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Brown Shoe Company Reports First Quarter 2012 Results

Stocks in this article: BWS

Brown Shoe Company, Inc. (NYSE: BWS, brownshoe.com) today reported its first quarter 2012 financial results, with net sales of $626.4 million compared to first quarter 2011 net sales of $619.6 million. First quarter net earnings of $1.7 million, or $0.04 per diluted share, compared to $3.7 million, or $0.08 per diluted share, in 2011. On an adjusted * basis, net earnings of $10.0 million, or $0.23 per diluted share, compared to $7.0 million, or $0.16 per diluted share, in the prior year. Gross profit margin for the first quarter of 2012 was 38.2% versus 40.0% in 2011.

“With sales of $626.4 million and adjusted earnings of $0.23 per share -- up 44% -- we had a great start to 2012. Strong topline sales growth and effective expense management helped drive good quarterly results, despite some gross margin pressure,” said Diane Sullivan, president and chief executive officer of Brown Shoe Company. “While good weather, an earlier Easter and an easier quarterly comp were welcome, these factors only helped to magnify the success we are seeing with the first phase of our portfolio realignment.”

“Our strong quarterly performance was better than expected and is reflective of the hard work we completed last year and are continuing to execute on this year,” continued Sullivan. “I’m looking forward to reporting ongoing benefits from these efforts throughout this year, and we will continue to evaluate our brands and our businesses against the financial hurdles we outlined during our portfolio realignment.”

   
 
US$M, except per share (unaudited) 13 Weeks 52 Weeks
  1Q’12   1Q’11   Change   1Q’12   1Q’11   Change
Famous Footwear     347.1       342.7     1.3 %     1,460.7       1,467.1     (0.4 %)
Wholesale Operations     223.2       217.1     2.8 %     877.0       796.7     10.1 %
Specialty Retail    

56.1

     

59.8

    (6.1 %)    

252.0

     

262.1

   

(3.9

%)

Consolidated net sales   $ 626.4     $ 619.6     1.1 %   $ 2,589.7     $ 2,525.9     2.5 %
Gross profit     239.1       248.0     (3.6 %)     987.7       1,004.0     (1.6 %)
Margin     38.2 %     40.0 %   -180 bps     38.1 %     39.7 %   -160 bps
SG&A expenses     218.9       234.2     (6.5 %)     922.1       932.7     (1.1 %)
% of net sales     35.0 %     37.8 %   -280 bps     35.6 %     36.9 %   -130 bps
Net restructuring, other special charges     11.5       1.7     n/m       33.4       7.9     320.4 %
Operating earnings     8.7       12.1     (28.0 %)     32.2       63.4     (49.3 %)
% of net sales     1.4 %     1.9 %   -50 bps     1.2 %     2.5 %   -130 bps
Net interest expense     6.1       6.6     (8.2 %)     26.0       21.5     20.4 %
Earnings before income tax     2.6       5.5     (52.1 %)     6.2       41.9     (85.2 %)
Tax rate     37.9 %     38.8 %   -90 bps     12.9 %     28.6 %   n/m  

Net earnings from discontinued operations

    --       0.3     (100.0 %)     15.4       0.3     n/m  
Net earnings   $ 1.7     $ 3.7     (54.0 %)   $ 22.6     $ 30.9     (26.8 %)
Per diluted share   $ 0.04     $ 0.08     (50.0 %)   $ 0.52     $ 0.70     (25.7 %)
Adjusted operating earnings   $ 21.5     $ 16.5     29.8 %   $ 70.3     $ 74.1     (5.1 %)
Adjusted per diluted share   $ 0.23     $ 0.16     43.8 %   $ 0.77     $ 0.86     (10.5 %)
       
 

First Quarter Highlights

Famous Footwear reported a year-over-year improvement in first quarter net sales of 1.3%, while same store sales were up 2.5%. Improved weather, both on a quarterly sequential and year-over-year basis, helped drive strong growth in running and sandals. During the quarter, the company closed or relocated 34 stores and added 11 new stores, and average revenue per square foot improved 4.5% over the first quarter of 2011.

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