BROWN SHOE COMPANY, INC.
(Exact name of registrant as specified in its charter)
|
|
New York
(State or other jurisdiction of incorporation or organization)
|
|
1-2191
(Commission File Number)
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43-0197190
(IRS Employer Identification Number)
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8300 Maryland Avenue
St. Louis, Missouri
(Address of principal executive offices)
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63105
(Zip Code)
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(314) 854-4000
(Registrant's telephone number, including area code)
|
|
(c)
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Exhibit
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|
99.1
|
Press Release issued March 15, 2011
|
|
BROWN SHOE COMPANY, INC.
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||
(Registrant)
|
||
Date: March 15, 2011
|
/s/ Michael I. Oberlander
|
|
Michael I. Oberlander
|
||
Senior Vice President, General Counsel and Corporate Secretary
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Exhibit Number
|
Description
|
|
99.1
|
Press Release issued March 15, 2011
|
·
|
2010 consolidated net sales increased 11.7 percent to record $2.5 billion
|
·
|
Record year at Famous Footwear driven by same-store sales increase of 10.5 percent
|
·
|
2010 GAAP net earnings per diluted share of $0.85 versus $0.22 in 2009
|
·
|
2010 adjusted net earnings per diluted share of $0.97 versus $0.40 in 2009
|
·
|
Expects 2011 net sales to increase low double-digits, including sales from recently acquired American Sporting Goods brands
|
·
|
Expects 2011 GAAP net earnings per diluted share in the range of $1.25 to $1.32
|
·
|
Expects 2011 adjusted net earnings per diluted share in the range of $1.37 to $1.47
|
·
|
Record consolidated net sales results for the full year;
|
·
|
Record fourth quarter and full year net sales for Famous Footwear driven by a full year same-store sales increase of 10.5 percent, including its best ever Back-to-School and Black Friday performances;
|
·
|
Famous Footwear more than doubled its operating profit performance in 2010 from the prior year to a record $90.4 million;
|
·
|
Ecommerce full year net sales exceeded $120 million, increasing by 21 percent for both the year and the fourth quarter, with double-digit percentage increases across all of its businesses for the year and the fourth quarter, including a 14.4 percent increase at Shoes.com;
|
·
|
Naturalizer net sales increased 14.4 percent and 11.9 percent for the full year and fourth quarter, respectively, across its multi-channel business, including a 7.2 percent same-store sales increase for the full year;
|
·
|
Wholesale net sales increased 19.4 percent and 15.1 percent for the full year and fourth quarter, respectively;
|
·
|
Acquired the remaining interest in Edelman Shoe, Inc. in June;
|
·
|
Acquired American Sporting Goods Corporation (ASG) in February 2011, further strengthening the Company’s healthy living platform.
|
·
|
Famous Footwear net sales were up 3.7 percent to $355.5 million, driven by a 4.9 percent same-store sales increase, which follows a 9.0 percent same-store sales gain in the fourth quarter of 2009, with positive performances across all genders, channels, and geographies. Store productivity continued to improve during the quarter, with sales per square foot increasing to $187 on a trailing four quarter basis, versus $167 in the year-ago period. During the quarter, Famous Footwear opened 10 stores and closed 18, ending the year with 1,110 stores;
|
·
|
Net sales in the Wholesale division rose 15.1 percent to $173.9 million, with increases across the majority of its brands and channels of distribution;
|
·
|
Net sales in the Specialty Retail division were $75.1 million, reflecting a 3.2 percent same-store sales increase; and
|
·
|
The increase in retail sales in the fourth quarter was supported by a 21.1 percent increase in Company-wide ecommerce net sales, including record results for Thanksgiving Day, Black Friday, and Cyber Monday.
|
·
|
Famous Footwear’s gross profit rate increased by 50 basis points to 44.6 percent of net sales and Specialty Retail’s gross profit rate increased by 30 basis points to 40.6 percent of net sales. The higher gross profit rate at Famous Footwear reflects the strong performance of higher-margin categories, such as boots, and 33 percent fewer store BOGO days than in the year-ago period.
|
·
|
Offsetting the strong retail performance was a decrease in Wholesale gross profit rate to 26.6 percent of net sales in the quarter from 34.6 percent in the year-ago period. This was driven by several factors, including:
|
o
|
A continuation of industry-wide sourcing and supply chain issues that led to increased delivery costs and disruption in the timing of deliveries, leading to lower initial margins and greater markdowns and allowances; and
|
o
|
Order fulfillment was further aggravated by the business process changes, data conversion, and learning curves associated with the Company’s systems transition that went live in December.
|
·
|
Additionally, the Wholesale division, which carries a lower gross margin rate than the retail division, represented approximately 29 percent of consolidated net sales in the quarter versus approximately 27 percent in the previous year;
|
Contacts: | ||
For investors: | For media: | |
Allison Malkin | Erin Conroy | |
ICR, Inc. | Brown Shoe | |
Allison.malkin@icrinc.com | econroy@brownshoe.com | |
203-682-8225 | 212-324-4515 |
Thirteen Weeks Ended
|
Fifty-two Weeks Ended
|
|||||||||||
(Thousands, except per share data)
|
January 29,
2011
|
January 30,
2010
|
January 29,
2011
|
January 30,
2010
|
||||||||
Net sales
|
$
|
604,524
|
$
|
565,972
|
$
|
2,504,091
|
$
|
2,241,968
|
||||
Cost of goods sold
|
369,219
|
333,580
|
1,500,537
|
1,338,829
|
||||||||
Gross profit
|
235,305
|
232,392
|
1,003,554
|
903,139
|
||||||||
Selling and administrative expenses
|
226,924
|
217,972
|
922,976
|
859,693
|
||||||||
Restructuring and other special charges, net
|
2,454
|
5,089
|
7,914
|
11,923
|
||||||||
Operating earnings
|
5,927
|
9,331
|
72,664
|
31,523
|
||||||||
Interest expense
|
(5,409
|
)
|
(5,003
|
)
|
(19,647
|
)
|
(20,195
|
)
|
||||
Interest income
|
90
|
34
|
203
|
374
|
||||||||
Earnings before income taxes
|
608
|
4,362
|
53,220
|
11,702
|
||||||||
Income tax benefit (provision)
|
2,639
|
364
|
(16,160
|
)
|
(1,259
|
)
|
||||||
Net earnings
|
$
|
3,247
|
$
|
4,726
|
$
|
37,060
|
$
|
10,443
|
||||
Less: Net (loss) earnings attributable to noncontrolling interests
|
(106
|
)
|
(322
|
)
|
(173
|
)
|
943
|
|||||
Net earnings attributable to Brown Shoe Company, Inc.
|
$
|
3,353
|
$
|
5,048
|
$
|
37,233
|
$
|
9,500
|
||||
Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.08
|
$
|
0.12
|
$
|
0.85
|
$
|
0.22
|
||||
Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.08
|
$
|
0.12
|
$
|
0.85
|
$
|
0.22
|
||||
Basic number of shares
|
42,372
|
41,602
|
42,156
|
41,585
|
||||||||
Diluted number of shares
|
42,838
|
41,777
|
42,487
|
41,649
|
(Thousands)
|
January 29, 2011
|
January 30, 2010
|
||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
126,548
|
$
|
125,833
|
||||
Receivables
|
113,937
|
84,297
|
||||||
Inventories
|
524,250
|
456,682
|
||||||
Deferred income taxes
|
4,503
|
17,894
|
||||||
Income taxes
|
10,195
|
4,163
|
||||||
Prepaid expenses and other current assets
|
28,848
|
19,380
|
||||||
Total current assets
|
808,281
|
708,249
|
||||||
Other assets
|
133,538
|
110,810
|
||||||
Deferred income taxes
|
–
|
2,304
|
||||||
Intangible assets, net
|
70,592
|
77,226
|
||||||
Property and equipment, net
|
135,632
|
141,561
|
||||||
Total assets
|
$
|
1,148,043
|
$
|
1,040,150
|
||||
LIABILITIES AND EQUITY
|
||||||||
Borrowings under revolving credit agreement
|
$
|
198,000
|
$
|
94,500
|
||||
Trade accounts payable
|
167,190
|
177,700
|
||||||
Other accrued expenses
|
146,715
|
141,863
|
||||||
Total current liabilities
|
511,905
|
414,063
|
||||||
Long-term debt
|
150,000
|
150,000
|
||||||
Deferred rent
|
34,678
|
38,869
|
||||||
Deferred income taxes
|
11,534
|
–
|
||||||
Other liabilities
|
24,017
|
25,991
|
||||||
Total other liabilities
|
220,229
|
214,860
|
||||||
Total Brown Shoe Company, Inc. shareholders’ equity
|
415,080
|
402,171
|
||||||
Noncontrolling interests
|
829
|
9,056
|
||||||
Total equity
|
415,909
|
411,227
|
||||||
Total liabilities and equity
|
$
|
1,148,043
|
$
|
1,040,150
|
Fifty-two Weeks Ended
|
|||||||
(Thousands)
|
January 29, 2011
|
January 30, 2010
|
|||||
OPERATING ACTIVITIES:
|
|||||||
Net earnings
|
$
|
37,060
|
$
|
10,443
|
|||
Adjustments to reconcile net earnings to net cash (used for) provided by operating activities:
|
|||||||
Depreciation
|
33,149
|
36,459
|
|||||
Amortization of capitalized software
|
10,506
|
7,867
|
|||||
Amortization of intangibles
|
6,667
|
6,774
|
|||||
Amortization of debt issuance costs
|
2,195
|
2,195
|
|||||
Share-based compensation expense
|
6,144
|
4,673
|
|||||
Tax deficiency related to share-based plans
|
87
|
58
|
|||||
Loss on disposal of facilities and equipment
|
1,089
|
1,180
|
|||||
Impairment charges for facilities and equipment
|
2,762
|
3,928
|
|||||
Deferred rent
|
(4,191
|
)
|
(2,845
|
)
|
|||
Deferred income taxes
|
27,229
|
15,414
|
|||||
Provision for doubtful accounts
|
516
|
727
|
|||||
Foreign currency transaction gains
|
(18
|
)
|
(106
|
)
|
|||
Changes in operating assets and liabilities:
|
|||||||
Receivables
|
(30,088
|
)
|
(714
|
)
|
|||
Inventories
|
(66,568
|
)
|
11,166
|
||||
Prepaid expenses and other current and noncurrent assets
|
(9,440
|
)
|
(1,601
|
)
|
|||
Trade accounts payable
|
(10,754
|
)
|
24,987
|
||||
Accrued expenses and other liabilities
|
2,668
|
285
|
|||||
Income taxes
|
(5,993
|
)
|
2,742
|
||||
Other, net
|
(5,332
|
)
|
(5,554
|
)
|
|||
Net cash (used for) provided by operating activities
|
(2,312
|
)
|
118,078
|
||||
INVESTING ACTIVITIES:
|
|||||||
Purchases of property and equipment
|
(30,781
|
)
|
(24,880
|
)
|
|||
Capitalized software
|
(24,046
|
)
|
(25,098
|
)
|
|||
Net cash used for investing activities
|
(54,827
|
)
|
(49,978
|
)
|
|||
FINANCING ACTIVITIES:
|
|||||||
Borrowings under revolving credit agreement
|
1,051,500
|
848,900
|
|||||
Repayments under revolving credit agreement
|
(948,000
|
)
|
(866,900
|
)
|
|||
Acquisition of noncontrolling interests (Edelman Shoe, Inc.)
|
(32,692
|
)
|
–
|
||||
Dividends paid
|
(12,254
|
)
|
(12,009
|
)
|
|||
Debt issuance costs
|
(2,636
|
)
|
–
|
||||
Proceeds from stock options exercised
|
926
|
107
|
|||||
Contributions by noncontrolling interests
|
527
|
–
|
|||||
Tax deficiency related to share-based plans
|
(87
|
)
|
(58
|
)
|
|||
Net cash provided by (used for) financing activities
|
57,284
|
(29,960
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
570
|
793
|
|||||
Increase in cash and cash equivalents
|
715
|
38,933
|
|||||
Cash and cash equivalents at beginning of year
|
125,833
|
86,900
|
|||||
Cash and cash equivalents at end of year
|
$
|
126,548
|
$
|
125,833
|
4th Quarter 2010
|
4th Quarter 2009
|
||||||||||||
(Thousands, except per share data)
|
Operating
Earnings
|
Net
Earnings
Attributable to
Brown Shoe
Company, Inc.
|
Diluted
Earnings
Per Share
|
Operating
Earnings
|
Net
Earnings
Attributable to
Brown Shoe
Company, Inc.
|
Diluted
Earnings
Per Share
|
|||||||
GAAP earnings
|
$ 5,927
|
$ 3,353
|
$0.08
|
$ 9,331
|
$ 5,048
|
$ 0.12
|
|||||||
Charges / Other Items:
|
|||||||||||||
IT initiatives
|
1,335
|
893
|
0.02
|
2,329
|
1,371
|
0.03
|
|||||||
Acquisition-related costs
|
1,119
|
724
|
0.01
|
–
|
–
|
–
|
|||||||
Headquarters consolidation
|
–
|
–
|
–
|
(1,864
|
)
|
(1,139
|
)
|
(0.03
|
)
|
||||
Organizational changes
|
–
|
–
|
–
|
4,624
|
2,825
|
0.07
|
|||||||
Total charges / other items
|
2,454
|
1,617
|
0.03
|
5,089
|
3,057
|
0.07
|
|||||||
Adjusted earnings
|
$ 8,381
|
$ 4,970
|
$ 0.11
|
$ 14,420
|
$ 8,105
|
$ 0.19
|
2010
|
2009
|
|||||||||||||
(Thousands, except per share data)
|
Operating
Earnings
|
Net
Earnings
Attributable to
Brown Shoe
Company, Inc.
|
Diluted
Earnings
Per Share
|
Operating
Earnings
|
Net
Earnings
Attributable to
Brown Shoe
Company, Inc.
|
Diluted
Earnings
Per Share
|
||||||||
GAAP earnings
|
$ 72,664
|
$ 37,233
|
$ 0.85
|
$ 31,523
|
$ 9,500
|
$ 0.22
|
||||||||
Charges / Other Items:
|
||||||||||||||
IT initiatives
|
6,795
|
4,536
|
0.10
|
9,163
|
5,772
|
0.14
|
||||||||
Acquisition-related costs
|
1,119
|
724
|
0.02
|
–
|
–
|
–
|
||||||||
Headquarters consolidation
|
–
|
–
|
–
|
(1,864
|
)
|
(1,139
|
)
|
(0.03
|
)
|
|||||
Organizational changes |
–
|
– | – | 4,624 | 2,825 | 0.07 | ||||||||
Total charges / other items | 7,914 | 5,260 | 0.12 | 11,923 | 7,458 | 0.18 | ||||||||
Adjusted earnings | $ 80,578 | $ 42,493 | $0.97 | $ 43,446 | $ 16,958 | $0.40 |
Famous Footwear
|
Wholesale Operations
|
Specialty Retail
|
||||||||||
($ millions)
|
4th Quarter
2010
|
4th Quarter
2009
|
4th Quarter
2010
|
4th Quarter
2009
|
4th Quarter
2010
|
4th Quarter
2009
|
||||||
Net Sales
|
$355.5
|
$342.7
|
$173.9
|
$151.1
|
$75.1
|
$72.2
|
||||||
Gross Profit
|
$158.5
|
$151.1
|
$46.3
|
$52.2
|
$30.5
|
$29.1
|
||||||
Gross Profit Rate
|
44.6%
|
44.1%
|
26.6%
|
34.6%
|
40.6%
|
40.3%
|
||||||
Operating Earnings (Loss)
|
$14.3
|
$13.9
|
$0.8
|
$10.7
|
$(1.0)
|
$(2.4)
|
||||||
Operating Earnings (Loss) %
|
4.0%
|
4.0%
|
0.5%
|
7.1%
|
(1.3)%
|
(3.3)%
|
||||||
Same-store Sales %
|
4.9%
|
9.0%
|
-
|
-
|
3.2%
|
7.6%
|
||||||
Number of Stores
|
1,110
|
1,129
|
-
|
-
|
259
|
282
|
||||||
Famous Footwear
|
Wholesale Operations
|
Specialty Retail
|
||||||||||
($ millions)
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
||||||
Net Sales
|
$1,486.5
|
$1,363.6
|
$754.4
|
$631.8
|
$263.2
|
$246.6
|
||||||
Gross Profit
|
$669.0
|
$592.9
|
$222.0
|
$205.8
|
$112.5
|
$104.4
|
||||||
Gross Profit Rate
|
45.0%
|
43.5%
|
29.4%
|
32.6%
|
42.8%
|
42.4%
|
||||||
Operating Earnings (Loss)
|
$90.4
|
$44.6
|
$32.2
|
$41.1
|
$(6.0)
|
$(14.2)
|
||||||
Operating Earnings (Loss) %
|
6.1%
|
3.3%
|
4.3%
|
6.5%
|
(2.3)%
|
(5.8)%
|
||||||
Same-store Sales %
|
10.5%
|
0.5%
|
-
|
-
|
6.6%
|
0.8%
|
||||||