What Happened?
Shares of footwear company Caleres (NYSE: CAL) jumped 3.3% in the morning session after the company announced an expanded partnership with Cash App's Afterpay service.
The partnership will bring flexible 'Buy Now, Pay Later' payment options to shoppers across Caleres' portfolio of footwear brands, including Famous Footwear, Sam Edelman, Allen Edmonds, and Naturalizer. The collaboration allows customers to use Afterpay's 'Pay in 4' and 'Pay Monthly' services for online purchases and at select retail locations across the United States. This move, arriving just in time for the fall shopping season, is designed to cater to modern consumer preferences. Willis Hill, Chief Information Officer of Caleres, stated that the partnership reflects the company's 'appreciation of how today's customers want to shop and pay,' suggesting the initiative aims to enhance the customer experience and potentially drive sales by offering greater payment flexibility.
After the initial pop the shares cooled down to $14.73, up 0.3% from previous close.
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What Is The Market Telling Us
Caleres’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 7.5% on the news that the latest Consumer Price Index (CPI) report showed inflation holding steady, bolstering investor optimism for a potential interest rate cut by the Federal Reserve. The data, which revealed that inflation remained at 2.7% for the year ending in July, was seen as a positive sign by investors. This stability increases the likelihood that the Federal Reserve might lower interest rates at its upcoming September meeting. Lower interest rates can stimulate the economy by making borrowing cheaper for both consumers and businesses, which often translates into higher consumer spending. This is particularly beneficial for the Consumer Discretionary sector, which includes companies selling non-essential goods and services like apparel, travel, and electronics.
Caleres is down 34.5% since the beginning of the year, and at $14.73 per share, it is trading 66.5% below its 52-week high of $43.97 from August 2024. Investors who bought $1,000 worth of Caleres’s shares 5 years ago would now be looking at an investment worth $2,141.
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