Caleres, Inc. (CAL): One of the Underperforming Stocks Targeted By Short Sellers

Jabran Kundi

Wed, May 14, 2025, 10:28 AM 3 min read

We recently published a list of 20 Underperforming Stocks Targeted By Short Sellers. In this article, we are going to take a look at where Caleres, Inc. (NYSE:CAL) stands against other underperforming stocks targeted by short sellers.

Short interest refers to the percentage of publicly available shares that have been sold short. It is an indicator used by many investors to determine how strong a company’s bear thesis may be. Due to the nature of short selling, the short interest has become a popular indicator among investors.

The reason it is given so much weightage is that people betting against a stock have usually done solid research and are confident of a company’s downfall. They take unlimited risk, so when big investors or the smart money shorts a stock, people take notice. They try to unearth the red flags that may have prompted the high short interest.

We decided to dig deeper and try to find out where smart money sees trouble ahead. To come up with our list of 20 underperforming stocks targeted by short sellers, we looked at the worst-performing stocks of the last six months and then ranked them by the short interest.

A sneaker factory production line, showcasing the manufacturing process of the company's products.

Short interest: 15.71%

6 months’ performance: -49.56%

Caleres, Inc. (NYSE:CAL) is a developer, designer, manufacturer, sourcer, and seller of footwear. The company generates its revenue through the Brand Portfolio and Famous Footwear segments. It provides private-label, licensed, and branded athletic, dress, and casual footwear products.

The firm’s sales performance remained challenging, with Famous Footwear comparable sales down by 3% and Brand Portfolio sales down by 7%. Due to high fixed costs and lower sales, the company faces margin pressure. Caleres’ operating margins significantly declined to 2% in Q4 from 5%. For the full year, operating margins dropped by 5.8%.

Caleres, Inc. (NYSE:CAL)’s capital allocation decisions highlight further risks. In 2024, the company prioritized shareholders’ returns instead of paying off debt. As a result, the amount of debt increased to $220 million from $190 million in the last year. The latest acquisition of Stuart Weitzman will further cost $105 million, increasing debt by 50%. Stuart Weitzman, which is an unprofitable brand, will require significant investment, which is likely to also pressure margins.

Overall, CAL ranks 12th on our list of underperforming stocks targeted by short sellers. While we acknowledge the potential of CAL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CAL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.