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Brown Shoe Reports Second Quarter 2010 Financial Results

08/25/2010

- Consolidated net sales increased 14.5 percent

- Wholesale division net sales rose 25.8 percent

- Famous Footwear same-store sales increased 11.8 percent

- Net earnings per diluted share of $0.12

Brown Shoe Company, Inc. (NYSE: BWS) (www.brownshoe.com) today reported financial results for the 13-week period ended July 31, 2010. Net sales for the second quarter increased 14.5 percent from the second quarter of 2009 to $585.8 million. Net earnings (loss) attributable to Brown Shoe Company, Inc. (hereafter "net earnings" or "net loss") were $5.3 million, or $0.12 per diluted share, compared to a net loss of $4.2 million, or $0.10 per diluted share, in the second quarter of 2009. On an adjusted basis, excluding charges related to the Company's information technology initiatives, net earnings were $6.5 million, or $0.15 per diluted share, compared to a net loss of $3.0 million, or $0.07 per diluted share in the second quarter of 2009. See Schedule 4 attached for a reconciliation to net earnings (loss) on a GAAP basis and the discussion of "Non-GAAP Financial Measures."

Ron Fromm, Brown Shoe's Chairman and Chief Executive Officer, said, "The positive momentum for our retail and wholesale brands continued in the second quarter and resulted in strong sales growth across our multi-channel portfolio and a significant improvement in earnings during the period. This performance reflects our growing engagement with our consumers, built upon exceptional product and compelling merchandising and marketing plans. We have seen tremendous growth from our Wholesale division, with strong performances in the quarter from Naturalizer, Dr. Scholl's, and our contemporary fashion brands. Additionally, Famous Footwear drove a double-digit sales gain with a significantly reduced promotional cadence in the quarter, resulting in solid year-over-year gross profit rate improvement. As a result of the strong performance for the first six months of the year, we are proud to have achieved our short-term milestone of delivering adjusted earnings of $1.00 per diluted share on a trailing 12-month basis in a much faster timeframe than previously anticipated."

Fromm concluded, "We remain well-positioned to continue our market share gains during the important Back-to-School season and are encouraged by the early results we have seen. Historically, one out of 10 American families shops at Famous Footwear during Back-to-School, and we expect 2010 to be no exception. We plan to drive increased market share gains with a powerful assortment of brands and traffic-generating TV, print and digital-marketing campaigns. Our portfolio of wholesale brands is equally poised for growth, as evidenced by our strong backlog for fall and holiday shipments. While the economic environment remains uncertain, we expect our initiatives to fuel a strong year for Brown Shoe and lead to increased value for our shareholders, as we continue to invest in our core brands to support our long-term growth."

Consolidated Results for the Second Quarter of 2010:

  • Net sales for the second quarter were $585.8 million, up 14.5 percent over $511.6 million in the year-earlier quarter;
    • Famous Footwear net sales improved 10.6 percent to $347.3 million. The sales results were driven by an 11.8 percent same-store sales increase, which reflects positive performances across all categories, channels, and geographies in the quarter;
    • Net sales in the Wholesale division rose 25.8 percent to $178.6 million, driven by sales increases across all of its channels of distribution; and
    • Net sales in the Specialty Retail division were $59.8 million, reflecting a 6.8 percent same-store sales increase.
  • Gross profit rate climbed 90 basis points to 40.7 percent of net sales compared with the year-ago level of 39.8 percent;
    • The key driver was a 320 basis point improvement in the Famous Footwear division versus the same period last year, benefiting from 85 percent fewer store BOGO days than in the year-ago period and improved sell-through across all categories; and
    • This improvement was partially offset by a 230 basis point decline in gross profit rate in the Wholesale division, attributable primarily to an increased mix of sales to third parties as well as shifts in brand and channel mix and increased freight costs.
  • Selling and administrative expenses increased to $224.5 million from $206.6 million in the year-ago second quarter. As a percent of net sales, selling and administrative expenses were 38.3 percent, a decrease of 210 basis points, resulting from better expense leverage from the Company's improved sales performance. The year-over-year increase in expense was principally related to increased payroll costs, a portion of which is variable with sales volume, a 44 percent increase in marketing expense, and higher incentive compensation expense due to improved performance. These increases were partially offset by operating 64 fewer stores across the retail portfolio as well as expense controls across the enterprise;
  • Net restructuring and other special charges related to the Company's information technology initiatives were $1.9 million and $2.0 million in the 2010 and 2009 second quarters, respectively;
  • Operating earnings improved to $12.1 million, contrasted with an operating loss of $5.0 million in the second quarter of 2009;
  • Net interest expense was $4.8 million in the quarter;
  • The Company's effective tax rate in the second quarter of 2010 was 35.0 percent;
  • Net earnings were $5.3 million, or $0.12 per diluted share, versus a net loss of $4.2 million, or $0.10 per diluted share, in the year-ago quarter. Both quarters included after-tax charges of $1.3 million, or $0.03 per diluted share, related to the Company's information technology initiatives;
  • Inventory at quarter-end was $578.1 million, a 9.7 percent increase from the year-ago level of $526.8 million. Average units on a per-store basis at Famous Footwear increased 8.9 percent at quarter-end versus the year-ago period, reflecting the strong sales trend and outlook. Inventory at the Wholesale division increased 28.3 percent year-over-year, consistent with a strong, unshipped order position; and
  • At quarter-end, the Company had $331.9 million in availability under its revolving credit facility and had $30.7 million in cash and cash equivalents. During the second quarter, the Company completed the acquisition of Edelman Shoe, Inc. for $32.7 million in cash and $7.3 million in stock.

Outlook

Based on its current outlook, the Company expects the following:

  • Consolidated net sales for the full year of 2010 are expected to grow in the low double-digit range, with third quarter net sales expected to increase in the low-teens range;
  • Famous Footwear same-store sales are expected to grow in the high single- to low double-digit range for both the full year of 2010 and the third quarter. Famous Footwear plans to open 30 to 35 stores while closing 50 stores in 2010;
  • Wholesale net sales are currently estimated to grow in the high-teens range for the full year of 2010, with low- to mid-20's growth in the third quarter;
  • Gross profit rate in the second half of 2010 is expected to be in the range of 40.0 to 40.5 percent;
  • Selling and administrative expenses as a percent of net sales are expected to be in the range of 37.5 to 38.0 percent for the full year of 2010, which includes net restructuring and other special charges of $7.0 million to $7.5 million for the Company's information technology initiatives. Third quarter selling and administrative expenses as a percent of net sales are expected to be in the range of 35.8 to 36.3 percent, which includes net restructuring and other special charges of $2.0 to $2.5 million for information technology initiatives as well as an increase in marketing and incentive compensation costs versus the third quarter last year of approximately $20.0 million, or $0.29 per diluted share on an after-tax basis;
  • Depreciation and amortization of capitalized software and intangible assets are expected to total $50.0 million to $52.0 million for the full year of 2010;
  • Net interest expense is expected to approximate $20.0 million to $21.0 million for the full year of 2010;
  • The Company expects an effective tax rate of 36.5 to 37.0 percent for the full year of 2010; and
  • Purchases of property and equipment and capitalized software are targeted in the range of $60.0 million to $63.0 million for the full year of 2010.

Definitions

Consistent with guidance issued by the FASB on noncontrolling interests in consolidated financial statements, all references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings (loss) attributable to Brown Shoe Company, Inc. and diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders, are presented as net earnings (loss) and earnings (loss) per diluted share, respectively.

Non-GAAP Financial Measures

In this press release, the Company's financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic and estimated future net earnings (loss) and earnings (loss) per diluted share adjusted to exclude certain charges and recoveries, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the Company's business and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company's core operating results. These measures should not be considered a substitute for or superior to GAAP results.

Conference Call

A conference call to discuss second quarter 2010 results will be held today at 9:00 a.m. ET. While participation in the question-and-answer session of the call will be limited to institutional analysts and investors, retail brokers and individual investors are invited to attend via a live web-cast at www.brownshoe.com/investor or www.earnings.com (at the website, type in the BWS ticker symbol to locate the broadcast).

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:

This press release contains certain forward-looking statements and expectations regarding the Company's future performance and the future performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include (i) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions; (ii) the timing and uncertainty of activities and costs related to the Company's information technology initiatives, including software implementation and business transformation; (iii) potential disruption to the Company's business and operations as it implements its information technology initiatives; (iv) the Company's ability to utilize its new information technology system to successfully execute its strategies; (v) intense competition within the footwear industry; (vi) rapidly changing fashion trends and purchasing patterns; (vii) customer concentration and increased consolidation in the retail industry; (viii) political and economic conditions or other threats to continued and uninterrupted flow of inventory from China and Brazil, where the Company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (ix) the Company's ability to attract and retain licensors and protect its intellectual property; (x) the Company's ability to secure/exit leases on favorable terms; (xi) the Company's ability to maintain relationships with current suppliers; (xii) compliance with applicable laws and standards with respect to lead content in paint and other product safety issues; (xiii) the Company's ability to successfully execute its international growth strategy; (xiv) the Company's ability to source product at a pace consistent with increased demand for footwear; and (xv) the impact of rising prices in a potentially inflationary global environment. The Company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K for the year ended January 30, 2010, which information is incorporated by reference herein and updated by the Company's Quarterly Reports on Form 10-Q. The Company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.

About Brown Shoe Company, Inc.

Brown Shoe is a $2.4 billion global footwear company. Brown Shoe's Retail division operates Famous Footwear, a leading family branded footwear destination with over 1,100 stores nationwide and e-commerce site FamousFootwear.com, approximately 270 specialty retail stores in the U.S., Canada, and China primarily under the Naturalizer brand name, and footwear e-tailer shoes.com. Through its wholesale divisions, Brown Shoe designs and markets leading footwear brands including Naturalizer, Dr. Scholl's, Franco Sarto, LifeStride, Etienne Aigner, Sam Edelman, Via Spiga, Vera Wang Lavender and Buster Brown. Brown Shoe press releases are available on the Company's website at www.brownshoe.com.

                        SCHEDULE 1
               BROWN SHOE COMPANY, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                      (Unaudited)

    (Thousands, except per
     share data)                          Thirteen Weeks Ended
                                          --------------------

                                          July 31,          August 1,
                                            2010               2009
                                             ---               ----

    Net sales                            $585,756           $511,621
    Cost of goods sold                    347,286            307,981
    ------------------                    -------            -------

    Gross profit                          238,470            203,640
    ------------                          -------            -------

    Selling and administrative
     expenses                             224,448            206,620
    Restructuring and other
     special charges, net                   1,891              1,998

    Operating earnings (loss)              12,131             (4,978)
    -------------------------              ------             ------

    Interest expense                       (4,810)            (4,914)
    Interest income                            49                145
    ---------------                           ---                ---

    Earnings (loss) before
     income taxes                           7,370             (9,747)
    ----------------------                  -----             ------

    Income tax (provision)
     benefit                               (2,582)             5,531

    Net earnings (loss)                    $4,788            $(4,216)
    -------------------                    ------            -------
    Less: Net (loss) earnings
     attributable to                         (473)                29
        noncontrolling interests             ----                ---
        ------------------------
    Net earnings (loss)
     attributable to Brown
     Shoe Company, Inc.                    $5,261            $(4,245)
    ----------------------                 ------            -------
    Basic earnings (loss) per
     common share                           $0.12             $(0.10)
        attributable to Brown Shoe
         Company,                           -----             ------
        Inc. shareholders
        -----------------
    Diluted earnings (loss)
     per common share                       $0.12             $(0.10)
        attributable to Brown Shoe
         Company,                           -----             ------
        Inc. shareholders
        -----------------

    Basic number of shares                 42,147             41,583
    Diluted number of shares               42,463             41,583



    (Thousands, except per
     share data)                          Twenty-six Weeks Ended
                                          ----------------------

                                         July 31,          August 1,
                                            2010                2009
                                            ----                ----

    Net sales                           $1,183,474          $1,050,361
    Cost of goods sold                     697,444             638,557
    ------------------                     -------             -------

    Gross profit                           486,030             411,804
    ------------                           -------             -------

    Selling and administrative
     expenses                              448,963             419,337
    Restructuring and other
     special charges, net                    3,608               4,612

    Operating earnings (loss)               33,459             (12,145)
    -------------------------               ------             -------

    Interest expense                        (9,322)            (10,163)
    Interest income                             67                 288
    ---------------                            ---                 ---

    Earnings (loss) before
     income taxes                           24,204             (22,020)
    ----------------------                  ------             -------

    Income tax (provision)
     benefit                                (8,881)             10,733

    Net earnings (loss)                    $15,323            $(11,287)
    -------------------                    -------            --------
    Less: Net (loss) earnings
     attributable to                            16                 561
        noncontrolling interests               ---                 ---
        ------------------------
    Net earnings (loss)
     attributable to Brown
     Shoe Company, Inc.                    $15,307            $(11,848)
    ----------------------                 -------            --------
    Basic earnings (loss) per
     common share                            $0.35              $(0.28)
        attributable to Brown Shoe
         Company,                            -----              ------
        Inc. shareholders
        -----------------
    Diluted earnings (loss)
     per common share                        $0.35              $(0.28)
        attributable to Brown Shoe
         Company,                            -----              ------
        Inc. shareholders
        -----------------

    Basic number of shares                  41,951              41,574
    Diluted number of shares                42,267              41,574
 

 SCHEDULE 2
                             BROWN SHOE COMPANY, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

      (Thousands)                         July 31,  August 1,   January 30,
      -----------                          2010        2009        2010
                                            ----        ----        ----
    ASSETS

    Cash and cash equivalents             $30,724     $37,274    $125,833
    Receivables                           106,149      72,156      84,297
    Inventories                           578,085     526,808     456,682
    Prepaid expenses and other current
     assets                                33,206      41,877      41,437
    ----------------------------------     ------      ------      ------
      Total current assets                748,164     678,115     708,249
      --------------------                -------     -------     -------

    Other assets                          118,884     110,540     113,114
    Intangible assets, net                 73,876      80,613      77,226
    Property and equipment, net           136,207     155,550     141,561
    ---------------------------           -------     -------     -------
        Total assets                   $1,077,131  $1,024,818  $1,040,150
        ------------                   ----------  ----------  ----------

    LIABILITIES AND EQUITY

    Borrowings under revolving credit
     agreement                            $35,500     $47,500     $94,500
    Trade accounts payable                294,845     233,791     177,700
    Other accrued expenses                139,675     133,652     141,863
       Total current liabilities          470,020     414,943     414,063
       -------------------------          -------     -------     -------

    Long-term debt                        150,000     150,000     150,000
    Deferred rent                          38,011      42,049      38,869
    Other liabilities                      27,555      29,570      25,991

    Total Brown Shoe Company, Inc.
     shareholders' equity                 391,071     379,583     402,171
    Noncontrolling interests                  474       8,673       9,056
    ------------------------                  ---       -----       -----
    Total equity                          391,545     388,256     411,227
    ------------                          -------     -------     -------
        Total liabilities and equity   $1,077,131  $1,024,818  $1,040,150
        ----------------------------   ----------  ----------  ----------
                      SCHEDULE 3
                 BROWN SHOE COMPANY, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (Unaudited)

                                              Twenty-six Weeks Ended
                                              ----------------------
                                            July 31,           August 1,
    (Thousands)                              2010                2009

    OPERATING ACTIVITIES:
    Net earnings (loss)                     $15,323            $(11,287)
    Adjustments to reconcile net
     earnings (loss) to net cash
     provided by
    operating activities:
       Depreciation                          16,028              18,204
       Amortization of capitalized
        software                              5,010               3,993
       Amortization of intangibles            3,350               3,387
       Amortization of debt issuance
        costs                                 1,098               1,098
       Share-based compensation expense       2,781               1,944
       Tax deficiency related to share-
        based plans                             142                  89
       Loss on disposal of facilities
        and equipment                           617                 293
       Impairment charges for facilities
        and equipment                         1,684               2,094
       Deferred rent                           (858)                335
       Provision for doubtful accounts           80                 477
       Foreign currency transaction
        gains                                   (11)                (61)
       Changes in operating assets and
        liabilities:
          Receivables                       (21,923)             11,643
          Inventories                      (121,298)            (59,120)
          Prepaid expenses and other
           current and noncurrent assets      8,923               2,507
          Trade accounts payable            117,041              81,073
          Accrued expenses and other
           liabilities                         (714)             (4,391)
       Other, net                              (284)             (2,567)
       ----------                              ----              ------
    Net cash provided by operating
     activities                              26,989              49,711
    ------------------------------           ------              ------

    INVESTING ACTIVITIES:
       Purchases of property and
        equipment                           (12,844)            (17,911)
       Capitalized software                 (11,871)            (10,916)
       -------------------------            -------             -------
    Net cash used for investing
     activities                             (24,715)            (28,827)
    ---------------------------             -------             -------

    FINANCING ACTIVITIES:
       Borrowings under revolving credit
        agreement                           435,500             394,900
       Repayments under revolving credit
        agreement                          (494,500)           (459,900)
       Proceeds from stock options
        exercised                               561                   -
       Tax deficiency related to share-
        based plans                            (142)                (89)
       Acquisition of noncontrolling
        interests (Edelman Shoe, Inc.)      (32,692)                  -
       Dividends paid                        (6,114)             (6,006)
       -------------------------------       ------              ------
    Net cash used for financing
     activities                             (97,387)            (71,095)
    ---------------------------             -------             -------

    Effect of exchange rate changes
     on cash                                      4                 585
    -------------------------------             ---                 ---

    Decrease in cash and cash
     equivalents                            (95,109)            (49,626)

    Cash and cash equivalents at
     beginning of period                    125,833              86,900
    ----------------------------            -------              ------

    Cash and cash equivalents at end
     of period                              $30,724             $37,274
    --------------------------------        -------             -------

                                      SCHEDULE 4
                              BROWN SHOE COMPANY, INC.
        Reconciliation of Operating Earnings (Loss), Net Earnings (Loss) and
                                      Diluted
       Earnings (Loss) Per Share (GAAP Basis) to Adjusted Operating Earnings
                                      (Loss),
    Net Earnings (Loss) and Diluted Earnings (Loss) Per Share (Non-GAAP Basis)

                                            2nd Quarter 2010
                                            ----------------

(Thousands, except per share
     data)                        Operating          Net      Diluted
    ----------------------------  Earnings        Earnings    Earnings
                                                 Attributable    Per
                                  --------            to       Share
                                                     Brown
                                                     Shoe     ------
                                                   Company,
                                                     Inc.
                                                  ---------

    GAAP earnings (loss)            $12,131            $5,261    $0.12

    Charges / Other Items:
    ----------------------

    IT initiatives                    1,891             1,263     0.03

       Total charges /other items     1,891             1,263     0.03
       --------------------------     -----             -----     ----

    Adjusted earnings (loss)        $14,022            $6,524    $0.15
    ------------------------        -------            ------    -----


                                            Six Months 2010
                                            ---------------
    (Thousands, except per share
     data)                        Operating          Net      Diluted
    ----------------------------  Earnings        Earnings    Earnings
                                                 Attributable    Per
                                  --------            to       Share
                                                     Brown
                                                     Shoe     ------
                                                   Company,
                                                     Inc.
                                                    --------

    GAAP earnings (loss)            $33,459           $15,307    $0.35

    Charges / Other Items:
    ----------------------

    IT initiatives                    3,608             2,447     0.06

       Total charges /other items     3,608             2,447     0.06
       --------------------------     -----             -----     ----

    Adjusted earnings (loss)        $37,067           $17,754    $0.41
    ------------------------        -------           -------    -----


                                             2nd Quarter 2009
                                             ----------------
    (Thousands, except per share
     data)                        Operating        Net (Loss)   Diluted
    ----------------------------   (Loss)           Earnings    -------
                                                  Attributable
                                  Earnings              to      (Loss)
                                  --------         Brown Shoe   Earnings
                                                    Company,       Per
                                                       Inc.      Share
                                                   ---------    ------

    GAAP earnings (loss)            ($4,978)           ($4,245)   ($0.10)

    Charges / Other Items:
    ----------------------

    IT initiatives                    1,998              1,282      0.03

       Total charges /other items     1,998              1,282      0.03
       --------------------------     -----              -----      ----

    Adjusted earnings (loss)        ($2,980)           ($2,963)   ($0.07)
    ------------------------        -------            -------    ------


                                              Six Months 2009
                                              ---------------
    (Thousands, except per share
     data)                        Operating        Net (Loss)   Diluted
    ----------------------------   (Loss)           Earnings    (Loss)
                                                  Attributable
                                  Earnings              to      Earnings
                                                                   Per
                                  --------         Brown Shoe    Share
                                                    Company,
                                                       Inc.     ------
                                                   ---------

    GAAP earnings (loss)           ($12,145)          ($11,848)   ($0.28)

    Charges / Other Items:
    ----------------------

    IT initiatives                    4,612              2,965      0.07

       Total charges /other items     4,612              2,965      0.07
       --------------------------     -----              -----      ----

    Adjusted earnings (loss)        ($7,533)           ($8,883)   ($0.21)
    ------------------------        -------            -------    ------
          SCHEDULE 5
        BROWN SHOE COMPANY, INC.
     OPERATING RESULTS BY SEGMENT

                                                   Wholesale
                          Famous Footwear         Operations
                          ---------------         ----------
    ($ millions)         2nd           2nd      2nd          2nd
    ------------       Quarter       Quarter  Quarter      Quarter
                          2010          2009     2010         2009
                          ----          ----     ----         ----

    Net Sales           $347.3        $314.1   $178.6       $142.0

    Gross Profit        $159.6        $134.3    $54.1        $46.3

    Gross Profit Rate     46.0%         42.8%    30.3%        32.6%

    Operating Earnings
     (Loss)              $15.8         $(0.8)    $9.0         $7.9

    Operating Earnings
     (Loss) %             4.5%        (0.3)%     5.1%         5.5%

    Same-store Sales %   11.8%        (6.7)%       -            -

    Number of Stores     1,128         1,167        -            -



                                                 Wholesale
                         Famous Footwear        Operations
                         ---------------        ----------
    ($ millions)         Six           Six      Six          Six
    ------------       Months        Months   Months       Months
                          2010          2009     2010         2009
                          ----          ----     ----         ----

    Net Sales           $709.5        $631.7   $353.4       $310.9

    Gross Profit        $323.8        $270.8   $110.7        $95.7

    Gross Profit Rate     45.6%         42.9%    31.3%        30.8%

    Operating Earnings
     (Loss)              $43.9          $2.2    $17.7        $13.8

    Operating Earnings
     (Loss) %             6.2%          0.3%     5.0%         4.4%

    Same-store Sales %   13.6%        (5.9)%       -            -
                              Specialty Retail
                              ----------------
    ($ millions)             2nd          2nd
    ------------           Quarter      Quarter
                              2010         2009
                              ----         ----

    Net Sales                $59.8        $55.5

    Gross Profit             $24.8        $23.0

    Gross Profit Rate         41.4%        41.6%

    Operating Earnings
     (Loss)                  $(2.7)       $(4.3)

    Operating Earnings
     (Loss) %               (4.6)%       (7.8)%

    Same-store Sales %        6.8%       (3.8)%

    Number of Stores           264          289


                            Specialty Retail
                            ----------------
    ($ millions)             Six          Six
    ------------           Months       Months
                              2010         2009
                              ----         ----

    Net Sales               $120.6       $107.8

    Gross Profit             $51.5        $45.3

    Gross Profit Rate         42.7%        42.0%

    Operating Earnings
     (Loss)                  $(5.7)      $(10.5)

    Operating Earnings
     (Loss) %               (4.7)%       (9.8)%

    Same-store Sales %       11.3%       (4.9)%

           SCHEDULE 6
        BROWN SHOE COMPANY, INC.
     Trailing Twelve-Months Results

                                             Twelve Months  Twelve Months
    (Thousands, except per share data)            Ended          Ended
                                             July 31, 2010  August 1, 2009
                                             -------------  --------------

    Net sales                                  $2,375,081   $2,203,013

    Gross profit                                  977,365      854,081


    Gross profit %                                  41.2%        38.8%

    Operating earnings (loss)                      77,127     (204,153)

    Operating earnings (loss) %                      3.3%       (9.3%)

    Net earnings (loss) attributable to
     Brown Shoe Company, Inc.                      36,655     (154,498)

    Adjusted net earnings attributable to
     Brown Shoe Company, Inc.                      43,597          119

    Diluted earnings (loss) per common share
     attributable to Brown Shoe Company,            $0.84       ($3.72)
        Inc. shareholders

    Adjusted diluted earnings per common
     share attributable to Brown Shoe               $1.00        $0.00
        Company, Inc. shareholders                  -----        -----
        --------------------------

                            BROWN SHOE COMPANY, INC.
     Reconciliation of Trailing Twelve-Months Net Earnings (Loss) and Diluted
         Earnings (Loss) Per Share (GAAP Basis) to Trailing Twelve-Months
                                   Adjusted Net
             Earnings and Diluted Earnings Per Share (Non-GAAP Basis)

                                             Twelve Months Ended
                                                July 31, 2010
                                                -------------------
                                            Net
    (Thousands)                          Earnings                Diluted
                                           (Loss)
    -----------                        Attributable              Earnings
                                         to Brown
                                            Shoe                  (Loss)
                                         Company,                   Per
                                            Inc.                   Share
                                        ---------                 ------

    GAAP earnings (loss)                    $36,655                 $0.84

    Charges / Other Items:
    ----------------------


    Impairment of goodwill and
     intangible assets                            -                     -

    Expense and capital
     containment initiatives                      -                     -

    Headquarters consolidation               (1,139)                (0.03)

    IT initiatives                            5,256                  0.12

    Organizational changes                    2,825                  0.07


       Total charges /other items             6,942                  0.16
       --------------------------             -----                  ----

    Adjusted earnings                       $43,597                 $1.00
    -----------------                       -------                 -----

                                          Twelve Months Ended
                                            August 1, 2009
                                             -------------------
                                     Net (Loss)
    (Thousands)                       Earnings               Diluted
    -----------                     Attributable             (Loss)
                                      to Brown
                                         Shoe                Earnings
                                      Company,                  Per
                                         Inc.                 Share
                                     ---------               ------

    GAAP earnings (loss)               ($154,498)              ($3.72)

    Charges / Other Items:
    ----------------------


    Impairment of goodwill and
     intangible assets                   119,203                 2.87

    Expense and capital
     containment initiatives              19,091                 0.46

    Headquarters consolidation            11,253                 0.27

    IT initiatives                         5,070                 0.12

    Organizational changes                     -                    -


       Total charges /other items        154,617                 3.72
       --------------------------        -------                 ----

    Adjusted earnings                       $119                $0.00
    -----------------                       ----                -----

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