostofthematerialsthatareusedinourmanufacturingprocess,suchasleatherandothermaterialsorresources,couldhaveamaterialnegativeimpactonourbusinessandresultsofoperations.Inaddition,inflationisoftenaccompaniedbyhigherinterestrates,whichcouldhaveanegativeimpactonconsumerspending,inwhichcaseournetsalesandprofitratescoulddecrease.Moreover,increasesininflationmaynotbematchedbyincreasesinwages,whichalsocouldhaveanegativeimpactonconsumerspending.Ifweincurincreasedcoststhatareunabletoberecoveredthroughpriceincreases,orifconsumerspendingdecreasesgenerally,ourbusiness,resultsofoperations,financialcondition,andcashflowsmaybeadverselyaffected.Inanefforttomitigatetheimpactoftheseincrementalcostsonouroperatingresults,weexpecttopassonsomeportionofcostincreasestoourconsumersandadjustourbusinessmodel,asappropriate,tominimizetheimpactofhighercosts.FurtherdiscussionofthepotentialimpactofinflationandchangingpricesisincludedinItem1A,Risk Factors.

LIQUIDITY AND CAPITAL RESOURCES

Borrowings ($ millions) January 30, 2016 January31,2015 Increase(Decrease)

Long-termdebt-2023SeniorNotes . . . . . . . . . . . . . $ 196.5 $ – $ 196.5Long-termdebt-2019SeniorNotes . . . . . . . . . . . . . – 196.7 (196.7)Totaldebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 196.5 $196.7 $ (0.2)

Totaldebtobligationsdecreased$0.2million,or0.1%,to$196.5millionattheendof2015comparedto$196.7millionattheendoflastyear.Interestexpensein2015was$16.5millioncomparedto$20.5millionin2014and$21.3millionin2013.Thedecreaseininterestexpensein2015reflectsloweraverageborrowingsunderourrevolvingcreditagreementandlowerinterestonourseniornotesasaresultoftheredemptionofourseniornotesduein2019(“2019SeniorNotes”)andtheissuanceofseniornotesduein2023(“2023SeniorNotes”)reducingourinterestratefrom7.125%to6.25%,asfurtherdescribedbelow.Inaddition,wecapitalized$0.3millionofinterestcostsassociatedwiththeexpansionandmodernizationofourLebanon,Tennesseedistributioncenter.

Credit AgreementOnDecember18,2014,theCompanyandcertainofitssubsidiaries(the“LoanParties”)enteredintoaFourthAmendedandRestatedCreditAgreement,whichwasfurtheramendedonJuly20,2015toreleasealloftheCompany’ssubsidiariesthatwereborrowersunderorthatguaranteedthecreditagreementotherthanSidneyRichAssociates,Inc.andBGRetail,LLC(assoamended,the“CreditAgreement”).Aftergivingeffecttotheamendment,theCompanyistheleadborrower,andSidneyRichAssociates,Inc.andBGRetail,LLCareeachco-borrowersandguarantorsundertheCreditAgreement.TheCreditAgreementmaturesonDecember18,2019andprovidesforarevolvingcreditfacilityinanaggregateamountofupto$600.0million,subjecttothecalculatedborrowingbaserestrictions,andprovidesforanincreaseattheCompany’soptionbyupto$150.0millionfromtimetotimeduringthetermoftheCreditAgreement,subjecttosatisfactionofcertainconditionsandtheconsentofexistingornewlenderstoassumetheincrease.UndertheCreditAgreement,theLoanParties’obligationsaresecuredbyafirstprioritysecurityinterestinallaccountsreceivable,inventoryandcertainothercollateral.

InterestonborrowingsisatvariableratesbasedontheLondonInterbankOfferedRate(“LIBOR”)ortheprimerate,asdefinedintheCreditAgreement,plusaspread.TheinterestrateandfeesforlettersofcreditvarybaseduponthelevelofexcessavailabilityundertheCreditAgreement.Thereisanunusedlinefeepayableontheunusedportionunderthefacilityandaletterofcreditfeepayableontheoutstandingfaceamountunderlettersofcredit.

WewereincompliancewithallcovenantsandrestrictionsundertheCreditAgreementasofJanuary30,2016.RefertofurtherdiscussionregardingtheCreditAgreementinNote10totheconsolidatedfinancialstatements.

AtJanuary30,2016,wehadnoborrowingsand$6.5millioninlettersofcreditoutstandingundertheCreditAgreement.Totalborrowingavailabilitywas$525.1millionatJanuary30,2016.

$200 Million Senior NotesOnJuly20,2015,wecommencedacashtenderofferforour2019SeniorNotes.ThetenderofferexpiredonJuly24,2015and$160.7millionaggregateprincipalamountofthe2019SeniorNoteswerevalidlytendered.Theremaining $39.3millionaggregateprincipalamountof2019SeniorNoteswasredeemedonAugust26,2015.

OnJuly27,2015,weissued$200.0millionaggregateprincipalamountofour2023SeniorNotesinaprivateplacement. OnOctober22,2015,wecommencedanoffertoexchangeour2023SeniorNotesoutstandingforsubstantiallyidenticaldebtsecuritiesregisteredundertheSecuritiesActof1933.TheexchangeofferwascompletedonNovember23,2015


anddidnotaffecttheamountofourindebtednessoutstanding.Thenetproceedsfromtheofferingwereapproximately$196.3millionafterdeductingfeesandexpensesassociatedwiththeoffering.Weusedthenetproceeds,togetherwithcashonhand,toredeemtheoutstanding2019SeniorNotes.

The2023SeniorNotesareguaranteedonaseniorunsecuredbasisbyeachofthesubsidiariesofCaleres,Inc.thatisanobligorundertheCreditAgreement.The2023SeniorNotesbearinterestat6.25%,whichispayableonFebruary15 andAugust15ofeachyearbeginningonFebruary15,2016.The2023SeniorNotesmatureonAugust15,2023.PriortoAugust15,2018,wemayredeemsomeorallofthe2023SeniorNotesatvariousredemptionprices.

The2023SeniorNotesalsocontaincertaincovenantsandrestrictionsthatlimitcertainactivitiesincluding,amongotherthings,levelsofindebtedness,paymentsofdividends,theguaranteeorpledgeofassets,certaininvestments,commonstockrepurchases,mergersandacquisitionsandsalesofassets.AsofJanuary30,2016,wewereincompliancewithallcovenantsandrestrictionsrelatingtothe2023SeniorNotes.

loss on early extinguishment of DebtDuring2015and2014,weincurredlossesonearlyextinguishmentofdebtof$10.7millionand$0.4million,respectively,withnocorrespondinglossin2013.Thelossin2015representsthetenderofferandcallpremiums,unamortizeddebtissuancecosts,andoriginalissuediscountrelatedtothe2019SeniorNotes.Ofthe$10.7millionlossonearlyextinguishmentofdebtin2015,approximately$3.0millionwasnon-cash.Thelossin2014representstheearlyextinguishmentoftherevolvingcreditagreementpriortomaturity.

Working capital and cash Flow January 30, 2016 January31,2015 Increase(Decrease) Workingcapital($millions)(1) . . . . . . . . . . . . . . . . $484.8 $420.6 $64.2Debt-to-capitalratio(2) . . . . . . . . . . . . . . . . . . . . . 24.6% 26.6% (2.0)%Currentratio(3) . . . . . . . . . . . . . . . . . . . . . . . . . 2.24:1 2.14:1 (1) Workingcapitalhasbeencomputedastotalcurrentassetslesstotalcurrentliabilities.(2) Debt-to-capitalhasbeencomputedbydividingtotaldebtbytotalcapitalization.Totaldebtisdefinedaslong-termdebt

andborrowingsundertheCreditAgreement.Totalcapitalizationisdefinedastotaldebtandtotalequity.(3) Thecurrentratiohasbeencomputedbydividingtotalcurrentassetsbytotalcurrentliabilities. Increase(Decrease) in Cash and 2015 2014 CashEquivalents Netcashprovidedbyoperatingactivities. . . . . . . . . . . . . . $ 149.2 $ 118.8 $30.4Netcashusedforinvestingactivities . . . . . . . . . . . . . . . . (73.8) (112.0) 38.2 Netcashusedforfinancingactivities . . . . . . . . . . . . . . . . (23.5) (20.5) (3.0)Effectofexchangeratechangesoncashandcashequivalents . . (1.2) (1.4) 0.2 Increase(decrease)incashandcashequivalents . . . . . . . . . . $ 50.7 $ (15.1) $65.8

WorkingcapitalatJanuary30,2016,was$484.8million,whichwas$64.2millionhigherthanatJanuary31,2015.Theincreaseinworkingcapitalreflectsourstrong2015financialperformance,includingnetcashprovidedbyoperatingactivities,partiallyoffsetbycashusedforbothinvestingandfinancingactivities.Workingcapitalalsoreflectshighercashandcashequivalents,higherreceivables,andanincreaseinthecurrentincometaxasset,partiallyoffsetbyanincreaseintradeaccountspayable.Ourdebt-to-capitalratioimprovedto24.6%asofJanuary30,2016,comparedto26.6%atJanuary31,2015,primarilyreflectinghighershareholders’equityduetotheimpactofour2015netearnings.Ourcurrentratioimprovedto2.24to1atJanuary30,2016,from2.14to1atJanuary31,2015.

AtJanuary30,2016,wehad$118.2millionofcashandcashequivalents.Themajorityofthisbalancerepresentstheaccumulatedunremittedearningsofourforeignsubsidiaries,whichareconsideredindefinitelyreinvested.RefertoNote6totheconsolidatedfinancialstatementsformoreinformationregardingourunremittedforeignearnings.

Reasonsforthemajorvariancesincashprovided(used)inthetableaboveareasfollows:

Cashprovidedbyoperatingactivitieswas$30.4millionhigherin2015thanlastyear,reflectingthefollowingfactors:• Anincreaseintradeaccountspayablein2015ascomparedtoadecreasein2014duetothetimingofinventory

purchasesandpaymentstovendors;• Highernetearnings(afterconsiderationofnon-cashitems);and• Asmallerincreaseinprepaidexpensesandothercurrentandnoncurrentassetsin2015ascomparedto2014,reflecting

asmallerincreaseinprepaidrentin2015than2014asaresultofthetimingofpayments;partiallyoffsetby• Adecreaseinaccruedexpensesandotherliabilitiesin2015ascomparedtoanincreasein2014drivenbyhigher

paymentsunderourcash-basedincentiveplansin2015.

Cashusedforinvestingactivitieswas$38.2millionlowerin2015thanlastyear,primarilyduetothe$65.1millionacquisitionoftheFrancoSartotrademarksin2014andthe$7.4millioninproceedsfromdisposalofpropertyandequipmentrelatedtothesaleofavacantbuildingatourCorporateheadquartersin2015.Thesevarianceswerepartiallyoffsetbyhigherpurchasesofpropertyandequipmentin2015,drivenbytheexpansionandmodernizationofour


distributioncentersandleaseholdimprovementsassociatedwiththerelocationofoneofourleasedofficespacesin NewYorkCity.In2016,weexpectpurchasesofpropertyandequipmentandcapitalizedsoftwareofapproximately $70million,withanestimated$16millionallocatedforcontinuedexpansionandmodernizationofourdistributioncenters.

Cashusedforfinancingactivitieswas$3.0millionhigherin2015thanlastyear,primarilyduetoanincreaseincommonstockissuedundershare-basedplansin2015andtheacquisitionoftreasurystockin2015,partiallyoffsetbyadecreaseinnetrepaymentsundertherevolvingcreditagreement.

Wepaiddividendsof$0.28pershareineachof2015,2014and2013.The2015dividendsmarkedthe93rdyearofconsecutivequarterlydividends.OnMarch3,2016,theBoardofDirectorsdeclaredaquarterlydividendof$0.07pershare,payableApril1,2016,toshareholdersofrecordonMarch21,2016,markingthe373rdconsecutivequarterlydividendtobepaidbytheCompany.ThedeclarationandpaymentofanyfuturedividendisatthediscretionoftheBoardofDirectorsandwilldependonourresultsofoperations,financialcondition,businessconditionsandotherfactorsdeemedrelevantbyourBoardofDirectors.However,wepresentlyexpectthatdividendswillcontinuetobepaid.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Certainaccountingissuesrequiremanagementestimatesandjudgmentsforthepreparationoffinancialstatements. Ourmostsignificantpoliciesrequiringtheuseofestimatesandjudgmentsarelistedbelow.

revenue recognitionRetailsales,recognizedatthepointofsale,arerecordednetofreturnsandexcludesalestax.Wholesalesalesarerecorded,netofreturns,allowancesanddiscounts,generallywhenthemerchandisehasbeenshippedandtitleandriskoflosshavepassedtothecustomer.Revenueforproductssoldthatareshippeddirectlytoanindividualconsumerisrecognizedupondeliverytotheconsumer.Reservesforprojectedmerchandisereturns,discountsandallowancesaredeterminedbasedonhistoricalexperienceandcurrentexpectations.RevenueisrecognizedonlicensefeesrelatedtoCompany-ownedbrand-names,wheretheCompanyisthelicensor,whentherelatedsalesofthelicenseearemade.

InventoriesInventoriesareourmostsignificantasset,representingapproximately42%oftotalassetsattheendof2015.Wevalueinventoriesatthelowerofcostormarketwith95%ofconsolidatedinventoriesusingthelast-in,first-out(“LIFO”)method.AnactualvaluationofinventoryundertheLIFOmethodcanbemadeonlyattheendofeachyearbasedontheinventorylevelsandcostsatthattime.Accordingly,interimLIFOcalculationsarebasedonmanagement’sestimatesofexpectedyear-endinventorylevelsandcostsandaresubjecttothefinalyear-endLIFOinventoryvaluation.

Weapplyjudgmentinvaluingourinventoriesbyassessingthenetrealizablevalueofourinventoriesbasedoncurrentsellingprices.AtourFamousFootwearsegment,werecognizemarkdownswhenitbecomesevidentthatinventoryitemswillbesoldatretailpriceslessthancost,plusthecosttoselltheproduct.ThispolicycausesthegrossprofitrateatourFamousFootwearsegmenttobelowerthantheinitialmarkupduringperiodswhenpermanentpricereductionsaretakentoclearproduct.AtourBrandPortfoliosegment,wegenerallyprovidemarkdownreservestoreducethecarryingvaluesofinventoriestoalevelwhere,uponsaleoftheproduct,wewillrealizeournormalgrossprofitrate.WebelievethesepoliciesreflectthedifferenceinoperatingmodelsbetweenourFamousFootwearsegmentandourBrandPortfoliosegment.FamousFootwearperiodicallyrunspromotionaleventstodrivesalestoclearseasonalinventories.TheBrandPortfoliosegmentgenerallyreliesonpermanentpricereductionstoclearslower-movinginventory.

Weperformphysicalinventorycountsorcyclecountsonallmerchandiseinventoryonhandthroughouttheyearandadjusttherecordedbalancetoreflecttheresults.Werecordestimatedshrinkagebetweenphysicalinventorycountsbasedonhistoricalresults.Inventoryshrinkageisincludedasacomponentofcostofgoodssold.

Income TaxesWerecorddeferredtaxesfortheeffectsoftimingdifferencesbetweenfinancialandtaxreporting.Thesedifferencesrelateprincipallytoemployeebenefitplans,accruedexpenses,baddebtreserves,depreciationandamortizationandinventory.

Weevaluateourforeigninvestmentopportunitiesandplans,aswellasourforeignworkingcapitalneeds,todeterminethelevelofinvestmentrequiredand,accordingly,determinethelevelofforeignearningsthatweconsiderindefinitelyreinvested.Baseduponthatevaluation,earningsofourforeignsubsidiariesthatarenototherwisesubjecttoUnitedStatestaxation,exceptforourCanadiansubsidiary,areconsideredtobeindefinitelyreinvested,andaccordingly,deferredtaxeshavenotbeenprovided.Ifchangesoccurinfutureinvestmentopportunitiesandplans,thosechangeswillbereflectedwhenknownandmayresultinprovidingresidualUnitedStatesdeferredtaxesonunremittedforeignearnings.

AtJanuary30,2016,wehavenetoperatinglossandothercarryforwardsatcertainofoursubsidiaries.Weevaluate thesecarryforwardsforrealizationbasedupontheirexpirationdatesandourexpectationsoffuturetaxableincome. Asdeemedappropriate,valuationreservesarerecordedtoadjusttherecordedvalueofthesecarryforwardstotheexpectedrealizablevalue.

Weareauditedperiodicallybydomesticandforeigntaxauthoritiesandtaxassessmentsmayariseseveralyearsaftertaxreturnshavebeenfiled.Taxliabilitiesarerecordedwhen,inmanagement’sjudgment,ataxpositiondoesnotmeetthe


more-likely-than-notthresholdforrecognition.Fortaxpositionsthatmeetthemore-likely-than-notthreshold,ataxliabilitymayberecordeddependingonmanagement’sassessmentofhowthetaxpositionwillultimatelybesettled.Inevaluatingissuesraisedinsuchauditsandotheruncertaintaxpositions,weprovidereservesforexposuresasappropriate.

Goodwill and Intangible assetsGoodwillandintangibleassetsdeemedtohaveindefinitelivesarenotamortizedbutaresubjecttoannualimpairmenttests.WeadoptedtheprovisionsofAccountingStandardsCodification(“ASC”),Intangibles-Goodwill and Other (ASC Topic 350) Testing Goodwill for Impairment,whichpermits,butdoesnotrequire,acompanytoqualitativelyassessindicatorsofareportingunit’sfairvaluewhenitisunlikelythatareportingunitisimpaired.If,aftercompletingthequalitativeassessment,acompanybelievesitislikelythatareportingunitisimpaired,adiscountedcashflowanalysisispreparedtoestimatefairvalue.Iftherecordedvaluesoftheseassetsarenotrecoverable,basedoneithertheassessmentscreenordiscountedcashflowanalysis,managementperformsthenextstep,whichcomparesthefairvalueofthereportingunittotherecordedvalueofthetangibleandintangibleassetsofthereportingunits.Goodwillisconsideredimpairedifthefairvalueofthetangibleandintangibleassetsexceedsthefairvalueofthereportingunit.Anadjustmenttogoodwillisrecordedforanygoodwilldeterminedtobeimpaired.Impairmentofgoodwillismeasuredastheexcessofthecarryingamountofgoodwilloverthefairvaluesofrecognizedassetsandliabilitiesofthereportingunit.For2015,weelectedtoperformtheoptionalqualitativeassessmentforthegoodwillimpairmenttest.

Weperformimpairmenttestsduringthefourthquarterofeachfiscalyearunlesseventsindicateaninterimtestisrequired.Thegoodwillimpairmenttestingandotherindefinite-livedintangibleassetimpairmentreviewswereperformedasofthefirstdayofourfourthfiscalquarterandresultedinnoimpairmentcharges.Otherintangibleassetsareamortizedovertheirusefullivesandarereviewedforimpairmentifandwhenimpairmentindicatorsarepresent.RefertoNote9totheconsolidatedfinancialstatementsforadditionalinformationrelatedtotheimpairmentofgoodwillandintangibleassets.

store closing and Impairment chargesWeregularlyanalyzetheresultsofallofourstoresandassesstheviabilityofunderperformingstorestodeterminewhethereventsorcircumstancesexistthatindicatethestoresshouldbeclosedorwhetherthecarryingamountoftheirlong-livedassetsmaynotberecoverable.Afterallowingforanappropriatestart-upperiod,unusualnonrecurringeventsorfavorabletrends,wewritedowntofairvaluethefixedassetsofstoresindicatedasimpaired.

litigation contingenciesWearethedefendantinseveralclaimsandlawsuitsarisingintheordinarycourseofbusiness.Wedonotbelieveanyoftheseordinary-course-of-businessproceedingswillhaveamaterialadverseeffectonourconsolidatedfinancialpositionorresultsofoperations.Weaccrueourbestestimateofthecostofresolutionoftheseclaims.Legaldefensecostsofsuchclaimsarerecognizedintheperiodinwhichweincurthecosts.SeeNote17totheconsolidatedfinancialstatementsforafurtherdescriptionofcommitmentsandcontingencies.

environmental MattersWeareinvolvedinenvironmentalremediationandongoingcomplianceactivitiesatseveralsites.Weareremediating,undertheoversightofColoradoauthorities,thegroundwaterandindoorairatourRedfieldsiteandresidentialneighborhoodsadjacenttoandneartheproperty,whichhavebeenaffectedbysolventspreviouslyusedatthefacility.Inaddition,variousfederalandstateauthoritieshaveidentifiedusasapotentiallyresponsiblepartyforremediationatcertainlandfills.WhilewecurrentlydonotoperatemanufacturingfacilitiesintheUnitedStates,prioroperationsincludednumerousmanufacturingandotherfacilitiesforwhichwemayhaveresponsibilityundervariousenvironmentallawstoaddressconditionsthatmaybeidentifiedinthefuture.SeeNote17totheconsolidatedfinancialstatementsforafurtherdescriptionofspecificproperties.

Environmentalexpendituresrelatingtoanexistingconditioncausedbypastoperationsandthatdonotcontributetocurrentorfuturerevenuegenerationareexpensed.Liabilitiesarerecordedwhenenvironmentalassessmentsand/orremedialeffortsareprobableandthecostscanbereasonablyestimatedandareevaluatedindependentlyofanyfutureclaimsrecovery.Generally,thetimingoftheseaccrualscoincideswithcompletionofafeasibilitystudyorourcommitmenttoaformalplanofaction,andourestimatesofcostaresubjecttochangeasnewinformationbecomesavailable.Costsoffutureexpendituresforenvironmentalremediationobligationsarediscountedtotheirpresentvalue inthosesituationsrequiringonlycontinuingmaintenanceandmonitoringbaseduponascheduleoffixedpayments.

Retirement and Other Benefit PlansWesponsorpensionplansinboththeUnitedStatesandCanada.Ourdomesticpensionplanscoversubstantially allUnitedStatesemployees,andourCanadianpensionplanscovercertainemployeesbasedonplanspecifications. Inaddition,wemaintainanunfundedSupplementalExecutiveRetirementPlan(“SERP”)andsponsorunfundeddefinedbenefitpostretirementlifeinsuranceplansthatcoverbothsalariedandhourlyemployeeswhohadbecomeeligibleforbenefitsbyJanuary1,1995.

Wedetermineourexpenseandobligationsforretirementandotherbenefitplansbasedonassumptionsrelatedtodiscountrates,expectedlong-termratesofreturnoninvestedplanassets,expectedsalaryincreasesandcertainemployee-relatedfactors,suchasturnover,retirementageandmortality,amongothers.Ourassumptionsreflectour


historicalexperienceandourbestjudgmentregardingfutureexpectations.Additionalinformationrelatedtoourassumptionsisasfollows:

•Expectedlong-termrateofreturn–Theexpectedlong-termrateofreturnonplanassetsisbasedonhistoricalandprojectedratesofreturnforcurrentandplannedassetclassesintheplan’sinvestmentportfolio.Assumedprojectedratesofreturnforeachassetclasswereselectedafteranalyzingexperienceandfutureexpectationsofthereturns.Theoverallexpectedrateofreturnfortheportfoliowasdevelopedbasedonthetargetallocationforeachassetclass.Theweighted-averageexpectedrateofreturnonplanassetsusedtodetermineourpensionexpensefor2015was8.25%.Adecreaseof50basispointsintheweighted-averageexpectedrateofreturnonplanassetswouldincreasepensionexpensebyapproximately$1.9million.Theactualreturnonplanassetsinagivenyearmaydifferfromtheexpectedlong-termrateofreturn,andtheresultinggainorlossisdeferredandrecognizedintotheplans’expenseovertime.

•Discountrate–Discountratesusedtomeasurethepresentvalueofourbenefitobligationsforourpensionandotherpostretirementbenefitplansarebasedonahypotheticalbondportfolioconstructedfromasubsetofhigh-qualitybondsforwhichthetimingandamountofcashoutflowsapproximatetheestimatedpayoutsoftheplans.Theweighted-averagediscountrateselectedtomeasurethepresentvalueofourbenefitobligationsunderourpensionandotherpostretirementbenefitplanswas4.7%foreach.Adecreaseof50basispointsintheweighted-averagediscountratewouldhaveincreasedtheprojectedbenefitobligationofthepensionandotherpostretirementbenefitplansbyapproximately$27.3millionand$0.1million,respectively.

•Mortalitytable–AsofJanuary30,2016,weareusingtheRP-2014BottomQuartiletables,projectedusinggenerationalscaleMP-2015,anupdatedprojectionscaleissuedbytheSocietyofActuariesin2015,toestimatetheactuarialgainorloss.Actuarialgains,relatedtothechangeinmortalitytables,reducedtheprojectedbenefitobligationbyapproximately$7.9millionasofJanuary30,2016.

RefertoNote5totheconsolidatedfinancialstatementsforadditionalinformationrelatedtoourretirementandotherbenefitplans.

Impact of Prospective accounting PronouncementsRecentaccountingpronouncementsandtheirimpactontheCompanyaredescribedinNote1totheconsolidatedfinancialstatements.

OFF-BALANCE SHEET ARRANGEMENTS

TheCompanyhasnooff-balancesheetarrangementsasofJanuary30,2016.

CONTRACTUAL OBLIGATIONS

Thetablebelowsetsforthoursignificantfutureobligationsbytimeperiod.Furtherinformationoncertainofthesecommitmentsisprovidedinthenotestoourconsolidatedfinancialstatements,whicharecross-referencedinthistable.OurobligationsoutstandingasofJanuary30,2016includethefollowing: PaymentsDuebyPeriod Less Than 1-3 3-5 more Than ($ millions) Total 1Year Years Years 5 Years

Long-termdebt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200.0 $ – $ – $ – $200.0Interestonlong-termdebt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 12.5 25.0 25.0 37.5Operatingleasecommitments(2) . . . . . . . . . . . . . . . . . . . . . . . . . 757.6 159.7 238.1 154.0 205.8Minimumlicensecommitments . . . . . . . . . . . . . . . . . . . . . . . . . 24.9 10.0 12.5 2.4 –Purchaseobligations(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645.0 630.9 13.9 0.2 –other (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 3.6 3.2 3.4 2.7Total(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,740.4 $816.7 $292.7 $185.0 $446.0

(1) Interestobligationshavebeenreflectedbasedonour$200.0millionprincipalvalueof2023SeniorNotesatafixedinterestrateof6.25%asoffiscalyearendedJanuary30,2016.RefertoNote10totheconsolidatedfinancialstatements.

(2) Amajorityofourretailoperatingleasescontainprovisionsthatallowustomodifyamountspayableundertheleaseorterminatetheleaseincertaincircumstances,suchasexperiencingactualsalesvolumebelowadefinedthresholdand/orco-tenancyprovisionsassociatedwiththefacility.Thecontractualobligationspresentedinthetableabovereflectthetotalleaseobligation,irrespectiveofourabilitytoreduceorterminaterentalpaymentsinthefuture,asnoted.RefertoNote11totheconsolidatedfinancialstatements.

(3) Purchaseobligationsincludeagreementstopurchaseassets,goodsorservicesthatspecifyallsignificantterms,includingquantityandpriceprovisions.

(4) Includesobligationsforoursupplementalexecutiveretirementplanandotherpostretirementbenefits,asdiscussedinNote5totheconsolidatedfinancialstatements,andothercontractualobligations.

(5) Excludesliabilitiesof$3.4million,$1.7millionand$8.9millionforournon-qualifieddeferredcompensationplan,deferredcompensationplanfornon-employeedirectorsandrestrictedstockunitsfornon-employeedirectors,respectively,duetotheuncertainnatureintimingofpayments.RefertoNote5,Note13andNote15totheconsolidatedfinancialstatements.


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 Operationscontainsforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Actualresultscoulddiffermateriallyfromthoseprojectedastheyaresubjecttovariousrisksanduncertainties.Theserisksanduncertaintiesinclude,withoutlimitation,therisksdetailedinItem1A,Risk Factors,andthosedescribedinotherdocumentsandreportsfiledfromtimetotimewiththeSEC,pressreleasesandothercommunications.Wedonotundertakeanyobligationorplantoupdatetheseforward-lookingstatements,eventhoughoursituationmaychange.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN CURRENCY EXCHANGE RATES

Themarketriskinherentinourfinancialinstrumentsandpositionsrepresentsthepotentiallossarisingfromadversechangesinforeigncurrencyexchangeratesandinterestrates.Toaddresstheserisks,weenterintovarioushedgingtransactions.Alldecisionsonhedgingtransactionsareauthorizedandexecutedpursuanttoourpoliciesandprocedures,whichdonotallowtheuseoffinancialinstrumentsfortradingpurposes.Wealsoareexposedtocredit-relatedlossesintheeventofnonperformancebycounterpartiestothesefinancialinstruments.Counterpartiestotheseagreements,however,aremajorinternationalfinancialinstitutions,andwebelievetheriskoflossduetononperformanceisminimal.

AdescriptionofouraccountingpoliciesforderivativefinancialinstrumentsisincludedinNotes1and12totheconsolidatedfinancialstatements.

Inaddition,weareexposedtotranslationriskbecausecertainofourforeignoperationsutilizethelocalcurrencyastheirfunctionalcurrencyandthosefinancialresultsmustbetranslatedintoUnitedStatesdollars.Ascurrencyexchangeratesfluctuate,translationofourfinancialstatementsofforeignbusinessesintoUnitedStatesdollarsaffectsthecomparabilityoffinancialresultsbetweenyears.

INTEREST RATES

OurfinancingarrangementsincludeoutstandingvariableratedebtundertheCreditAgreementand$200.0millioninprincipalvalueof2023SeniorNotes,whichbearinterestatafixedrateof6.25%.WehadnoborrowingsundertheCreditAgreementatJanuary30,2016.Changesininterestratesimpactfixedandvariableratedebtdifferently.Forfixedratedebt,achangeininterestrateswillonlyimpactthefairvalueofthedebt,whereasachangeintheinterestratesonvariableratedebtwillimpactinterestexpenseandcashflows.

AtJanuary30,2016,thefairvalueofourlong-termdebtisestimatedatapproximately$196.0millionbaseduponthepricingofour2023SeniorNotesatthattime.Marketriskisviewedasthepotentialchangeinfairvalueofourdebtresultingfromahypothetical10%adversechangeininterestratesandwouldbe$7.5millionforourlong-termdebtatJanuary30,2016.

InformationappearingunderthecaptionRisk Management and Derivatives in Note 12 and Fair Value Measurements inNote13totheconsolidatedfinancialstatementsisincorporatedhereinbyreference.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management’s report on Internal control Over Financial reportingOurmanagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreportingassuchtermisdefinedinExchangeActRules13a-15(f)and15d-15(f).Underthesupervisionandwiththeparticipationofourmanagement,includingourprincipalexecutiveofficerandprincipalfinancialofficer,weconductedanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingbasedontheframeworkin Internal Control — Integrated FrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(2013Framework).Basedonourevaluation,ourprincipalexecutiveofficerandprincipalfinancialofficerhaveconcludedthattheCompany’sinternalcontroloverfinancialreportingwaseffectiveasofJanuary30,2016. TheeffectivenessofourinternalcontroloverfinancialreportingasofJanuary30,2016hasbeenauditedby Ernst&YoungLLP,anindependentregisteredpublicaccountingfirm,asstatedinitsreportwhichisincludedherein.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TheBoardofDirectorsandShareholdersCaleres,Inc.

WehaveauditedCaleres,Inc.’s(theCompany’s)internalcontroloverfinancialreportingasofJanuary30,2016,basedoncriteriaestablishedinInternal Control — Integrated FrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(2013Framework)(theCOSOcriteria).TheCompany’smanagementisresponsibleformaintainingeffectiveinternalcontroloverfinancialreportingandforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreportingincludedintheaccompanyingManagement’sReportonInternalControlOverFinancialReporting.OurresponsibilityistoexpressanopinionontheCompany’sinternalcontroloverfinancialreportingbasedonouraudit.

WeconductedourauditinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.Ourauditincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,testingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk,andperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditprovidesareasonablebasisforouropinion.

Acompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciplesandthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditionsorthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Inouropinion,Caleres,Inc.maintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofJanuary30,2016,basedontheCOSOcriteria.

Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates),theconsolidatedbalancesheetsofCaleres,Inc.asofJanuary30,2016andJanuary31,2015,andtherelatedconsolidatedstatementsofearnings,comprehensiveincome,cashflowsandshareholders’equityforeachofthethreeyearsintheperiodendedJanuary30,2016,andourreportdatedMarch29,2016,expressedanunqualifiedopinionthereon.

St.Louis,MissouriMarch29,2016


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TheBoardofDirectorsandShareholdersCaleres,Inc.

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofCaleres,Inc.(theCompany)asofJanuary30,2016andJanuary31,2015,andtherelatedconsolidatedstatementsofearnings,comprehensiveincome,cashflowsandshareholders’equityforeachofthethreeyearsintheperiodendedJanuary30,2016.OurauditsalsoincludedthefinancialstatementschedulelistedintheIndexatItem15(a).ThesefinancialstatementsandschedulearetheresponsibilityoftheCompany’smanagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsandschedulebasedonouraudits.

WeconductedourauditsinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditsprovideareasonablebasisforouropinion.

Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,theconsolidatedfinancialpositionofCaleres,Inc.atJanuary30,2016andJanuary31,2015,andtheconsolidatedresultsofitsoperationsanditscashflowsforeachofthethreeyearsintheperiodendedJanuary30,2016,inconformitywithU.S.generallyacceptedaccountingprinciples.Also,inouropinion,therelatedfinancialstatementschedule,whenconsideredinrelationtothebasicfinancialstatementstakenasawhole,presentsfairly,inallmaterialrespects, the information set forth therein.

Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard (UnitedStates),Caleres,Inc.’sinternalcontroloverfinancialreportingasofJanuary30,2016,basedoncriteriaestablishedinInternal Control — Integrated FrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(2013Framework),andourreportdatedMarch29,2016,expressedanunqualifiedopinion thereon.

St.Louis,MissouriMarch29,2016


CONSOLIDATED BALANCE SHEETS

($ thousands, except number of shares and per share amounts) January 30, 2016 January31,2015

asseTsCurrentassets: Cashandcashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 118,151 $ 67,403 Receivables,netofallowancesof$24,780in2015and$25,393in2014 . . . . . . . . . . . . . . . . . . . . 153,664 136,646 Inventories,netofadjustmenttolast-in,first-outcostof$4,094in2015and$3,668in2014 . . . . . . . . 546,745 543,103 Incometaxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,146 620 Prepaidexpensesandothercurrentassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,359 42,376Totalcurrentassets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875,065 790,148 Prepaidpensioncosts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,890 73,324 Propertyandequipment,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179,010 149,743 Deferredincometaxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,847 7,704 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,954 13,954 Intangibleassets,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,945 120,633 other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,612 58,821 Totalassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,303,323 $1,214,327

lIaBIlITIes aND eQUITYCurrentliabilities: Tradeaccountspayable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 237,802 $ 215,921 Employeecompensationandbenefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,993 58,593 Incometaxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,519 6,285 Otheraccruedexpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,985 88,740 Totalcurrentliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390,299 369,539

Otherliabilities: Long-termdebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,544 196,712 Deferred rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,506 39,742 Deferredincometaxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,268 27,544 Otherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,234 39,168Totalotherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310,552 303,166

Equity: Preferredstock,$1.00parvalue,1,000,000sharesauthorized;nosharesoutstanding. . . . . . . . . . . . – – Commonstock,$0.01parvalue,100,000,000sharesauthorized;43,660,213and43,752,031shares outstanding,netof2,426,582and2,334,764treasurysharesin2015and2014,respectively . . . . . . 437 437 Additionalpaid-incapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,881 138,957 Accumulatedothercomprehensive(loss)income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,864) 2,712 retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,030 398,804 TotalCaleres,Inc.shareholders’equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601,484 540,910 Noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 988 712 Totalequity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602,472 541,622Totalliabilitiesandequity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,303,323 $1,214,327

See notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF EARNINGS

($ thousands, except per share amounts) 2015 2014 2013

Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,577,430 $2,571,709 $2,513,113Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,529,627 1,531,609 1,498,825Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,047,803 1,040,100 1,014,288 Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912,696 910,682 909,749Restructuringandotherspecialcharges,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 3,484 1,262Impairmentofassetsheldforsale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 4,660operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,107 125,934 98,617Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,589) (20,445) (21,254)Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,651) (420) –Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899 379 377 Gainonsaleofsubsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 4,679 –Earningsbeforeincometaxesfromcontinuingoperations . . . . . . . . . . . . . . . . . . . . 108,766 110,127 77,740 Incometaxprovision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,942) (27,184) (23,758)Netearningsfromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,824 82,943 53,982

Discontinuedoperations:Lossfromdiscontinuedoperations,netoftaxof$5,922in2013 . . . . . . . . . . . . . . . . . – – (4,574)Disposition/impairmentofdiscontinuedoperations,netoftaxof$0in2013 . . . . . . . . . – – (11,512)Netlossfromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (16,086)Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,824 82,943 37,896Netearnings(loss)attributabletononcontrollinginterests . . . . . . . . . . . . . . . . . . . . 345 93 (177)NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,479 $ 82,850 $ 38,073

Basicearnings(loss)percommonshare:Fromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.86 $ 1.90 $ 1.25Fromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (0.37)BasicearningspercommonshareattributabletoCaleres,Inc.shareholders . . . . . . . . . . $ 1.86 $ 1.90 $ 0.88

Dilutedearnings(loss)percommonshare:Fromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.85 $ 1.89 $ 1.25Fromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (0.37)DilutedearningspercommonshareattributabletoCaleres,Inc.shareholders. . . . . . . . . $ 1.85 $ 1.89 $ 0.88



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ($ thousands) 2015 2014 2013

Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,824 $ 82,943 $37,896

Othercomprehensive(loss)income(“OCI”),netoftax: Foreigncurrencytranslationadjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (224) (3,145) (4,538) Pensionandotherpostretirementbenefitsadjustments . . . . . . . . . . . . . . . . . . . (8,589) (10,349) 19,529 Derivativefinancialinstruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 (514) 819 Othercomprehensive(loss)income,netoftax . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,645) (14,008) 15,810 Comprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,179 68,935 53,706Comprehensiveincome(loss)attributabletononcontrollinginterests . . . . . . . . . . . . . 276 49 (109) ComprehensiveincomeattributabletoCaleres,Inc. . . . . . . . . . . . . . . . . . . . . . . . . $ 72,903 $ 68,886 $53,815



CONSOLIDATED STATEMENTS OF CASH FLOWS ($ thousands) 2015 2014 2013

Operating activitiesNet earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,824 $ 82,943 $ 37,896

Adjustmentstoreconcilenetearningstonetcashprovidedbyoperatingactivities: Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,428 35,002 36,033 Amortizationofcapitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,323 12,662 13,047 Amortizationofintangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,688 3,951 6,249 Amortizationofdebtissuancecostsanddebtdiscount. . . . . . . . . . . . . . . . . . . . 1,167 2,400 2,513 Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,651 420 – Share-basedcompensationexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,491 6,190 5,567 Excesstaxbenefitrelatedtoshare-basedplans . . . . . . . . . . . . . . . . . . . . . . . . (2,651) (929) (3,439) (Gain)lossondisposalofpropertyandequipment . . . . . . . . . . . . . . . . . . . . . . (1,963) 1,610 1,697 Impairmentchargesforpropertyandequipment . . . . . . . . . . . . . . . . . . . . . . . 2,761 1,982 1,636 Impairmentofassetsheldforsale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 4,660 Disposition/impairmentofdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . – – 11,512 Net(gain)lossonsaleofsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (4,679) 576 Deferred rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,764 1,149 4,882 Deferredincometaxesprovision(benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,581 (3,416) 18,061 Provisionfordoubtfulaccounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480 1,716 551

Changesinoperatingassetsandliabilities: Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,438) (9,175) (17,570) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,270) (7,651) (44,852) Prepaidexpensesandothercurrentandnoncurrentassets . . . . . . . . . . . . . . . (8,654) (20,053) 3,798 Tradeaccountspayable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,881 (8,204) 12,951 Accruedexpensesandotherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,865) 20,142 4,389 Incometaxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,308) 2,411 2,335 other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,262 341 1,540 Netcashprovidedbyoperatingactivities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,152 118,812 104,032

Investing activitiesPurchasesofpropertyandequipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,479) (44,952) (43,968)Proceedsfromdisposalofpropertyandequipment . . . . . . . . . . . . . . . . . . . . . . . . 7,433 – –Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,735) (5,086) (5,235)Acquisitionoftrademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (65,065) –Investmentinnonconsolidatedaffiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (7,000) –Netproceedsfromsaleofsubsidiaries,inclusiveofnotereceivable . . . . . . . . . . . . . . . – 10,120 69,347Netcash(usedfor)providedbyinvestingactivities . . . . . . . . . . . . . . . . . . . . . . . . (73,781) (111,983) 20,144

Financing activitiesBorrowingsunderrevolvingcreditagreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 198,000 867,000 1,129,000Repaymentsunderrevolvingcreditagreement . . . . . . . . . . . . . . . . . . . . . . . . . . (198,000) (874,000) (1,227,000)Proceedsfromissuanceof2023seniornotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 – –redemption of 2019 senior notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (200,000) – –Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,253) (12,237) (12,105)Debtissuancecosts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,650) (2,618) –Acquisitionoftreasurystock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,921) – –Issuanceofcommonstockundershare-basedplans,net . . . . . . . . . . . . . . . . . . . . . (5,297) 443 804 Excesstaxbenefitrelatedtoshare-basedplans . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,651 929 3,439 Contributionsbynoncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 50Netcashusedforfinancingactivities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,470) (20,483) (105,812) Effectofexchangeratechangesoncashandcashequivalents . . . . . . . . . . . . . . . . . . (1,153) (1,489) (4,041) Increase(decrease)incashandcashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 50,748 (15,143) 14,323 Cashandcashequivalentsatbeginningofyear . . . . . . . . . . . . . . . . . . . . . . . . . . 67,403 82,546 68,223Cashandcashequivalentsatendofyear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 118,151 $ 67,403 $ 82,546



CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Accumulated Total Additional Other Caleres,Inc. Non-($ thousands, except number of shares CommonStock Paid-In Comprehensive Retained Shareholders’ controlling Total and per share amounts) Shares Dollars Capital Income(Loss) Earnings Equity Interests Equity

bALANCE fEbrUArY 2, 2013. . . . . . . . . 42,896,363 $429 $121,593 $ 884 $302,223 $425,129 $ 772 $425,901Net earnings . . . . . . . . . . . . . . . . . . . 38,073 38,073 (177) 37,896Foreigncurrencytranslationadjustment . . . (4,556) (4,556) 18 (4,538)Unrealizedgainonderivativefinancial instruments,netoftaxof$289 . . . . . . . 819 819 819Pensionandotherpostretirementbenefits adjustments,netoftaxof$12,319 . . . . . 19,529 19,529 19,529

Comprehensiveincome . . . . . . . . . . . . . 53,865 (159) 53,706Dividends($0.28pershare) . . . . . . . . . . . (12,105) (12,105) (12,105)Contributionsbynoncontrollinginterests . . 50 50Stockissuedunderemployeeanddirector benefitandrestrictedstockplans . . . . . 481,916 5 799 804 804Excesstaxbenefitrelated toshare-basedplans . . . . . . . . . . . . 3,439 3,439 3,439Share-basedcompensationexpense . . . . . . 5,567 5,567 5,567bALANCE fEbrUArY 1, 2014. . . . . . . . . 43,378,279 $434 $131,398 $ 16,676 $328,191 $476,699 $ 663 $477,362Net earnings . . . . . . . . . . . . . . . . . . . 82,850 82,850 93 82,943Foreigncurrencytranslationadjustment . . . (3,101) (3,101) (44) (3,145)Unrealizedlossonderivativefinancial instruments,netoftaxof$408 . . . . . . . (514) (514) (514)Pensionandotherpostretirementbenefits adjustments,netoftaxof$6,494 . . . . . . (10,349) (10,349) (10,349)

Comprehensiveincome . . . . . . . . . . . . . 68,886 49 68,935Dividends($0.28pershare) . . . . . . . . . . . (12,237) (12,237) (12,237)Stockissuedunderemployeeanddirector benefitandrestrictedstockplans . . . . . 373,752 3 440 443 443Excesstaxbenefitrelated toshare-basedplans . . . . . . . . . . . . 929 929 929Share-basedcompensationexpense . . . . . . 6,190 6,190 6,190BALANCEJANUARY31,2015. . . . . . . . . 43,752,031 $437 $138,957 $ 2,712 $398,804 $540,910 $ 712 $541,622Net earnings . . . . . . . . . . . . . . . . . . . 81,479 81,479 345 81,824Foreigncurrencytranslationadjustment . . . (155) (155) (69) (224)Unrealizedgainonderivativefinancial instruments,netoftaxof$170 . . . . . . . 168 168 168Pensionandotherpostretirementbenefits adjustments,netoftaxof$5,537 . . . . . . (8,589) (8,589) (8,589)

Comprehensiveincome . . . . . . . . . . . . . 72,903 276 73,179Dividends($0.28pershare) . . . . . . . . . . . (12,253) (12,253) (12,253)Acquisitionoftreasurystock . . . . . . . . . . (151,500) (2) (4,919) (4,921) (4,921)Stockissuedunderemployeeanddirector benefitandrestrictedstockplans . . . . . 59,682 2 (5,299) (5,297) (5,297)Excesstaxbenefitrelated toshare-basedplans . . . . . . . . . . . . 2,651 2,651 2,651Share-basedcompensationexpense . . . . . . 7,491 7,491 7,491 BalaNce JaNUarY 30, 2016 . . . . . . . . 43,660,213 $ 437 $ 138,881 $ (5,864) $ 468,030 $ 601,484 $ 988 $ 602,472



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OrganizationCaleres,Inc.,originallyfoundedasBrownShoeCompany,Inc.in1878andincorporatedin1913,isaglobalfootwearretailerandwholesaler.InMay2015,theshareholdersofBrownShoeCompany,Inc.approvedarebrandinginitiativethatchangedthenameofthecompanytoCaleres,Inc.(the“Company”).TheCompany’ssharesaretradedunderthe“CAL”symbolontheNewYorkStockExchange.

TheCompanyprovidesabroadofferingoflicensed,brandedandprivate-labelcasual,dressandathleticfootwearproductstowomen,menandchildren.Footwearissoldatavarietyofpricepointsthroughmultipledistributionchannelsbothdomesticallyandinternationally.TheCompanycurrentlyoperates1,211retailshoestoresintheUnitedStates,CanadaandGuamprimarilyundertheFamousFootwearandNaturalizernames.Inaddition,throughitsBrandPortfoliosegment,theCompanydesigns,sourcesandmarketsfootweartoretailstoresdomesticallyandinternationally,includingnationalchains,departmentstores,onlineretailers,massmerchandisers,independentretailersandcatalogs.In2015,approximately66%oftheCompany’snetsaleswereatretail,comparedto67%in2014and70%in2013.SeeNote7to theconsolidatedfinancialstatementsforadditionalinformationregardingtheCompany’sbusinesssegments.

TheCompany’sbusinessisseasonalinnatureduetoconsumerspendingpatternswithhigherback-to-schoolandChristmasseasonsales.Traditionally,thethirdfiscalquarteraccountsforasubstantialportionoftheCompany’searningsfortheyear.

consolidationTheconsolidatedfinancialstatementsincludetheaccountsoftheCompanyanditswholly-ownedandmajority-ownedsubsidiaries,aftertheeliminationofintercompanyaccountsandtransactions.

Noncontrolling InterestsNoncontrollinginterestsintheCompany’sconsolidatedfinancialstatementsresultfromtheaccountingfornoncontrollinginterestsinpartially-ownedconsolidatedsubsidiariesoraffiliates.Noncontrollinginterestsrepresentpartially-ownedsubsidiaries’orconsolidatedaffiliates’lossesandcomponentsofothercomprehensiveincomethatareattributabletothenoncontrollingparties’equityinterests.TheCompanyconsolidatesB&HFootwearCompanyLimited(“B&HFootwear”),ajointventure,intoitsconsolidatedfinancialstatements.Netearnings(loss)attributabletononcontrollinginterestsrepresenttheshareofnetearningsorlossesthatareattributabletotheequitythatisownedbytheCompany’spartners.TransactionsbetweentheCompanyandB&HFootwearhavebeeneliminatedintheconsolidatedfinancialstatements.

accounting PeriodTheCompany’sfiscalyearisthe52-or53-weekperiodendingtheSaturdaynearesttoJanuary31.Fiscalyears2015,2014and2013endedonJanuary30,2016,January31,2015andFebruary1,2014,respectively,andeachfiscalyearincluded52weeks.

Basis of PresentationCertainpriorperiodamountsontheconsolidatedfinancialstatementshavebeenreclassifiedtoconformtothecurrentperiodpresentation.ThesereclassificationsdidnotaffectnetearningsattributabletoCaleres,Inc.

Theconsolidatedstatementofcashflowsincludesthecashflowsfromoperating,financingandinvestingactivitiesofbothcontinuingoperationsanddiscontinuedoperations.Allotherfinancialinformationisreportedonacontinuingoperationsbasis,unlessotherwisenoted.RefertoNote2totheconsolidatedfinancialstatementsfordiscussionregardingdiscontinuedoperations.

Use of estimatesThepreparationoffinancialstatementsinconformitywithgenerallyacceptedaccountingprinciples(“GAAP”)requiresmanagementtomakeestimatesandassumptionsthataffecttheamountsreportedinthefinancialstatementsandaccompanyingnotes.Actualresultscoulddifferfromthoseestimates.

cash and cash equivalentsTheCompanyconsidersallhighlyliquidinvestmentswithmaturitiesofthreemonthsorlesswhenpurchasedtobecashequivalents.

receivablesTheCompanyevaluatesthecollectibilityofselectedaccountsreceivableonacase-by-casebasisandmakesadjustmentstothebaddebtreserveforexpectedlosses.TheCompanyconsidersfactorssuchasabilitytopay,bankruptcy,creditratingsandpaymenthistory.Forallotheraccounts,theCompanyestimatesreservesforbaddebtsbasedonexperienceandpastduestatusoftheaccounts.Ifcircumstancesrelatedtocustomerschange,estimatesofrecoverabilityarefurtheradjusted.TheCompanyrecognizedaprovisionfordoubtfulaccountsof$0.5millionin2015,$1.7millionin2014and$0.6millionin2013.


Customerallowancesrepresentreservesagainstourwholesalecustomers’accountsreceivableformarginassistance,productreturns,customerdeductionsandco-opadvertisingallowances.Weestimatethereservesneededformarginassistancebyreviewinginventorylevelsontheretailfloors,sell-throughrates,historicaldilution,currentgrossmarginlevelsandotherperformanceindicatorsofourmajorretailcustomers.Productreturnsandcustomerdeductionsareestimatedusinghistoricalexperienceandanticipatedfuturetrends.Co-opadvertisingallowancesareestimatedbasedoncustomeragreements.TheCompanyrecognizedaprovisionforcustomerallowancesof $47.4millionin2015,$46.9millionin2014and$45.1millionin2013.

Customerdiscountsrepresentreservesagainstouraccountsreceivablefordiscountsthatourwholesalecustomersmaytakebasedonmeetingcertainorder,paymentorreturnguidelines.Weestimatethereservesneededforcustomerdiscountsbaseduponcustomernetsalesandrespectiveagreementterms.TheCompanyrecognizedaprovisionforcustomerdiscountsof$2.6millionin2015,$3.5millionin2014and$4.8millionin2013.

InventoriesAllinventoriesarevaluedatthelowerofcostormarketwith95%ofconsolidatedinventoriesusingthelast-in,first-out(“LIFO”)method.AnactualvaluationofinventoryundertheLIFOmethodcanbemadeonlyattheendofeachyearbasedontheinventorylevelsandcostsatthattime.Accordingly,interimLIFOcalculationsarebasedonmanagement’sestimatesofexpectedyear-endinventorylevelsandcostsandaresubjecttothefinalyear-endLIFOinventoryvaluation.Ifthefirst-in,first-out(“FIFO”)methodhadbeenused,consolidatedinventorieswouldhavebeen$4.1millionand$3.7millionhigheratJanuary30,2016andJanuary31,2015,respectively.Substantiallyallinventoryisfinishedgoods.TheCompany’sinventorybalanceincludes$2.3millionand$1.9millionasofJanuary30,2016andJanuary31,2015,respectively,ofproductsubjecttoaconsignmentarrangementwithwholesalecustomers.

Thecostsofinventory,inboundfreightandduties,markdowns,shrinkageandroyaltyexpenseareclassifiedincostofgoodssold.Costsofwarehousinganddistributionareclassifiedinsellingandadministrativeexpensesandareexpensedasincurred.Suchwarehousinganddistributioncoststotaled$70.4million,$71.1millionand$75.1millionin2015,2014and2013,respectively.Costsofoverseassourcingofficesandotherinventoryprocurementcostsarereflectedinsellingandadministrativeexpensesandareexpensedasincurred.Suchsourcingandprocurementcoststotaled$23.9million,$20.8millionand$20.2millionin2015,2014and2013,respectively.

TheCompanyappliesjudgmentinvaluinginventoriesbyassessingthenetrealizablevalueofinventoriesbasedoncurrentsellingprices.AttheFamousFootwearsegment,markdownsarerecognizedwhenitbecomesevidentthatinventoryitemswillbesoldatretailpriceslessthancost,plusthecosttoselltheproduct.ThispolicycausesthegrossprofitrateatFamousFootweartobelowerthantheinitialmarkupduringperiodswhenpermanentpricereductionsaretakentoclearproduct.AtourBrandPortfoliosegment,markdownreservesgenerallyreducethecarryingvaluesofinventoriestoalevelwhere,uponsaleoftheproduct,theCompanywillrealizeitsnormalgrossprofitrate.TheCompanybelievesthesepoliciesreflectthedifferenceinoperatingmodelsbetweentheFamousFootwearandBrandPortfoliosegments.FamousFootwearperiodicallyrunspromotionaleventstodrivesalestoclearseasonalinventories.TheBrandPortfoliosegmentreliesonpermanentpricereductionstoclearslower-movinginventory.

Markdownsarerecordedtoreflectexpectedadjustmentstosalesprices.Indeterminingmarkdowns,managementconsiderscurrentandrecentlyrecordedsalesprices,thelengthoftimetheproductisheldininventoryandquantitiesofvariousproductstylescontainedininventory,amongotherfactors.Theultimateamountrealizedfromthesaleofcertainproductscoulddifferfrommanagementestimates.TheCompanyperformsphysicalinventorycountsorcyclecountsonallmerchandiseinventoryonhandthroughouttheyearandadjuststherecordedbalancetoreflecttheresults.TheCompanyrecordsestimatedshrinkagebetweenphysicalinventorycountsbasedonhistoricalresults.

computer software costsTheCompanycapitalizescertaincostsinotherassets,includinginternalpayrollcostsincurredinconnectionwiththedevelopmentoracquisitionofsoftwareforinternaluse.Otherassetsontheconsolidatedbalancesheetsinclude$33.2millionand$37.9millionofcomputersoftwarecostsasofJanuary30,2016andJanuary31,2015,respectively,whicharenetofaccumulatedamortizationof$101.0millionand$90.1millionasoftheendoftherespectiveperiods.

Property and equipmentPropertyandequipmentarestatedatcost.Depreciationofpropertyandequipmentisprovidedovertheestimatedusefullivesoftheassetsortheremainingleaseterms,whereapplicable,usingthestraight-linemethod.

Interest expenseCapitalized InterestInterestcostsformajorassetadditionsarecapitalizedduringtheconstructionordevelopmentperiodandamortizedoverthelivesoftherelatedassets.In2015,theCompanycapitalizedinterestof$0.3millionrelatedtoitsexpansionandmodernizationprojectatitsLebanon,Tennesseedistributioncenter,withnocorrespondingamountscapitalizedin 2014 or 2013.


Interest ExpenseInterestexpenseincludesinterestforborrowingsunderboththeCompany’sshort-termandlong-termdebt,netofamountscapitalized.Interestexpenseincludesfeespaidundertheshort-termrevolvingcreditagreementfortheunusedportionofitslineofcredit.Interestexpensealsoincludestheamortizationofdeferreddebtissuancecostsanddebtdiscountaswellastheaccretionofcertaindiscountednoncurrentliabilities.

Goodwill and Intangible assetsGoodwillandintangibleassetsdeemedtohaveindefinitelivesarenotamortizedbutaresubjecttoannualimpairmenttests.TheCompanyadoptedtheprovisionsofAccountingStandardsCodification(“ASC”),Intangibles-Goodwill and Other (ASC Topic 350) Testing Goodwill for Impairment,whichpermits,butdoesnotrequire,acompanytoqualitativelyassessindicatorsofareportingunit’sfairvaluewhenitisunlikelythatareportingunitisimpaired.If,aftercompletingthequalitativeassessment,acompanybelievesitislikelythatareportingunitisimpaired,adiscountedcashflowanalysisispreparedtoestimatefairvalue.Afairvalue-basedtestisappliedatthereportingunitlevel,whichisgenerallyatoronelevelbelowtheoperatingsegmentlevel.ThetestcomparesthefairvalueoftheCompany’sreportingunitstothecarryingvalueofthosereportingunits.Thistestrequiressignificantassumptions,estimatesandjudgmentsbymanagement,andissubjecttoinherentuncertaintiesandsubjectivity.Thefairvalueofgoodwillisdeterminedusinganestimateoffuturecashflowsofthereportingunitsandarisk-adjusteddiscountratetocomputeanetpresentvalueoffuturecashflows.Projectednetsales,grossprofit,sellingandadministrativeexpense,capitalexpendituresandworkingcapitalrequirementsarebasedontheCompany’sinternalprojections.Discountratesreflectmarket-basedestimatesoftherisksassociatedwiththeprojectedcashflowsofthereportingunitsdirectlyresultingfromtheuseofitsassetsinitsoperations.Assumptionsthatmarketparticipantsmayusearealsoconsidered.BoththeestimatesofthefairvalueoftheCompany’sreportingunitsandtheallocationoftheestimatedfairvalueofthereportingunitsarebasedonthebestinformationavailabletotheCompany’smanagementasofthedateoftheassessment.Iftherecordedvaluesoftheseassetsarenotrecoverable,basedoneithertheassessmentscreenordiscountedcashflowanalysis,managementperformsthenextstep,whichcomparesthefairvalueofthereportingunittotherecordedvalueofthetangibleandintangibleassetsofthereportingunits.Goodwillisconsideredimpairedifthefairvalueofthetangibleandintangibleassetsexceedsthefairvalueofthereportingunit.

TheCompanyelectedtoperformtheoptionalqualitativeassessmentforthegoodwillimpairmenttestasofthefirstdayofthefourthquarterof2015.TheCompanyhastworeportingunits,FamousFootwearandBrandPortfolio.Basedontheresultsofthemostrecentgoodwillimpairmentqualitativeassessment,theCompanydeterminedthatitwasmorelikelythannotthatthefairvalueofthereportingunitsexceededthecarryingvalue.Asaresult,theCompanywasnotrequiredtoperformthediscountedcashflowanalysis.AsofJanuary30,2016,thegoodwillallocatedtotheBrandPortfolioreportingunitwas$14.0million.

TheCompanyperformsimpairmenttestsonitsindefinite-livedintangibleassetsasofthefirstdayofthefourthquarterofeachfiscalyearunlesseventsindicateaninterimtestisrequired.Theindefinite-livedintangibleassetimpairmentreviewsperformedasofthefirstdayoftheCompany’sfourthfiscalquarterresultedinnoimpairmentcharges.Definite-livedintangibleassets,otherthangoodwill,areamortizedovertheirusefullivesandarereviewedforimpairmentifandwhenimpairmentindicatorsarepresent.

Investment in Nonconsolidated AffiliateTheCompanyhasaninvestmentinanonconsolidatedaffiliatethatisaccountedforusingthecostmethod.Theinvestment’scarryingvalueof$7.0millionasofJanuary30,2016andJanuary31,2015isincludedinotherassetsontheconsolidatedbalancesheets.TheCompanymonitorstheinvestmentforindicatorsthatadecreaseininvestmentvaluehasoccurredthatisotherthantemporary.IftheCompanydeterminedthatadeclineinthefairvalueoftheinvestmentbelowitscarryingvalueisotherthantemporary,animpairmentlosswouldberecognized.AsofJanuary30,2016,therehavebeennoimpairmentlossesrecognizedonthisinvestment.

self-Insurance reservesTheCompanyisself-insuredand/orretainshighdeductiblesforasignificantportionofitsworkers’compensation,health,disability,cyberrisk,generalliability,automobileandpropertyprograms,amongothers.LiabilitiesassociatedwiththerisksthatareretainedbytheCompanyareestimatedbyconsideringhistoricalclaimsexperience,trendsoftheCompanyandtheindustry,andotheractuarialassumptions.Theestimatedaccrualsfortheseliabilitiescouldbeaffectedifdevelopmentofcostsonclaimsdifferfromtheseassumptionsandhistoricaltrends.BasedonavailableinformationasofJanuary30,2016,theCompanybelievesithasprovidedadequatereservesforitsself-insuranceexposure.AsofJanuary30,2016andJanuary31,2015,self-insurancereserveswere$9.7millionand$9.3million,respectively.

revenue recognitionRetailsales,recognizedatthepointofsale,arerecordednetofreturnsandexcludesalestax.Wholesalesalesarerecorded,netofreturns,allowancesanddiscounts,generallywhenthemerchandisehasbeenshippedandtitleandriskoflosshavepassedtothecustomer.Revenueforproductssoldthatareshippeddirectlytoanindividualconsumerisrecognizedupondeliverytotheconsumer.Reservesforprojectedmerchandisereturns,discountsandallowancesare


determinedbasedonhistoricalexperienceandcurrentexpectations.RevenueisrecognizedonlicensefeesrelatedtoCompany-ownedbrand-names,wheretheCompanyisthelicensor,whentherelatedsalesofthelicenseearemade.

Gift cardsTheCompanysellsgiftcardstoitsconsumersinitsretailstores,throughitsInternetsitesandatotherretailers.TheCompany’sgiftcardsdonothaveexpirationdatesorinactivityfees.TheCompanyrecognizesrevenuefromgiftcardswhen(i)thegiftcardisredeemedbytheconsumeror(ii)thelikelihoodofthegiftcardbeingredeemedbytheconsumerisremote(“giftcardbreakage”)andtheCompanydeterminesthatitdoesnothavealegalobligationtoremitthevalueofunredeemedgiftcardstotherelevantjurisdictions.TheCompanydeterminesitsgiftcardbreakageratebaseduponhistoricalredemptionpatterns.TheCompanyrecognizesgiftcardbreakageduringthe24-monthperiodfollowingthesaleofthegiftcard,accordingtotheCompany’shistoricalredemptionpattern.Giftcardbreakageincomeisincludedinnetsalesintheconsolidatedstatementsofearningsandtheliabilityestablisheduponthesaleofagiftcardisincludedinotheraccruedexpenseswithintheconsolidatedbalancesheets.TheCompanyrecognized$0.7millionofgiftcardbreakagein2015,$0.4millionin2014,and$0.5millionin2013.

loyalty ProgramTheCompanymaintainsaloyaltyprogram(“Rewards”)atFamousFootwear,throughwhichconsumersearnpointstowardsavingscertificatesforqualifyingpurchases.Uponreachingspecifiedpointvalues,consumersareissuedasavingscertificatethatmayberedeemedforpurchasesatFamousFootwear.Savingscertificatesearnedmustberedeemedwithinstatedexpirationdates.Inadditiontothesavingscertificates,theCompanyalsooffersexclusivememberdiscounts.ThevalueofpointsandrewardsearnedbyFamousFootwear’sRewardsprogrammembersarerecordedasareductionofnetsalesandaliabilityisestablishedwithinotheraccruedexpensesatthetimethepointsareearnedbasedonhistoricalconversionandredemptionrates.Approximately74%ofnetsalesintheFamousFootwearsegmentweremadetoitsRewardsmembersin2015,comparedto73%in2014and70%in2013.AsofJanuary30,2016andJanuary31,2015,theCompanyhadaRewardsprogramliabilityof$7.1millionand$7.2million,respectively,whichisincludedinotheraccruedexpensesontheconsolidatedbalancesheets.

store closing and Impairment chargesThecostsofclosingstores,includingleaseterminationcosts,propertyandequipmentwrite-offsandseverance,asapplicable,arerecordedwhenthestoreisclosedorwhenabindingagreementisreachedwiththelandlordtoclosethestore.

TheCompanyregularlyanalyzestheresultsofallofitsstoresandassessestheviabilityofunderperformingstorestodeterminewhethereventsorcircumstancesexistthatindicatethestoresshouldbeclosedorwhetherthecarryingamountoftheirlong-livedassetsmaynotberecoverable.Afterallowingforanappropriatestart-upperiod,unusualnonrecurringeventsorfavorabletrends,propertyandequipmentatstoresindicatedasimpairedarewrittendowntofairvalueascalculatedusingadiscountedcashflowmethod.TheCompanyrecordedassetimpairmentcharges,primarilyrelatedtounderperformingretailstores,of$2.8millionin2015,$2.0millionin2014and$1.6millionin2013.

advertising and Marketing expenseAdvertisingandmarketingcostsareexpensedasincurred,exceptforthecostsofdirectresponseadvertisingthatrelateprimarilytotheproductionanddistributionoftheCompany’scatalogsandcouponmailers.Directresponseadvertisingcostsarecapitalizedandamortizedovertheexpectedfuturerevenuestream,whichisgenerallyonetothreemonthsfromthedatethematerialsaremailed.Externalproductioncostsofadvertisingareexpensedwhentheadvertisingfirstappearsinthemediaorinthestore.

Inaddition,theCompanyparticipatesinco-opadvertisingprogramswithcertainofitswholesalecustomers.Forthoseco-opadvertisingprogramswheretheCompanyhasvalidatedthefairvalueoftheadvertisingreceived,co-opadvertisingcostsarereflectedasadvertisingexpensewithinsellingandadministrativeexpenses.Otherwise,co-opadvertisingcostsarereflectedasareductionofnetsales.

Totaladvertisingandmarketingexpensewas$78.4million,$83.6millionand$82.2millionin2015,2014and2013,respectively.Thesecostswereoffsetbyco-opadvertisingallowancesrecoveredbytheCompany’sretailbusinessof$6.5million,$6.2millionand$7.8millionin2015,2014and2013,respectively.Totalco-opadvertisingcostsreflectedasareductionofnetsaleswere$9.7millionin2015,$10.0millionin2014and$8.3millionin2013.Totaladvertisingcostsattributabletofutureperiodsthataredeferredandrecognizedasacomponentofprepaidexpensesandothercurrentassetswere$2.7millionand$2.6millionatJanuary30,2016andJanuary31,2015,respectively.

Income TaxesTheCompanyrecognizesdeferredtaxassetsandliabilitiesfortheexpectedfuturetaxconsequencesoftemporarydifferencesbetweentheconsolidatedfinancialstatementcarryingamountsandthetaxbasesofitsassetsandliabilities.TheCompanyestablishesvaluationallowancesifitbelievesthatitismore-likely-than-notthatsomeorallofitsdeferredtaxassetswillnotberealized.TheCompanydoesnotrecognizeataxbenefitunlessitconcludesthatitismore-likely-than-notthatthebenefitwillbesustainedonauditbythetaxingauthoritybasedsolelyonthetechnicalmeritsoftheassociatedtaxposition.Iftherecognitionthresholdismet,theCompanyrecognizesataxbenefitmeasuredatthelargestamountof


thetaxbenefitthat,initsjudgment,isgreaterthan50%likelytoberealized.TheCompanyrecordsinterestandpenaltiesrelatedtounrecognizedtaxpositionswithintheincometaxprovisionontheconsolidatedstatementsofearnings.

Operating leasesTheCompanyleasesitsstorepremisesandcertainofficelocations,distributioncentersandequipmentunderoperatingleases.Approximatelyone-halfoftheleasesenteredintobytheCompanyincludeoptionsthatallowtheCompanytoextendtheleasetermbeyondtheinitialcommitmentperiod,subjecttotermsagreedtoatleaseinception.Someleasesalsoincludeearlyterminationoptionsthatcanbeexercisedunderspecificconditions.

Contingent RentalsManyoftheleasescoveringretailstoresrequirecontingentrentalsinadditiontotheminimummonthlyrentalchargebasedonretailsalesvolume.TheCompanyrecordsexpenseforcontingentrentalsduringtheperiodinwhichtheretailsalesvolumeexceedstherespectivetargets.

Construction Allowances Received From LandlordsAtthetimeitsretailfacilitiesareinitiallyleased,theCompanyoftenreceivesconsiderationfromlandlordstobeappliedagainstthecostofleaseholdimprovementsnecessarytoopenthestore.TheCompanytreatstheseconstructionallowancesasaleaseincentive.Theallowancesarerecordedasadeferredrentobligationandamortizedtoincomeovertheleasetermasareductionofrentexpense.Theallowancesarereflectedasacomponentofotheraccruedexpensesanddeferredrentontheconsolidatedbalancesheets.

Straight-Line Rents and Rent HolidaysTheCompanyrecordsrentexpenseonastraight-linebasisovertheleasetermforallofitsleasedfacilities.Forleasesthathavepredeterminedfixedescalationsoftheminimumrentals,theCompanyrecognizestherelatedrentalexpenseonastraight-linebasisandrecordsthedifferencebetweentherecognizedrentalexpenseandamountspayableundertheleaseasdeferredrent.Atthetimeitsretailfacilitiesareleased,theCompanyisfrequentlynotchargedrentforaspecifiedperiodoftime,typically30to60days,whilethestoreisbeingpreparedforopening.Thisrent-freeperiodisreferredtoasarentholiday.TheCompanyrecognizesrentexpenseovertheleaseterm,includinganyrentholiday,withinsellingandadministrativeexpensesontheconsolidatedstatementsofearnings.

Pre-opening CostsPre-openingcostsassociatedwithopeningretailstores,includingpayroll,suppliesandfacilitycosts,areexpensedasincurred.

earnings Per common share attributable to caleres, Inc. shareholdersTheCompanyusesthetwo-classmethodtocalculatebasicanddilutedearningspercommonshareattributabletoCaleres,Inc.shareholders.Unvestedrestrictedstockawardsareconsideredparticipatingunitsbecausetheyentitleholderstonon-forfeitablerightstodividendsordividendequivalentsduringthevestingterm.Underthetwo-classmethod,basicearningspercommonshareattributabletoCaleres,Inc.shareholdersiscomputedbydividingthenetearningsattributabletoCaleres,Inc.afterallocationofearningstoparticipatingsecuritiesbytheweighted-averagenumberofcommonsharesoutstandingduringtheyear.Dilutedearningspercommonshareattributableto Caleres,Inc.shareholdersiscomputedbydividingthenetearningsattributabletoCaleres,Inc.afterallocationofearningstoparticipatingsecuritiesbytheweighted-averagenumberofcommonsharesandpotentialdilutivesecuritiesoutstandingduringtheyear.PotentialdilutivesecuritiesconsistofoutstandingstockoptionsandcontingentlyissuablesharesfortheCompany’sperformanceshareawards.SeeNote3totheconsolidatedfinancialstatementsforadditionalinformationrelatedtothecalculationofearningspercommonshareattributabletoCaleres,Inc.shareholders.

comprehensive IncomeComprehensiveincomeincludestheeffectofforeigncurrencytranslationadjustments,pensionandotherpostretirementbenefitsadjustmentsandunrealizedgainsorlossesfromderivativesusedforhedgingactivities.

Foreign Currency Translation AdjustmentForcertainoftheCompany’sinternationalsubsidiaries,thelocalcurrencyisthefunctionalcurrency.AssetsandliabilitiesofthesesubsidiariesaretranslatedintoUnitedStatesdollarsattheperiod-endexchangerateorhistoricalratesasappropriate.Consolidatedstatementsofearningsamountsaretranslatedataverageexchangeratesfortheperiod.Thecumulativetranslationadjustmentsresultingfromchangesinexchangeratesareincludedintheconsolidatedbalancesheetsasacomponentofaccumulatedothercomprehensive(loss)incomeintotalCaleres,Inc.shareholders’equity.Transactiongainsandlossesareincludedintheconsolidatedstatementsofearnings.

Pension and Other Postretirement Benefits AdjustmentsTheCompanydeterminestheexpenseandobligationsforretirementandotherbenefitplansusingassumptionsrelated todiscountrates,expectedlong-termratesofreturnoninvestedplanassets,expectedsalaryincreasesandcertainemployee-relatedfactors.Theunrecognizedportionofthegainorlossonplanassetsisincludedintheconsolidatedbalancesheetsasacomponentofaccumulatedothercomprehensive(loss)incomeintotalCaleres,Inc.shareholders’equity.Thegainorlossisrecognizedintotheplans’expenseovertime.Seeadditionalinformationrelatedtopension andotherpostretirementbenefitsinNote5andNote14totheconsolidatedfinancialstatements.


Derivative Financial InstrumentsTheCompanyrecognizesallderivativefinancialinstrumentsaseitherassetsorliabilitiesintheconsolidatedbalancesheetsandmeasuresthoseinstrumentsatfairvalue.TheCompanyevaluatesitsexposuretovolatilityinforeigncurrencyratesandmayenterintoderivativetransactions.Thesederivativefinancialinstrumentsareviewedasriskmanagementtoolsandarenotusedfortradingorspeculativepurposes.SeeadditionalinformationrelatedtoderivativefinancialinstrumentsinNote12,Note13andNote14totheconsolidatedfinancialstatements.

Business combination accountingTheCompanyallocatesthepurchasepriceofanacquiredentitytotheassetsandliabilitiesacquiredbasedupontheirestimatedfairvaluesatthebusinesscombinationdate.TheCompanyalsoidentifiesandestimatesthefairvaluesofintangibleassetsthatshouldberecognizedasassetsapartfromgoodwill.Asingleestimateoffairvalueresultsfromacomplexseriesofjudgmentsaboutfutureeventsanduncertaintiesandreliesheavilyonestimatesandassumptions.TheCompanyhashistoricallyreliedinpartuponreportsfromthird-partyvaluationspecialiststoassistintheestimationoffairvaluesforintangibleassetsotherthangoodwill.Thecarryingvaluesofacquiredreceivablesandtradeaccountspayablehavehistoricallyapproximatedtheirfairvaluesatthebusinesscombinationdate.Withrespecttootheracquiredassetsandliabilities,theCompanyusesallavailableinformationtomakethebestestimatesoftheirfairvaluesatthebusinesscombinationdate.

TheCompany’spurchasepriceallocationmethodologycontainsuncertaintiesbecauseitrequiresmanagementtomakeassumptionsandtoapplyjudgmenttoestimatethefairvalueofacquiredassetsandliabilities.Managementestimatesthefairvalueofassetsandliabilitiesbaseduponquotedmarketprices,thecarryingvalueoftheacquiredassetsandwidelyacceptedvaluationtechniques,includingdiscountedcashflows.UnanticipatedeventsorcircumstancesmayoccurwhichcouldaffecttheaccuracyoftheCompany’sestimates,includingassumptionsregardingindustryeconomicfactorsandbusinessstrategies.

share-Based compensationTheCompanyhasshare-basedincentivecompensationplansunderwhichcertainofficers,employeesandmembersoftheBoardofDirectorsareparticipantsandmaybegrantedstockoptions,restrictedstock,andstockperformanceawards.Additionally,share-basedgrantsmaybemadetonon-employeemembersoftheBoardofDirectorsintheformofcash-equivalentrestrictedstockunits(“RSUs”)atnocosttothenon-employeememberoftheBoardofDirectors. TheCompanyaccountsforshare-basedcompensationinaccordancewiththefairvaluerecognitionprovisionsof ASC 718, Compensation – Stock Compensation, and ASC 505, Equity,whichrequireallshare-basedpaymentstoemployeesandmembersoftheBoardofDirectors,includinggrantsofemployeestockoptions,toberecognizedasexpenseintheconsolidatedfinancialstatementsbasedontheirfairvalues.ThefairvalueofstockoptionsisestimatedusingtheBlack-Scholesoptionpricingformulathatrequiresassumptionsforexpectedvolatility,expecteddividends,therisk-freeinterestrateandtheexpectedtermoftheoption.Stockoptionsgenerallyvestoverfouryears,with25%vestingannually,andexpenseisrecognizedonastraight-linebasisseparatelyforeachvestingportionofthestockoptionaward.Expenseforrestrictedstockisbasedonthefairvalueoftherestrictedstockonthedateofgrantandisrecognizedonastraight-linebasisgenerallyoverafour-yearvestingperiod.Expenseforstockperformanceawards isrecognizedbaseduponthefairvalueoftheawardsonthedateofgrantandtheanticipatednumberofsharesorunitstobeawardedonastraight-linebasisovertherespectivetermoftheaward,orindividualvestingportionofanaward.ExpensefortheinitialgrantofRSUsisrecognizedratablyovertheone-yearvestingperiodbaseduponthefairvalueoftheRSUs,asremeasuredattheendofeachperiod.IfanyoftheassumptionsusedintheBlack-Scholesmodelortheanticipatednumberofsharestobeawardedchangesignificantly,share-basedcompensationexpensemaydiffermateriallyinthefuturefromthatrecordedinthecurrentperiod.Seeadditionalinformationrelatedtoshare-basedcompensationinNote15totheconsolidatedfinancialstatements.

Impact of New accounting PronouncementsInApril2015,theFinancialAccountingStandardsBoard(“FASB”)issuedASU2015-03,Simplifying the Presentation of Debt Issuance Costs,whichrequiresdebtissuancecoststobepresentedasadirectdeductionfromtheassociateddebtliabilityinthebalancesheet,consistentwiththepresentationofdebtdiscounts.Theamortizationofdebtissuancecostswillcontinuetobereportedasinterestexpenseinthestatementofearnings.TherecognitionandmeasurementguidancefordebtissuancecostsarenotaffectedbyASU2015-03.InAugust2015,theFASBissued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements, toclarifythatdebtissuancecostsassociatedwitharevolvingline-of-creditarrangementmaybepresentedasanasset,regardlessofwhetherthereareanyoutstandingborrowingsontheline-of-creditarrangement.TheASUsare tobeappliedonaretrospectivebasisandreportedasachangeinaccountingprincipleandareeffectiveforfiscalyearsbeginningafterDecember15,2015.AspermittedbytheASUs,theCompanyadoptedASU2015-03andASU2015-15duringthefourthquarterof2015.TheadoptionoftheseASUsdidnotaffecttheCompany’sresultsofoperationsorcashflows,butitrequiredtheCompanytoreclassifyitsdeferredfinancingcostsassociatedwithitsseniornotesfromotherassetstolong-termdebtonaretrospectivebasis.TheCompany’sconsolidatedbalancesheetsincludeddeferredfinancingcostsof$3.5millionand$2.5millionasofJanuary30,2016andJanuary31,2015,


respectively,thatwerereclassedfromotherassetstolong-termdebt.ThedebtissuancecostsassociatedwiththeCompany’srevolvingcreditagreementcontinuetobepresentedinotherassetsontheconsolidatedbalancesheets.

InNovember2015,theFASBissuedASU2015-17,Balance Sheet Classification of Deferred Taxes,whichrequiresentitiestopresentalldeferredtaxassetsandliabilitiesasnoncurrentonthebalancesheet.TheASUiseffectiveforfiscalyears,andinterimperiodswithinthoseyears,beginningafterDecember15,2016,withearlyadoptionpermitted.TheCompanyadoptedASU2015-17onaretrospectivebasisduringthefourthquarterof2015,resultinginareclassificationof$0.8millionand$0.7millionincurrentdeferredtaxassetsasofJanuary30,2016andJanuary31,2015,respectively,tononcurrentdeferredtaxassetsandareclassificationof$32.5millionand$27.5millionincurrentdeferredtaxliabilitiesasofJanuary30,2016andJanuary31,2015,respectively,tononcurrentdeferredtaxliabilitiesontheconsolidatedbalancesheets.

Impact of Prospective accounting PronouncementsInMay2014,theFASBissuedAccountingStandardsUpdate(“ASU”)No.2014-09,Revenue from Contracts with Customers (Topic 606).TheASUsupersedestherevenuerecognitionrequirementsinAccountingStandardsCodification(“ASC”)605,Revenue Recognition.Thestandardprovidesafive-stepanalysisofrevenuetransactionstodeterminewhenandhowrevenueisrecognized,baseduponthecoreprinciplethatrevenueisrecognizedtodepictthetransferofgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.TheASUalsorequiresadditionaldisclosuresregardingthenature,amount,timinganduncertaintyofrevenueandcashflowsarisingfromcontractswithcustomers.InAugust2015,theFASBissuedASU2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date,thatresultedinaoneyeardeferralofASU2014-09forfiscalyears,andinterimperiodswithinthoseyears,beginningafterDecember15,2017.Earlyadoptionispermittedforfiscalyears,andinterimperiodswithinthoseyears,beginningafterDecember15,2016.TheCompanyiscurrentlyevaluatingtheimpactoftheadoptionofthisASUonitsconsolidatedfinancialstatements.

InMay2015,theFASBissuedASU2015-07,Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent).ASU2015-07removestherequirementtocategorizewithinthefairvaluehierarchyinvestmentsforwhichfairvaluesareestimatedusingthenetassetvaluepracticalexpedientprovidedbyASC820,FairValueMeasurement.DisclosuresaboutinvestmentsincertainentitiesthatcalculatenetassetvaluepersharearelimitedunderASU2015-07tothoseinvestmentsforwhichtheentityhaselectedtoestimatethefairvalueusingthenetassetvaluepracticalexpedient.TheASUiseffectiveforfiscalyears,andinterimperiodswithinthoseyears,beginningafterDecember15,2015,withretrospectiveapplicationtoallperiodspresented.Earlyadoptionispermitted.TheCompanywilladoptASU2015-07duringthefirstquarteroffiscal2016.AsofJanuary30,2016,theCompany’spensionplanassetsincludedanalternativeinvestmentfundforwhichthefairvalueof$10.9millionwasestimatedusingthenetassetvalue.

InJuly2015,theFASBissuedASU2015-11,Simplifying the Measurement of Inventory,whichrequiresentitiestomeasureinventoryatthelowerofcostandnetrealizablevalue,simplifyingthecurrentguidanceunderwhichentitiesmustmeasureinventoryatthelowerofcostormarket.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessreasonablypredictablecostsofcompletion,disposalandtransportation.SubsequentmeasurementisunchangedforinventorymeasuredusingLIFO.TheASUiseffectiveprospectivelyforfiscalyears,andinterimperiodswithinthoseyears,beginningafterDecember15,2016,withearlyadoptionpermitted.Approximately95%oftheCompany’sconsolidatedinventoryismeasuredusingLIFO,whichwillremainunchangedupontheadoptionofASU2015-11. TheCompanyiscurrentlyevaluatingtheimpactoftheadoptionofthisASUonitsconsolidatedfinancialstatements.

InFebruary2016,theFASBissuedASU2016-02,Leases (Topic 842),whichrequireslesseestorecognizemostleases onthebalancesheet.TheASUalsoeliminatesthereal-estatespecificprovisionsinthecurrentstandard.Forlessors, ASU2016-02modifiestheclassificationcriteriaandtheaccountingforsales-typeanddirectfinancingleases.TheASUiseffectiveforfiscalyears,andinterimperiodswithinthosefiscalyears,beginningafterDecember15,2018,withearlyadoptionpermitted.TheCompanyiscurrentlyevaluatingtheimpactoftheadoptionofthisASUonitsconsolidatedfinancialstatements.DuetothelargenumberofretailoperatingleasestowhichtheCompanyisaparty,theCompanyanticipatesthattheimpacttoitsconsolidatedfinancialstatementsuponadoptioninthefirstquarterof2019maybesignificant.However,theadoptionoftheASUisnotexpectedtotriggernon-compliancewithanycovenantorotherrestrictionundertheprovisionsofanyoftheCompany’sdebtobligations.

2. DISCONTINUED OPERATIONS AND OTHER DISPOSITIONS

Discontinued OperationsTheCompany’sdiscontinuedoperationsincludetheprioroperationsofourAvia,Nevados,EtienneAignerandVeraWangbrands.TheCompanyapplieddiscontinuedoperationsaccountinginaccordancewithASCTopic205-20,Presentation of Financial Statements –Discontinued Operations.TheCompanyhadnodiscontinuedoperationsin2015or2014.In2013,discontinuedoperationsincludednetsalesof$26.3millionandalossbeforeincometaxesof$10.5million.Discontinuedoperationsalsoincludedanetlossondisposition/impairmentof$11.5millionin2013.


Avia and NevadosTheCompanypurchasedAviaandNevadosonFebruary17,2011aspartofitsacquisitionofAmericanSportingGoodsCorporation.OnMay14,2013,CaleresInternationalCorp.(“CI”),(formerlyknownasBrownShoeInternationalCorp.),thesoleshareholderofAmericanSportingGoodsCorporation,enteredintoandsimultaneouslyclosedaStockPurchaseAgreement(the“StockPurchaseAgreement”)byandamongtheCompany,CIandGalaxyBrandHoldings,Inc.(“theBuyer”),pursuanttowhichtheBuyeracquiredalloftheoutstandingcapitalstockofAmericanSportingGoodsCorporationfromCI.UndertheStockPurchaseAgreement,theAviaandNevadosbusinessesweresoldandtheCompanyretainedcertainotherbusinesses.Inconnectionwiththetransaction,AmericanSportingGoodsCorporationsoldinventorytoathirdpartyunaffiliatedwiththeBuyeranddistributedcertainassetstoCI.TheaggregatepurchasepriceforthestockofAmericanSportingGoodsCorporationandtheprovisionoftransitionserviceswas$74.0million,subjecttoworkingcapitaladjustments,minustheamountofthepre-closingcashdividenddeclaredbyAmericanSportingGoodsCorporationandpaidtoCI,representingproceedsfromAmericanSportingGoodsCorporation’ssaleofinventory.Inthisdocument,“ASG”referstothesubsidiarydisposedonMay14,2013,includingtheAviaandNevadosbrandsandexcludingotherretainedbusinesses.

TheCompanyreceived$60.3millionincashandapromissorynoteof$12.0millionatclosing,fromthesaleofstock,thesaleofinventory,andfortheprovisionoftransitionalservices,lessworkingcapitaladjustments.ThepromissorynotewasdueNovember14,2013,earnedinterestata3%annualrate,andwassecuredbyaguaranteebyAmericanSportingGoodsCorporationandalienoncertainassetsofASG.Inaccordancewiththetermsofthepromissorynote,theCompanyreceivedapaymentof$12.2milliononNovember14,2013,representingthenoteprincipalandaccruedinterest.AsaresultofthesaleofASG,theCompanyrecordedanimpairmentchargeinthefirstquarterof2013of$12.6million($12.6millionafter-tax,$0.30perdilutedshare),representingthedifferenceinthefairvaluelesscoststosellascomparedtothecarryingvalueofthenetassetstobesold.Duringthesecondquarterof2013,theCompanyrecognizedagainupondispositionoftheASGsubsidiaryof$1.0million($1.0millionaftertax,$0.02perdilutedshare).AviaandNevadoswerepreviouslyincludedintheBrandPortfoliosegment.Discontinuedoperationsincludenetsalesof$20.3millionandlossesbeforeincometaxesof$1.6millionin2013.

Vera WangDuringthefirstquarterof2013,theCompanydecidednottorenewtheVeraWanglicenseagreement.TheresultsofVeraWangwerepreviouslyincludedintheBrandPortfoliosegment.Discontinuedoperationsincludenetsalesof$5.7millionandlossesbeforeincometaxesof$1.9millionin2013.

Etienne AignerDuringthesecondquarterof2012,theCompanyterminatedtheEtienneAignerlicenseagreementduetoadisputewiththelicensor.OnApril29,2013,anagreementtoresolvethedisputewasreached,pursuanttowhichtheCompanypaidEtienneAigner$6.5million.TheresultsofEtienneAignerwerepreviouslyincludedintheBrandPortfoliosegment.Discontinuedoperationsincludednetsalesof$0.3millionandlossesbeforeincometaxesof$7.0millionin2013.

Lossfromdiscontinuedoperationsfor2013wasasfollows:

($ thousands) 2013

Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,318Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,927 Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,391Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,103Restructuringandotherspecialcharges,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,768Operatingloss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,480)Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Lossbeforeincometaxesfromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,496)Incometaxbenefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,922 Lossfromdiscontinuedoperations,netoftax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (4,574)

Other DispositionsOnDecember12,2014,CaleresInvestmentCompany,Inc.(“CIC”)(formerlyknownasBrownShoeInvestmentCompany,Inc.),thesoleshareholderofShoes.com,Inc.,simultaneouslyenteredintoandclosedaStockPurchaseAgreementbyandamongCICandanaffiliateofShoeMeTechnologiesLimited(“thePurchaser”),pursuanttowhichthePurchaseracquiredalloftheoutstandingcapitalstock,inventoryandotherassetsofShoes.comfromCICandtheCompanyagreedtoprovidecertaintransitionservices.Theaggregatepurchasepriceofthesalewas$15.0million,subjecttoworkingcapitalandotheradjustments.TheCompanyreceived$4.4millionincashanda$7.5millionfacevaluesecuredconvertiblenote(“convertiblenote”)atclosing.Theconvertiblenoterequiresinstallmentsoverfouryearswiththefirstprincipalpaymentof$1.25milliondueonJuly1,2017andquarterlyinstallmentsof$0.6millionthereafter,plusaccruedinterest,untilitmaturesonDecember12,2019.Interestaccruesatanannualrateof6%untilDecember11,2016,7%until


December11,2017,8%untilDecember11,2018,and9%untilthematuritydate.TheprincipalandoutstandingaccruedinterestisconvertibleintocommonstockofthePurchaserataspecifiedconversionpricepershare,attheCompany’soption,orautomaticallyuponaqualifiedinitialpublicoffering(“IPO”)bythePurchaserattheIPOprice.Thefairvalueoftheconvertiblenoteof$7.1millionand$7.0millionatJanuary30,2016andJanuary31,2015,respectively,isincludedinotherassetsontheconsolidatedbalancesheets.TheCompanyrecognizedinterestincomeof$0.5millionin2015andanimmaterialamountofinterestin2014.

Afterconsiderationofworkingcapitaladjustmentsandperformanceobligationsrelatedtoourtransitionservices,thenetpurchasepricewas$10.1million.TheCompanyrecognizedapre-taxgainonthesaleofthesubsidiaryof$4.7million,representingthedifferenceinthefairvalueofproceedslesscoststosell,ascomparedtothecarryingvalueofthenetassets.Inresponsetothesale,theCompanyincurredrestructuringandotherspecialchargesof$1.5million,primarilyforseverance,toeliminatecertainpositionssupportingtheCompany’se-commerceplatformsaswellaspositionsinotheradministrativefunctions.Thesechargesincluded$0.8millionwithintheFamousFootwearsegment,$0.3millionwithintheBrandPortfoliosegmentand$0.4millionwithintheOthercategory.TheCompanyrecognizedtaxbenefitsof$6.6millionin2014associatedwiththedispositionandanadditional$1.7millionin2015uponsettlementofthetaxattributesassociatedwiththedisposition.Thesetaxbenefitsweredriveninpartbytheutilizationofoperatingandcapitallosscarryforwardsthatpreviouslywerenotanticipatedtobeutilized,andtherefore,fullyreservedontheCompany’sconsolidatedbalancesheet.

TheoperatingresultsofShoes.comwereincludedintheFamousFootwearsegmentincontinuingoperationsthroughDecember12,2014.TheoperationsofShoes.comwerenotsignificanttotheFamousFootwearsegmentortheCompany’sfinancialresults.InaccordancewithASUNo.2014-08,Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,whichtheCompanyadoptedduringthethirdquarterof2014,thefinancialpositionandoperatingresultsofShoes.comwerenotclassifiedasadiscontinuedoperationasthedispositiondidnotrepresentastrategicshiftresultinginamajorimpactontheCompany’soperationsorfinancialresults.

3. EARNINGS PER SHARE

TheCompanyusesthetwo-classmethodtocomputebasicanddilutedearnings(loss)percommonshareattributabletoCaleres,Inc.shareholders.Inperiodsofnetloss,noeffectisgiventotheCompany’sparticipatingsecuritiessincetheydonotcontractuallyparticipateinthelossesoftheCompany.ThefollowingtablesetsforththecomputationofbasicanddilutedearningspercommonshareattributabletoCaleres,Inc.shareholders:(in $ thousands, except per share amounts) 2015 2014 2013

NUMeraTOrNetearningsfromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,824 $82,943 $ 53,982Net(earnings)lossattributabletononcontrollinginterests . . . . . . . . . . . . . . . . . . . . . (345) (93) 177Netearningsallocatedtoparticipatingsecurities . . . . . . . . . . . . . . . . . . . . . . . . . . (2,587) (3,068) (2,304)Netearningsfromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,892 79,782 51,855

Netlossfromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (16,086)Netlossallocatedtoparticipatingsecurities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 687Netlossfromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (15,399) NetearningsattributabletoCaleres,Inc. afterallocationofearningstoparticipatingsecurities . . . . . . . . . . . . . . . . . . . . . $ 78,892 $79,782 $ 36,456

DeNOMINaTOrDenominatorforbasiccontinuinganddiscontinuedearningsper commonshareattributabletoCaleres,Inc.shareholders . . . . . . . . . . . . . . . . . . . . . . 42,455 42,071 41,356Dilutiveeffectofshare-basedawardsforcontinuingoperationsanddiscontinuedoperations . . 201 203 297 Denominatorfordilutedcontinuinganddiscontinuedearnings percommonshareattributabletoCaleres,Inc.shareholders . . . . . . . . . . . . . . . . . 42,656 42,274 41,653

Basicearnings(loss)percommonshare:Fromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.86 $ 1.90 $ 1.25Fromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (0.37) BasicearningspercommonshareattributabletoCaleres,Inc.shareholders . . . . . . . . . . . $ 1.86 $ 1.90 $ 0.88

Dilutedearnings(loss)percommonshare:Fromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.85 $ 1.89 $ 1.25Fromdiscontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (0.37) DilutedearningspercommonshareattributabletoCaleres,Inc.shareholders. . . . . . . . . . $ 1.85 $ 1.89 $ 0.88

Optionstopurchase56,997,64,497and86,247sharesofcommonstockin2015,2014and2013,respectively,werenotincludedinthedenominatorfordilutedearningspercommonshareattributabletoCaleres,Inc.shareholdersbecausetheeffectwouldbeantidilutive.


4. RESTRUCTURING AND OTHER INITIATIVES

Portfolio realignmentTheCompany’sportfoliorealignmenteffortsincludedthesaleofASG,thesaleandclosureofcertainsourcingandsupplychainassets,closingorrelocatingnumerousunderperformingorpoorlyalignedretailstores,theterminationoftheEtienneAignerlicenseagreement,theelectionnottorenewtheVeraWanglicenseinaccordancewithagreementtermsandotherinfrastructurechanges.Theseportfoliorealignmenteffortsbeganin2011andwerecompletedin2013.Expensesfortheseinitiativesarereflectedinbothcontinuingoperationsanddiscontinuedoperations.

ThefollowingisasummaryoftheCompany’sportfoliorealignmentexpenseforourcontinuinganddiscontinuedoperationsfor2013: 2013 Loss Per Pre-tax After-tax Diluted ($ millions, except per share data) Expense Expense Share continuing Operations Businessexitsandcostreductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.2 $ 0.8 $ 0.02 Non-cashimpairments/dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 4.7 0.11 TotalContinuingOperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9 5.5 0.13 Discontinued Operations Businessexitsandcostreductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3 6.4 0.13 Non-cashimpairments/dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5 11.5 0.27 TotalDiscontinuedOperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.8 17.9 0.40 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30.7 $23.4 $ 0.5

Thebusinessexitsandcostreductionsassociatedwithcontinuingoperationswererecordedwithinrestructuringandotherspecialcharges,netandcostofgoodssoldintheconsolidatedstatementsofearnings.Thebusinessexitsandcostreductionsassociatedwithdiscontinuedoperationswererecordedwithinlossfromdiscontinuedoperations,netoftax,intheconsolidatedstatementsofearnings.Thenon-cashimpairments/dispositionsoftheCompany’scontinuingoperationswererecordedwithinimpairmentofassetsheldforsaleintheconsolidatedstatementsofearnings.Thenon-cashimpairments/dispositionsoftheCompany’sdiscontinuedoperationswererecordedwithindisposition/impairmentofdiscontinuedoperations,netoftaxintheconsolidatedstatementsofearnings.Thenon-cashimpairments/dispositionsareincludedinOtherinthefollowingtable.Allofthe$5.9millionofexpensesforportfoliorealignmentthatwererecordedincontinuingoperationsduring2013wereincludedintheBrandPortfoliosegment.

Thefollowingisasummaryofthechargesandsettlementsbycategoryofcosts: markdowns TotalbyClassification andRoyalty Continuing Discontinued ($ millions) Employee Shortfalls Facility Other Total Operations OperationsReservebalanceatFebruary2,2013 . . . . . . . . . . $ 1.7 $ 0.2 $3.3 $ 0.3 $ 5.5 $ 5.3 $ 0.2Additionalchargesin2013 . . . . . . . . . . . . . . . 2.6 2.7 0.1 25.3 30.7 5.9 24.8Amountssettledin2013. . . . . . . . . . . . . . . . . (3.3) (2.9) (2.0) (25.6) (33.8) (9.7) (24.1)ReservebalanceatFebruary1,2014 . . . . . . . . . . $ 1.0 $ – $ 1.4 $ – $ 2.4 $ 1.5 $ 0.9Amountssettledin2014. . . . . . . . . . . . . . . . . (0.9) – (0.4) – (1.3) (0.4) (0.9) ReservebalanceatJanuary31,2015 . . . . . . . . . . $ 0.1 $ – $ 1.0 $ – $ 1.1 $ 1.1 $ – Amountssettledin2015. . . . . . . . . . . . . . . . . (0.1) – (0.3) – (0.4) (0.4) – reserve balance at January 31, 2015. . . . . . . . . . $ – $ – $ 0.7 $ – $ 0.7 $ 0.7 $ –

sale of sourcing and supply chain assetsOnApril30,2013,theCompanyenteredintoanagreementtosellcertainofitssupplychainandsourcingassets(“SaleAgreement”)for$9.0million,including$1.5millionincashanda$7.5millionpromissorynote,subjecttoworkingcapitaladjustments.Thesaleclosedduringthesecondquarterof2013.Inanticipationofthistransaction,theCompanyrecognizedanimpairmentchargeinthefirstquarterof2013of$4.7million($4.7millionaftertax,or$0.11perdilutedshare)toadjusttheassetstotheirestimatedfairvalue.Thepromissorynoterequiredinstallmentsovertwoyearsandaccruedinterestat5%.Inaccordancewiththetermsofthepromissorynote,thefinalprincipalpaymentwasreceivedduringthethirdquarterof2015.

Organizational changeDuring2014,theCompanyincurredcostsof$1.9million($1.2milliononanafter-taxbasis,or$0.03perdilutedshare)relatedtoamanagementchangeatthecorporateheadquarters,withnocorrespondingchargesin2015or2013. Thesecostswererecognizedasrestructuringandotherspecialcharges,netandincludedintheOthercategory.


Disposition of shoes.comAsfurtherdiscussedinNote2totheconsolidatedfinancialstatements,inresponsetothesaleofShoes.com,theCompanyincurredrestructuringandotherspecialchargesof$1.5millionin2014.Therestructuringreserveof$1.5millionasofJanuary31,2015wasincludedinemployeecompensationandbenefitsontheconsolidatedbalancesheets,withnocorrespondingreserveasofJanuary30,2016.

5. RETIREMENT AND OTHER BENEFIT PLANS

TheCompanysponsorspensionplansinboththeUnitedStatesandCanada.TheCompany’sdomesticpensionplanscoversubstantiallyallUnitedStatesemployees.Underthedomesticplans,salaried,managementandcertainhourlyemployees’pensionbenefitsarebasedonatwo-rateformulaappliedtoeachyearofservice.ParticipantsreceivethelargeroftheaccruedbenefitasofDecember31,2015(basedonservicecommencingatthedateofhireanda35-yearservicecapandanaverageannualsalaryforthefivehighestconsecutiveyearsduringthelast10yearperiod)andthebenefitcalculatedunderthecurrentplanprovisionsusingpayandservicefromthedateofhire.Generally,underthecurrentplanprovisions,aparticipantreceivescreditforoneyearofserviceforeach365daysofemploymentasaneligibleemployeewiththeCompanycommencingaftertheemployee’sdateofparticipationintheplan,upto30years.Aservicecreditof0.825%isappliedtothatportionoftheaverageannualsalaryforthelast10yearsthatdoesnotexceed“coveredcompensation,”whichisthe35-yearaveragecompensationsubjecttoFICAtaxbasedonaparticipant’syearofbirth,andaservicecreditof1.425%isappliedtothatportionoftheaveragesalaryduringthose10yearsthatexceedssaidlevel.

TheCompany’sCanadianpensionplanscovercertainemployeesbasedonplanspecifications.UndertheCanadianplans,employees’pensionbenefitsarebasedontheemployee’shighestconsecutivefiveyearsofcompensationduringthe10yearsbeforeretirement.TheCompany’sfundingpolicyforallplansistomaketheminimumannualcontributionsrequiredbyapplicableregulations.TheCompanyalsomaintainsanunfundedSupplementalExecutiveRetirementPlan(“SERP”).

Inadditiontoprovidingpensionbenefits,theCompanysponsorsunfundeddefinedbenefitpostretirementlifeinsuranceplansthatcoverbothsalariedandhourlyemployeeswhobecameeligibleforbenefitsbyJanuary1,1995.Thelifeinsuranceplansprovidecoverageofupto$20thousanddollarsforqualifyingretiredemployees.

Benefit ObligationsThefollowingtablesetsforthchangesinbenefitobligations,includingalldomesticandCanadianplans:

PensionBenefits OtherPostretirementBenefits($ thousands) 2015 2014 2015 2014 Benefitobligationatbeginningofyear . . . . . . . . . . . . . . . . . . . $ 362,340 $279,964 $ 1,512 $1,119Servicecost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,639 9,650 – –Interestcost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,321 14,230 56 49 Planparticipants’contribution . . . . . . . . . . . . . . . . . . . . . . . . 11 12 9 4 Planamendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 (11,671) – –Actuarial(gain)loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (49,318) 83,105 (31) 483 Benefitspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,490) (11,814) (135) (143)Curtailments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (120) – – –Foreignexchangeratechanges . . . . . . . . . . . . . . . . . . . . . . . . (397) (1,136) – –Benefitobligationatendofyear . . . . . . . . . . . . . . . . . . . . . . . $ 326,077 $362,340 $ 1,411 $1,512

TheaccumulatedbenefitobligationfortheUnitedStatespensionplanswas$311.6millionand$342.6millionasofJanuary30,2016andJanuary31,2015,respectively.TheaccumulatedbenefitobligationfortheCanadianpensionplanswas$3.5millionand$4.3millionasofJanuary30,2016andJanuary31,2015,respectively.

PensionBenefits OtherPostretirementBenefitsWeighted-averageassumptionsusedtodeterminebenefitobligations, endofyear 2015 2014 2015 2014 Discountrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.70% 3.90% 4.70% 3.90%Rateofcompensationincrease . . . . . . . . . . . . . . . . . . . . . . . . 3.00% 3.00% N/a N/A

AsofJanuary30,2016,theCompanyisusingtheRP-2014BottomQuartiletables,projectedusinggenerationalscaleMP-2015,anupdatedprojectionscaleissuedbytheSocietyofActuariesin2015,toestimatetheactuarialgainorloss.Actuarialgains,relatedtothechangeinmortalitytables,reducedtheprojectedbenefitobligationbyapproximately$7.9millionasofJanuary30,2016.

During2014,theCompanyannouncedamendmentstothedomesticqualifiedpensionplanandtheSERP,includingcertainchangestoeligibilityandserviceperiodrequirementsaswellaschangestothebenefitformula,including


thecalculationofparticipants’finalaveragecompensation.CertainchangesbecameeffectiveinJanuary2015, whileotherchangesbecameeffectiveinJanuary2016.Theseplanamendmentsincreasedthepensionliabilityby$0.1millionasofJanuary30,2016anddecreasedthepensionliabilityby$11.7millionasofJanuary31,2015.

Plan assetsPensionassetsaremanagedinaccordancewiththeprudentinvestorstandardsoftheEmployeeRetirementIncomeSecurityAct(“ERISA”).Theplan’sinvestmentobjectiveistoearnacompetitivetotalreturnonassets,whilealsoensuringplanassetsareadequatelymanagedtoprovideforfuturepensionobligations.Thisresultsintheprotectionofplansurplusandisaccomplishedbymatchingthedurationoftheprojectedbenefitobligationusingleveragedfixedincomeinstrumentsand,whilemaintaininganequitycommitment,managinganequityoverlaystrategy.Theoverlaystrategyisintendedtoprotectthemanagedequityportfoliosagainstadversestockmarketenvironments.TheCompanydelegatesinvestmentmanagementoftheplanassetstospecialistsineachassetclassandregularlymonitorsmanagerperformanceandcompliancewithinvestmentguidelines.TheCompany’soverallinvestmentstrategyistoachieveamixofapproximately97%ofinvestmentsforlong-termgrowthand3%fornear-termbenefitpaymentswithawidediversificationofassettypes,fundstrategiesandfundmanagers.Thetargetallocationsforplanassetsfor2015were70%equitiesand30%debtsecurities.Allocationsmaychangeperiodicallybaseduponchangingmarketconditions.EquitiesdidnotincludeanyCompanystockatJanuary30,2016orJanuary31,2015.

AssetsoftheCanadianpensionplans,whichtotalapproximately$4.0millionatJanuary30,2016,wereinvested61%inequityfunds,36%inbondfundsand3%inmoneymarketfunds.TheCanadianpensionplansdidnotincludeanyCompanystockasofJanuary30,2016orJanuary31,2015.

Afinancialinstrument’slevelwithinthevaluationhierarchyisbaseduponthelowestlevelofinputthatissignificanttothefairvaluemeasurement.RefertofurtherdiscussiononthefairvaluehierarchyinNote13totheconsolidatedfinancialstatements.Followingisadescriptionofthepensionplaninvestmentsmeasuredatfairvalue,includingthegeneralclassificationofsuchinvestmentspursuanttothevaluationhierarchy.

• Cashandcashequivalentsincludecashcollateralandmarginaswellasmoneymarketfunds.ThefairvaluesarebasedonunadjustedquotedmarketpricesinactivemarketswithsufficientvolumeandfrequencyandthereforeareclassifiedwithinLevel1ofthefairvaluehierarchy.

• Investmentsincorporatestocks–common,U.S.governmentsecurities,mutualfunds,preferredsecurities,realestateinvestmenttrustsandS&P500Indexputandcalloptions(tradedonsecurityexchanges)areclassifiedwithinLevel1ofthefairvaluehierarchybecausethefairvaluesarebasedonunadjustedquotedmarketpricesinactivemarketswithsufficientvolumeandfrequency.

• Interestrateswapagreementsarevaluedatfairvaluebasedonvendor-quotedpricingforwhichinputsareobservableandcanbecorroborated;therefore,theseareclassifiedwithinLevel2ofthefairvaluehierarchy.

• Thealternativeinvestmentfund,withafairvalueof$10.9millionand$10.7millionasofJanuary30,2016andJanuary31,2015,respectively,isaninvestmentinapooloflong-durationdomesticinvestmentgradeassets.Thisinvestmentisvaluedatfairvaluebasedonvendor-quotedpricingforwhichinputsareobservableandcanbecorroboratedandtherefore,areclassifiedwithinLevel2ofthefairvaluehierarchy.

• Theunallocatedinsurancecontractisvaluedatcontractvalue,whichapproximatesfairvalue;therefore,thiscontractisclassifiedwithinLevel3ofthefairvaluehierarchy.Theunallocatedinsurancecontractfairvaluewas$0.1millionasofbothJanuary30,2016andJanuary31,2015.

ThefairvaluesoftheCompany’spensionplanassetsatJanuary30,2016byassetcategoryareasfollows:

Fair Value Measurements at January 30, 2016 ($ thousands) Total level 1 level 2 level 3 asset Cashandcashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,881 $ 42,881 $ – $ – U.S.governmentsecurities . . . . . . . . . . . . . . . . . . . . . . . . . 129,846 129,846 – – Mutualfund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,662 27,662 – – Corporatestocks–common . . . . . . . . . . . . . . . . . . . . . . . . 171,898 171,898 – – Preferredsecurities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 657 – – S&P500Indexoptions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,742 1,742 – – Interest rate swap agreements . . . . . . . . . . . . . . . . . . . . . . . (6,028) – (6,028) – Alternativeinvestmentfund . . . . . . . . . . . . . . . . . . . . . . . . 10,901 – 10,901 – Unallocatedinsurancecontract . . . . . . . . . . . . . . . . . . . . . . 79 – – 79Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 379,638 $ 374,686 $ 4,873 $ 79


ThefairvaluesoftheCompany’spensionplanassetsatJanuary31,2015byassetcategoryareasfollows: FairValueMeasurementsatJanuary31,2015 ($ thousands) Total Level1 Level2 Level3 asset Cashandcashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,560 $ 95,560 $ – $ – U.S.governmentsecurities . . . . . . . . . . . . . . . . . . . . . . . . . 84,141 84,141 – – Mutualfund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,240 29,240 – – Corporatestocks–common . . . . . . . . . . . . . . . . . . . . . . . . 184,486 184,486 – – S&P500Indexoptions . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,731 11,731 – – Preferredsecurities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 286 – – Interest rate swap agreements . . . . . . . . . . . . . . . . . . . . . . . 7,268 – 7,268 – Alternativeinvestmentfund . . . . . . . . . . . . . . . . . . . . . . . . 10,733 – 10,733 – Unallocatedinsurancecontract . . . . . . . . . . . . . . . . . . . . . . 89 – – 89 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $423,534 $405,444 $18,001 $89

Thefollowingtablesetsforthchangesinthefairvalueofplanassets,includingalldomesticandCanadianplans: PensionBenefits OtherPostretirementBenefits($ thousands) 2015 2014 2015 2014 Fairvalueofplanassetsatbeginningofyear. . . . . . . . . . . . . . . . $ 423,534 $356,320 $ – $ – Actualreturnonplanassets . . . . . . . . . . . . . . . . . . . . . . . . . (30,091) 79,986 – – Employercontributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 206 126 139 Planparticipants’contributions . . . . . . . . . . . . . . . . . . . . . . . 11 12 9 4 Benefitspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,490) (11,814) (135) (143)Foreignexchangeratechanges . . . . . . . . . . . . . . . . . . . . . . . . (416) (1,176) – – Fairvalueofplanassetsatendofyear . . . . . . . . . . . . . . . . . . . $ 379,638 $423,534 $ – $ –

Funded statusTheover-fundedstatusasofJanuary30,2016andJanuary31,2015forpensionbenefitswas$53.6millionand $61.2million,respectively.Theunder-fundedstatusasofJanuary30,2016andJanuary31,2015forotherpostretirementbenefitswas$1.4millionand$1.5million,respectively.Amountsrecognizedintheconsolidatedbalancesheetsconsistof: PensionBenefits OtherPostretirementBenefits($ thousands) 2015 2014 2015 2014 Prepaidpensioncosts(noncurrentassets) . . . . . . . . . . . . . . . . . $ 64,890 $73,324 $ – $ – Accruedbenefitliabilities(currentliability) . . . . . . . . . . . . . . . . (3,512) (2,675) (141) (142)Accruedbenefitliabilities(noncurrentliability) . . . . . . . . . . . . . . (7,817) (9,455) (1,270) (1,370) Netamountrecognizedatendofyear. . . . . . . . . . . . . . . . . . . . $ 53,561 $61,194 $ (1,411) $(1,512)

Theprojectedbenefitobligation,theaccumulatedbenefitobligationandthefairvalueofplanassetsforpensionplanswithaprojectedbenefitobligationinexcessofplanassetsandforpensionplanswithanaccumulatedbenefitobligationinexcessofplanassets,whichincludesonlytheCompany’sSERP,wereasfollows: ProjectedBenefit AccumulatedBenefit ObligationExceeds ObligationExceeds theFairValueofPlanAssets theFairValueofPlanAssets ($ thousands) 2015 2014 2015 2014 end of YearProjectedbenefitobligation . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,326 $12,130 $ 11,326 $12,130Accumulatedbenefitobligation . . . . . . . . . . . . . . . . . . . . . . . . 10,747 10,770 10,747 10,770 Fairvalueofplanassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – –

TheaccumulatedpostretirementbenefitobligationexceedsassetsforalloftheCompany’sotherpostretirementbenefitplans.Theamountsinaccumulatedothercomprehensive(loss)incomethathavenotyetbeenrecognizedascomponentsofnetperiodicbenefit(income)costatJanuary30,2016andJanuary31,2015,andtheexpectedamortizationoftheJanuary30,2016amountsascomponentsofnetperiodicbenefit(income)costforfiscalyear2016areasfollows: PensionBenefits OtherPostretirementBenefits($ thousands) 2015 2014 2015 2014 components of accumulated other comprehensive (loss) income, net of tax:Netactuarialloss(gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,976 $ 4,872 $ (947) $(1,068)Netpriorservice(credit)cost . . . . . . . . . . . . . . . . . . . . . . . . . . (5,673) (7,037) – – $ 6,303 $(2,165) $ (947) $(1,068)

PensionBenefits OtherPostretirementBenefits($ thousands) 2016 2016 expected amortization, net of tax: Amortizationofnetactuarialloss(gain) . . . . . . . . . . . . . . . . . $ 590 $(217) Amortizationofnetpriorservicecost . . . . . . . . . . . . . . . . . . (2,090) – $(1,500) $(217)


Net Periodic Benefit (Income) CostNetperiodicbenefit(income)costfor2015,2014and2013foralldomesticandCanadianplansincludedthefollowingcomponents: PensionBenefits OtherPostretirementBenefits($ thousands) 2015 2014 2013 2015 2014 2013 Servicecost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,639 $ 9,650 $ 10,638 $ – $ – $ –Interestcost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,321 14,230 13,241 56 49 55 Expectedreturnonassets . . . . . . . . . . . . . . . . . . . . . (31,682) (24,757) (24,773) – – –

Amortizationof: Actuarialloss(gain) . . . . . . . . . . . . . . . . . . . . . . 604 201 954 (220) (432) (351) Priorservice(credit)cost . . . . . . . . . . . . . . . . . . . (1,906) 27 13 – – –Curtailments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (184) – – – – –Totalnetperiodicbenefit(income)cost . . . . . . . . . . . . . $ (6,208) $ (649) $ 73 $ (164) $(383) $(296)

Weighted-averageassumptionsusedtodeterminenetperiodicbenefit(income)cost: PensionBenefits OtherPostretirementBenefits 2015 2014 2013 2015 2014 2013 Discountrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.90% 5.00% 4.50% 3.90% 5.00% 4.50%Rateofcompensationincrease . . . . . . . . . . . . . . . . . . 3.00% 3.00% 3.50% N/a N/A N/AExpectedreturnonplanassets . . . . . . . . . . . . . . . . . . 8.25% 8.25% 8.25% N/a N/A N/A

Thenetactuarialloss(gain)subjecttoamortizationisamortizedonastraight-linebasisovertheaveragefutureserviceofactiveplanparticipantsasofthemeasurementdate.Thepriorservice(credit)costisamortizedonastraight-linebasisovertheaveragefutureserviceofactiveplanparticipantsbenefitingundertheplanatthetimeofeachplanamendment.

Theexpectedlong-termrateofreturnonplanassetsisbasedonhistoricalandprojectedratesofreturnforcurrentandplannedassetclassesintheplan’sinvestmentportfolio.Assumedprojectedratesofreturnforeachassetclasswereselectedafteranalyzingexperienceandfutureexpectationsofthereturns.Theoverallexpectedrateofreturnfortheportfoliowasdevelopedbasedonthetargetallocationforeachassetclass.

expected cash FlowsInformationaboutexpectedcashflowsforallpensionandpostretirementbenefitplansfollows: PensionBenefits other Postretirement ($ thousands) FundedPlans SERP Total Benefitsemployer contributions 2016expectedcontributionstoplantrusts . . . . . . . . . . . . . . . . . . $ 101 $ – $ 101 $ – 2016expectedcontributionstoplanparticipants . . . . . . . . . . . . . . – 3,510 3,510 141Expected Benefit Payments 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,440 $3,510 $14,950 $141 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,207 1,174 13,381 132 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,995 1,778 14,773 123 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,744 945 14,689 114 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,461 2,211 16,672 106 2021–2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,154 2,276 83,430 404

Defined Contribution PlansTheCompany’sdomesticdefinedcontribution401(k)plancoverssalariedandcertainhourlyemployees.Companycontributionsrepresentapartialmatchingofemployeecontributions,generallyuptoamaximumof3.5%oftheemployee’ssalaryandbonus.TheCompany’sexpenseforthisplanwas$3.6millionin2015,$3.0millionin2014,and$3.4millionin2013.

TheCompany’sCanadiandefinedcontributionplancoverscertainsalariedandhourlyemployees.TheCompanymakescontributionsforalleligibleemployees,rangingfrom3%to5%oftheemployee’ssalary.Inaddition,eligibleemployeesmayvoluntarilycontributetotheplan.TheCompany’sexpenseforthisplanwas$0.2millionin2015,2014and2013.

Deferred compensation PlanTheCompanyhasanon-qualifieddeferredcompensationplan(the“DeferredCompensationPlan”)forthebenefitofcertainmanagementemployees.TheinvestmentfundsofferedtotheparticipantsgenerallycorrespondtothefundsofferedintheCompany’s401(k)planandtheaccountbalancefluctuateswiththeinvestmentreturnsonthosefunds.TheDeferredCompensationPlanpermitsthedeferralofupto50%ofbasesalaryand100%ofcompensationreceivedundertheCompany’sannualincentiveplan.Thedeferralsareheldinaseparatetrust,whichhasbeenestablishedby


theCompanytoadministertheDeferredCompensationPlan.TheassetsofthetrustaresubjecttotheclaimsoftheCompany’screditorsintheeventthattheCompanybecomesinsolvent.Consequently,thetrustqualifiesasagrantortrustforincometaxpurposes(i.e.,a“RabbiTrust”).TheliabilitiesoftheDeferredCompensationPlanof$3.4millionand$2.9millionasofJanuary30,2016andJanuary31,2015,respectively,arepresentedinemployeecompensationandbenefitsintheaccompanyingconsolidatedbalancesheets.Theassetsheldbythetrustof$3.4millionasofJanuary30,2016and$2.9millionasofJanuary31,2015areclassifiedastradingsecuritieswithinprepaidexpensesandothercurrentassetsintheaccompanyingconsolidatedbalancesheets,withchangesinthedeferredcompensationchargedtosellingandadministrativeexpensesintheaccompanyingconsolidatedstatementsofearnings.

Deferred compensation Plan for Non-employee Directors Non-employeedirectorsareeligibletoparticipateinadeferredcompensationplan,wherebydeferredcompensationamountsarevaluedasifinvestedintheCompany’scommonstockthroughtheuseofphantomstockunits(“PSUs”).Undertheplan,eachparticipatingdirector’saccountiscreditedwiththenumberofPSUsequaltothenumberofsharesoftheCompany’scommonstockthattheparticipantcouldpurchaseorreceivewiththeamountofthedeferredcompensation,baseduponthefairvalue(asdeterminedbasedontheaverageofthehighandlowprices)oftheCompany’scommonstockonthelasttradingdayofthefiscalquarterwhenthecashcompensationwasearned.DividendequivalentsarepaidonPSUsatthesamerateasdividendsontheCompany’scommonstockandarere-investedinadditionalPSUsatthenextfiscalquarter-end.ThePSUsarepayableincashbasedonthenumberofPSUscreditedtotheparticipatingdirector’saccount,valuedonthebasisofthefairvalueatfiscalquarter-endonorfollowingterminationofthedirector’sservice.Theliabilitiesoftheplanof$1.7millionasofJanuary30,2016and$2.1millionasofJanuary31,2015arebasedon56,629and67,488outstandingPSUs,respectively,andarepresentedinotherliabilitiesintheaccompanyingconsolidatedbalancesheets.GainsandlossesresultingfromchangesinthefairvalueofthePSUsarechargedtosellingandadministrativeexpensesintheaccompanyingconsolidatedstatementsofearnings.

6. INCOME TAXES

Thecomponentsofearningsbeforeincometaxesfromcontinuingoperationsconsistedofdomesticearningsbeforeincometaxesfromcontinuingoperationsof$68.2million,$70.8millionand$40.9millionin2015,2014and2013,respectively,andforeignearningsbeforeincometaxesfromcontinuingoperationsof$40.6million,$39.3millionand$36.8millionin2015,2014and2013,respectively.Inadditiontotheincometaxexpenseassociatedwithcontinuingoperations,wealsorecordedincometaxbenefitsassociatedwiththelossfromdiscontinuedoperationsof$5.9millionin2013.

Thecomponentsofincometaxprovision(benefit)onearningsfromcontinuingoperationswereasfollows:

($ thousands) 2015 2014 2013 Federal Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,530 $27,311 $14,621 Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,202 (9,502) 260 20,732 17,809 14,881state Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497 5,501 5,770 Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,176 (642) (1,210) 1,673 4,859 4,560

Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,537 4,516 4,317 Totalincometaxprovision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,942 $27,184 $23,758

TheCompanymadefederal,stateandforeigntaxpayments,netofrefunds,of$22.1million,$20.1millionand$5.0millionin2015,2014and2013,respectively.Thedifferencesbetweentheincometaxprovisionreflectedintheconsolidatedfinancialstatementsandtheamountscalculatedatthefederalstatutoryincometaxrateof35%wereasfollows:

($ thousands) 2015 2014 2013

Incometaxesatstatutoryrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,068 $38,544 $27,208Stateincometaxes,netoffederaltaxbenefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,481 3,159 2,964Foreignearningstaxedatlowerrates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,491) (8,882) (8,090)Non-deductibilityofimpairmentofassetsheldforsale. . . . . . . . . . . . . . . . . . . . . . . – – 1,631Taxoninternationalsubsidiarydividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 1,040 –DisposalandsettlementofShoes.com. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,701) (7,428) –Valuationallowancereleaseonstatelosscarryforwards . . . . . . . . . . . . . . . . . . . . . . (1,635) – –Valuationallowancereleaseonothertaxcarryforwards . . . . . . . . . . . . . . . . . . . . . . (1,367) – –other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 587 751 45 Totalincometaxprovision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,942 $27,184 $23,758


In2015,theCompany’seffectivetaxratewasimpactedbyseveraldiscretetaxbenefitswhichtotaled$5.1millionfortheyear.Thesediscretetaxbenefitsprimarilyreflectedtheutilizationofoperatingloss,capitallossandothercarryforwardsthatwerepreviouslynotanticipatedtobeutilizedandwerethereforefullyreservedontheconsolidatedbalancesheet.AportionofthesecarryforwardsbecameutilizableuponconversionoftheCompany’sprimaryretailentitytoanLLCearlyin2015.Inaddition,certainadditionaltaxcarryforwardswereabletobeutilizeduponsettlementofnegotiationsrelatedtothetaxattributesassociatedwiththesaleofourShoes.comsubsidiary.Ifthesediscretetaxbenefitshadnotbeenrecognized,theCompany’sfullfiscalyear2015effectivetaxratewouldhavebeen29.5%,whichis1.1%lowerthan2014,drivenbyalowerstatetaxrateandahighermixofearningsininternationaljurisdictions.

Theothercategoryofincometaxprovisionprincipallyrepresentstheimpactofexpensesthatarenotdeductibleorpartiallydeductibleforfederalincometaxpurposesandadjustmentsintheamountsofdeferredtaxassetsthatareanticipatedtoberealized.

SignificantcomponentsoftheCompany’sdeferredincometaxassetsandliabilitieswereasfollows:

($ thousands) January 30, 2016 January31,2015

Deferred Tax assetsEmployeebenefits,compensationandinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,740 $ 26,430Accruedexpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,118 16,539Postretirementandpostemploymentbenefitplans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721 862Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,269 6,285Accountsreceivablereserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,946 7,563Netoperatingloss(“NOL”)carryforward/carryback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,943 9,483 Capitallosscarryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,368 5,188 Foreigntaxcreditcarryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 1,098Inventorycapitalizationandinventoryreserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,620 1,683Intangibleassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 4,865Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 3,957 other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,346 1,907 Totaldeferredtaxassets,beforevaluationallowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,701 85,860Valuationallowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,544) (11,514) Totaldeferredtaxassets,netofvaluationallowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,157 74,346

Deferred Tax liabilitiesRetirementplans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,051) (23,822)LIFOinventoryvaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61,585) (56,525)Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,525) (12,721)other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (786) (1,118)Intangibleassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (631) –Totaldeferredtaxliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94,578) (94,186)Netdeferredtaxliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (30,421) $(19,840)

AsofJanuary30,2016,theCompanyhadvariousstatenetoperatinglosscarryforwardswithtaxvaluestotaling $7.8million.Avaluationallowanceof$3.0millionhasbeenestablishedrelatedtotheseoperatinglosscarryforwards.Theremainingnetoperatinglosswillbecarriedforwardtofuturetaxyears.TheCompanyalsohasvaluationallowancesof$2.4millionrelatedtocapitallosscarryforwardsand$1.1millionrelatedtoshare-basedcompensation.

AsofJanuary30,2016,nodeferredtaxeshavebeenprovidedontheaccumulatedunremittedearningsoftheCompany’sforeignsubsidiariesthatarenotsubjecttoUnitedStatesincometax.TheCompanyperiodicallyevaluatesitsforeigninvestmentopportunitiesandplans,aswellasitsforeignworkingcapitalneeds,todeterminethelevelofinvestmentrequiredand,accordingly,determinethelevelofforeignearningsthatisconsideredindefinitelyreinvested.Baseduponthatevaluation,earningsoftheCompany’sforeignsubsidiariesthatarenototherwisesubjecttoUnitedStatestaxation,exceptfortheCompany’sCanadiansubsidiary,areconsideredtobeindefinitelyreinvested,andaccordingly,deferredtaxeshavenotbeenprovided.Ifchangesoccurinfutureinvestmentopportunitiesandplans,thosechangeswillbereflectedwhenknownandmayresultinprovidingresidualUnitedStatesdeferredtaxesonunremittedforeignearnings.IftheCompany’sunremittedforeignearningswerenotconsideredindefinitelyreinvestedasofJanuary30,2016additionaldeferredtaxesofapproximately$43.8millionwouldhavebeenprovided.


Uncertain Tax PositionsASC 740, Income Taxes,establishesasinglemodeltoaddressaccountingforuncertaintaxpositions.Thestandardclarifiestheaccountingforincometaxesbyprescribingaminimumrecognitionthresholdataxpositionisrequiredtomeetbeforebeingrecognizedinthefinancialstatements.Thestandardalsoprovidesguidanceonderecognition,measurementclassification,interestandpenalties,accountingininterimperiods,disclosureandtransition.

Areconciliationofthebeginningandendingamountofunrecognizedtaxbenefitsisasfollows:($ thousands)

BalanceatFebruary2,2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,149

Reductionsfortaxpositionsofprioryearsduetoalapseinthestatuteoflimitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . (134) BalanceatFebruary1,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,015

Reductionsfortaxpositionsofprioryearsduetoalapseinthestatuteoflimitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . –BalanceatJanuary31,2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,015

Amountssettledandutilizedforcurrenttaxobligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (636)Reductionsfortaxpositionsofprioryears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (379) Balance at January 30, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ –

Iftheunrecognizedtaxbenefitsweretoberecognizedinfull,thenetamountthatwouldbereflectedintheincometaxprovisioninprioryears,therebyimpactingtheeffectivetaxrate,wouldhavebeen$1.1millionatJanuary31,2015andFebruary1,2014.

Estimatedinterestrelatedtotheunderpaymentofincometaxeswasclassifiedasacomponentoftheincometaxprovisionintheconsolidatedstatementsofearningsandwasinsignificantin2015,2014and2013.

Forfederalpurposes,theCompany’staxyears2011to2013(fiscalyearsendingJanuary28,2012,February2,2013andFebruary1,2014)remainopentoexamination.TheCompanyalsofilestaxreturnsinvariousforeignjurisdictionsandnumerousstatesforwhichvarioustaxyearsaresubjecttoexamination.TheCompanydoesnotexpectanysignificantchangestoitsliabilityforunrecognizedtaxbenefitsduringthenext12months.

7. BUSINESS SEGMENT INFORMATION

TheCompany’sreportablesegmentsareFamousFootwearandBrandPortfolio.

TheFamousFootwearsegmentiscomprisedofFamousFootwearandFamous.com.Inaddition,Shoes.comwasincludedthroughDecember12,2014(thedateofsale).FamousFootwearoperated1,046storesattheendof2015,primarilysellingbrandedfootwearfortheentirefamily.

TheBrandPortfoliosegmentiscomprisedofourbrandedfootwear,ourbrandedretailstoresande-commercesitesassociatedwiththosebrands.Thissegmentsourcesandmarketslicensed,brandedandprivate-labelfootwearprimarilytonationalchains,departmentstores,onlineretailers,massmerchandisers,independentretailersandcatalogsaswellasCompany-ownedFamousFootwear,NaturalizerandSamEdelmanstores,ande-commercebusinesses.TheBrandPortfoliosegmentincluded80brandedretailstoresintheUnitedStatesand85brandedretailstoresinCanadaattheendof2015,sellingprimarilyNaturalizerbrandfootwear.

TheCompany’sFamousFootwearandBrandPortfolioreportablesegmentsareoperatingunitsthataremanagedseparately.Anoperatingsegment’sperformanceisevaluatedandresourcesareallocatedbasedprimarilyonoperatingearnings(loss).Operatingearnings(loss)representgrossprofit,lesssellingandadministrativeexpenses,restructuringandotherspecialcharges,netandimpairmentofassetsheldforsale.TheaccountingpoliciesofthereportablesegmentsarethesameasthosedescribedinNote1totheconsolidatedfinancialstatements.Intersegmentsalesaregenerallyrecordedataprofittothesellingsegment.Allintersegmentearningsrelatedtoinventoryonhandatthepurchasingsegmentareeliminatedagainsttheearningsofthesellingsegment.

Corporateassets,administrativeexpenses,andothercostsandrecoveriesthatarenotallocatedtotheoperatingunitsarereportedintheOthercategory.


Followingisasummaryofcertainkeyfinancialmeasuresfortherespectiveperiods.Externalsales,intersegmentsalesandoperatingearnings(loss)excludediscontinuedoperations.Segmentassets,depreciationandamortization,amortizationofdebtissuancecostsanddebtdiscount,purchasesofpropertyandequipmentandcapitalizedsoftwareincludebothcontinuingoperationsanddiscontinuedoperations.($ thousands) FamousFootwear BrandPortfolio Other TotalFiscal 2015Externalsales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,572,665 $ 1,004,765 $ – $ 2,577,430 Intersegmentsales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 100,186 – 100,186 Depreciationandamortization . . . . . . . . . . . . . . . . . . . . . . . . . 25,842 9,339 16,258 51,439 Amortizationofdebtissuancecostsanddebtdiscount . . . . . . . . . . . – – 1,167 1,167 Operatingearnings(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,030 66,578 (40,501) 135,107 Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542,842 534,137 226,344 1,303,323 Purchasesofpropertyandequipment. . . . . . . . . . . . . . . . . . . . . 48,761 18,340 6,378 73,479 Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,538 – 5,197 7,735

Fiscal 2014Externalsales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,589,258 $ 982,451 $ – $2,571,709Intersegmentsales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 114,408 – 114,408Depreciationandamortization . . . . . . . . . . . . . . . . . . . . . . . . . 26,581 8,974 16,060 51,615Amortizationofdebtissuancecostsanddebtdiscount . . . . . . . . . . . – – 2,400 2,400Operatingearnings(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,581 73,403 (52,050) 125,934Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458,847 518,099 237,381 1,214,327Purchasesofpropertyandequipment. . . . . . . . . . . . . . . . . . . . . 33,001 6,105 5,846 44,952Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 58 4,830 5,086

Fiscal 2013Externalsales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,588,552 $ 924,561 $ – $ 2,513,113Intersegmentsales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 132,596 – 132,596Depreciationandamortization . . . . . . . . . . . . . . . . . . . . . . . . . 25,917 13,440 15,972 55,329 Amortizationofdebtissuancecostsanddebtdiscount . . . . . . . . . . . – – 2,513 2,513Operatingearnings(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,382 39,909 (46,674) 98,617Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448,549 514,902 182,889 1,146,340Purchasesofpropertyandequipment. . . . . . . . . . . . . . . . . . . . . 32,728 6,026 5,214 43,968 Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 122 4,920 5,235

Followingisareconciliationofoperatingearningstoearningsbeforeincometaxesfromcontinuingoperations:($ thousands) 2015 2014 2013 operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 135,107 $125,934 $ 98,617Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,589) (20,445) (21,254)Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,651) (420) –Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899 379 377 Gainonsaleofsubsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 4,679 –Earningsbeforeincometaxesfromcontinuingoperations . . . . . . . . . . . . . . . . . . . . . $ 108,766 $110,127 $ 77,740

Forgeographicpurposes,thedomesticoperationsincludethewholesaledistributionoflicensed,brandedandprivate-labelfootweartoavarietyofretailcustomers,includingtheCompany’sFamousFootwearandBrandPortfoliostoresande-commercebusinesses,aswellastheCompany’sdomesticretailoperations.TheCompany’sforeignoperationsprimarilyconsistofwholesaleandretailoperationsintheFarEastandCanada.TheFarEastoperationsincludefirst-costtransactions,wherefootwearissoldatforeignportstocustomerswhothenimportthefootwearintotheUnitedStatesandothercountries.AsummaryoftheCompany’snetsalesandlong-livedassetsbygeographicareawereasfollows:($ thousands) 2015 2014 2013

Net salesUnited States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,342,590 $2,318,530 $2,258,605far East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,654 194,296 193,725Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,186 58,883 60,783Totalnetsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,577,430 $2,571,709 $2,513,113

long-lived assetsUnited States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 417,198 $ 412,822 $ 344,413Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,596 8,773 7,159far East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,193 2,336 2,454LatinAmerica,Europeandother . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 248 236Totallong-livedassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 428,258 $ 424,179 $ 354,262 Long-livedassetsconsistedprimarilyofpropertyandequipment,intangibleassets,prepaidpensioncosts,goodwillandothernoncurrentassets.


8. PROPERTY AND EQUIPMENT

Propertyandequipmentconsistedofthefollowing:($ thousands) January 30, 2016 January31,2015

Landandbuildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,300 $ 40,078Leaseholdimprovements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,960 183,466Technologyequipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,575 53,406Machineryandequipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,805 35,988 Furnitureandfixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,186 117,254 Constructioninprogress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,924 8,504 Propertyandequipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475,750 438,696Allowancesfordepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (296,740) (288,953) Propertyandequipment,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 179,010 $ 149,743

Usefullivesofpropertyandequipmentareasfollows: Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-30yearsLeaseholdimprovements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-20yearsTechnologyequipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10yearsMachineryandequipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-20yearsFurnitureandfixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10years

TheCompanyrecordedchargesforimpairment,primarilyforleaseholdimprovementsandfurnitureandfixturesintheCompany’sretailstores,of$2.8million,$2.0millionand$1.6millionin2015,2014and2013,respectively.Alloftheimpairmentchargesin2015,2014and2013areincludedinsellingandadministrativeexpenses.Fairvaluewasbasedonestimatedfuturecashflowstobegeneratedbyretailstores,discountedatamarketrateofinterest.

Interestcostsformajorassetadditionsarecapitalizedduringtheconstructionordevelopmentperiodandamortizedoverthelivesoftherelatedassets.In2015,theCompanycapitalizedinterestof$0.3millionrelatedtoitsexpansionandmodernizationprojectatitsLebanon,Tennesseedistributioncenter,withnocorrespondingamountscapitalizedin2014or2013. 9. GOODWILL AND INTANGIBLE ASSETS

Goodwillandintangibleassetswereasfollows: ($ thousands) January 30, 2016 January31,2015

Intangible assetsFamousFootwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,800 $ 2,800BrandPortfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183,068 183,068Totalintangibleassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,868 185,868Accumulatedamortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (68,923) (65,235)Totalintangibleassets,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,945 120,633

GoodwillBrandPortfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,954 13,954 Totalgoodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,954 13,954 Goodwillandintangibleassets,net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 130,899 $134,587

OnFebruary3,2014,theCompanyenteredintoandsimultaneouslyclosedanAssetPurchaseAgreement(the“AssetPurchaseAgreement”),pursuanttowhichtheCompanyacquiredtheFrancoSartotrademarks.Asconsideration,theCompanypaidacashpurchasepriceof$65.0millionatthetimeofclosing.AsaresultofenteringintoandclosingtheAssetPurchaseAgreement,theCompany’slicenseagreement,grantingtheCompanytherighttosellfootwearandotherproductsusingtheFrancoSartotrademarksthrough2019,wasterminated.Thepurchasepriceof$65.0million,aswellastransactioncostsof$0.1million,arebeingamortizedoverausefullifeof40years.

InDecember2014,inconjunctionwiththedispositionofShoes.comasfurtherdescribedinNote2totheconsolidatedfinancialstatements,theCompanysoldintangibleassetsof$0.2million.TheintangibleassetswerepreviouslyincludedintheFamousFootwearsegment.

Intangibleassetsconsistprimarilyofownedandlicensedtrademarks,ofwhich$20.8millionasofJanuary30,2016andJanuary31,2015arenotsubjecttoamortization.Allremainingintangibleassetsaresubjecttoamortizationandhaveusefullivesrangingfrom15to40years.Amortizationexpenseforcontinuingoperationsrelatedtointangibleassetswas$3.7million,$4.0millionand$6.0millionin2015,2014and2013,respectively.TheCompanyestimates$3.7millionofamortizationexpenserelatedtointangibleassetsineachoftheyearsfrom2016through2020.Asaresultofitsannualimpairmenttesting,theCompanydidnotrecordanyimpairmentchargesduring2015,2014and2013relatedtointangibleassets.


Goodwillistestedforimpairmentatleastannually,ormorefrequentlyifeventsorcircumstancesindicateitmightbeimpaired,usingeitherthequalitativeassessmentorafairvalue-basedtest.If,aftercompletingthequalitativeassessment,acompanybelievesitislikelythatareportingunitisimpaired,adiscountedcashflowanalysisispreparedtoestimatefairvalue.Afairvalue-basedtestisappliedatthereportingunitlevel,whichisgenerallyatoronelevelbelowtheoperatingsegmentlevel.ThetestcomparesthefairvalueoftheCompany’sreportingunitstothecarryingvalueofthosereportingunits.Thistestrequiressignificantassumptions,estimatesandjudgmentsbymanagement,andissubjecttoinherentuncertaintiesandsubjectivity.Thefairvalueofgoodwillisdeterminedusinganestimateoffuturecashflowsofthereportingunitsandarisk-adjusteddiscountratetocomputeanetpresentvalueoffuturecashflows.Iftherecordedvaluesoftheseassetsarenotrecoverable,basedoneithertheassessmentscreenordiscountedcashflowanalysis,managementperformsthenextstep,whichcomparesthefairvalueofthereportingunittotherecordedvalueofthetangibleandintangibleassetsofthereportingunits.Goodwillisconsideredimpairedifthefairvalueofthetangibleandintangibleassetsexceedsthefairvalueofthereportingunit.TheCompanyperformedagoodwillimpairmenttestasofthefirstdayoftheCompany’sfourthfiscalquarteranddeterminedthatitwasmorelikelythannotthatthefairvalueofthereportingunitsexceededthecarryingvalue.Asaresult,theCompanywasnotrequiredtoperformthediscountedcashflowanalysis.

10. LONG-TERM AND SHORT-TERM FINANCING ARRANGEMENTS

credit agreementOnDecember18,2014,theCompanyandcertainofitssubsidiaries(the“LoanParties”)enteredintoaFourthAmendedandRestatedCreditAgreement,whichwasfurtheramendedonJuly20,2015toreleasealloftheCompany’ssubsidiariesthatwereborrowersunderorthatguaranteedtheCreditAgreementotherthanSidneyRichAssociates,Inc.andBGRetail,LLC(assoamended,the“CreditAgreement”).Aftergivingeffecttotheamendment,theCompanyistheleadborrower,andSidneyRichAssociates,Inc.andBGRetail,LLCareeachco-borrowersandguarantorsundertheCreditAgreement.TheCreditAgreementmaturesonDecember18,2019andprovidesforarevolvingcreditfacilityinanaggregateamountofupto$600.0million,subjecttothecalculatedborrowingbaserestrictions,andprovidesforanincreaseattheCompany’soptionbyupto$150.0millionfromtimetotimeduring thetermoftheCreditAgreement,subjecttosatisfactionofcertainconditionsandtheconsentofexistingornewlenderstoassumetheincrease.TheCreditAgreementamendedandrestatedtheThirdAmendedandRestated CreditAgreement,datedJanuary7,2011(the“FormerCreditAgreement”).

BorrowingavailabilityundertheCreditAgreementislimitedtothelesserofthetotalcommitmentsandtheborrowingbase(“LoanCap”),whichisbasedonstatedpercentagesofthesumofeligibleaccountsreceivable,eligibleinventoryandeligiblecreditcardreceivables,asdefined,lessapplicablereserves.UndertheCreditAgreement,theLoanParties’obligationsaresecuredbyafirst-prioritysecurityinterestinallaccountsreceivable,inventoryandcertainothercollateral.

InterestonborrowingsisatvariableratesbasedontheLondonInterbankOfferedRate(“LIBOR”)ortheprimerate,asdefinedintheCreditAgreement,plusaspread.TheinterestrateandfeesforlettersofcreditvarybaseduponthelevelofexcessavailabilityundertheCreditAgreement.Thereisanunusedlinefeepayableontheunusedportionunderthefacilityandaletterofcreditfeepayableontheoutstandingfaceamountunderlettersofcredit.

TheCreditAgreementlimitstheCompany’sabilitytocreate,incur,assumeorpermittoexistadditionalindebtednessandliens,makeinvestmentsorspecifiedpayments,giveguarantees,paydividends,makecapitalexpendituresandmergeoracquireorsellassets.Inaddition,certainadditionalcovenantswouldbetriggeredifexcessavailabilityweretofallbelowspecifiedlevels,includingfixedchargecoverageratiorequirements.Furthermore,ifexcessavailabilityfallsbelow12.5%oftheLoanCapforthreeconsecutivebusinessdaysoraneventofdefaultoccurs,thelendersmayassumedominionandcontrolovertheCompany’scash(a“cashdominionevent”)untilsucheventofdefaultiscuredorwaivedortheexcessavailabilityexceedssuchamountfor30consecutivedays,providedthatacashdominioneventshallbedeemedcontinuing(evenifaneventofdefaultisnolongercontinuingand/orexcessavailabilityexceedstherequiredamountfor30consecutivebusinessdays)afteracashdominioneventhasoccurredandbeendiscontinuedontwooccasionsinanytwelvemonthperiod.

TheCreditAgreementcontainscustomaryeventsofdefault,including,withoutlimitation,paymentdefaults,breachesofrepresentationsandwarranties,covenantdefaults,cross-defaultstoothermaterialindebtedness,certaineventsofbankruptcyandinsolvency,judgmentdefaultsinexcessofacertainthreshold,thefailureofanyguarantyorsecuritydocumentsupportingtheagreementtobeinfullforceandeffect,andachangeofcontrolevent.Inaddition,iftheexcessavailabilityfallsbelowthegreaterof(i)10.0%ofthelesseroftheLoanCapand(ii)$50.0million,andthefixedchargecoverageratioislessthan1.0to1.0,theCompanywouldbeindefaultundertheCreditAgreement.TheCreditAgreementalsocontainscertainothercovenantsandrestrictions.TheCompanywasincompliancewithallcovenantsandrestrictionsundertheCreditAgreementasofJanuary30,2016.


ThemaximumamountofborrowingsundertheCreditAgreementattheendofanymonthwas$28.0millionin2015and$74.0millionin2014.Theaveragedailyborrowingsduringtheyearwere$3.6millionin2015and$37.6millionin2014.Theweighted-averageinterestratesapproximated3.0%in2015and2.9%in2014.AtJanuary30,2016,theCompanyhadnoborrowingsoutstandingand$6.5millioninlettersofcreditoutstandingundertheCreditAgreement.Totaladditionalborrowingavailabilitywas$525.1millionatJanuary30,2016.

$200 Million senior Notes Due 2019OnMay11,2011,theCompanyclosedonanoffering(the“Offering”)of$200.0millionaggregateprincipalamountof7.125%SeniorNotesdue2019(the“2019SeniorNotes”).The2019SeniorNoteswereguaranteedonaseniorunsecuredbasisbyeachofitssubsidiariesthatwasanobligorundertheCreditAgreement,priortotheJuly20,2015amendment.Interestonthe2019SeniorNoteswaspayableonMay15andNovember15ofeachyear.The2019SeniorNoteswerescheduledtomatureonMay15,2019butwerecallableatspecifiedredemptionprices,plusaccruedandunpaidinterest.

OnJuly20,2015,theCompanycommencedacashtenderoffer(the“TenderOffer”)topurchaseanyandalloftheoutstandingaggregateprincipalamountofits2019SeniorNotes.UponexpirationoftheTenderOfferonJuly24,2015,$160.7millionaggregateprincipalamountofthe2019SeniorNoteswerevalidlytenderedattheredemptionpriceof103.950%,representingthespecifiedredemptionpriceandatenderpremium.OnAugust26,2015,theremainingoutstanding$39.3millionaggregateprincipalamountofoutstanding2019SeniorNoteswereredeemedattheredemptionpriceof103.563%.

$200 Million senior Notes Due 2023OnJuly27,2015,theCompanyissued$200.0millionaggregateprincipalamountof6.25%SeniorNotesdue2023 (the“2023SeniorNotes”)inaprivateplacement.OnOctober22,2015,theCompanycommencedanoffertoexchangeits2023SeniorNotesoutstandingforsubstantiallyidenticaldebtsecuritiesregisteredundertheSecuritiesActof1933.TheexchangeofferwascompletedonNovember23,2015anddidnotaffecttheamountoftheCompany’sindebtednessoutstanding.Thenetproceedsfromtheissuanceofthe2023SeniorNoteswereapproximately$196.3millionafterdeductingfeesandexpensesassociatedwiththeoffering.TheCompanyusedthenetproceeds,togetherwithcashonhand,toredeemtheoutstanding2019SeniorNotes.

The2023SeniorNotesareguaranteedonaseniorunsecuredbasisbyeachoftheCompany’ssubsidiariesthatisaborrowerorguarantorundertheCreditAgreement.Interestonthe2023SeniorNotesispayableonFebruary15andAugust15ofeachyear,beginningonFebruary15,2016.The2023SeniorNoteswillmatureonAugust15,2023.Prior toAugust15,2018,theCompanymayredeemsomeorallofthe2023SeniorNotesataredemptionpriceequalto 100%oftheprincipalamountofthe2023SeniorNotesplusa“make-whole”premium(asdefinedinthe2023SeniorNotesindenture)andaccruedandunpaidinteresttotheredemptiondate.AfterAugust15,2018,theCompanymayredeemallorapartofthe2023SeniorNotesattheredemptionprices(expressedasapercentageofprincipalamount) setforthbelowplusaccruedandunpaidinterest,andAdditionalInterest(asdefinedinthe2023SeniorNotesindenture),ifredeemedduringthe12-monthperiodbeginningonAugust15oftheyearsindicatedbelow:

Year Percentage2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104.688%2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103.125%2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101.563%2021 and thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100.000%

IftheCompanyexperiencesspecifickindsofchangesofcontrol,itwouldberequiredtooffertopurchasethe2023SeniorNotesatapurchasepriceequalto101%oftheprincipalamount,plusaccruedandunpaidinterestandAdditionalInterest,ifany,to,butnotincluding,thedateofrepurchase.The2023SeniorNotesalsocontaincertainothercovenantsandrestrictionsthatlimitcertainactivitiesincluding,amongotherthings,levelsofindebtedness,paymentsofdividends,theguaranteeorpledgeofassets,certaininvestments,commonstockrepurchases,mergersandacquisitionsandsalesofassets.AsofJanuary30,2016, wewereincompliancewithallcovenantsandrestrictionsrelatingtothe2023SeniorNotes.Cashpaymentsofinterestforthesefinancingarrangementsduring2015,2014and2013were$11.9million, $17.9millionand$18.7million,respectively.loss on early extinguishment of DebtDuring2015and2014,weincurredalossonearlyextinguishmentofdebtof$10.7millionand$0.4million,respectively,withnocorrespondinglossin2013.Thelossin2015representsthetenderandcallpremiums,unamortizeddebtissuancecosts,andoriginalissuediscountrelatedtothe2019SeniorNotes.Ofthe$10.7millionlossonearlyextinguishmentofdebtrecognizedin2015,approximately$3.0millionwasnon-cash.Thelossin2014representstheearlyextinguishmentoftheFormerCreditAgreementpriortomaturity.


11. LEASES

TheCompanyleasesallofitsretaillocationsandcertainofficelocations,distributioncentersandequipment. TheminimumleasetermsfortheCompany’sretailstoresgenerallyrangefromfiveto10years.Approximately51% oftheretailstoreleasesaresubjecttorenewaloptionsforvaryingperiods.Thetermoftheleasesforofficefacilities anddistributioncentersaveragesapproximately10yearswithrenewaloptionsoffiveto20years.

Atthetimeitsretailfacilitiesareinitiallyleased,theCompanyoftenreceivesconsiderationfromlandlordsforaportionofthecostofleaseholdimprovementsnecessarytoopenthestore,whicharerecordedasadeferredrentobligationandamortizedtoincomeovertheleasetermasareductionofrentexpense.Inadditiontominimumrentalpayments,certainoftheretailstoreleasesrequirecontingentpaymentsbasedonsaleslevels.AmajorityoftheCompany’sretailoperatingleasescontainprovisionsthatallowittomodifyamountspayableundertheleaseorterminatetheleaseincertaincircumstances,suchasexperiencingactualsalesvolumebelowadefinedthresholdand/orco-tenancyprovisionsassociatedwiththefacility.

Thefollowingisasummaryofrentexpenseforoperatingleases:($ thousands) 2015 2014 2013

Minimumrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,902 $143,050 $143,958Contingent rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 971 942 Subleaseincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,223) (1,197) (1,170) Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,199 $142,824 $143,730

FutureminimumpaymentsundernoncancelableoperatingleaseswithaninitialtermofoneyearormorewereasfollowsatJanuary30,2016:($ thousands)

2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $159,7302017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,5192018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,5672019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,9282020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,098Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205,742Totalminimumoperatingleasepayments . . . . . . . . . . . . $757,584

12. RISK MANAGEMENT AND DERIVATIVES

General risk ManagementTheCompanymaintainscashandcashequivalentsandcertainotherfinancialinstrumentswithvariousfinancialinstitutions.ThefinancialinstitutionsarelocatedthroughouttheworldandtheCompany’spolicyisdesignedtolimitexposuretoanyoneinstitutionorgeographicregion.TheCompany’speriodicevaluationsoftherelativecreditstandingofthesefinancialinstitutionsareconsideredintheCompany’sinvestmentstrategy.

TheCompany’sBrandPortfoliosegmentsellstonationalchains,departmentstores,onlineretailers,massmerchandisers,independentretailersandcatalogsintheUnitedStates,Canadaandapproximately65othercountries.Receivablesarisingfromthesesalesarenotcollateralized.However,aportioniscoveredbydocumentarylettersofcredit.Creditriskisaffectedbyconditionsoroccurrenceswithintheeconomyandtheretailindustry.TheCompanymaintainsanallowancefordoubtfulaccountsbaseduponfactorssurroundingthecreditriskofspecificcustomersandhistoricaltrends.

DerivativesInthenormalcourseofbusiness,theCompany’sfinancialresultsareimpactedbycurrencyratemovementsinforeign-currency-denominatedassets,liabilitiesandcashflowsasitmakesaportionofitspurchasesandsalesinlocalcurrencies.TheCompanyhasestablishedpoliciesandbusinesspracticesthatareintendedtomitigateaportionoftheeffectoftheseexposures.TheCompanyusesderivativefinancialinstruments,primarilyforwardcontracts,tomanageitscurrencyexposures.Thesederivativefinancialinstrumentsareviewedasriskmanagementtoolsandarenotusedfortradingorspeculativepurposes.DerivativesenteredintobytheCompanyaredesignatedascashflowhedgesofforecastedforeigncurrencytransactions.

DerivativefinancialinstrumentsexposetheCompanytocreditandmarketrisk.Themarketriskassociatedwiththeseinstrumentsresultingfromcurrencyexchangemovementsisexpectedtooffsetthemarketriskoftheunderlyingtransactionsbeinghedged.TheCompanydoesnotbelievethereisasignificantriskoflossintheeventofnon-performancebythecounterpartiesassociatedwiththeseinstrumentsbecausethesetransactionsareexecutedwithmajorinternationalfinancialinstitutionsandhavevaryingmaturitiesthroughJanuary2017.Creditriskismanagedthroughthecontinuousmonitoringofexposurestosuchcounterparties.

TheCompanyprincipallyusesforeigncurrencyforwardcontractsascashflowhedgestooffsetaportionoftheeffectsofexchangeratefluctuations.TheCompany’scashflowexposuresincludeanticipatedforeigncurrencytransactions,such asforeigncurrencydenominatedsales,costs,expensesandintercompanycharges,aswellascollectionsandpayments.


TheCompanyperformsaquarterlyassessmentoftheeffectivenessofthehedgerelationshipandmeasuresandrecognizesanyhedgeineffectivenessintheconsolidatedstatementofearnings.Hedgeineffectivenessisevaluatedusingthehypotheticalderivativemethod.Theamountofhedgeineffectivenessfor2015,2014and2013wasnotmaterial.

TheCompany’shedgingstrategyusesforwardcontractsascashflowhedginginstruments,whicharerecordedintheCompany’sconsolidatedbalancesheetsatfairvalue.Theeffectiveportionofgainsandlossesresultingfromchangesinthefairvalueofthesehedgeinstrumentsaredeferredinaccumulatedothercomprehensiveincomeandreclassifiedtoearningsintheperiodthatthehedgedtransactionisrecognizedinearnings.

AsofJanuary30,2016andJanuary31,2015,theCompanyhadforwardcontractsmaturingatvariousdatesthroughJanuary2017andJanuary2016,respectively.Thecontractamountrepresentsthenetamountofallpurchaseandsalecontractsofaforeigncurrency.

(U.S. $ equivalent in thousands) January 30, 2016 January31,2015Financial InstrumentsU.S.dollars(purchasedbytheCompany’sCanadiandivisionwithCanadiandollars) . . . . . . . . . . . . $ 14,118 $19,633Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,499 16,152Chineseyuan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,623 14,512 Japaneseyen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,159 1,523 UnitedArabEmiratesdirham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930 970 NewTaiwanesedollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570 599 Othercurrencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 –Totalfinancialinstruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47,118 $53,389 TheclassificationandfairvaluesofderivativeinstrumentsdesignatedashedginginstrumentsincludedwithintheconsolidatedbalancesheetsasofJanuary30,2016andJanuary31,2015areasfollows: AssetDerivatives LiabilityDerivatives ($ in thousands) BalanceSheetLocation FairValue BalanceSheetLocation FairValueForeign exchange forwards contracts:January 30, 2016 . . . . . . . . . . . . . . Prepaid expenses and other current assets $1,000 Other accrued expenses $ 846January31,2015 . . . . . . . . . . . . . . Prepaidexpensesandothercurrentassets $1,863 Otheraccruedexpenses $1,784 During2015and2014,theeffectofderivativeinstrumentsincashflowhedgingrelationshipsontheconsolidatedstatementsofearningswasasfollows: ($ in thousands) 2015 2014 Gain (loss) Gain (loss) Gain (Loss) Gain (Loss)Foreignexchangeforwardcontracts: Recognized in Reclassified from Recognizedin ReclassifiedIncomeStatementClassification OcI on accumulated OcI OCIon fromAccumulatedGains(Losses)-Realized Derivatives into earnings Derivatives OCIintoEarnings

Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 57 $ 147 $ 166 $ 93Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . 1,028 (27) (693) 113Sellingandadministrativeexpenses . . . . . . . . . . . . . . . (907) (297) (271) (64)Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . (17) – 18 –

Allofthegainsandlossescurrentlyincludedwithinaccumulatedothercomprehensive(loss)incomeassociatedwiththeCompany’sforeignexchangeforwardcontractsareexpectedtobereclassifiedintonetearningswithinthenext12months.AdditionalinformationrelatedtotheCompany’sderivativefinancialinstrumentsaredisclosedwithinNote1andNote13totheconsolidatedfinancialstatements.

13. FAIR VALUE MEASUREMENTS

Fair Value HierarchyFairvaluemeasurementdisclosurerequirementsspecifyahierarchyofvaluationtechniquesbaseduponwhethertheinputstothosevaluationtechniquesreflectassumptionsothermarketparticipantswouldusebaseduponmarketdataobtainedfromindependentsources(“observableinputs”)orreflecttheCompany’sownassumptionsofmarketparticipantvaluation(“unobservableinputs”).Inaccordancewiththeserequirements,thehierarchyiscategorizedintothreelevelsbasedonthereliabilityoftheinputsasfollows:

• Level1–Quotedpricesinactivemarketsthatareunadjustedandaccessibleatthemeasurementdateforidentical,unrestrictedassetsorliabilities;

• Level2–Quotedpricesforidenticalassetsandliabilitiesinmarketsthatarenotactive,quotedpricesforsimilarassetsandliabilitiesinactivemarketsorfinancialinstrumentsforwhichsignificantinputsareobservable,eitherdirectlyorindirectly;and

• Level3–Pricesorvaluationsthatrequireinputsthatarebothsignificanttothefairvaluemeasurementandunobservable.


Indeterminingfairvalue,theCompanyusesvaluationtechniquesthatmaximizetheuseofobservableinputsandminimizetheuseofunobservableinputstotheextentpossibleaswellasconsiderscounterpartycreditriskinitsassessmentoffairvalue.Classificationofthefinancialornon-financialassetorliabilitywithinthehierarchyisdeterminedbasedonthelowestlevelinputthatissignificanttothefairvaluemeasurement.

Measurement of Fair ValueTheCompanymeasuresfairvalueasanexitprice,thepricetosellanassetortransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate,usingtheproceduresdescribedbelowforallfinancialandnon-financialassetsandliabilitiesmeasuredatfairvalue.

Money Market FundsTheCompanyhascashequivalentsconsistingofshort-termmoneymarketfundsbackedbyU.S.Treasurysecurities.TheprimaryobjectiveoftheseinvestingactivitiesistopreservetheCompany’scapitalforthepurposeoffundingoperationsanditdoesnotenterintomoneymarketfundsfortradingorspeculativepurposes.Thefairvalueisbasedonunadjustedquotedmarketpricesforthefundsinactivemarketswithsufficientvolumeandfrequency(Level1).

Deferred Compensation Plan Assets and LiabilitiesTheCompanymaintainsanon-qualifieddeferredcompensationplan(the“DeferredCompensationPlan”)for thebenefitofcertainmanagementemployees.TheinvestmentfundsofferedtotheparticipantsgenerallycorrespondtothefundsofferedintheCompany’s401(k)plan,andtheaccountbalancefluctuateswiththeinvestmentreturnsonthosefunds.TheDeferredCompensationPlanpermitsthedeferralofupto50%ofbasesalaryand100%ofcompensationreceivedundertheCompany’sannualincentiveplan.Thedeferralsareheld inaseparatetrust,whichhasbeenestablishedbytheCompanytoadministertheDeferredCompensationPlan. TheassetsofthetrustaresubjecttotheclaimsoftheCompany’screditorsintheeventthattheCompanybecomesinsolvent.Consequently,thetrustqualifiesasagrantortrustforincometaxpurposes(i.e.,a“RabbiTrust”). TheliabilitiesoftheDeferredCompensationPlanarepresentedinotheraccruedexpensesandtheassetsheldbythetrustareclassifiedastradingsecuritieswithinprepaidexpensesandothercurrentassetsintheaccompanyingconsolidatedbalancesheets.Changesindeferredcompensationplanassetsandliabilitiesarechargedtosellingandadministrativeexpenses.Thefairvalueisbasedonunadjustedquotedmarketpricesforthefundsinactivemarketswithsufficientvolumeandfrequency(Level1).

Deferred Compensation Plan for Non-Employee DirectorsNon-employeedirectorsareeligibletoparticipateinadeferredcompensationplanwithdeferredamountsvaluedasifinvestedintheCompany’scommonstockthroughtheuseofphantomstockunits(“PSUs”).Undertheplan,eachparticipatingdirector’saccountiscreditedwiththenumberofPSUsthatisequaltothenumberofsharesoftheCompany’scommonstockwhichtheparticipantcouldpurchaseorreceivewiththeamountofthedeferredcompensation,basedupontheaverageofthehighandlowpricesoftheCompany’scommonstockonthelasttradingdayofthefiscalquarterwhenthecashcompensationwasearned.DividendequivalentsarepaidonPSUsatthesamerateasdividendsontheCompany’scommonstockandarere-investedinadditionalPSUsatthenextfiscalquarter-end.TheliabilitiesoftheplanarebasedonthefairvalueoftheoutstandingPSUsandarepresentedinotheraccruedexpenses(currentportion)orotherliabilitiesintheaccompanyingconsolidatedbalancesheets.GainsandlossesresultingfromchangesinthefairvalueofthePSUsarepresentedinsellingandadministrativeexpensesintheCompany’sconsolidatedstatementofearnings.ThefairvalueofeachPSUisbasedonanunadjustedquotedmarketpricefortheCompany’scommonstockinanactivemarketwithsufficientvolumeandfrequencyoneachmeasurementdate(Level1).

Restricted Stock Units for Non-Employee DirectorsUndertheCompany’sincentivecompensationplans,cash-equivalentrestrictedstockunits(“RSUs”)oftheCompanymaybegrantedatnocosttonon-employeedirectors.TheRSUsaresubjecttoavestingrequirement(usuallyoneyear),earndividend-equivalentunits,andaresettledincashonthedatethedirectorterminatesserviceorsuchearlierdateasadirectormayelect,subjecttorestrictions,basedonthethencurrentfairvalueoftheCompany’scommonstock.ThefairvalueofeachRSUisbasedonanunadjustedquotedmarketpricefortheCompany’scommonstockinanactivemarketwithsufficientvolumeandfrequencyoneachmeasurementdate(Level1).Additionalinformationrelatedtorestrictedstockunitsfornon-employeedirectorsisdisclosedinNote15totheconsolidatedfinancialstatements.

Performance Share UnitsUndertheCompany’sincentivecompensationplans,commonstockorcashmaybeawardedattheendoftheperformanceperiodatnocosttocertainofficersandkeyemployeesifcertainfinancialgoalsaremet.Undertheplan,employeesaregrantedperformanceshareawardsatatargetnumberofsharesorunits,whichvestgenerallyoverathree-yearserviceperiod.Attheendofthevestingperiod,theemployeewillhaveearnedanamountofsharesorunitsbetween0%and200%ofthetargetedaward,dependingontheachievementofspecifiedfinancialgoalsfortheserviceperiod.ThefairvalueofeachperformanceshareunitisbasedonanunadjustedquotedmarketpricefortheCompany’scommonstockinanactivemarketwithsufficientvolumeandfrequencyoneachmeasurementdate(Level1).AdditionalinformationrelatedtoperformanceshareunitsisdisclosedinNote15totheconsolidatedfinancialstatements.


Derivative Financial InstrumentsTheCompanyusesderivativefinancialinstruments,primarilyforeignexchangecontracts,toreduceitsexposuretomarketrisksfromchangesinforeignexchangerates.Theseforeignexchangecontractsaremeasuredatfairvalueusingquotedforwardforeignexchangepricesfromcounterpartiescorroboratedbymarket-basedpricing(Level2).AdditionalinformationrelatedtotheCompany’sderivativefinancialinstrumentsisdisclosedinNote1andNote12totheconsolidatedfinancialstatements.

Secured Convertible NoteTheCompanyreceivedasecuredconvertiblenoteaspartialconsiderationforthe2014dispositionofShoes.com,asfurtherdescribedinNote2totheconsolidatedfinancialstatements.Theconvertiblenoteismeasuredatfairvalueusingunobservableinputs(Level3).Thechangeinfairvalueduring2015and2014reflectsanimmaterialamountofinterestincome.

ThefollowingtablepresentstheCompany’sassetsandliabilitiesthataremeasuredatfairvalueonarecurringbasisatJanuary30,2016andJanuary30,2015.TheCompanydidnothaveanytransfersbetweenLevel1andLevel2during2015 or 2014. FairValueMeasurements($ thousands) Total Level1 Level2 Level3asset (liability)as of January 30, 2016: Cashequivalents–moneymarketfunds . . . . . . . . . . . . . . . . . $ 100,694 $ 100,694 $ – $ – Non-qualifieddeferredcompensationplanassets. . . . . . . . . . . . 3,383 3,383 – – Non-qualifieddeferredcompensationplanliabilities. . . . . . . . . . (3,383) (3,383) – – Deferredcompensationplanliabilitiesfornon-employeedirectors . . (1,728) (1,728) – – Restrictedstockunitsfornon-employeedirectors. . . . . . . . . . . . (8,879) (8,879) – – Performanceshareunits . . . . . . . . . . . . . . . . . . . . . . . . . . (3,780) (3,780) – – Derivative financial instruments, net . . . . . . . . . . . . . . . . . . . 154 – 154 – Securedconvertiblenote . . . . . . . . . . . . . . . . . . . . . . . . . . 7,117 – – 7,117

AsofJanuary31,2015: Cashequivalents–moneymarketfunds . . . . . . . . . . . . . . . . . $ 35,533 $ 35,533 $ – $ – Non-qualifieddeferredcompensationplanassets. . . . . . . . . . . . 2,904 2,904 – – Non-qualifieddeferredcompensationplanliabilities. . . . . . . . . . (2,904) (2,904) – – Deferredcompensationplanliabilitiesfornon-employeedirectors . . (2,066) (2,066) – – Restrictedstockunitsfornon-employeedirectors. . . . . . . . . . . . (8,857) (8,857) – – Performanceshareunits . . . . . . . . . . . . . . . . . . . . . . . . . . (5,147) (5,147) – – Derivativefinancialinstruments,net . . . . . . . . . . . . . . . . . . . 79 – 79 – Securedconvertiblenote . . . . . . . . . . . . . . . . . . . . . . . . . . 6,957 – – 6,957 Impairment ChargesTheCompanyassessestheimpairmentoflong-livedassetswhenevereventsorchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.FactorstheCompanyconsidersimportantthatcouldtriggeranimpairmentreviewincludeunderperformancerelativetoexpectedhistoricalorprojectedfutureoperatingresults,asignificantchangeinthemanneroftheuseoftheassetoranegativeindustryoreconomictrend.WhentheCompanydeterminesthatthecarryingvalueoflong-livedassetsmaynotberecoverablebasedupontheexistenceofoneormoreoftheaforementionedfactors,impairmentismeasuredbasedonaprojecteddiscountedcashflowmethod.Certainfactors,suchasestimatedstoresalesandexpenses,usedforthisnonrecurringfairvaluemeasurementareconsideredLevel3inputsasdefinedbyFASBASC820, Fair Value Measurement.Long-livedassetsheldandusedwithacarryingamountof$92.9million,netofimpairmentcharges,wereassessedforindicatorsofimpairmentandwrittendowntotheirfairvalue,resultinginimpairmentchargesincludedinsellingandadministrativeexpensesof$2.8millionin2015.Ofthe$2.8millionimpairmentcharges, $1.2millionrelatedtotheFamousFootwearsegmentand$1.6millionrelatedtotheBrandPortfoliosegment.

In2014,long-livedassetsheldandusedwithacarryingamountof$87.8million,netofimpairmentcharges,wereassessedforindicatorsofimpairmentandwrittendowntotheirfairvalue,resultinginimpairmentchargesof$2.0millionincludedinsellingandadministrativeexpenses,ofwhich$1.0millionrelatedtotheFamousFootwearsegmentand $1.0millionrelatedtotheBrandPortfoliosegment.

In2013,long-livedassetsheldandusedwithacarryingamountof$81.4million,netofimpairmentcharges,wereassessedforindicatorsofimpairmentandwrittendowntotheirfairvalue,resultinginimpairmentchargesof$1.4millionincludedinsellingandadministrativeexpenses,ofwhich$0.7millionrelatedtotheFamousFootwearsegmentand$0.7millionrelatedtotheBrandPortfoliosegment.

Duringthefirstquarterof2013,theCompanyrecognizedanimpairmentchargeof$4.7million($4.7millionaftertax, $0.11perdilutedshare)relatedtocertainsupplychainandsourcingassets,whichrepresentedtheexcessnetasset


valueovertheestimatedfairvalueoftheassetslesscoststosell.Thefairvalueofnetassetswasestimatedbasedontheanticipatedsalesproceeds.ThiswasconsideredaLevel2inputastheassetswerenotsoldonanactivemarket.TheimpairmentchargewasrecordedasimpairmentofassetsheldforsaleintheconsolidatedstatementofearningsandwasincludedintheBrandPortfoliosegment.Theseassetsweresoldinthesecondquarterof2013andtheCompanyrecognizedanadditionallossonsaleof$0.6million.SeeNote4totheconsolidatedfinancialstatementsforadditionalinformation.

Duringthesecondquarterof2013,theCompanysoldASG.Inanticipationofthistransaction,theassetsofASGweredeterminedtobeheldforsaleatMay4,2013,andanimpairmentchargeof$12.6millionwasrecordedinthefirstquarterof2013withinthediscontinuedoperationssectionoftheconsolidatedstatementofearnings.TheCompanyrecognizedagainondispositionof$1.0millioninthesecondquarterof2013.ASGwaspreviouslyincludedwithintheBrandPortfoliosegment.Thefairvalueofassetswasestimatedbasedontheanticipatedsalesproceedslesscoststosell.ThiswasconsideredaLevel2inputastheassetswerenotsoldonanactivemarket.SeeNote2totheconsolidatedfinancialstatementsforadditionalinformation.

TheCompanyperformeditsannualimpairmenttestsofindefinite-livedintangibleassets,whichinvolvesestimatingthefairvalueusingsignificantunobservableinputs(Level3).Asaresultofitsannualimpairmenttesting,theCompanydidnotrecordanyimpairmentchargesduring2015,2014or2013relatedtointangibleassets.

TheCompanyperformeditsannualimpairmenttestofgoodwillbyperformingaqualitativeassessmentatthereportingunitlevelduring2015.During2014and2013,theCompanyperformedaquantitativeassessmentwhichinvolvedestimatingthefairvalueofitsreportingunitsusingsignificantunobservableinputs(Level3).Theimpairmenttests,performedasofthefirstdayoftheCompany’sfourthfiscalquarterof2015,2014and2013,resultedinnoimpairmentcharges.SeeNote1andNote9totheconsolidatedfinancialstatementsforadditionalinformationrelatedtothegoodwillimpairmenttest.

Fair Value of the company’s Other Financial InstrumentsThefairvaluesofcashandcashequivalents(excludingmoneymarketfundsdiscussedabove),receivablesandtradeaccountspayableapproximatetheircarryingvaluesduetotheshort-termnatureoftheseinstruments.

ThecarryingamountsandfairvaluesoftheCompany’sotherfinancialinstrumentssubjecttofairvaluedisclosuresareasfollows: January 30, 2016 January31,2015

($ thousands) carrying Value (1) Fair Value CarryingValue(1) FairValue Long-termdebt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $196,544 $196,000 $196,712 $208,000

(1) Thecarryingvalueofthelong-termdebtisnetofdeferredissuancecostsof$3.5millionand$2.5millionasofJanuary30,2016andJanuary31,2015,respectively,asaresultoftheadoptionofASU2015-03,asfurtherdiscussedinNote1totheconsolidatedfinancialstatements.

ThefairvalueoftheCompany’slong-termdebtwasbaseduponquotedpricesinaninactivemarketasoftheendoftherespectiveperiods(Level2).

14. SHAREHOLDERS’ EQUITY

stock repurchase ProgramOnAugust25,2011,theBoardofDirectorsapprovedastockrepurchaseprogram(“2011Program”)authorizingtherepurchaseofupto2.5millionsharesoftheCompany’soutstandingcommonstock.TheCompanycanusetherepurchaseprogramtorepurchasesharesontheopenmarketorinprivatetransactionsfromtimetotime,dependingonmarketconditions.Therepurchaseprogramdoesnothaveanexpirationdate.RepurchasesofcommonstockarelimitedundertheCompany’sdebtagreements.During2015,therewere151,500sharesrepurchasedunderthe2011Programandduring2013and2014,noshareswererepurchasedunderthestockrepurchaseprogram.Therefore,therewere2.3millionsharesauthorizedtoberepurchasedunderthe2011ProgramasofJanuary30,2016.

repurchases related to employee share-based awardsDuring2015and2014,222,110sharesand172,471shares,respectively,weretenderedbyemployeesrelatedtocertainshare-basedawards.Thesesharesweretenderedinsatisfactionoftheexercisepriceofstockoptionsand/ortosatisfyminimumtaxwithholdingamountsfornon-qualifiedstockoptions,restrictedstockandstockperformanceawards.Accordingly,thesesharerepurchasesarenotconsideredapartoftheCompany’spubliclyannouncedstockrepurchaseprograms.


accumulated Other comprehensive (loss) IncomeThefollowingtablesetsforththechangesinaccumulatedothercomprehensive(loss)income,netoftax,bycomponentfor2015,2014and2013: Pensionand Accumulated foreign other other Currency Postretirement Derivative Comprehensive($ thousands) Translation Transactions(1) Transactions(2) Income(Loss)BalanceatFebruary2,2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,912 $ (5,947) $ (81) $ 884

Othercomprehensive(loss)incomebeforereclassifications . . . . . . . . . . . (4,556) 19,136 1,260 15,840Reclassifications: Amountsreclassifiedfromaccumulatedothercomprehensive(loss)income . – 617 (670) (53) Tax(benefit)provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (224) 229 5Netreclassifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 393 (441) (48)Othercomprehensive(loss)income . . . . . . . . . . . . . . . . . . . . . . . . . (4,556) 19,529 819 15,792BalanceatFebruary1,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,356 $ 13,582 $ 738 $ 16,676 Othercomprehensivelossbeforereclassifications . . . . . . . . . . . . . . . . . (3,101) (10,235) (411) (13,747)Reclassifications: Amountsreclassifiedfromaccumulatedothercomprehensive(loss)income . – (204) (142) (346) Taxprovision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 90 39 129Netreclassifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (114) (103) (217)Othercomprehensiveloss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,101) (10,349) (514) (13,964)BalanceatJanuary31,2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (745) $ 3,233 $ 224 $ 2,712 Othercomprehensive(loss)incomebeforereclassifications . . . . . . . . . . . (155) (7,559) 74 (7,640)Reclassifications: Amountsreclassifiedfromaccumulatedothercomprehensive(loss)income . – (1,706) 177 (1,529) Taxprovision(benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 676 (83) 593 Netreclassifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (1,030) 94 (936) Othercomprehensive(loss)income . . . . . . . . . . . . . . . . . . . . . . . . . (155) (8,589) 168 (8,576) Balance at January 30, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (900) $ (5,356) $ 392 $ (5,864)

(1) Amountsreclassifiedareincludedinsellingandadministrativeexpenses.RefertoNote5totheconsolidatedfinancialstatementsforadditionalinformationrelatedtopensionandotherpostretirementbenefits.

(2) Amountsreclassifiedareincludedinnetsales,costsofgoodssoldandsellingandadministrativeexpenses.RefertoNote12andNote13totheconsolidatedfinancialstatementsforadditionalinformationrelatedtoderivativefinancialinstruments.

15. SHARE-BASED COMPENSATION TheCompanyhasshare-basedincentivecompensationplansunderwhichcertainofficers,employeesandmembersoftheBoardofDirectorsareparticipantsandmaybegrantedstockoptions,restrictedstockandstockperformanceawards.ASC 718, Compensation – Stock Compensation, and ASC 505, Equity,requirecompaniestorecognizecompensationexpenseinanamountequaltothefairvalueofallshare-basedpaymentsgrantedtoemployeesovertherequisiteserviceperiodforeachaward.Incertainlimitedcircumstances,theCompany’sincentivecompensationplanprovidesforacceleratedvestingoftheawards,suchasintheeventofachangeincontrol,qualifiedretirement,deathordisability.TheCompanyhasapolicyofissuingtreasurysharesinsatisfactionofshare-basedawards.Share-basedcompensationexpenseof$7.5million,$6.2millionand$5.6millionwasrecognizedin2015,2014and2013,respectively,asacomponentofsellingandadministrativeexpenses.Thefollowingtabledetailstheshare-basedcompensationexpensebyplanandthetotalrelatedincometaxbenefitfor2015,2014and2013: ($ thousands) 2015 2014 2013

Expense(income)forshare-basedcompensationplans,netofforfeitures: Stockoptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 66 $ (46) $ 248 Stockperformanceawards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,398 – – Restrictedstockgrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,027 6,236 5,319Totalshare-basedcompensationexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,491 6,190 5,567Less:Incometaxbenefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,937 2,397 2,136Totalshare-basedcompensationexpense,netofincometaxbenefit . . . . . . . . . . . . . . . . . $ 4,554 $ 3,793 $3,431

Inadditiontotheshare-basedcompensationexpenseabove,theCompanyrecognizedcash-basedexpenserelatedtoperformanceshareunitsandcashawardsgrantedundertheperformanceshareplans.In2015,2014and2013,theCompanyrecognized $5.1million,$6.6millionand$3.7million,respectively,inexpenseforcash-basedawardsundertheperformanceshareplans.

TheCompanyissued59,682,373,752and481,916sharesofcommonstockin2015,2014and2013,respectively,forrestrictedstockgrants,stockoptionsexercisedandstockperformanceawardsissuedtoemployeesandcommonandrestrictedstockgrantsissuedtodirectors,netofforfeituresandshareswithheldtosatisfytheminimumtaxwithholdingrequirement.Therewerenosignificantmodificationstoanyshare-basedawardsin2015,2014or2013.


Restricted StockUndertheCompany’sincentivecompensationplans,restrictedstockoftheCompanymaybegrantedatnocosttocertainofficers,keyemployeesanddirectors.Planparticipantsareentitledtocashdividendsandvotingrightsfortheirrespectiveshares.Restrictionslimitthesaleortransferofthesesharesduringtherequisiteserviceperiod,whichgenerallyrangesfromonetoeightyears.Expenseforrestrictedstockgrantsisrecognizedonastraight-linebasisseparatelyforeachvestingportionofthestockawardbaseduponfairvalueoftheawardonthedateofgrant.ThefairvalueoftherestrictedstockgrantsisthequotedmarketpricefortheCompany’scommonstockonthedateofgrant.

Thefollowingtablesummarizesrestrictedstockactivityfor2015,2014and2013: NumberofNonvested Weighted-Average RestrictedShares GrantDateFairValue NonvestedatFebruary2,2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,110,325 $10.14 Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411,735 17.47 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (658,712) 6.22 forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (163,250) 12.04NonvestedatFebruary1,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700,098 $13.25 Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281,710 28.17 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (364,238) 14.21 forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,100) 15.89 NonvestedatJanuary31,2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,562,470 $15.61 Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318,921 30.02 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (492,092) 14.10 forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (126,850) 18.74 Nonvested at January 30, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,262,449 $ 19.55

ThetotalgrantdatefairvalueofrestrictedstockawardsvestedduringtheyearsendedJanuary30,2016,January31,2015andFebruary1,2014,was$6.9million,$5.2millionand$4.1million,respectively.AsofJanuary30,2016,thetotalremainingunrecognizedcompensationcostrelatedtononvestedrestrictedstockgrantswas$11.1million,whichwillbeamortizedovertheweighted-averageremainingrequisiteserviceperiodof2.6years.

TheCompanyrecognizedexcesstaxbenefitsrelatedtorestrictedstockvestinganddividendsof$2.6million,$0.8millionand$2.9millionin2015,2014and2013,respectively,whichwerereflectedasanincreasetoadditionalpaid-incapital.

Performance Share AwardsUndertheCompany’sincentivecompensationplans,commonstockorcashmaybeawardedattheendoftheperformanceperiodatnocosttocertainofficersandkeyemployeesifcertainfinancialgoalsaremet.Undertheplan,employeesare grantedperformanceshareawardsatatargetnumberofsharesorunits,whichgenerallyvestoverathree-yearserviceperiod.Attheendofthevestingperiod,theemployeewillhaveearnedanamountofsharesbetween0%and200%ofthetargetedaward,dependingontheachievementofspecifiedfinancialgoalsfortheserviceperiod.Iftheawardsaregrantedinunits, theemployeewillbegivenanamountofcashrangingfrom0%to200%oftheequivalentmarketvalueofthetargetedaward.

Expenseforperformanceshareawardsisrecognizedbaseduponthefairvalueoftheawardsonthedateofgrantandtheanticipatednumberofsharesorcashtobeawardedonastraight-linebasisforeachvestingportionoftheshareaward. ThefairvalueoftheperformanceshareawardsistheunadjustedquotedmarketpricefortheCompany’scommonstock on the date of grant.

Thefollowingtablesummarizesperformanceshareactivityfor2015,2014and2013: Numberof NumberofNonvested Performance Performance Weighted-Average Share Awards Share Awards Grant Date atTargetLevel atMaximumLevel FairValue NonvestedatFebruary2,2013 . . . . . . . . . . . . . . . . . . . . . . . . . 222,325 382,525 $12.67 Granted(awardofunitspayableincash) . . . . . . . . . . . . . . . . 70,225 140,450 17.00 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (117,250) (175,875) 15.20 Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,775) (18,050) 13.09 NonvestedatFebruary1,2014 . . . . . . . . . . . . . . . . . . . . . . . . . 164,525 329,050 $12.69 Granted(awardofunitspayableincash) . . . . . . . . . . . . . . . . 88,185 176,370 28.18 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84,275) (168,550) 9.27 Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,900) (39,800) 15.96NonvestedatJanuary31,2015 . . . . . . . . . . . . . . . . . . . . . . . . . 148,535 297,070 $23.39 Granted(awardpayableinshares) . . . . . . . . . . . . . . . . . . . . 177,921 355,842 30.12 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,182) (30,364) 24.71 Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,750) (7,500) 29.47 Nonvested at January 30, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . 307,524 615,048 $ 27.14


AsofJanuary30,2016,theremainingunrecognizedcompensationcostrelatedtononvestedperformanceshareawardswas$11.3million,whichwillberecognizedovertheweighted-averageremainingserviceperiodof1.6years.

Stock OptionsStockoptionsaregrantedtoemployeesatexercisepricesequaltothequotedmarketpriceoftheCompany’sstockatthedateofgrant.Stockoptionsgenerallyvestoverfouryearsandhaveatermof10years.Compensationcostforallstockoptionsisrecognizedovertherequisiteserviceperiodforeachaward.Nodividendsarepaidonunexercisedoptions.Expenseforstockoptionsisrecognizedonastraight-linebasisseparatelyforeachvestingportionofthestockoptionaward.

TheCompanygranted16,667,zeroand4,000stockoptionsduring2015,2014and2013respectively.FairvaluesofoptionsgrantedwereestimatedusingtheBlack-Scholesoption-pricingmodelbasedonthefollowingassumptions:

2015 2013

Dividendyield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0% 1.7%Expectedvolatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.5% 67.7%risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8% 1.3%Expectedterm(inyears) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7

Dividendyieldsarebasedonhistoricaldividendyields.ExpectedvolatilitiesarebasedonhistoricalvolatilitiesoftheCompany’scommonstockatthetimeofgrant.Therisk-freeinterestrateisbasedontheU.S.Treasuryyieldcurveineffectatthetimeofthegrantforperiodscorrespondingwiththeexpectedtermoftheoptions.Theexpectedtermofoptionsrepresentstheweighted-averageperiodoftimethatoptionsgrantedareexpectedtobeoutstanding,givingconsiderationtovestingschedulesandtheCompany’shistoricalexercisepatterns.

SummarizedinformationaboutstockoptionsoutstandingandexercisableatJanuary30,2016isasfollows:

Outstanding Exercisable Weighted- Weighted- Weighted- Weighted- Average Average Average Average Numberof Remaining Exercise Numberof Remaining ExerciseExercisePriceRange Options Life(Years) Price Options Life(Years) Price

$3.33-$11.54 . . . . . . . . . . . . . . . . . . . . . . . . 71,625 4.2 $ 6.36 54,625 4.5 $ 7.09$11.55-$14.45 . . . . . . . . . . . . . . . . . . . . . . . 61,000 4.1 13.99 61,000 4.1 13.99$14.46-$15.35 . . . . . . . . . . . . . . . . . . . . . . . 20,750 3.9 15.20 20,750 3.9 15.20$15.36-$22.44 . . . . . . . . . . . . . . . . . . . . . . . 63,006 0.5 20.96 63,006 0.5 20.96$22.45-$35.25 . . . . . . . . . . . . . . . . . . . . . . . 84,914 2.5 32.50 68,247 1.0 33.31 301,295 2.9 $18.93 267,628 2.5 $19.24

TheaggregateintrinsicvalueofstockoptionsoutstandingandcurrentlyexercisableatJanuary30,2016was$2.9millionand$2.5million,respectively.IntrinsicvalueforstockoptionsiscalculatedbasedontheexercisepriceoftheunderlyingawardsascomparedtothequotedpriceoftheCompany’scommonstockasofthereportingdate.

Thefollowingtablesummarizesstockoptionactivityfor2015underthecurrentandpriorplans: Numberof Weighted-Average Options ExercisePrice

OutstandingatJanuary31,2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416,803 $17.75 Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,667 29.18 Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (88,224) 15.58 forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,500) 35.25 Canceledorexpired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,451) 14.91OutstandingatJanuary30,2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301,295 $18.93ExercisableatJanuary30,2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,628 $19.24

Theintrinsicvalueofstockoptionsexercisedwas$1.3million,$3.8millionand$4.0millionfor2015,2014and2013,respectively.Theamountofcashreceivedfromtheexerciseofstockoptionswas$0.4millionin2015,$3.2millionin2014and$4.9millionin2013.Inaddition,32,139,60,624and91,157sharesweretenderedbyemployeesinsatisfactionoftheexercisepriceofstockoptionsduring2015,2014and2013,respectively.

TheCompanyrecognizedexcesstaxbenefitsrelatedtostockoptionexercisesof$0.1millionin2015and2014and$0.5millionin2013whichwerereflectedasanincreasetoadditionalpaid-incapital.


Thefollowingtablesummarizesnonvestedstockoptionactivityfor2015underthecurrentandpriorplans:

Numberof Weighted-Average Nonvested GrantDate Options FairValue

NonvestedatJanuary31,2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,625 $ 3.28 Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,667 12.81 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,625) 4.72 forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – NonvestedatJanuary30,2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,667 $ 7.16

Theweighted-averagegrantdatefairvalueofstockoptionsgrantedfor2015,2014and2013was$12.81,$0and$9.46,respectively.Thetotalgrantdatefairvalueofstockoptionsvestedduring2015,2014and2013was$0.1million, $0.3millionand$0.4million,respectively.AsofJanuary30,2016,thetotalremainingunrecognizedcompensation costrelatedtononvestedstockoptionswas$0.1million,whichwillbeamortizedovertheweighted-averageremainingrequisiteserviceperiodof3.5years.

Restricted Stock Units for Non-Employee DirectorsEquity-basedgrantsmaybemadetonon-employeedirectorsintheformofcash-equivalentrestrictedstockunits(“RSUs”)atnocosttothenon-employeedirector.TheRSUsaresubjecttoavestingrequirement(usuallyoneyear),earndividendequivalentunitsandarepayableincashonthedatethedirectorterminatesserviceorsuchearlierdateasadirectormayelect,subjecttorestrictions,basedonthethencurrentfairvalueoftheCompany’scommonstock.DividendequivalentsarepaidonoutstandingRSUsatthesamerateasdividendsontheCompany’scommonstock,areautomaticallyre-investedinadditionalRSUsandvestimmediatelyasofthepaymentdateforthedividend.ExpenserelatedtotheinitialgrantofRSUsisrecognizedratablyoverthevestingperiodbaseduponthefairvalueoftheRSUs,asremeasuredattheendofeachperiod.Expenseforthedividendequivalentsisrecognizedatfairvalueimmediately.GainsandlossesresultingfromchangesinthefairvalueoftheRSUssubsequenttothevestingperiodandthroughthesettlementdatearereportedintheCompany’sconsolidatedstatementsofearnings.RefertoNote5andNote13totheconsolidatedfinancialstatementsforinformationregardingthedeferredcompensationplanfornon-employeedirectors.

ThefollowingtablesummarizesrestrictedstockunitactivityfortheyearendedJanuary30,2016:

Outstanding Accrued(1) NonvestedRSUs Weighted-Average Numberof Numberof TotalNumber TotalNumber GrantDate VestedRSUs NonvestedRSUs ofRSUs ofRSUs FairValue January31,2015 . . . . . . . . . . . . . . . . . . . . 292,294 38,700 330,994 318,094 $28.72 Granted (2) . . . . . . . . . . . . . . . . . . . . . 2,800 36,341 39,141 27,141 31.65 Vested. . . . . . . . . . . . . . . . . . . . . . . . 39,041 (39,041) – 12,900 28.73 Settled . . . . . . . . . . . . . . . . . . . . . . . (21,698) – (21,698) (21,698) 31.41January30,2016 . . . . . . . . . . . . . . . . . . . . 312,437 36,000 348,437 336,437 $31.67

(1) AccruedRSUsincludeallfullyvestedawardsandapro-rataportionofnonvestedawardsbasedontheelapsedportionofthevestingperiod.

(2) GrantedRSUsinclude3,141RSUsresultingfromdividendequivalentspaidonoutstandingRSUs,ofwhich2,800relatedtooutstandingvestedRSUsand341tooutstandingnonvestedRSUs.

InformationaboutRSUsgranted,vestedandsettledduring2015,2014and2013isasfollows: ($ thousands, except per unit amounts) 2015 2014 2013

Weighted-averagegrantdatefairvalueofRSUsgranted(1) . . . . . . . . . . . . . . . . . . . . . $31.54 $28.69 $21.33FairvalueofRSUsvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,049 1,558 1,600RSUssettled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,698 57,260 9,905

(1) IncludesdividendequivalentsgrantedonoutstandingRSUs,whichvestimmediately.

ThefollowingtabledetailstheRSUcompensationexpenseandtherelatedincometaxbenefitfor2015,2014and2013: ($ thousands) 2015 2014 2013

Compensationexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 704 $ 2,707 $ 3,258Incometaxbenefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (276) (1,053) (1,267)Compensationexpense,netofincometaxbenefit . . . . . . . . . . . . . . . . . . . . . . . . . . $ 428 $ 1,654 $ 1,991


TheaggregateintrinsicvalueofRSUsoutstandingandcurrentlyvestedatJanuary30,2016is$9.4millionand$8.4million,respectively.AggregateintrinsicvalueforRSUsiscalculatedbasedontheaverageofthehighandlowpricesoftheCompany’scommonstockasofthereportingdate.TheliabilitiesassociatedwiththeaccruedRSUstotaled$8.9millionasofbothJanuary30,2016andJanuary31,2015.

16. RELATED PARTY TRANSACTIONS

c. banner International Holdings limitedTheCompanyhasajointventureagreementwithasubsidiaryofC.bannerInternationalHoldingsLimited(“CBI”)tomarketNaturalizerfootwearinChina,effectivethroughAugust2017.TheCompanyisa51%ownerofthejointventure(“B&HFootwear”),withCBIowningtheother49%.During2013,B&HFootweartransferredtheoperationofitsretailstoresinChinatoCBI.B&HFootwearcontinuestosellNaturalizerfootweartoaretailaffiliateofCBIonawholesalebasis,whichinturnsellstheNaturalizerproductsthroughdepartmentstoreshopsandfree-standingstoresinChina.During2015,2014and2013,theCompany,throughitsconsolidatedsubsidiary,B&HFootwear,sold$8.4million,$8.6million,and$8.3million,respectively,ofNaturalizerfootwearonawholesalebasistoCBI.

17. COMMITMENTS AND CONTINGENCIES

environmental remediationPrioroperationsincludednumerousmanufacturingandotherfacilitiesforwhichtheCompanymayhaveresponsibilityundervariousenvironmentallawsfortheremediationofconditionsthatmaybeidentifiedinthefuture.TheCompanyisinvolvedinenvironmentalremediationandongoingcomplianceactivitiesatseveralsitesandhasbeennotifiedthatitisormaybeapotentiallyresponsiblepartyatseveralothersites.

RedfieldTheCompanyisremediating,undertheoversightofColoradoauthorities,thegroundwaterandindoorairatitsownedfacilityinColorado(the“Redfieldsite”or,whenreferringtoremediationactivitiesatorunderthefacility,the“on-siteremediation”)andresidentialneighborhoodsadjacenttoandneartheproperty(the“off-siteremediation”)thathavebeenaffectedbysolventspreviouslyusedatthefacility.Theon-siteremediationcallsfortheoperationofapumpandtreatsystem(whichpreventsmigrationofcontaminatedgroundwaterofftheproperty)asthefinalremedyforthesite,subjecttomonitoringandperiodicreviewoftheon-siteconditionsandotherremedialtechnologiesthatmaybedevelopedinthefuture.Off-sitegroundwaterconcentrationshavebeenreducingovertimesinceinstallationofthepumpandtreatsystemin2000andinjectionofcleanwaterbeginningin2003.However,localizedareasofcontaminatedbedrockjustbeyondthepropertylinecontinuetoimpactoff-sitegroundwater.Themodifiedworkplanforaddressingthisconditionincludesconvertingtheoff-sitebioremediationsystemintoamonitoringwellnetworkandemployingdifferentremediationmethodsintheserecalcitrantareas.Inaccordancewiththeworkplan,apilottestwasconductedofcertaingroundwaterremediationmethodsandtheresultsofthattestwereusedtodevelopmoredetailedplansforremedialactivitiesintheoff-siteareas,whichwereapprovedbytheauthoritiesandarebeingimplementedinaphasedmanner.Theresultsofgroundwatermonitoringarebeingusedtoevaluatetheeffectivenessoftheseactivities.In2014,theCompanysubmittedaproposedexpandedremedyworkplan(“ExpandedRemedyWorkplan”)thatwasacceptedbytheoversightauthoritiesduring2015.TheCompanyisimplementingtheExpandedRemedyWorkplanandwillcontinuetheseeffortsin2016.

Thecumulativeexpendituresforbothon-siteandoff-siteremediationthroughJanuary30,2016were$27.9million. TheCompanyhasrecoveredaportionoftheseexpendituresfrominsurersandotherthirdparties.Thereservefor theanticipatedfutureremediationactivitiesatJanuary30,2016is$9.8million,ofwhich$9.0millionisrecorded withinotherliabilitiesand$0.8millionisrecordedwithinotheraccruedexpenses.Ofthetotal$9.8millionreserve, $5.0millionisforon-siteremediationand$4.8millionisforoff-siteremediation.Theliabilityfortheon-siteremediationwasdiscountedat4.8%.Onanundiscountedbasis,theon-siteremediationliabilitywouldbe$15.2millionasofJanuary30,2016.TheCompanyexpectstospendapproximately$0.2millionineachofthenextfiveyearsand$14.2millionintheaggregatethereafterrelatedtotheon-siteremediation.

OtherTheCompanyhascompleteditsremediationeffortsatitsclosedNewYorktanneryandtwoassociatedlandfills.In1995,stateenvironmentalauthoritiesreclassifiedthestatusofthesesitesasbeingproperlyclosedandrequiringonlycontinuedmaintenanceandmonitoringthrough2024.TheCompanyhasanaccruedliabilityof$1.3millionatJanuary30,2016relatedtothesesites,whichhasbeendiscountedat6.4%.Ofthe$1.3millionreserve,$1.1millionisrecordedinotherliabilitiesand$0.2millionisrecordedinotheraccruedexpenses.Onanundiscountedbasis,thisliabilitywouldbe$1.6million.TheCompanyexpectstospendapproximately$0.2millionineachofthenextfiveyearsand$0.6millionintheaggregatethereafterrelatedtothesesites.Inaddition,variousfederalandstateauthoritieshaveidentifiedtheCompanyasapotentiallyresponsiblepartyforremediationatcertainothersites.However,theCompanydoesnotcurrentlybelievethatitsliabilityforsuchsites,ifany,wouldbematerial.


TheCompanycontinuestoevaluateitsestimatedcostsinconjunctionwithitsenvironmentalconsultantsandrecordsitsbestestimateofsuchliabilities.However,futureactionsandtheassociatedcostsaresubjecttooversightandapprovalofvariousgovernmentalauthorities.Accordingly,theultimatecostsmayvary,anditispossiblecostsmayexceedtherecordedamounts.

litigationTheCompanyisinvolvedinlegalproceedingsandlitigationarisingintheordinarycourseofbusiness.Intheopinionofmanagement,theoutcomeofsuchordinarycourseofbusinessproceedingsandlitigationcurrentlypendingisnotexpectedtohaveamaterialadverseeffectontheCompany’sresultsofoperationsorfinancialposition.Legalcostsassociatedwithlitigationaregenerallyexpensedasincurred.

During2014,theCompanysignedasettlementagreementtoresolveaputativeclassactionlawsuitinvolvingwageandhourclaimsinCaliforniaforanamountnottoexceed$1.5million.In2015,thecourtgrantedfinalapprovalofthesettlement,pursuanttowhichtheCompanywasrequiredtopay$1.0millioninattorneys’fees,costsofadministeringthesettlementandsettlementpaymentstoclassmemberswhosubmittedclaims.Allpaymentsrequiredunderthesettlementagreementweremadeinthefourthquarterof2015andthismatterisfullyresolved. 18. FINANCIAL INFORMATION FOR THE COMPANY AND ITS SUBSIDIARIES

TheCompany’s2023SeniorNotesarefullyandunconditionallyandjointlyandseverallyguaranteedbyallofitsexistingandfuturesubsidiariesthatareguarantorsundertheCreditAgreement,asfurtherdiscussedinNote10totheconsolidatedfinancialstatements.ThefollowingtablepresentsthecondensedconsolidatingfinancialinformationforeachofCaleres,Inc.(“Parent”),theGuarantors,andsubsidiariesoftheParentthatarenotGuarantors(the“Non-Guarantors”),togetherwithconsolidatingeliminations,asofandfortheperiodsindicated.Guarantorsare100%ownedbytheParent.

Thecondensedconsolidatingfinancialstatementshavebeenpreparedusingtheequitymethodofaccountinginaccordancewiththerequirementsforpresentationofsuchinformation.Managementbelievesthattheinformation,presentedinlieuofcompletefinancialstatementsforeachoftheGuarantors,providesmeaningfulinformationtoallowinvestorstodeterminethenatureoftheassetsheldby,andoperationsandcashflowsof,eachoftheconsolidatedgroups.

CONDENSED CONSOLIDATING BALANCE SHEETAS OF JANUARY 30, 2016

($ thousands) Parent Guarantors Non-Guarantors Eliminations Totalassets Cashandcashequivalents . . . . . . . . . . . . . . . . . . . . $ 31,000 $ – $ 87,151 $ – $ 118,151 Receivables,net . . . . . . . . . . . . . . . . . . . . . . . . . . 110,235 2,290 41,139 – 153,664 Inventories,net . . . . . . . . . . . . . . . . . . . . . . . . . . 151,704 371,538 23,503 – 546,745 Prepaidexpensesandothercurrentassets . . . . . . . . . . . 29,765 24,597 8,109 (5,966) 56,505 Intercompanyreceivable-current. . . . . . . . . . . . . . . . 650 176 6,877 (7,703) –Totalcurrentassets. . . . . . . . . . . . . . . . . . . . . . . . . . . 323,354 398,601 166,779 (13,669) 875,065 Propertyandequipment,net . . . . . . . . . . . . . . . . . . 32,538 136,223 10,249 – 179,010 Goodwillandintangibleassets,net . . . . . . . . . . . . . . . 115,558 2,800 12,541 – 130,899 other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,767 15,772 7,810 – 118,349 Investmentinsubsidiaries . . . . . . . . . . . . . . . . . . . . 1,028,143 – (19,524) (1,008,619) – Intercompanyreceivable-noncurrent . . . . . . . . . . . . . 431,523 354,038 556,259 (1,341,820) –Totalassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,025,883 $907,434 $ 734,114 $(2,364,108) $1,303,323

liabilities and equityCurrentliabilities: Tradeaccountspayable . . . . . . . . . . . . . . . . . . . . . . $ 78,332 $123,274 $ 36,196 $ – $ 237,802 Otheraccruedexpenses . . . . . . . . . . . . . . . . . . . . . 80,053 62,729 15,681 (5,966) 152,497 Intercompanypayable-current . . . . . . . . . . . . . . . . . 4,394 – 3,309 (7,703) –Totalcurrentliabilities . . . . . . . . . . . . . . . . . . . . . . . . . 162,779 186,003 55,186 (13,669) 390,299Otherliabilities: Long-termdebt . . . . . . . . . . . . . . . . . . . . . . . . . . 196,544 – – – 196,544 Otherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 44,011 66,302 3,695 – 114,008 Intercompanypayable-noncurrent. . . . . . . . . . . . . . . 1,021,065 39,175 281,580 (1,341,820) —Totalotherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 1,261,620 105,477 285,275 (1,341,820) 310,552Equity: Caleres,Inc.shareholders’equity . . . . . . . . . . . . . . . . 601,484 615,954 392,665 (1,008,619) 601,484 Noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . – – 988 – 988Totalequity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601,484 615,954 393,653 (1,008,619) 602,472Totalliabilitiesandequity. . . . . . . . . . . . . . . . . . . . . . . $2,025,883 $907,434 $ 734,114 $(2,364,108) $1,303,323


CONDENSED CONSOLIDATING STATEMENT OF EARNINGSFOR THE FISCAL YEAR ENDED JANUARY 30, 2016

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNetsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 819,148 $1,652,444 $268,779 $(162,941) $2,577,430Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . 591,539 905,412 162,384 (129,708) 1,529,627Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227,609 747,032 106,395 (33,233) 1,047,803Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . 235,210 649,020 61,699 (33,233) 912,696Operating(loss)earnings . . . . . . . . . . . . . . . . . . . . . . (7,601) 98,012 44,696 – 135,107Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,588) (1) – – (16,589)Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . (10,651) – – – (10,651)Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 – 204 – 899Intercompanyinterestincome(expense) . . . . . . . . . . . . . 14,363 (14,581) 218 – –(Loss)earningsbeforeincometaxes . . . . . . . . . . . . . . . . (19,782) 83,430 45,118 – 108,766Incometaxbenefit(provision) . . . . . . . . . . . . . . . . . . . 8,755 (29,475) (6,222) – (26,942)Equityinearnings(loss)ofsubsidiaries,netoftax. . . . . . . . 92,506 – (616) (91,890) –Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,479 53,955 38,280 (91,890) 81,824 Less:Netearningsattributabletononcontrollinginterests . . . – – 345 – 345NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . $ 81,479 $ 53,955 $ 37,935 $ (91,890) $ 81,479

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOMEFOR THE FISCAL YEAR ENDED JANUARY 30, 2016

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNet earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,479 $53,955 $ 38,280 $ (91,890) $ 81,824 Othercomprehensiveincome(loss),netoftax: Foreigncurrencytranslationadjustment . . . . . . . . . . . . – – (224) – (224) Pensionandotherpostretirementbenefitsadjustments . . . (8,838) – 249 – (8,589) Derivativefinancialinstruments . . . . . . . . . . . . . . . . 628 – (460) – 168 Othercomprehensivelossfrominvestmentinsubsidiaries . (366) – – 366 –Othercomprehensiveloss,netoftax . . . . . . . . . . . . . . . . (8,576) – (435) 366 (8,645)Comprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . 72,903 53,955 37,845 (91,524) 73,179Comprehensiveincomeattributabletononcontrollinginterests . . – – 276 – 276ComprehensiveincomeattributabletoCaleres,Inc. . . . . . . . . $ 72,903 $53,955 $ 37,569 $ (91,524) $ 72,903

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSFOR THE FISCAL YEAR ENDED JANUARY 30, 2016

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNetcash(usedfor)providedbyoperatingactivities . . . . . . . $ (1,259) $ 99,222 $ 51,189 $ – $ 149,152

Investing activitiesPurchasesofpropertyandequipment. . . . . . . . . . . . . . . . (14,585) (56,382) (2,512) – (73,479)Proceedsfromdisposalofpropertyandequipment . . . . . . . . 7,111 – 322 – 7,433Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . (5,197) (2,538) – – (7,735)Intercompanyinvesting . . . . . . . . . . . . . . . . . . . . . . . . (568) 568 – – –Netcashusedforinvestingactivities . . . . . . . . . . . . . . . . (13,239) (58,352) (2,190) – (73,781)

Financing activitiesBorrowingsunderrevolvingcreditagreement . . . . . . . . . . . 198,000 – – – 198,000Repaymentsunderrevolvingcreditagreement . . . . . . . . . . (198,000) – – – (198,000)Proceedsfromissuanceof2023seniornotes . . . . . . . . . . . . 200,000 – – – 200,000redemption of 2019 senior notes. . . . . . . . . . . . . . . . . . . (200,000) – – – (200,000)Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,253) – – – (12,253)Debtissuancecosts . . . . . . . . . . . . . . . . . . . . . . . . . . (3,650) – – – (3,650)Acquisitionoftreasurystock . . . . . . . . . . . . . . . . . . . . . (4,921) – – – (4,921)Issuanceofcommonstockundershare-basedplans,net . . . . . (5,297) – – – (5,297)Excesstaxbenefitrelatedtoshare-basedplans . . . . . . . . . . . 2,651 – – – 2,651Intercompanyfinancing . . . . . . . . . . . . . . . . . . . . . . . . 55,077 (40,870) (14,207) – –Netcashprovidedby(usedfor)financingactivities . . . . . . . . 31,607 (40,870) (14,207) – (23,470)Effectofexchangeratechangesoncashandcashequivalents . . – – (1,153) – (1,153)Increaseincashandcashequivalents . . . . . . . . . . . . . . . . 17,109 – 33,639 – 50,748Cashandcashequivalentsatbeginningofyear . . . . . . . . . . 13,891 – 53,512 – 67,403Cashandcashequivalentsatendofyear . . . . . . . . . . . . . . $ 31,000 $ – $ 87,151 $ – $ 118,151


CONDENSED CONSOLIDATING BALANCE SHEETAS OF JANUARY 31, 2015

($ thousands) Parent Guarantors Non-Guarantors Eliminations Totalassets Currentassets: Cashandcashequivalents . . . . . . . . . . . . . . . . . . . $ 13,891 $ – $ 53,512 $ – $ 67,403 Receivables,net . . . . . . . . . . . . . . . . . . . . . . . . . 89,030 5,398 42,218 – 136,646 Inventories,net . . . . . . . . . . . . . . . . . . . . . . . . . 148,082 376,254 18,767 – 543,103 Prepaidexpensesandothercurrentassets . . . . . . . . . . 40,746 20,777 8,964 (27,491) 42,996 Intercompanyreceivable-current. . . . . . . . . . . . . . . 1,194 – 8,750 (9,944) –Totalcurrentassets. . . . . . . . . . . . . . . . . . . . . . . . . . 292,943 402,429 132,211 (37,435) 790,148 Propertyandequipment,net . . . . . . . . . . . . . . . . . 29,237 109,720 10,786 – 149,743 Goodwillandintangibleassets,net . . . . . . . . . . . . . . 117,792 2,800 13,995 – 134,587 other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,185 13,733 13,931 – 139,849 Investmentinsubsidiaries . . . . . . . . . . . . . . . . . . . 956,831 – (18,909) (937,922) – Intercompanyreceivable-noncurrent . . . . . . . . . . . . 459,774 306,871 539,396 (1,306,041) –Totalassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,968,762 $835,553 $691,410 $(2,281,398) $1,214,327

liabilities and equityCurrentliabilities: Tradeaccountspayable . . . . . . . . . . . . . . . . . . . . . $ 60,377 $114,208 $ 41,336 $ – $ 215,921 Otheraccruedexpenses . . . . . . . . . . . . . . . . . . . . 83,170 85,638 12,301 (27,491) 153,618 Intercompanypayable-current . . . . . . . . . . . . . . . . 4,948 – 4,996 (9,944) –Totalcurrentliabilities . . . . . . . . . . . . . . . . . . . . . . . . 148,495 199,846 58,633 (37,435) 369,539Otherliabilities: Long-termdebt . . . . . . . . . . . . . . . . . . . . . . . . . 196,712 – – – 196,712 Otherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . 69,391 32,574 4,489 – 106,454 Intercompanypayable-noncurrent. . . . . . . . . . . . . . 1,013,254 21,078 271,709 (1,306,041) –Totalotherliabilities . . . . . . . . . . . . . . . . . . . . . . . . . 1,279,357 53,652 276,198 (1,306,041) 303,166Equity: Caleres,Inc.shareholders’equity . . . . . . . . . . . . . . . 540,910 582,055 355,867 (937,922) 540,910 Noncontrollinginterests . . . . . . . . . . . . . . . . . . . . – – 712 – 712Totalequity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540,910 582,055 356,579 (937,922) 541,622Totalliabilitiesandequity. . . . . . . . . . . . . . . . . . . . . . $1,968,762 $835,553 $691,410 $(2,281,398) $1,214,327

CONDENSED CONSOLIDATING STATEMENT OF EARNINGSFOR THE FISCAL YEAR ENDED JANUARY 31, 2015

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNetsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 788,708 $1,634,375 $329,765 $(181,139) $2,571,709Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . 570,343 899,968 213,716 (152,418) 1,531,609Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218,365 734,407 116,049 (28,721) 1,040,100Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . 231,141 633,073 75,189 (28,721) 910,682Restructuringandotherspecialcharges,net . . . . . . . . . . . 3,484 – – – 3,484Operating(loss)earnings . . . . . . . . . . . . . . . . . . . . . . (16,260) 101,334 40,860 – 125,934Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,444) (1) – – (20,445)Lossonearlyextinguishmentofdebt . . . . . . . . . . . . . . . (420) – – – (420)Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 – 348 – 379Intercompanyinterestincome(expense) . . . . . . . . . . . . . 12,115 (12,826) 711 – –Gainonsaleofsubsidiary. . . . . . . . . . . . . . . . . . . . . . – – 4,679 – 4,679(Loss)earningsbeforeincometaxes . . . . . . . . . . . . . . . . (24,978) 88,507 46,598 – 110,127Incometaxbenefit(provision) . . . . . . . . . . . . . . . . . . . 10,599 (34,710) (3,073) – (27,184)Equityinearningsofsubsidiaries,netoftax . . . . . . . . . . . 97,229 – 37 (97,266) –Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,850 53,797 43,562 (97,266) 82,943Less:Netearningsattributabletononcontrollinginterests . . . – – 93 – 93NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . $ 82,850 $ 53,797 $ 43,469 $ (97,266) $ 82,850


CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOMEFOR THE FISCAL YEAR ENDED JANUARY 31, 2015

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNet earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,850 $53,797 $43,562 $(97,266) $ 82,943 Othercomprehensiveincome(loss),netoftax: Foreigncurrencytranslationadjustment . . . . . . . . . . . . – – (3,145) – (3,145) Pensionandotherpostretirementbenefitsadjustments . . . (10,003) – (346) – (10,349) Derivativefinancialinstruments . . . . . . . . . . . . . . . . (1,250) – 736 – (514) Othercomprehensivelossfrominvestmentinsubsidiaries . (2,711) – – 2,711 –Othercomprehensiveloss,netoftax . . . . . . . . . . . . . . . . (13,964) – (2,755) 2,711 (14,008)Comprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . 68,886 53,797 40,807 (94,555) 68,935Comprehensiveincomeattributabletononcontrollinginterests . – – 49 – 49ComprehensiveincomeattributabletoCaleres,Inc. . . . . . . . . $ 68,886 $53,797 $40,758 $(94,555) $ 68,886

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSFOR THE FISCAL YEAR ENDED JANUARY 31, 2015

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNetcash(usedfor)providedbyoperatingactivities . . . . . . . $ (11,728) $ 99,709 $ 30,831 $ – $ 118,812

Investing activitiesPurchasesofpropertyandequipment. . . . . . . . . . . . . . . . (7,129) (33,067) (4,756) – (44,952)Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . . (4,834) (194) (58) – (5,086)Acquisitionoftrademarks . . . . . . . . . . . . . . . . . . . . . . (65,065) – – – (65,065)Investmentinnonconsolidatedaffiliate . . . . . . . . . . . . . . . – – (7,000) – (7,000)Netproceedsfromsaleofsubsidiaries, inclusiveofnotereceivable. . . . . . . . . . . . . . . . . . . . – – 10,120 – 10,120Intercompanyinvesting . . . . . . . . . . . . . . . . . . . . . . . . (2,314) (124) 2,438 – –Netcash(usedfor)providedbyinvestingactivities . . . . . . . . (79,342) (33,385) 744 – (111,983)

Financing activitiesBorrowingsunderrevolvingcreditagreement . . . . . . . . . . . 867,000 – – – 867,000Repaymentsunderrevolvingcreditagreement . . . . . . . . . . (874,000) – – – (874,000)Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,237) – – – (12,237)Debtissuancecosts . . . . . . . . . . . . . . . . . . . . . . . . . . (2,618) – – – (2,618)Issuanceofcommonstockundershare-basedplans,net . . . . . 443 – – – 443Excesstaxbenefitrelatedtoshare-basedplans . . . . . . . . . . . 929 – – – 929Intercompanyfinancing . . . . . . . . . . . . . . . . . . . . . . . . 125,444 (66,324) (59,120) – –Netcashprovidedby(usedfor)financingactivities . . . . . . . . 104,961 (66,324) (59,120) – (20,483)Effectofexchangeratechangesoncashandcashequivalents . . – – (1,489) – (1,489)Increase(decrease)incashandcashequivalents . . . . . . . . . . 13,891 – (29,034) – (15,143)Cashandcashequivalentsatbeginningofyear . . . . . . . . . . – – 82,546 – 82,546Cashandcashequivalentsatendofyear . . . . . . . . . . . . . . $ 13,891 $ – $ 53,512 $ – $ 67,403


CONDENSED CONSOLIDATING STATEMENT OF EARNINGSFOR THE FISCAL YEAR ENDED FEBRUARY 1, 2014

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNetsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $733,996 $1,631,755 $361,277 $(213,915) $2,513,113Costofgoodssold . . . . . . . . . . . . . . . . . . . . . . . . . . 549,281 900,043 236,113 (186,612) 1,498,825Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184,715 731,712 125,164 (27,303) 1,014,288Sellingandadministrativeexpenses . . . . . . . . . . . . . . . . 217,902 629,405 89,745 (27,303) 909,749Restructuringandotherspecialcharges,net . . . . . . . . . . . 686 – 576 – 1,262Impairmentofassetsheldforsale . . . . . . . . . . . . . . . . . – – 4,660 – 4,660Operating(loss)earnings . . . . . . . . . . . . . . . . . . . . . . (33,873) 102,307 30,183 – 98,617Interestexpense . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,163) (1) (90) – (21,254)Interestincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 – 354 – 377Intercompanyinterestincome(expense) . . . . . . . . . . . . . 13,414 (13,060) (354) – –(Loss)earningsbeforeincometaxesfromcontinuingoperations . (41,599) 89,246 30,093 – 77,740Incometaxbenefit(provision) . . . . . . . . . . . . . . . . . . . 20,427 (35,727) (8,458) – (23,758)Equityinearnings(loss)fromcontinuingoperations ofsubsidiaries,netoftax . . . . . . . . . . . . . . . . . . . . 75,331 – (168) (75,163) –Netearningsfromcontinuingoperations . . . . . . . . . . . . . 54,159 53,519 21,467 (75,163) 53,982Discontinuedoperations: . . . . . . . . . . . . . . . . . . . . . . (Loss)earningsfromdiscontinuedoperations,netoftax . . . . (5,296) – 722 – (4,574)Disposition/impairmentofdiscontinuedoperations, netoftax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (11,512) – (11,512)Equityinlossfromdiscontinuedoperations ofsubsidiaries,netoftax . . . . . . . . . . . . . . . . . . . . (10,790) – – 10,790 –Netlossfromdiscontinuedoperations . . . . . . . . . . . . . . (16,086) – (10,790) 10,790 (16,086)Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,073 53,519 10,677 (64,373) 37,896Plus:Netlossattributabletononcontrollinginterests . . . . . . – – (177) – (177)NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . $ 38,073 $ 53,519 $ 10,854 $ (64,373) $ 38,073 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOMEFOR THE FISCAL YEAR ENDED FEBRUARY 1, 2014

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNet earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,073 $53,519 $10,677 $(64,373) $37,896 Othercomprehensiveincome(loss),netoftax: Foreigncurrencytranslationadjustment . . . . . . . . . . . – – (4,538) – (4,538) Pensionandotherpostretirementbenefitsadjustments . . 19,114 – 415 – 19,529 Derivativefinancialinstruments . . . . . . . . . . . . . . . (55) – 874 – 819 Othercomprehensivelossfrominvestmentinsubsidiaries (3,317) – – 3,317 –Othercomprehensiveincome(loss),netoftax . . . . . . . . . . 15,742 – (3,249) 3,317 15,810Comprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . 53,815 53,519 7,428 (61,056) 53,706Comprehensivelossattributabletononcontrollinginterests . . – – (109) – (109)ComprehensiveincomeattributabletoCaleres,Inc. . . . . . . . $53,815 $53,519 $ 7,537 $(61,056) $53,815

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSFOR THE FISCAL YEAR ENDED FEBRUARY 1, 2014

($ thousands) Parent Guarantors Non-Guarantors Eliminations TotalNetcashprovidedby(usedfor)operatingactivities . . . . . . $ 60,886 $ 62,603 $ (19,457) $ – $ 104,032Investing activitiesPurchasesofpropertyandequipment. . . . . . . . . . . . . . . (5,595) (34,606) (3,767) – (43,968)Capitalizedsoftware . . . . . . . . . . . . . . . . . . . . . . . . . (4,920) (193) (122) – (5,235)Netproceedsfromsaleofsubsidiaries . . . . . . . . . . . . . . – – 69,347 – 69,347Intercompanyinvesting . . . . . . . . . . . . . . . . . . . . . . . (1,128) (247) 1,375 – –Netcash(usedfor)providedbyinvestingactivities . . . . . . . (11,643) (35,046) 66,833 – 20,144Financing activitiesBorrowingsunderrevolvingcreditagreement . . . . . . . . . . 1,129,000 – – – 1,129,000Repaymentsunderrevolvingcreditagreement . . . . . . . . . (1,227,000) – – – (1,227,000)Dividendpaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,105) – – – (12,105)Issuanceofcommonstockundershare-basedplans,net . . . . 804 – – – 804Excesstaxbenefitrelatedtoshare-basedplans . . . . . . . . . . 3,439 – – – 3,439Contributionsbynoncontrollinginterest . . . . . . . . . . . . . – – 50 – 50Intercompanyfinancing . . . . . . . . . . . . . . . . . . . . . . . 56,619 (27,557) (29,062) – –Netcashusedforbyfinancingactivities . . . . . . . . . . . . . (49,243) (27,557) (29,012) – (105,812)Effectofexchangeratechangesoncashandcashequivalents . – – (4,041) – (4,041)Increaseincashandcashequivalents . . . . . . . . . . . . . . . – – 14,323 – 14,323Cashandcashequivalentsatbeginningofyear . . . . . . . . . – – 68,223 – 68,223Cashandcashequivalentsatendofyear . . . . . . . . . . . . . $ – $ – $ 82,546 $ – $ 82,546


19. QUARTERLY FINANCIAL DATA (Unaudited)

Quarterlyfinancialresults(unaudited)for2015and2014areasfollows:

Quarters First Quarter second Quarter Third Quarter Fourth Quarter($ thousands, except per share amounts) (13 weeks) (13 weeks) (13 weeks) (13 weeks) 2015 Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $602,283 $637,834 $728,639 $608,674 Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,526 262,795 288,434 248,048 Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,391 16,863 33,992 11,578 NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . . . . . 19,261 16,825 33,983 11,410 Pershareofcommonstock: Basicearningspercommonshareattributable toCaleres,Inc.shareholders(1). . . . . . . . . . . . . . . . . . . 0.44 0.38 0.78 0.26 Dilutedearningspercommonshareattributable toCaleres,Inc.shareholders(1). . . . . . . . . . . . . . . . . . . 0.44 0.38 0.78 0.26 Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.07 0.07 0.07 0.07 Marketvalue: High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.33 33.83 33.73 31.75 Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.22 28.91 27.90 23.22

(1)EPSforthequartersmaynotsumtotheannualamountaseachperiodiscomputedonadiscreteperiodbasis.

Quarters First Quarter second Quarter Third Quarter Fourth Quarter($ thousands, except per share amounts) (13 weeks) (13 weeks) (13 weeks) (13 weeks) 2014 Netsales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $591,162 $635,877 $729,277 $615,393Grossprofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242,341 259,642 290,730 247,387Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,476 18,039 33,237 16,191NetearningsattributabletoCaleres,Inc. . . . . . . . . . . . . . . . . . 15,429 18,064 33,113 16,244Pershareofcommonstock: Basicearningspercommonshareattributable toCaleres,Inc.shareholders(1). . . . . . . . . . . . . . . . . . . 0.35 0.41 0.76 0.37 Dilutedearningspercommonshareattributable toCaleres,Inc.shareholders(1). . . . . . . . . . . . . . . . . . . 0.35 0.41 0.75 0.37 Dividendspaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.07 0.07 0.07 0.07 Marketvalue: High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.73 29.65 32.31 33.67 Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.30 23.14 25.30 26.39

(1)EPSforthequartersmaynotsumtotheannualamountaseachperiodiscomputedonadiscreteperiodbasis.


SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

Col.A Col.B Col.C Col.D Col.E Additions Balanceat Chargedto Chargedto Balance Beginning Costsand OtherAccounts- Deductions- atEndDescription ofPeriod Expenses Describe Describe ofPeriod($ thousands)Year eNDeD JaNUarY 30, 2016Deductedfromassetsoraccounts: Doubtfulaccountsandallowances . . . . . . . $ 2,235 $ 480 $ – $ 420 (a) $ 2,295 Customerallowances . . . . . . . . . . . . . . . 21,906 47,435 – 47,751 (B) 21,590 Customerdiscounts . . . . . . . . . . . . . . . . 1,252 2,624 – 2,981 (B) 895 Inventoryvaluationallowances . . . . . . . . . 16,051 55,126 – 55,397 (c) 15,780 Deferredtaxassetvaluationallowance . . . . . 11,514 670 – 5,640 (D) 6,544

Year eNDeD JaNUarY 31, 2015Deductedfromassetsoraccounts: Doubtfulaccountsandallowances . . . . . . . $ 832 $ 1,716 $ – $ 313(A) $ 2,235 Customerallowances . . . . . . . . . . . . . . . 19,862 46,878 – 44,834(b) 21,906 Customerdiscounts . . . . . . . . . . . . . . . . 776 3,519 – 3,043(b) 1,252 Inventoryvaluationallowances . . . . . . . . . 17,739 50,781 – 52,469(C) 16,051 Deferredtaxassetvaluationallowance . . . . . 13,949 714 – 3,149(D) 11,514

Year eNDeD FeBrUarY 1, 2014Deductedfromassetsoraccounts: Doubtfulaccountsandallowances . . . . . . . $ 973 $ 602 $ – $ 743(A) $ 832 Customerallowances . . . . . . . . . . . . . . . 19,080 45,099 – 44,317(b) 19,862 Customerdiscounts . . . . . . . . . . . . . . . . 489 4,809 – 4,522(b) 776 Inventoryvaluationallowances . . . . . . . . . 19,080 53,881 – 55,222(C) 17,739 Deferredtaxassetvaluationallowance . . . . . 8,014 6,490 – 555(D) 13,949

(A) Accountswrittenoff,netofrecoveries.(B) DiscountsandallowancesgrantedtowholesalecustomersoftheBrandPortfoliosegment.(C) Adjustmentupondisposalofrelatedinventories.(D) Reductionstothevaluationallowanceforthenetoperatinglosscarryforwardsforcertainstatesbased

ontheCompany’sexpectationsforutilizationofnetoperatinglosscarryforwards.

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A CONTROLS AND PROCEDURES

evaluation of Disclosure controls and ProceduresItistheChiefExecutiveOfficer’sandChiefFinancialOfficer’sultimateresponsibilitytoensurewemaintaindisclosurecontrolsandproceduresdesignedtoprovidereasonableassurancethatinformationrequiredtobedisclosedinthereportsthatwefileorsubmitundertheSecuritiesExchangeActof1934isrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintheCommission’srulesandformsandisaccumulatedandcommunicatedtoourmanagement,includingourprincipalexecutiveandprincipalfinancialofficers,orpersonsperformingsimilarfunctions,asappropriatetoallowtimelydecisionsregardingrequireddisclosure.Ourdisclosurecontrolsandproceduresincludemandatorycommunicationofmaterialevents;automatedaccountingprocessingandreporting;managementreviewofmonthly,quarterlyandannualresults;anestablishedsystemofinternalcontrols;andinternalcontrolreviewsbyourinternalauditors.

Acontrolsystem,nomatterhowwell-conceivedoroperated,canprovideonlyreasonable,notabsolute,assurancethattheobjectivesofthecontrolsystemaremet.Furthermore,thedesignofacontrolsystemmustreflectthefactthereareresourceconstraints,andthebenefitsofcontrolsmustbeconsideredrelativetotheircosts.Becauseoftheinherentlimitationsinallcontrolsystems,noevaluationofcontrolscanprovideabsoluteassurancethatallcontrolissuesandinstancesoffraud,ifany,havebeendetected.Theseinherentlimitationsincludetherealitiesthatjudgmentsindecision-makingcanbefaulty,andbreakdownscanoccurbecauseofsimpleerrorormistake.


Additionally,controlscanbecircumventedbytheindividualactsofsomepersons,bycollusionoftwoormorepeopleorbymanagementoverrideofthecontrols.Thedesignofanysystemofcontrolsisbasedinpartuponcertainassumptionsaboutthelikelihoodoffutureevents,andtherecanbenoassuranceanydesignwillsucceedinachievingitsstatedgoalsunderallpotentialfutureconditions;overtime,controlsmaybecomeinadequatebecauseofchangesinconditionsorthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.Becauseoftheinherentlimitationsinacost-effectivecontrolsystem,misstatementsduetoerrorsorfraudmayoccurandnotbedetected.Ourdisclosurecontrolsandproceduresaredesignedtoprovideareasonablelevelofassurancethattheirobjectivesareachieved.AsofJanuary30,2016,managementoftheCompany,includingtheChiefExecutiveOfficerandChiefFinancialOfficer,conductedanevaluationoftheeffectivenessofourdisclosurecontrolsandprocedures(asdefinedinRule13a-15(e)undertheSecuritiesExchangeActof1934).Baseduponandasofthedateofthatevaluation,theChiefExecutiveOfficerandChiefFinancialOfficerhaveconcludedourdisclosurecontrolsandprocedureswereeffectiveatthereasonableassurancelevel.

Internal control Over Financial reportingBasedontheevaluationofinternalcontroloverfinancialreporting,theChiefExecutiveOfficerandChiefFinancialOfficerhaveconcludedthattherehavebeennochangesintheCompany’sinternalcontrolsoverfinancialreportingorinotherfactorsduringthequarterendedJanuary30,2016,thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,theCompany’sinternalcontroloverfinancialreporting.

ITEM 9B OTHER INFORMATION

None.

PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

InformationregardingDirectorsoftheCompanyissetforthunderthecaptionProposal 1 – Election of Directors in the ProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

InformationregardingExecutiveOfficersoftheRegistrantissetforthunderthecaptionExecutive Officers of the RegistrantthatcanbefoundinItem1ofthisreport,whichinformationisincorporatedhereinbyreference.

InformationregardingSection16,BeneficialOwnershipReportingCompliance,issetforthunderthecaptionSection 16(a) Beneficial Ownership Reporting Compliance intheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

InformationregardingtheAuditCommitteeandtheAuditCommitteefinancialexpertissetforthunderthecaptionBoard Meetings and CommitteesintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

InformationregardingtheCorporateGovernanceGuidelines,CodeofBusinessConduct,andCodeofEthicsissetforthunderthecaptionCorporate GovernanceintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

ITEM 11 EXECUTIVE COMPENSATION

InformationregardingExecutiveCompensationissetforthunderthecaptionsCompensation Discussion and Analysis, Executive Compensation, and Compensation of Non-Employee DirectorsintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

InformationregardingtheCompensationCommitteeReportissetforthunderthecaptionCompensation Committee ReportintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

InformationregardingCompensationCommitteeInterlocksandInsiderParticipationissetforthunderthecaptionCompensation Committee Interlocks and Insider ParticipationintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.


ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

InformationregardingCompanyStockOwnershipbyDirectors,OfficersandPrincipalHoldersofOurStockissetforthunderthecaptionStock Ownership by Directors, Executive Officers and 5% ShareholdersintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

equity compensation Plan InformationThefollowingtablesetsforthaggregateinformationregardingtheCompany’sequitycompensationplansasofJanuary30,2016: Numberofsecurities remainingavailable Numberofsecurities Weighted-average forfutureissuanceunder tobeissueduponexercise exercisepriceof equitycompensationplans ofoutstandingoptions, outstandingoptions, (excludingsecurities warrantsandrights warrantsandrights reflectedincolumn(a))PlanCategory (a) (b) (c) Equitycompensationplansapprovedbysecurityholders . . . 301,295 (1) $18.93(1) 2,136,477(2) Equitycompensationplansnotapprovedbysecurityholders . – – – Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301,295 $18.93 2,136,477

(1) Column(a)includes301,295outstandingstockoptions(includesvestedandnonvestedoptions).Performancesharerightsweredisregardedforpurposesofcomputingtheweighted-averageexercisepriceincolumn(b).Thistableexcludesrestrictedstockunitsgrantedtoindependentdirectorsandindependentdirectors’deferredcompensationunits,whicharepayableonlyincashandaredescribedfurtherinNote15totheconsolidatedfinancialstatements.

(2) Representsourremainingsharesavailableforawardgrantsbasedupontheplanprovisions,whichreflectsourpracticetoreservesharesforoutstandingawards.Perourcurrentpractice,thenumberofsecuritiesavailableforgranthasbeenreducedforstockoptiongrants.Performanceshareawardsarereservedbasedonthemaximumpayoutlevel.

Informationregardingshare-basedplansissetforthinNote15totheconsolidatedfinancialstatementsandisherebyincorporatedbyreference.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

InformationregardingCertainRelationshipsandRelatedTransactionsissetforthunderthecaptionRelated Party TransactionsintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

InformationregardingDirectorIndependenceissetforthunderthecaptionDirector IndependenceintheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.

ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES

InformationregardingourPrincipalAccountingFeesandServicesissetforthunderthecaptionFees Paid to Independent Registered Public Accountants intheProxyStatementfortheAnnualMeetingofShareholderstobeheldMay25,2016,whichinformationisincorporatedhereinbyreference.


PART IV

ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1)and(2)ThelistoffinancialstatementsandFinancialStatementSchedulesrequiredbythisitemisincludedintheIndexunder Financial Statements and Supplementary Data.AllotherschedulesspecifiedunderRegulationS-Xhavebeenomittedbecausetheyarenotapplicable,becausetheyarenotrequiredorbecausetheinformationrequiredisincludedinthefinancialstatementsornotesthereto.

(3)Exhibits

Certaininstrumentsdefiningtherightsofholdersoflong-termdebtsecuritiesoftheCompanyareomittedpursuanttoItem601(b)(4)(iii)ofRegulationS-K,andtheCompanyherebyundertakestofurnishtotheSEC,uponrequest,copiesofanysuchinstruments.

exhibit No. Description 3.1 RestatedCertificateofIncorporationofCaleres,Inc.(the“Company”)incorporatedhereinbyreferencetoExhibit3.1to

theCompany’sForm8-KfiledJune1,2015. 3.2 BylawsoftheCompanyasamendedthroughMay28,2015,incorporatedhereinbyreferencetoExhibit3.2tothe

Company’sForm8-KfiledJune1,2015. 4.1 Indentureforthe6.250%SeniorNotesdue2023,datedJuly27,2015amongtheCompany,thesubsidiaryguarantorsset

forththerein,andWellsFargoBank,NationalAssociation,astrustee,asincorporatedhereinbyreferencetoExhibit4.1totheCompany’sForm8-KdatedandfiledJuly27,2015.

4.2 Formof6.250%SeniorNotesdue2023(includedinExhibit4.1). 10.1 FirstAmendmenttoFourthAmendedandRestatedCreditAgreement,datedasofJuly20,2015(the“CreditAgreement”),

amongtheCompany,asleadborrowerforitselfandonbehalfofcertainofitssubsidiaries,andBankofAmerica,N.A., asleadissuingbank,administrativeagentandcollateralagent,WellsFargoBank,NationalAssociation,asanissuingbank,WellsFargoBank,NationalAssociation,assyndicationagent,JPMorganChaseBank,N.A.andSunTrustBank,as co-documentationagents,andtheotherfinancialinstitutionspartythereto,aslenders,asincorporatedhereinbyreferencetoExhibit10.1totheCompany’sForm8-KdatedandfiledJuly20,2015.

10.2a* Caleres,Inc.IncentiveandStockCompensationPlanof2002,asAmendedandRestatedasofMay22,2008,incorporatedhereinbyreferencetoExhibitAtotheCompany’sdefinitiveproxystatementdatedandfiledApril11,2008.

10.2b(1)* FormofIncentiveStockOptionAwardAgreement(forgrantscommencingMay2008)undertheCompany’sIncentiveandStockCompensationPlanof2002,incorporatedhereinbyreferencetoExhibit10.5b(1)totheCompany’sForm10-KfortheyearendedJanuary31,2009,andfiledMarch31,2009.

10.2b(2)* FormofIncentiveStockOptionAwardAgreement(forgrantspriortoMay2008)undertheCompany’sIncentiveand StockCompensationPlanof2002,incorporatedhereinbyreferencetoExhibit10.4totheCompany’sForm10-QforthequarterendedJuly31,2004,andfiledSeptember8,2004.

10.2c(1)* FormofNon-QualifiedStockOptionAwardAgreement(forgrantscommencingMay2008)undertheCompany’sIncentiveandStockCompensationPlanof2002,incorporatedhereinbyreferencetoExhibit10.5c(1)totheCompany’sForm10-KfortheyearendedJanuary31,2009,andfiledMarch31,2009.

10.2c(2)* FormofNon-QualifiedStockOptionAwardAgreement(forgrantspriortoMay2008)undertheCompany’sIncentiveandStockCompensationPlanof2002,incorporatedhereinbyreferencetoExhibit10.3totheCompany’sForm10-QforthequarterendedJuly31,2004,andfiledSeptember8,2004.

10.2d* FormofRestrictedStockAgreement(foremployeegrantscommencing2008)undertheCompany’sIncentiveandStockCompensationPlanof2002,incorporatedhereinbyreferencetoExhibit10.5d(1)totheCompany’sForm10-KfortheyearendedJanuary31,2009,andfiledMarch31,2009.

† 10.2e* FormofRestrictedStockAwardAgreementfornon-employeedirectorawards(forgrantscommencingMay2015)undertheCompany’sIncentiveandStockCompensationPlanof2011,filedherewith.

† 10.2f* FormofRestrictedStockAwardAgreement(foremployeegrantscommencingMarch2016)undertheCompany’sIncentiveandStockCompensationPlanof2011,filedherewith.

10.3a* Caleres,Inc.IncentiveandStockCompensationPlanof2011,asamendedandrestatedeffectiveMay28,2015,incorporatedbyreferencetoExhibit10.1totheCompany’sForm10-QforthequarterendedMay2,2015,andfiledJune10,2015.

10.3(b)(1)* FormofPerformanceAwardAgreement(for2012-2014performanceperiod)undertheCompany’sIncentiveandStockCompensationPlanof2011,incorporatedhereinbyreferencetoExhibit10.1totheCompany’sForm10-QforthequarterendedJuly28,2012,andfiledSeptember5,2012.

10.3(b)(2)* FormofPerformanceAwardAgreement(for2013-2015performanceperiod)undertheCompany’sIncentiveandStockCompensationPlanof2011,incorporatedhereinbyreferencetoExhibit10.3(b)(3)totheCompany’sForm10-KfortheyearendedFebruary2,2013,andfiledApril2,2013.

10.3(b)(3)* FormofPerformanceAwardAgreement(for2014-2016performanceperiod)undertheCompany’sIncentiveandStockCompensationPlanof2011,incorporatedhereinbyreferencetoExhibit10.3(b)(4)totheCompany’sForm10-KfortheyearendedFebruary1,2014,andfiledApril1,2014.


exhibit No. Description 10.3(b)(4)* FormofPerformanceAwardAgreement(for2015-2017performanceperiod)undertheCompany’sIncentiveandStock

CompensationPlanof2011,incorporatedhereinbyreferencetoExhibit10.3(b)(4)totheCompany’sForm10-KfortheyearendedJanuary31,2015,andfiledMarch31,2015.

† 10.3(b)(5)* FormofPerformanceAwardAgreement(for2016-2018performanceperiod)undertheCompany’sIncentiveandStockCompensationPlanof2011,filedherewith.

† 10.4a* FormofNon-EmployeeDirectorRestrictedStockUnitAgreementbetweentheCompanyanditsNon-EmployeeDirectors(forgrantscommencingin2015),filedherewith.

10.5* Caleres,Inc.DeferredCompensationPlanforNon-EmployeeDirectors,asamendedandrestatedasofMay28,2015,incorporatedhereinbyreferencetoExhibit10.2totheCompany’sForm10-QforthequarterendedMay2,2015,andfiledJune10,2015.

10.6* Caleres,Inc.SupplementalExecutiveRetirementPlan(SERP),asamendedandrestatedasofMay28,2015,incorporatedhereinbyreferencetoExhibit10.3totheCompany’sForm10-QforthequarterendedMay2,2015,andfiledJune10,2015.

10.7* Caleres,Inc.DeferredCompensationPlan,asamendedandrestatedasofMay28,2015,incorporatedhereinbyreferencetoExhibit10.4totheCompany’sForm10-QforthequarterendedMay2,2015,andfiledJune10,2015.

10.8* Caleres,Inc.Non-EmployeeDirectorSharePlan(2009),incorporatedhereinbyreferencetoExhibit10.5totheCompany’sForm10-QforthequarterendedMay2,2015,andfiledJune10,2015.

10.9* SeveranceAgreement,effectiveApril1,2006,betweentheCompanyandRichardM.Ausick,incorporatedhereinbyreferencetoExhibit10.4totheCompany’sForm10-QforthequarterendedJuly31,2010,andfiledSeptember7,2010.

10.10* SeveranceAgreement,effectiveApril1,2006,betweentheCompanyandDianeM.Sullivan,incorporatedhereinbyreferencetoExhibit10.5totheCompany’sForm8-KdatedandfiledApril6,2006.

10.11* SeveranceAgreement,effectiveApril1,2006,betweentheCompanyandDouglasW.Koch,incorporatedhereinby referencetoExhibit10.12totheCompany’sForm10-KfortheyearendedFebruary2,2013andfiledApril2,2013.

10.12* SeveranceAgreement,datedMarch24,2009andeffectiveasofApril1,2009,betweentheCompanyand DanielR.Friedman,incorporatedhereinbyreferencetoExhibit10.12totheCompany’sForm10-Kfortheyear endedJanuary31,2015andfiledMarch31,2015.

10.13* FormofAmendmentletterdatedDecember18,2009,totheSeveranceAgreementsbetweentheCompanyandeachof:RichardM.Ausick,DanielR.Friedman,DouglasW.KochandDianeM.Sullivan,asincorporatedhereinbyreferencetoExhibit10.6totheCompany’sForm10-QforthequarterendedJuly31,2010,andfiledSeptember7,2010.

10.14* SeveranceAgreement,effectiveFebruary16,2015,betweentheCompanyandKennethH.Hannah,incorporatedhereinbyreferencetoExhibit10.1totheCompany’sForm8-KdatedandfiledFebruary6,2015.

10.15 StockPurchaseAgreement,datedMay14,2013,byandamongtheCompany,asubsidiaryandGalaxyBrandHoldings,Inc.,incorporatedhereinbyreferencetoExhibit10.1totheCompany’sForm8-KfiledMay20,2013.

† 21 Subsidiariesoftheregistrant.† 23 ConsentofRegisteredPublicAccountingFirm.† 24 Powerofattorney(containedonsignaturepage).† 31.1 CertificationoftheChiefExecutiveOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002.† 31.2 CertificationoftheChiefFinancialOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002.† 32.1 CertificationoftheChiefExecutiveandChiefFinancialOfficerpursuanttoSection906oftheSarbanes-OxleyActof2002.† 101.INS XBRLInstanceDocument† 101.SCH XBRLTaxonomyExtensionSchemaDocument† 101.CAL XBRLTaxonomyExtensionCalculationLinkbaseDocument† 101.LAB XBRLTaxonomyExtensionLabelLinkbaseDocument† 101.PRE XBRLTaxonomyPresentationLinkbaseDocument† 101.DEF XBRLTaxonomyDefinitionLinkbaseDocument

(b) Exhibits:SeeItem15(a)(3)above.Onrequest,copiesofanyexhibitwillbefurnishedtoshareholdersuponpaymentoftheCompany’sreasonableexpensesincurredinfurnishingsuchexhibits.

(c) FinancialStatementSchedules: SeeItem8above.

* Denotesmanagementcontractorcompensatoryplanarrangements.= DenotesexhibitisfiledwiththisForm10-K.


SIGNATURES

PursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

CALErES, INC. By:/s/KennethH.Hannahkenneth H. HannahSeniorVicePresidentandChiefFinancialOfficer

Date:March29,2016 Knowallmenbythesepresents,thateachpersonwhosesignatureappearsbelowconstitutesandappointsDianeM.SullivanandKennethH.Hannahhisorhertrueandlawfulattorney-in-factandagent,withfullpowerofsubstitutionandresubstitution,forhimorherandinhisorhername,placeandstead,inanyandallcapacities,tosignanyandallamendmentstothisAnnualReportonForm10-K,andtofilethesame,withallexhibitsthereto,andotherdocumentsinconnectiontherewith,withtheSecuritiesandExchangeCommission,grantinguntosaidattorney-in-factandagent,fullpowerandauthoritytodoandperformeachandeveryactandthingrequisiteandnecessarytobedone,asfullytoallintentsandpurposesasheorshemightorcoulddoinperson,herebyratifyingandconfirmingallthatsaidattorney-in-factandagentorhissubstituteorsubstitutesmaylawfullydoorcausetobedonebyvirtuehereof.

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheregistrant,onthedatesandinthecapacitiesindicated.

signatures Date Title

/s/DianeM.Sullivan DianeM.Sullivan March29,2016 ChiefExecutiveOfficer,Presidentand ChairmanoftheBoardofDirectors (PrincipalExecutiveOfficer) /s/KennethH.Hannah KennethH.Hannah March29,2016 SeniorVicePresidentandChiefFinancialOfficer (PrincipalFinancialOfficerandPrincipalAccountingOfficer) /s/MarioL.Baeza MarioL.Baeza March22,2016 Director /s/W.LeeCapps W.LeeCapps March22,2016 Director /s/LoriH.Greeley LoriH.Greeley March22,2016 Director /s/M0ahendraR.Gupta MahendraR.Gupta March22,2016 Director /s/CarlaC.Hendra CarlaC.Hendra March22,2016 Director /s/WardM.Klein WardM.Klein March22,2016 Director /s/StevenW.Korn StevenW.Korn March22,2016 Director /s/PatriciaG.McGinnis PatriciaG.McGinnis March22,2016 Director /s/W.PatrickMcGinnis W.PatrickMcGinnis March22,2016 Director


Exhibit 31.1

CERTIFICATIONS

I,DianeM.Sullivan,certifythat:

1. IhavereviewedthisannualreportonForm10-KofCaleres,Inc.(the“registrant”);

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant’sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b) Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c) Evaluatedtheeffectivenessoftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

d) Disclosedinthisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant’smostrecentfiscalquarter(theregistrant’sfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting;and

5. Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant’sauditorsandtheauditcommitteeoftheregistrant’sboardofdirectors(orpersonsperformingtheequivalentfunctions):

a) Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreportfinancialinformation;and

b) Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant’sinternalcontroloverfinancialreporting.

/s/DianeM.SullivanDianeM.SullivanChiefExecutiveOfficer,PresidentandChairmanoftheBoardofDirectorsCaleres,Inc.March29,2016


Exhibit 31.2

CERTIFICATIONS

I,KennethH.Hannah,certifythat:

1. IhavereviewedthisannualreportonForm10-KofCaleres,Inc.(the“registrant”);

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant’sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b) Designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c) Evaluatedtheeffectivenessoftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

d) Disclosedinthisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant’smostrecentfiscalquarter(theregistrant’sfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting;and

5. Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant’sauditorsandtheauditcommitteeoftheregistrant’sboardofdirectors(orpersonsperformingtheequivalentfunctions):

a) Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreportfinancialinformation;and

b) Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant’sinternalcontroloverfinancialreporting.

/s/KennethH.Hannahkenneth H. HannahSeniorVicePresidentandChiefFinancialOfficerCaleres,Inc.March29,2016


Exhibit 32.1

Certification Pursuant to18 U.s.c. §1350,as adopted Pursuant tosection 906 of the sarbanes-Oxley act of 2002

InconnectionwiththeAnnualReportofCaleres,Inc.(the“Registrant”)onForm10-KfortheyearendedJanuary30,2016,asfiledwiththeSecuritiesandExchangeCommissiononthedatehereof(the“Report”),we,DianeM.Sullivan,ChiefExecutiveOfficer,PresidentandChairmanoftheBoardofDirectorsoftheRegistrant,andKennethH.Hannah,SeniorVicePresidentandChiefFinancialOfficeroftheRegistrant,certify,tothebestofourknowledge,pursuantto18U.S.C.§1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002,that:

(1) TheReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934;and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsoftheRegistrant.

/s/DianeM.SullivanDianeM.SullivanChiefExecutiveOfficer,PresidentandChairmanoftheBoardofDirectorsCaleres,Inc.March29,2016

/s/KennethH.Hannahkenneth H. HannahSeniorVicePresidentandChiefFinancialOfficerCaleres,Inc.March29,2016

Copyright©2016CALERES.Allrightsreserved.Design:JoannBittel,KansasCity,Missouri

CORPORATE INFORMATION

CORPORATE OFFICESCALErES8300MarylandAve.St.Louis,MO63105314.854.4000orcaleres.com

TRANSFER AGENT ComputershareP.O.Box30170CollegeStation,TX77842-3170866.865.6319computershare.com/investor

(1) Chairman of executive committee(2) Member of audit committee(3) Member of governance and nominating committee(4) Member of executive committee

(5) Chairman of governance and nominating committee (6) Member of compensation committee(7) Chairman of compensation committee(8) Chairman of audit committee and financial expert

BOARD OF DIRECTORSEXECUTIVE MANAGEMENT

DianeM.SullivanCEO, President and Chairman of the Board

RichardM.AusickDivision President - Famous Footwear

JanetA.CarrSenior Vice President, Global Business Development

SamEdelmanDivision President - Sam Edelman

DanielR.FriedmanDivision President - Global Supply Chain

kenneth H. HannahSenior Vice President and Chief Financial Officer

DouglasW.KochSenior Vice President and Chief Human Resources Officer

ThomasC.BurkeVice President, Legal and Secretary

JohnW.SchmidtDivision President - Brand Portfolio

MarkA.SchmittSenior Vice President, Chief Information Officer, Logistics and Customer Care

(in millions, except per share data) 2015 2014 2013 Consolidatednetsales . . . . . . . . . . . $ 2,577.4 $2,571.7 $2,513.1 FamousFootwear . . . . . . . . . . . . $ 1,572.7 $1,589.3 $1,588.6 BrandPortfolio . . . . . . . . . . . . . $ 1,004.8 $ 982.5 $ 924.6Gross profit . . . . . . . . . . . . . . . . . $ 1,047.8 $1,040.1 $1,014.3 Margin . . . . . . . . . . . . . . . . . . 40.7% 40.4% 40.4%SG&Aexpenses . . . . . . . . . . . . . . . $ 912.7 $ 910.7 $ 909.7 Percent of net sales . . . . . . . . . . . . 35.4% 35.4% 36.2%operating earnings . . . . . . . . . . . . . $ 135.1 $ 125.9 $ 98.6 Margin . . . . . . . . . . . . . . . . . . 5.2% 4.9% 3.9%Net earnings. . . . . . . . . . . . . . . . . $ 81.5 $ 82.8 $ 38.1 Per share, diluted. . . . . . . . . . . . . $ 1.85 $ 1.89 $ 0.88 Adjusted per share, diluted* . . . . . . . $ 2.00 $ 1.72 $ 1.41 * Non-GAAP financial measure

WardM.Klein (4,5)

Executive Chairman of the Board, Edgewell Personal Care

StevenW.Korn (2,3)

Former President and Chief Executive Officer of Radio Free Europe/Radio Liberty Inc. and Former Vice Chairman and Chief Operating Officer of CNN

PatriciaG.McGinnis (6)

Professor of Practice at George Washington University, Trachtenberg School of Public Policy and Public Administration

W.PatrickMcGinnis (4,7)

Non-Executive Chairman of Nestlé Purina PetCare Company

DianeM.Sullivan (1)

INVESTOR RELATIONSPeggyReillyTharpVicePresident,[email protected]

INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRMErnst&YoungLLP

COMMON STOCKCALErES is traded on NYSE underthesymbolCAL

2015 { financial HigHligHts

MarioL.Baeza (2)

Founder and controlling shareholder of Baeza & Co. and founder and former Chairman of V-Me Media Inc.

W. Lee Capps (8)

Former Chief Operating Officer and Chief Financial Officer of Kellwood Company

LoriH.Greeley (6)

Chief Executive Officer, Serena & Lily

MahendraR.Gupta,Ph.D. (2)

Dean of Olin Business School at Washington University in St. Louis

CarlaHendra (3)

Global Chairman of OgilvyRED, Ogilvy & Mather Worldwide

* NON-GAAP FINANCIAL MEASURES

Inthisannualreport,thecompany’sfinancialresultsareprovidedbothinaccordancewithgenerallyacceptedaccountingprinciples(GAAP)andusingcertainnon-GAAPfinancialmeasures.Inparticular,thecompanyprovideshistoricnetearnings(loss)andearnings(loss)perdilutedshareadjustedtoexcludecertaingains,chargesandrecoveries,whicharenon-GAAPfinancialmeasures.TheseresultsareincludedasacomplementtoresultsprovidedinaccordancewithGAAPbecausemanagementbelievesthesenon-GAAPfinancialmeasureshelpidentifyunderlyingtrendsinthecompany’sbusinessandprovideusefulinformationtobothmanagementandinvestorsbyexcludingcertainitemsthatmaynotbeindicativeofthecompany’scoreoperatingresults.ThesemeasuresshouldnotbeconsideredasubstitutefororsuperiortoGAAPresults.

SELECTED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

DILUTED EArNINGS PEr SHArE 2015 2014 2013 GAAP earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.85 $1.89 $0.88Charges, other items Lossondebtextinguishment . . . . . . . . . . . . . . . . . . . . . . 0.15 0.01 – Organizationalchanges . . . . . . . . . . . . . . . . . . . . . . . . . – 0.03 – Portfoliorealignment Brandexitsandcostreductions. . . . . . . . . . . . . . . . . . . – – 0.15 Non-cashimpairments/dispositions . . . . . . . . . . . . . . . . – – 0.38 DisposalofShoes.com . . . . . . . . . . . . . . . . . . . . . . . . . . – (0.23) – Taxondividendofinternationalsubsidiary . . . . . . . . . . . . . . – 0.02 – Totalcharges,otheritems . . . . . . . . . . . . . . . . . . . . . . 0.15 (0.17) 0.53 Adjustedearnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.00 $1.72 $1.41

FORWARD LOOKING STATEMENTS AND RISK FACTORS

Thisdocumentcontainscertainforward-lookingstatementsandexpectationsregardingthecompany’sfutureperformanceandtheperformanceofitsbrands.Suchstatementsaresubjecttovariousrisksanduncertaintiesthatcouldcauseactualresultstodiffermaterially.Theserisksinclude(i)changingconsumerdemands,whichmaybeinfluencedbyconsumers’disposableincome,whichinturncanbeinfluencedbygeneraleconomicconditions; (ii)rapidlychangingfashiontrendsandpurchasingpatterns;(iii)intensecompetitionwithinthefootwearindustry;(iv)politicalandeconomicconditionsorotherthreatstothecontinuedanduninterruptedflowofinventoryfromChinaandothercountries,wheretheCompanyreliesheavilyonthird-partymanufacturingfacilitiesforasignificantamountofitsinventory;(v)theabilitytoaccuratelyforecastsalesandmanageinventorylevels;(vi)cybersecuritythreatsorothermajordisruptiontotheCompany’sinformationtechnologysystems; (vii)customerconcentrationandincreasedconsolidationintheretailindustry;(viii)adisruptionintheCompany’sdistributioncenters;(ix)theabilitytorecruitandretainseniormanagementandotherkeyassociates;(x)foreigncurrencyfluctuations;(xi)compliancewithapplicablelawsandstandardswithrespecttolabor,tradeandproductsafetyissues;(xii)theabilitytosecure/exitleasesonfavorableterms;(xiii)theabilitytomaintainrelationshipswithcurrentsuppliers;and(xiv)theabilitytoattract,retain,andmaintaingoodrelationshipswithlicensorsandprotectintellectualpropertyrights.Thecompany’sreportstotheSecuritiesandExchangeCommissioncontaindetailedinformationrelatingtosuchfactors,including,withoutlimitation,theinformationunderthecaptionRiskFactorsinItem1Aofthecompany’sAnnualReportonForm10-KfortheyearendedJanuary30,2016,whichinformationisincorporatedbyreferencehereinandupdatedbythecompany’sQuarterlyReportsonForm10-Q.Thecompanydoesnotundertakeanyobligationorplantoupdatetheseforward-lookingstatements,eventhoughitssituationmaychange.

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8300 MARyLANd AvE.

ST. LOUiS, MO 631053 1 4 . 8 5 4 . 4 0 0 0c a l e r e s . c o m

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