The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Business Wire

Brown Shoe Company Reports Second Quarter 2013 Results

<p class='bwalignc'> <i>Raising adjusted diluted EPS guidance to $1.27 to $1.32 for fiscal 2013</i> </p> <p class='bwalignc'> <i>Famous Footwear sets new record for second quarter sales and operating profit</i> </p> <p class='bwalignc'> <i>Healthy Living and Contemporary Fashion wholesale sales both up double-digits</i> </p>

Tuesday, August 27, 2013

Brown Shoe Company Reports Second Quarter 2013 Results

07:00 EDT Tuesday, August 27, 2013

ST. LOUIS (Business Wire) -- Brown Shoe Company (NYSE: BWS), (brownshoe.com) today reported second quarter 2013 financial results, with net sales of $621.7 million up 10.1% versus second quarter 2012 net sales of $564.9 million, excluding sales from discontinued operations for both quarters. Results for the second quarter of 2013 and 2012 included sales of $1.0 million and $2.8 million, respectively, from brands and businesses the company has exited.

On a GAAP basis, the company reported net earnings of $15.4 million, or $0.35 per diluted share, in the second quarter of 2013 versus a loss of ($2.5) million, or ($0.06) per diluted share, in the prior year. Second quarter 2013 results included $1.8 million of pre-tax costs associated with portfolio realignment efforts ($1.2 million of income on an after-tax basis, or $0.02 per diluted share). The second quarter of 2012 included $14.6 million of costs related to the portfolio realignment and for other organizational changes ($9.3 million on an after-tax basis, or $0.22 per diluted share).

On an adjusted (1) basis, second quarter net earnings of $14.2 million, or $0.33 per diluted share, improved 108.3% compared to $6.8 million, or $0.16 per diluted share, in the prior year. Gross profit margin for the second quarter of 2013 improved to 41.0% from 40.3% in 2012.

“For the second quarter, we exceeded expectations with an improvement in adjusted EPS of over 100%. While consolidated net sales were up $57 million in the quarter -- or 10% year-over-year -- approximately $22 million of this amount was timing related, due to a shift in sales to the second quarter from the third quarter,” said Diane Sullivan, president and chief executive officer of Brown Shoe Company. “Both retail and wholesale contributed to this quarter's success, with Famous delivering record second quarter sales and operating profit and both of our wholesale platforms -- Healthy Living and Contemporary Fashion -- reporting double-digit increases in sales.”

     

US$M, except per share (unaudited)

13 Weeks 2Q
2Q'13   2Q'12 Change
Consolidated net sales     $621.7   $564.9   10.1%
Famous Footwear     388.2   350.3   10.8%
Wholesale Operations     180.5   160.6   12.4%
Specialty Retail     53.0   54.0   (1.8%)
Gross profit     254.6   227.6   11.8%
Margin     41.0%   40.3%   70 bps
SG&A     231.1   211.7   9.1%
% of net sales     37.2%   37.5%   (30 bps)
Restructuring and other special charges, net     0.7   7.3   (89.9%)
Operating earnings     22.8   8.6   164.6%
% of net sales     3.7%   1.5%   220 bps
Net interest expense     5.1   5.5   (8.2%)
Earnings from continuing operations before income taxes     17.7   3.1   479.6%
Tax rate     23.1%   40.6%   --
Net earnings (loss) from discontinued operations     1.7   (4.5)   136.7%
Net earnings (loss)     $15.4   ($2.5)   705.8%
Per diluted share     $0.35   ($0.06)   683.3%
Adjusted net earnings     $14.2   $6.8   108.3%
Per diluted share     $0.33   $0.16   106.3%
 

Second Quarter Highlights

Famous Footwear second quarter 2013 sales of $388.2 million were up 10.8% year-over-year, while same-store-sales (2) were up 6.8%. The strong performance was led by good sales growth in running, sandal and canvas shoe styles. During the quarter, the company closed or relocated 14 stores and added 19 new stores, as average revenue per square foot continued to improve.

Wholesale sales of $180.5 million were up 12.4% in the second quarter, excluding sales from discontinued brands. For the Healthy Living platform, wholesale sales of $106.1 million were up 14.4%, excluding sales from discontinued brands, reflecting double-digit sales growth at Naturalizer, LifeStride and Dr. Scholl's. The company's Contemporary Fashion wholesale sales of $73.4 million were up 10.2% in the second quarter, excluding sales from discontinued brands, with good growth from Sam Edelman and Franco Sarto. Wholesale gross margin of 31.0% expanded by 20 basis points over the previous second quarter, due to improved initial margins and reductions in markdown and allowance provisions.

Consolidated gross profit of $254.6 million was up 11.8% in the second quarter, while gross margin of 41.0% improved by approximately 70 basis points versus the prior year. SG&A for the second quarter was $231.1 million, or 37.2% of net sales, which was down approximately 30 basis points from 37.5% of net sales in the prior year. For the quarter, operating margins improved 220 basis points to 3.7%.

Inventory at the end of the second quarter was $615.9 million, up from $586.0 million in the prior year. Wholesale inventory was up 4.3%, while Famous Footwear inventory was up 3.4%.

At quarter-end, Brown Shoe Company had $498.1 million in availability under its revolving credit facility and $53.1 million in cash and cash equivalents. The company's debt-to-capital ratio improved to 34.2% from 43.6% in the second quarter of 2012.

Financial Review and 2013 Outlook

“Despite uneven weather patterns and a decline in retail traffic, our performance in the first half of the year exceeded expectations. As a result, we are increasing our adjusted EPS guidance to $1.27 to $1.32 for fiscal 2013,” said Russ Hammer, chief financial officer of Brown Shoe Company. “However, approximately $22 million of back-to-school and wholesale sales -- or approximately $0.09 of adjusted EPS -- shifted to the second quarter from the third quarter this year, and those sales have already been accounted for in our second quarter results. For the back half of the year, we are maintaining a realistic but cautious stance, as we continue to monitor the macro retail environment.”

   
Metric FY'13
Consolidated net sales     $2.53 to $2.56 billion
Famous Footwear same-store sales     Up low-single digits
Wholesale Operations net sales     Up low- to mid-single digits for continuing operations
Gross profit margin     Flat for continuing operations
SG&A     $910 to $915 million
Non-recurring costs     $31 million
Net interest expense     $21 to $22 million
Effective tax rate, on adjusted basis     31% to 32%
Earnings per diluted share     $0.73 to $0.78
Adjusted earnings per diluted share     $1.27 to $1.32
Depreciation and amortization     $54 to $56 million
Capital expenditures     $55 to $57 million
 

Investor Conference Call

Brown Shoe Company will webcast an investor conference call at 9:00 a.m. ET today, August 27, 2013. The webcast and slides will be available at investor.brownshoe.com/news/events. A live conference call will be available at (877) 217-9089 for analysts in North America or (706) 679-1723 for international analysts by using the conference ID 32003590.

A replay will be available for a limited period at investor.brownshoe.com/news/events/archive. Investors may also access the replay by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 32003590 through September 10, 2013.

(1) 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 gross profit, operating earnings, net earnings and earnings per diluted share adjusted to exclude certain gains, 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. Reconciliations to the applicable GAAP financial measures have been included in the attached schedules.

(2) Same-Stores-Sales: For comparability purposes, same-store-sales for the second quarter of 2013 is calculated based on retail sales for weeks 14 through 26 in 2013 as compared to weeks 15 through 27 in 2012. This adjustment is due to the impact of the 53rd week of sales in the fourth quarter of fiscal 2012. The calculation for the second quarter of 2013 appropriately reflects the change in same-store-sales on a true retail calendar basis.

Definitions

All references in this press release, outside of the condensed consolidated financial statements that follow, unless otherwise noted, related to net earnings attributable to Brown Shoe Company, Inc. and diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders, are presented as net earnings and earnings per diluted share, respectively.

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 performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These risks include (i) changing consumer demands, which may be influenced by consumers' disposable income, which in turn can be influenced by general economic conditions; (ii) intense competition within the footwear industry; (iii) rapidly changing fashion trends and purchasing patterns; (iv) customer concentration and increased consolidation in the retail industry; (v) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China, where Brown Shoe Company relies heavily on manufacturing facilities for a significant amount of their inventory; (vi) the ability to recruit and retain senior management and other key associates; (vii) the ability to attract, retain and maintain good relationships with licensors and protect intellectual property rights; (viii) the ability to secure/exit leases on favorable terms; (ix) the ability to maintain relationships with current suppliers; (x) compliance with applicable laws and standards with respect to lead content in paint and other product safety issues; (xi) the ability to source product at a pace consistent with increased demand for footwear; and (xii) 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 Feb. 2, 2013, 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

Brown Shoe Company is a $2.6 billion, global footwear company whose shoes are worn by people of all ages, from all walks of life. Our products are available virtually everywhere — in the nearly 1,300 Famous Footwear and Naturalizer retail stores we operate, in hundreds of major department and specialty stores, on 14 branded ecommerce sites, and on many additional third-party retail websites. Through our broad range of products, we serve three key market segments. Our Family brands — Famous Footwear, Famous.com, and shoes.com — are one-stop-shopping destinations for high quality, affordable styles for a family's every occasion. Active people who want comfort, style and performance can look to our Healthy Living brands — Naturalizer, Dr. Scholl's Shoes, LifeStride and Ryka. Our Contemporary Fashion brands — Via Spiga, Vince, Sam Edelman, Franco Sarto, Carlos Santana and Fergie Footwear — keep fashionistas in step with the latest trends. At Brown Shoe Company, we inspire people to feel good and live better... feet first!

 
SCHEDULE 1
         
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
 
(Unaudited) (Unaudited)
13 Weeks Ended 26 Weeks Ended
(Thousands, except per share data) August 3, 2013 July 28, 2012 August 3, 2013 July 28, 2012
 
Net sales $ 621,706 $ 564,897 $ 1,210,362 $ 1,163,076
Cost of goods sold   367,080     337,243     715,720     701,168  
 
Gross profit   254,626     227,654     494,642     461,908  
 
Selling and administrative expenses 231,071 211,706 444,950 423,181
Restructuring and other special charges, net 743 7,326 1,262 17,514
Impairment of assets held for sale   -     -     4,660     -  
 
Operating earnings   22,812     8,622     43,770     21,213  
 
Interest expense (5,192 ) (5,645 ) (10,913 ) (11,681 )
Interest income   82     77     150     160  
 
Earnings before income taxes from continuing operations   17,702     3,054     33,007     9,692  
 
Income tax provision   (4,081 )   (1,241 )   (12,027 )   (3,857 )
 
Net earnings from continuing operations   13,621     1,813     20,980     5,835  
 
Discontinued operations:
Earnings (loss) from discontinued operations, net of tax benefit of $2,588, $2,923, $6,171 and $4,546, respectively 620 (4,527 ) (5,017 ) (6,921 )
Impairment of net assets/disposition of discontinued operations   1,042     -     (11,512 )   -  
 
Net earnings (loss) from discontinued operations   1,662     (4,527 )   (16,529 )   (6,921 )
 
Net earnings (loss)   15,283     (2,714 )   4,451     (1,086 )
 
Net loss attributable to noncontrolling interests   (74 )   (179 )   (144 )   (246 )
 
Net earnings (loss) attributable to Brown Shoe Company, Inc. $ 15,357   $ (2,535 ) $ 4,595   $ (840 )
 
Basic earnings (loss) per common share:
From continuing operations $ 0.32 $ 0.05 $ 0.51 $ 0.15
From discontinued operations   0.04     (0.11 )   (0.40 )   (0.17 )
Basic earnings (loss) per common share attributable to
Brown Shoe Company, Inc. shareholders $ 0.36   $ (0.06 ) $ 0.11   $ (0.02 )
 
Diluted earnings (loss) per common share:
From continuing operations $ 0.31 $ 0.05 $ 0.50 $ 0.15
From discontinued operations   0.04     (0.11 )   (0.40 )   (0.17 )
Diluted earnings (loss) per common share attributable to
Brown Shoe Company, Inc. shareholders $ 0.35   $ (0.06 ) $ 0.10   $ (0.02 )
 
Basic number of shares 41,348 40,687 41,209 40,555
Diluted number of shares   41,664     40,775     41,476     40,778  
       
SCHEDULE 2
 
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited)  
(Thousands) August 3, 2013 July 28, 2012 February 2, 2013
ASSETS
 
Cash and cash equivalents $ 53,137 $ 47,397 $ 68,223
Receivables, net 120,054 107,534 111,392
Inventories, net 615,916 585,969 503,688
Prepaid expenses and other current assets 51,845 44,425 42,016
Current assets - discontinued operations   1,661   66,655   47,109
Total current assets   842,613   851,980   772,428
 
Property and equipment, net 147,955 133,520 144,856
Goodwill and intangible assets, net 76,688 80,530 82,504
Other assets 113,764 135,790 119,695
Non current assets - discontinued operations   -   52,354   51,776
Total assets $ 1,181,020 $ 1,254,174 $ 1,171,259
 
LIABILITIES AND EQUITY
 
Borrowings under revolving credit agreement $ 23,000 $ 116,000 $ 105,000
Trade accounts payable 309,806 284,190 213,660
Other accrued expenses 143,735 142,215 137,190
Current liabilities - discontinued operations   3,536   16,688   13,259
Total current liabilities   480,077   559,093   469,109
 
Long-term debt 198,917 198,726 198,823
Deferred rent 36,196 29,371 33,711
Other liabilities 39,429 50,673 36,719
Non current liabilities - discontinued operations   -   8,613   6,996
Total other liabilities   274,542   287,383   276,249
 
Total Brown Shoe Company, Inc. shareholders' equity 425,718 406,901 425,129
Noncontrolling interests   683   797   772
Total equity   426,401   407,698   425,901
Total liabilities and equity $ 1,181,020 $ 1,254,174 $ 1,171,259
     
SCHEDULE 3
 
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
26 Weeks Ended
(Thousands) August 3, 2013 July 28, 2012
OPERATING ACTIVITIES:
Net earnings (loss) $ 4,451 $ (1,086 )
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization 27,336 26,726
Amortization of debt issuance costs 1,256 1,256
Share-based compensation expense 2,935 3,275
Tax benefit related to share-based plans (2,798 ) (738 )
Loss on disposal of facilities and equipment 191 1,358
Impairment charges for facilities and equipment 959 3,131
Impairment of assets held for sale 4,660 -
Impairment of intangible assets - 5,777
Impairment of net assets/disposition of discontinued operations 11,512 -
Net loss on sale of subsidiaries 576 -
Deferred rent 2,485 (2,990 )
Provision for doubtful accounts 331 1,008
Changes in operating assets and liabilities, net of dispositions:
Receivables (8,605 ) 18,997
Inventories (112,625 ) (59,363 )
Prepaid expenses and other current and noncurrent assets (6,372 ) 2,864
Trade accounts payable 96,932 103,668
Accrued expenses and other liabilities 11,729 16,961
Other, net   536     (1,484 )
Net cash provided by operating activities   35,489     119,360  
 
INVESTING ACTIVITIES:
Capital expenditures (30,435 ) (27,102 )
Proceeds from sale of subsidiaries, net of cash balance of $4,370   69,347     -  
Net cash provided by (used for) investing activities   38,912     (27,102 )
 
FINANCING ACTIVITIES:
Borrowings under revolving credit agreement 685,000 334,000
Repayments under revolving credit agreement (767,000 ) (419,000 )
Dividends paid (6,048 ) (6,005 )
Issuance of common stock under share-based plans, net (2,780 ) (2,058 )
Tax benefit related to share-based plans   2,798     738  
Net cash used for financing activities   (88,030 )   (92,325 )
Effect of exchange rate changes on cash and cash equivalents   (1,457 )   (218 )
Decrease in cash and cash equivalents (15,086 ) (285 )
Cash and cash equivalents at beginning of period   68,223     47,682  
 
Cash and cash equivalents at end of period $ 53,137   $ 47,397  
 
SCHEDULE 4
                       
BROWN SHOE COMPANY, INC.
RECONCILIATION OF NET EARNINGS (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE (GAAP BASIS) TO ADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS)
 
(Unaudited) (Unaudited)
13 Weeks Ended August 3, 2013 13 Weeks Ended July 28, 2012
(Thousands, except per share data)

Pre-Tax

Impact of

Charges/

Other Items

Net Earnings

Attributable to

Brown Shoe

Company, Inc.

Diluted

Earnings Per

Share

Pre-Tax

Impact of

Charges/

Other Items

Net (Loss)

Earnings

Attributable to

Brown Shoe

Company, Inc.

Diluted (Loss)

Earnings Per

Share

 
GAAP earnings (loss) $ 15,357 $ 0.35 $ (2,535 ) $ (0.06 )
 

Charges/Other Items - Continuing Operations:

Portfolio realignment
Business exits and cost reductions

$

743 486 0.01 $ 5,091 3,517 0.08
Organizational change   -     -     -     2,283   1,395     0.03  
Total Continuing Operations 743 486 0.01 7,374 4,912 0.11
 

Charges/Other Items - Discontinued Operations:

Portfolio realignment
Business exits and cost reductions 2,124 (616 ) (0.01 ) 7,264 4,434 0.11
Non-cash impairments/dispositions   (1,042 )   (1,042 )   (0.02 )   -   -     -  
Total Discontinued Operations 1,082 (1,658 ) (0.03 ) 7,264 4,434 0.11
 
Total charges/other items $ 1,825     (1,172 )   (0.02 ) $ 14,638   9,346     0.22  
 
Adjusted earnings $ 14,185   $ 0.33   $ 6,811   $ 0.16  
 
 
26 Weeks Ended August 3, 2013 26 Weeks Ended July 28, 2012
(Thousands, except per share data)

Pre-Tax

Impact of

Charges/

Other Items

Net Earnings

Attributable to

Brown Shoe

Company, Inc.

Diluted

Earnings Per

Share

Pre-Tax

Impact of

Charges/

Other Items

Net (Loss)

Earnings

Attributable to

Brown Shoe Company, Inc.

Diluted (Loss)

Earnings Per

Share

 
GAAP earnings (loss) $ 4,595 $ 0.10 $ (840 ) $ (0.02 )
 

Charges/Other Items - Continuing Operations:

Portfolio realignment
Business exits and cost reductions $ 1,262 803 0.02 $ 16,590 11,015 0.26
Non-cash impairments/dispositions 4,660 4,660 0.11 - - -
Organizational change   -     -     -     2,283   1,395     0.03  
Total Continuing Operations 5,922 5,463 0.13 18,873 12,410 0.29
 

Charges/Other Items - Discontinued Operations:

Portfolio realignment
Business exits and cost reductions 13,233 6,414 0.13 7,856 4,819 0.11
Non-cash impairments/dispositions 11,512 11,512 0.28 - - -
ASG integration-related costs   -     -     -     675   441     0.01  
Total Discontinued Operations 24,745 17,926 0.41 8,531 5,260 0.12
 
Total charges/other items $ 30,667     23,389     0.54   $ 27,404   17,670     0.41  
 
Adjusted earnings $ 27,984   $ 0.64   $ 16,830   $ 0.39  
 
SCHEDULE 5
                     
BROWN SHOE COMPANY, INC.
SUMMARY FINANCIAL RESULTS BY SEGMENT
(Unaudited)
 
 
SUMMARY FINANCIAL RESULTS
 
Famous Footwear Wholesale Operations Specialty Retail Other Consolidated
13 Weeks Ended 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28,
(Thousands)   2013     2012     2013     2012     2013     2012     2013     2012     2013     2012  
 
Net Sales $ 388,259 $ 350,318 $ 180,440 $ 160,584 $ 53,007 $ 53,995 $ - $ - $ 621,706 $ 564,897
 
Gross Profit $ 177,074 $ 156,919 $ 55,863 $ 49,394 $ 21,689 $ 21,341 $ - $ - $ 254,626 $ 227,654
Adjusted Gross Profit $ 177,074 $ 156,919 $ 55,863 $ 49,467 $ 21,689 $ 21,316 $ - $ - $ 254,626 $ 227,702
 
Gross Profit Rate 45.6 % 44.8 % 31.0 % 30.8 % 40.9 % 39.5 % - - 41.0 % 40.3 %
Adjusted Gross Profit Rate 45.6 % 44.8 % 31.0 % 30.8 % 40.9 % 39.5 % - - 41.0 % 40.3 %
 
Operating Earnings (Loss) $ 28,969 $ 20,539 $ 8,196 $ 4,789 $ (1,826 ) $ (5,795 ) $ (12,527 ) $ (10,911 ) $ 22,812 $ 8,622
Adjusted Operating Earnings (Loss) $ 28,969 $ 20,845 $ 8,939 $ 6,776 $ (1,826 ) $ (3,247 ) $ (12,527 ) $ (8,378 ) $ 23,555 $ 15,996
 
Operating Earnings (Loss) % 7.5 % 5.9 % 4.5 % 3.0 % (3.4 %) (10.7 %) - - 3.7 % 1.5 %
Adjusted Operating Earnings (Loss) % 7.5 % 6.0 % 5.0 % 4.2 % (3.4 %) (6.0 %) - - 3.8 % 2.8 %
 
Same-store Sales % (on a 13-week basis) 6.8 % 3.9 % - - 4.8 % (1.5 %) - - - -
 
Number of Stores 1,059 1,054 - - 215 224 - - 1,274 1,278
                                       
 
 
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)
 
Famous Footwear Wholesale Operations Specialty Retail Other Consolidated
13 Weeks Ended 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28,
(Thousands)   2013     2012     2013     2012     2013     2012     2013     2012     2013     2012  
 
Gross Profit $ 177,074 $ 156,919 $ 55,863 $ 49,394 $ 21,689 $ 21,341 $ - $ - $ 254,626 $ 227,654
 

Charges/Other Items:

Portfolio realignment
Business exits and cost reductions - - - 73 - (25 ) - - - 48
                   
Total charges/other items   -     -     -     73     -     (25 )   -     -     -     48  
 
Adjusted Gross Profit $ 177,074   $ 156,919   $ 55,863   $ 49,467   $ 21,689   $ 21,316   $ -   $ -   $ 254,626   $ 227,702  
 
 
Operating Earnings (Loss) $ 28,969 $ 20,539 $ 8,196 $ 4,789 $ (1,826 ) $ (5,795 ) $ (12,527 ) $ (10,911 ) $ 22,812 $ 8,622
 

Charges/Other Items:

Portfolio realignment
Non-cash impairment charges - - - - - - - - - -
Business exits and cost reductions - 306 743 1,987 - 2,548 - 250 743 5,091
Organizational change - - - - - - - 2,283 - 2,283
                   
Total charges/other items   -     306     743     1,987     -     2,548     -     2,533     743     7,374  
 
Adjusted Operating Earnings (Loss) $ 28,969   $ 20,845   $ 8,939   $ 6,776   $ (1,826 ) $ (3,247 ) $ (12,527 ) $ (8,378 ) $ 23,555   $ 15,996  
 
SCHEDULE 5 - CONTINUED
                     
BROWN SHOE COMPANY, INC.
SUMMARY FINANCIAL RESULTS BY SEGMENT
(Unaudited)
 
 
SUMMARY FINANCIAL RESULTS
 
Famous Footwear Wholesale Operations Specialty Retail Other Consolidated
26 Weeks Ended 26 Weeks Ended 26 Weeks Ended 26 Weeks Ended 26 Weeks Ended
August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28,
(Thousands)   2013     2012     2013     2012     2013     2012     2013     2012     2013     2012  
 
Net Sales $ 740,538 $ 697,425 $ 362,065 $ 355,525 $ 107,759 $ 110,126 $ - $ - $ 1,210,362 $ 1,163,076
 
Gross Profit $ 335,735 $ 312,059 $ 113,682 $ 105,339 $ 45,225 $ 44,510 $ - $ - $ 494,642 $ 461,908
Adjusted Gross Profit $ 335,735 $ 312,059 $ 113,682 $ 106,502 $ 45,225 $ 44,706 $ - $ - $ 494,642 $ 463,267
 
Gross Profit Rate 45.3 % 44.7 % 31.4 % 29.6 % 42.0 % 40.4 % - - 40.9 % 39.7 %
Adjusted Gross Profit Rate 45.3 % 44.7 % 31.4 % 30.0 % 42.0 % 40.6 % - - 40.9 % 39.8 %
 
Operating Earnings (Loss) $ 58,011 $ 38,840 $ 11,303 $ 10,664 $ (3,155 ) $ (9,322 ) $ (22,389 ) $ (18,969 ) $ 43,770 $ 21,213
Adjusted Operating Earnings (Loss)

$

58,011

$ 46,171 $ 17,209 $ 15,680 $ (3,155 ) $ (5,785 ) $ (22,373 ) $ (15,980 ) $ 49,692 $ 40,086
 
Operating Earnings (Loss) % 7.8 % 5.6 % 3.1 % 3.0 % (2.9 %) (8.5 %) - - 3.6 % 1.8 %
Adjusted Operating Earnings (Loss) % 7.8 % 6.6 % 4.8 % 4.4 % (2.9 %) (5.3 %) - - 4.1 % 3.4 %
 
Same-store Sales % (on a 26-week basis) 4.0 % 3.2 % - - 2.3 % 0.5 % - - - -
 
Number of Stores 1,059 1,054 - - 215 224 - - 1,274 1,278
                                       
 
 
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)
 
Famous Footwear Wholesale Operations Specialty Retail Other Consolidated
26 Weeks Ended 26 Weeks Ended 26 Weeks Ended 26 Weeks Ended 26 Weeks Ended
August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28, August 3, July 28,
(Thousands)   2013     2012     2013     2012     2013     2012     2013     2012     2013     2012  
 
Gross Profit $ 335,735 $ 312,059 $ 113,682 $ 105,339 $ 45,225 $ 44,510 $ - $ - $ 494,642 $ 461,908
 

Charges/Other Items:

Portfolio realignment
Business exits and cost reductions - - - 1,163 - 196 - - - 1,359
                   
Total charges/other items   -     -     -     1,163     -     196     -     -     -     1,359  
 
Adjusted Gross Profit $ 335,735   $ 312,059   $ 113,682   $ 106,502   $ 45,225   $ 44,706   $ -   $ -   $ 494,642   $ 463,267  
 
 
Operating Earnings (Loss) $ 58,011 $ 38,840 $ 11,303 $ 10,664 $ (3,155 ) $ (9,322 ) $ (22,389 ) $ (18,969 ) $ 43,770 $ 21,213
 

Charges/Other Items:

Portfolio realignment
Non-cash impairment charges - - 4,660 - - - - - 4,660 -
Business exits and cost reductions - 7,331 1,246 5,016 - 3,537 16 706 1,262 16,590
Organizational change - - - - - - - 2,283 - 2,283
                   
Total charges/other items   -     7,331     5,906     5,016     -     3,537     16     2,989     5,922     18,873  
 
Adjusted Operating Earnings (Loss) $ 58,011   $ 46,171   $ 17,209   $ 15,680   $ (3,155 ) $ (5,785 ) $ (22,373 ) $ (15,980 ) $ 49,692   $ 40,086  
         
SCHEDULE 6
 
BROWN SHOE COMPANY, INC.
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE RECONCILIATION
 
(Unaudited) (Unaudited)
13 Weeks Ended 26 Weeks Ended
August 3, July 28, August 3, July 28,
(Thousands, except per share data)   2013     2012     2013     2012  
 
Net earnings attributable to Brown Shoe Company, Inc.:
Net earnings from continuing operations $ 13,621 $ 1,813 $ 20,980 $ 5,835
Net loss attributable to noncontrolling interests 74 179 144 246
Net earnings allocated to participating securities   (580 )   -     (266 )   -  
Net earnings from continuing operations   13,115     1,992     20,858     6,081  
 
Net earnings (loss) from discontinued operations 1,662 (4,527 ) (16,529 ) (6,921 )
Net earnings allocated to participating securities   (71 )   -     -     -  
Net earnings (loss) from discontinued operations   1,591     (4,527 )   (16,529 )   (6,921 )
 
Net earnings (loss) attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities $ 14,706   $ (2,535 ) $ 4,329   $ (840 )
 
 
Basic and diluted common shares attributable to Brown Shoe Company, Inc.:
Basic common shares for continuing operations and discontinued operations 41,348 40,687 41,209 40,555
Dilutive effect of share-based awards for continuing operations and discontinued operations   316     88     267     223  
Diluted common shares for continuing operations and discontinued operations attributable to Brown Shoe Company, Inc.   41,664     40,775     41,476     40,778  
 
Basic earnings (loss) per common share:
From continuing operations $ 0.32 $ 0.05 $ 0.51 $ 0.15
From discontinued operations   0.04     (0.11 )   (0.40 )   (0.17 )
Basic earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders $ 0.36   $ (0.06 ) $ 0.11   $ (0.02 )
 
Diluted earnings (loss) per common share:
From continuing operations $ 0.31 $ 0.05 $ 0.50 $ 0.15
From discontinued operations   0.04     (0.11 )   (0.40 )   (0.17 )
Diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders $ 0.35   $ (0.06 ) $ 0.10   $ (0.02 )
SCHEDULE 7          
 
BROWN SHOE COMPANY, INC.
BASIC AND DILUTED ADJUSTED EARNINGS (LOSS) PER SHARE RECONCILIATION
 
(Unaudited) (Unaudited)
13 Weeks Ended 26 Weeks Ended
August 3, July 28, August 3, July 28,
(Thousands, except per share data)   2013     2012     2013     2012  
 
Adjusted net earnings attributable to Brown Shoe Company, Inc.:
Adjusted net earnings from continuing operations $ 14,107 $ 6,725 $ 26,443 $ 18,245
Net loss attributable to noncontrolling interests 74 179 144 246
Net earnings allocated to participating securities   (601 )   (352 )   (1,193 )   (843 )
Adjusted net earnings from continuing operations   13,580     6,552     25,394     17,648  
 
Adjusted net earnings (loss) from discontinued operations 4 (93 ) 1,397 (1,661 )
Net earnings allocated to participating securities   -     -     (63 )   -  
Net earnings (loss) from discontinued operations   4     (93 )   1,334     (1,661 )
 
Adjusted net earnings attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities $ 13,584   $ 6,459   $ 26,728   $ 15,987  
 
 
Basic and diluted common shares attributable to Brown Shoe Company, Inc.:
Basic common shares for continuing operations and discontinued operations 41,348 40,687 41,209 40,555
Dilutive effect of share-based awards for continuing operations and discontinued operations   316     88     267     223  
Diluted common shares for continuing operations and discontinued operations attributable to Brown Shoe Company, Inc.   41,664     40,775     41,476     40,778  
 
Basic adjusted earnings (loss) per common share:
From continuing operations $ 0.33 $ 0.16 $ 0.62 $ 0.43
From discontinued operations   -     -     0.03     (0.04 )
Basic adjusted earnings per common share attributable to Brown Shoe Company, Inc. shareholders $ 0.33   $ 0.16   $ 0.65   $ 0.39  
 
Diluted adjusted earnings (loss) per common share:
From continuing operations $ 0.33 $ 0.16 $ 0.61 $ 0.43
From discontinued operations   -     -     0.03     (0.04 )
Diluted adjusted earnings per common share attributable to Brown Shoe Company, Inc. shareholders $ 0.33   $ 0.16   $ 0.64   $ 0.39  

Brown Shoe Company
Investors:
Peggy Reilly Tharp, 314-854-4134
ptharp@brownshoe.com
or
Media:
Kelly Malone, 314-854-4093
kmalone@brownshoe.com

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections