EX-99.1 2 bws8k031513ex99_1.htm EXHIBIT 99.1 bws8k031513ex99_1.htm

 
 
 

News
  
 
 
  Contacts:
  Investors
 
Peggy Reilly Tharp, Brown Shoe Company
  (314) 854-4134, ptharp@brownshoe.com
  Kelly Malone, Brown Shoe Company
  (314) 854-4093, kmalone@brownshoe.com
 
 

Brown Shoe Company Reports Fourth Quarter and Full Year 2012 Results
Famous Footwear same-store-sales up 4.4% in fourth quarter
Record breaking 52-week sales and operating profit at Famous Footwear
 

 
ST. LOUIS, Mar. 15, 2013 – Brown Shoe Company, Inc. (NYSE: BWS, brownshoe.com) today reported fourth quarter 2012 financial results, with net sales of $640.2 million versus fourth quarter 2011 net sales of $628.9 million.  Results for both the fourth quarter of 2012 and 2011 included sales of $2.8 million and $16.5 million, respectively, from brands and businesses the company has exited.  Excluding exited brands, year-over-year net sales were up 4.8% in the quarter.  
 
Net earnings were $4.0 million, or $0.09 per diluted share, in the fourth quarter of 2012 versus a loss of ($8.2) million, or ($0.21) per diluted share, in the prior year.  Fourth quarter 2012 results included portfolio realignment costs of $2.9 million, while earnings for the fourth quarter of 2011 included portfolio realignment and integration related costs of $18.5 million.  On an adjusted* basis, net earnings of $5.9 million, or $0.14 per diluted share, improved 43.0% compared to $4.1 million, or $0.10 per diluted share, in the prior year.  
 
For full year 2012, net sales of $2,598.1 million compared to $2,582.8 million in 2011.  Results for both 2012 and 2011 included sales from exited brands and businesses of $42.5 million and $92.5 million, respectively.  Excluding exited brands, 2012 sales were up 2.6% over 2011.  Full year 2012 includes 53 weeks, compared to 52 weeks in 2011, with the additional week occurring in the fourth quarter.  The 53rd week increased net sales by $21.2 million and had an immaterial impact on fourth quarter 2012 earnings.
 
Net earnings for 2012 were $27.5 million, or $0.64 per diluted share, versus $24.6 million, or $0.56 per diluted share, in 2011.  Earnings for 2012 included portfolio realignment, organization change and integration related costs of $32.9 million, while earnings for 2011 included portfolio realignment and integration related costs of $30.8 million, which were partially offset by a $20.6 million gain on the sale of AND 1.  On an adjusted basis, 2012 net earnings of $48.6 million, or $1.13 per diluted share, improved 60.4% compared to $30.3 million, or $0.70 per diluted share, in 2011.  
 
Gross profit margin for the fourth quarter of 2012 improved to 39.3% from 37.9% in 2011.  For the full year, it improved to 38.9% from 38.6% in 2011.
 
“In 2012, we hit several milestones at Famous Footwear, by achieving record-breaking sales for the 52-week year, as well as our highest annual operating profit,” said Diane Sullivan, president and chief executive officer of Brown Shoe Company.  “We also strengthened our balance sheet, by reducing short term borrowings by nearly $100 million and reduced our SG&A expenses by $18.3 million.  Thanks to the hard work of the entire Brown Shoe Company team, we ended 2012 on a high note, as our share price increased by 106% over the course of calendar 2012.”
 
 
 
 
 
 US$M, except per share (unaudited)
14 Weeks
13 Weeks
4Q
53 Weeks
52 Weeks
FY
 
4Q’12
4Q’11
Change
4Q’12
4Q’11
Change
 Consolidated net sales 
 $640.2
 $628.9
1.8%
 $2,598.1
 $2,582.8
0.6%
Famous Footwear
                  380.1
          352.4
7.9% 
         1,514.3
          1,456.3
4.0%
Wholesale Operations
                  194.5
          205.1
(5.2%)
          845.2
            870.9
(3.0%)
Specialty Retail
                    65.6
            71.4
(8.1%)
          238.5
            255.6
(6.7%)
 Gross profit
                  251.7
          238.6
5.5%
        1,010.4
            996.6
1.4%
Margin
39.3%
37.9%
140 bps
38.9%
38.6%
30 bps
 SG&A
                  238.5
         230.0
3.7%
           919.0
            937.3
(2.0%)
% of net sales
37.3%
36.6%
70 bps
35.4%
36.3%
- 90 bps
 Net restructuring, other special charges
                      2.7
             16.5
(83.5%)
            24.0
              23.7
1.5%
 Impairment of intangible assets
 --
 --
--
              5.8
 --
--
 Operating earnings (loss)
                    10.5
            (7.9)
n/m
             61.6
              35.6
73.3%
% of net sales
1.6%
(1.3%)
290 bps
2.4%
1.4%
100 bps
 Net interest expense
                      5.9
              5.8
0.4%
             23.1
              26.5
(13.0%)
 Earnings (loss) before income tax
                     4.6
           (13.7)
n/m
            38.5
                 9.1
325.9%
 Tax rate
13.7%
50.7%
  
29.4%
3.6%
  
 Net earnings (loss) from discontinued operations
 --
            (1.4)
--
 --
               15.7
--
 Net earnings (loss)
 $4.0
 $(8.2)
149.1%
 $27.5
 $24.6
11.8%
Per diluted share  
 $0.09
 $(0.21)
142.9%
 $0.64
 $0.56
14.3%
 Adjusted net earnings
 $5.9
 $4.1
43.0%
 $48.6
 $30.3
60.4%
Per diluted share
 $0.14
 $0.10
40.0%
 $1.13
 $0.70
61.4%
 
Fourth Quarter Highlights
 
Famous Footwear reported record fourth quarter 2012 sales of $380.1 million, a 7.9% year-over-year improvement, with good growth in athletic shoes, boat shoes and women’s boots.  On a 52 week same-store-sales basis, the fourth quarter was up 4.4% over the prior year.  During the quarter, the company closed or relocated 18 stores and added 12 new stores, and average revenue per square foot improved 6.9% year-over-year.   
 
Contemporary Fashion platform wholesale sales were up slightly in the fourth quarter, with the company’s Sam Edelman and Franco Sarto brands delivering strong performance.  In the Healthy Living portfolio, wholesale sales were up 1.8%, with contribution from LifeStride, Ryka and Dr. Scholl’s Shoes.  Excluding exited brands, Wholesale Operations sales were up 1.6% year-over-year in the fourth quarter.
 
Consolidated gross profit was up in the fourth quarter, while gross profit margin of 39.3% improved by approximately 140 basis points versus the prior year.  SG&A for the fourth quarter was $238.5 million, or 37.3% of net sales, up approximately 70 basis points from 36.6% of net sales in the prior year.  For the quarter, adjusted operating earnings improved 39.0% to $13.4 million from $9.7 million in the fourth quarter of 2011.   
 
Inventory at the end of the fourth quarter was $533.3 million, down 5.1% compared to $561.8 million in the prior year.  Wholesale inventory was down 21.6%, while Famous Footwear inventory was up 2.3%.
 
At quarter-end, Brown Shoe Company had $380.6 million in availability under its revolving credit facility and $68.2 million in cash and cash equivalents.  The company’s debt-to-capital ratio declined to 41.6% from 49.1% in the fourth quarter of 2011.
 
Full Year Highlights
 
Famous Footwear reported full year 2012 sales of $1,514.3 million, a 4.0% year-over-year improvement, with adjusted annual operating earnings topping $100 million.  On a 52-week basis, same-store-sales in 2012 were up 4.5% over 2011.  During the year, the company closed or relocated 89 stores and added 55 new stores, and average revenue per square foot improved to $199.   
 
Contemporary Fashion platform wholesale sales were up 11.0% in 2012, with the company’s Sam Edelman brand closing in on the $100 million sales threshold.  In the Healthy Living portfolio, wholesale sales were down 3.5%.  Excluding exited brands, Wholesale Operations sales were up 1.6% year-over-year in 2012.
 
Consolidated gross profit was up in 2012, while gross profit margin of 38.9% improved by approximately 30 basis points over 2011.  SG&A for 2012 was $919.0 million, or 35.4% of net sales versus 36.3% in the prior year.  For 2012, adjusted operating earnings improved 44.6% to $94.5 million from $65.4 million in 2011.    
 
Financial Review and 2013 Outlook
 
“We’re pleased to have wrapped up a strong 2012, with adjusted diluted EPS of $1.13, up more than 60% over the prior year,” said Russ Hammer, chief financial officer of Brown Shoe Company.  “However, like many other peers, we are beginning to see the effect on our consumers of recent payroll tax changes and other fiscal events.  As a result, we remain cognizant about the potential for changes in consumer discretionary spending in 2013 and any related impact on our results.”
 
 Metric
FY’13
 Consolidated net sales
$2.55 to $2.58 billion
 Famous Footwear same-store sales
Up low-single digits
 Wholesale Operations net sales
Down low- to mid-single digits, reflecting brand exits
 Gross profit margin
Up 10 to 40 basis points
 SG&A
$900 to $910 million
 Non-recurring costs
$1.0 to $2.0 million
 Net interest expense
$21 to $23 million
 Effective tax rate
33% to 35%
 Earnings per diluted share
$1.16 to $1.23
 Adjusted earnings per diluted share
$1.18 to $1.25
 Depreciation and amortization
$54 to $56 million
 Capital expenditures
$50 to $55 million
 
Investor Conference Call
 
Brown Shoe Company will webcast an investor conference call at 9:00 a.m. ET today, Mar. 15, 2013.  The webcast and accompanying slides will be available at investor.brownshoe.com.  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 17574957.  A replay will be available on the website for a limited period.  Investors may also access the replay by dialing (855) 859-2056 in North America or (404) 537-3406 internationally and using the conference ID 17574957 through Mar. 29, 2013.  
 
* 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 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.
 
Definitions
 
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 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 ASG has manufacturing facilities and both ASG and Brown Shoe Company rely heavily on third-party 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 January 28, 2012, 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, Avia and Ryka.  Our Contemporary Fashion brands — Via Spiga, Vera Wang, 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)
              
   
14 Weeks Ended
    
13 Weeks Ended
    
53 Weeks Ended
    
52 Weeks Ended
  
(Thousands, except per share data)
  
February 2, 2013
    
January 28, 2012
    
February 2, 2013
    
January 28, 2012
  
                         
Net sales
   $ 640,176     $ 628,891     $ 2,598,065     $ 2,582,824  
Cost of goods sold
     388,477       390,318       1,587,706       1,586,184  
                                 
Gross profit
     251,699       238,573       1,010,359       996,640  
                                 
Selling and administrative expenses
     238,465       229,943       918,957       937,419  
Restructuring and other special charges, net
     2,730       16,523       24,018       23,671  
Impairment of intangible assets
     -       -       5,777       -  
                                 
Operating earnings (loss)
     10,504       (7,893 )     61,607       35,550  
                                 
Interest expense
     (5,954 )     (6,238 )     (23,382 )     (26,141 )
Loss on early extinguishment of debt
     -       -       -       (1,003 )
Interest income
     86       396       322       644  
                                 
Earnings (loss) before income taxes from continuing operations
     4,636       (13,735 )     38,547       9,050  
                                 
Income tax (provision) benefit
     (633 )     6,968       (11,343 )     (326 )
                                 
Net earnings (loss) from continuing operations
     4,003       (6,767 )     27,204       8,724  
                                 
Discontinued operations:
                                
Earnings from operations of subsidiary, net of tax of $1,312 in 2011
     -       -       -       1,701  
(Loss) gain on sale of subsidiary, net of tax of $474 and $6,670 in 2011, respectively
     -       (1,409 )     -       13,965  
                                 
Net (loss) earnings from discontinued operations
     -       (1,409 )     -       15,666  
                                 
Net earnings (loss)
     4,003       (8,176 )     27,204       24,390  
                                 
Net (loss) earnings attributable to noncontrolling interests
     (36 )     46       (287 )     (199 )
                                 
Net earnings (loss) attributable to Brown Shoe Company, Inc.
   $ 4,039     $ (8,222 )   $ 27,491     $ 24,589  
                                 
Basic earnings (loss) per common share:
                                
From continuing operations
   $ 0.09     $ (0.17 )   $ 0.64     $ 0.20  
From discontinued operations
     -       (0.04 )     -       0.37  
 
                          
Basic earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
   $ 0.09     $ (0.21 )   $ 0.64     $ 0.57  
                                 
Diluted earnings (loss) per common share:
                                
From continuing operations
   $ 0.09     $ (0.17 )   $ 0.64     $ 0.20  
From discontinued operations
     -       (0.04 )     -       0.36  
 
                          
Diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
   $ 0.09     $ (0.21 )   $ 0.64     $ 0.56  
                                 
Basic number of shares
     40,774       40,098       40,659       41,126  
Diluted number of shares
     41,109       40,668       40,794       41,668  
 

 
 
 

SCHEDULE 2
            
             
BROWN SHOE COMPANY, INC.
            
CONDENSED CONSOLIDATED BALANCE SHEETS
            
             
(Thousands)
  
February 2, 2013
    
January 28, 2012
  
ASSETS
            
             
Cash and cash equivalents
   $ 68,223     $ 47,682  
Receivables, net
     125,683       154,022  
Inventories, net
     533,275       561,797  
Deferred income taxes
     -       14,432  
Income taxes
     3,069       5,145  
Prepaid expenses and other current assets
     42,178       32,060  
Total current assets
     772,428       815,138  
                 
Property and equipment, net
     146,089       131,471  
Deferred income taxes
     1,461       -  
Goodwill and intangible assets, net
     132,628       140,590  
Other assets
     118,653       140,277  
Total assets
   $ 1,171,259     $ 1,227,476  
                 
LIABILITIES AND EQUITY
                
                 
Borrowings under revolving credit agreement
   $ 105,000     $ 201,000  
Trade accounts payable
     222,742       190,611  
Deferred income taxes     748       -   
Other accrued expenses     140,619       132,969  
Total current liabilities
     469,109       524,580  
                 
Long-term debt
    198,823       198,633  
Deferred rent
     33,711       32,361  
Deferred income taxes
     13,862       31,136  
Other liabilities
     29,853       27,050  
Total other liabilities
     276,249       289,180  
                 
Total Brown Shoe Company, Inc. shareholders’ equity
     425,129       412,669  
Noncontrolling interests
     772       1,047  
Total equity
     425,901       413,716  
Total liabilities and equity
   $ 1,171,259     $ 1,227,476  

 
 
 

SCHEDULE 3
            
             
BROWN SHOE COMPANY, INC.
            
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
            
             
   
53 Weeks Ended
  
52 Weeks Ended
  
(Thousands)
  
February 2, 2013
    
January 28, 2012
  
OPERATING ACTIVITIES:
            
Net earnings
   $ 27,204     $ 24,390  
Adjustments to reconcile net earnings to net cash provided by operating activities:
        
Depreciation and amortization
     54,783       59,111  
Amortization of debt issuance costs
     2,561       2,338  
Loss on early extinguishment of debt
     -       1,003  
Share-based compensation expense
     6,489       5,633  
Tax benefit related to share-based plans
     (944 )     (1,000 )
Loss on disposal of facilities and equipment
     3,103       1,560  
Impairment charges for facilities and equipment
     4,132       1,871  
Impairment of intangible assets
     5,777       -  
Deferred rent
     1,350       (2,317 )
Deferred income taxes benefit
     (3,555 )      (112 )
Provision for doubtful accounts
     360       1,284  
Gain on sale of subsidiary, net
     -       (13,965 )
Changes in operating assets and liabilities, net of acquired and discontinued operations:
  
Receivables
     27,984       (26,298 )
Inventories
     28,623       3,502  
Prepaid expenses and other current and noncurrent assets
     (9,169 )     2,286  
Trade accounts payable
    32,091       13,660  
Accrued expenses and other liabilities
     10,436       (35,117 )
Income taxes
     2,076       12,512  
Other, net
     4,636       (2,255 )
Net cash provided by operating activities
     197,937       48,086  
                 
INVESTING ACTIVITIES:
                
Capital Expenditures
     (63,729 )     (38,564 )
Acquisition cost
     (5,000 )     (156,636 )
Cash recognized on initial consolidation
     -       3,121  
Net proceeds from sale of subsidiary
     -       55,350  
Net cash used for investing activities
     (68,729 )     (136,729 )
                 
FINANCING ACTIVITIES:
                
Borrowings under revolving credit agreement
     805,000       1,595,500  
Repayments under revolving credit agreement
     (901,000 )     (1,592,500 )
Proceeds from issuance of 2019 Senior Notes
     -       198,633  
Redemption of 2012 Senior Notes
     -       (150,000 )
Dividends paid
     (12,011 )     (12,076 )
Debt issuance costs
     -       (6,428 )
Acquisition of treasury stock
     -       (25,484 )
Issuance of common stock under share-based plans, net
     (1,700 )     918  
Tax benefit related to share-based plans
     944       1,000  
Contributions by noncontrolling interest
     -       378  
Net cash (used for) provided by financing activities
     (108,767 )     9,941  
Effect of exchange rate changes on cash and cash equivalents
     100       (164 )
Increase (decrease) in cash and cash equivalents
     20,541       (78,866 )
Cash and cash equivalents at beginning of period
     47,682       126,548  
                 
Cash and cash equivalents at end of period
   $ 68,223     $ 47,682  

 
 
 

SCHEDULE 4
                                    
                                     
BROWN SHOE COMPANY, INC.
                                    
RECONCILIATION OF NET EARNINGS AND DILUTED EARNINGS PER SHARE (GAAP BASIS) TO ADJUSTED NET EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS)
  
                                     
      (Unaudited)       (Unaudited)  
   
14 Weeks Ended February 2, 2013
    
13 Weeks Ended January 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)
         $ 4,039     $ 0.09           $ (8,222 )   $ (0.21 )
                                             
Charges/Other Items:
                                            
Portfolio realignment
                                            
Business exits and cost reductions
   $ 2,942       1,827       0.05     $ 14,649       9,285       0.23  
Loss on sale of subsidiary
     -       -       -       935       1,409       0.04  
ASG integration-related costs
     -       -       -       2,917       1,629       0.04  
                                                 
Total charges/other items
   $ 2,942       1,827       0.05     $ 18,501       12,323       0.31  
                                                 
Adjusted earnings
           $ 5,866     $ 0.14             $ 4,101     $ 0.10  
                                                 
                                                 
   
53 Weeks Ended February 2, 2013
    
52 Weeks Ended January 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 Earnings
Attributable to
Brown Shoe
Company, Inc.
  
Diluted Earnings
Per Share
  
                                                 
GAAP earnings
          $ 27,491     $ 0.64             $ 24,589     $ 0.56  
                                                 
Charges/Other Items:
                                                
Portfolio realignment
                                                
Gain on sale of subsidiary
   $ -       -       -     $ (20,635 )     (13,965 )     (0.32 )
Business exits and cost reductions
     29,944       19,266       0.45       19,154       12,036       0.28  
Organizational change
     2,283       1,395       0.03       -       -       -  
ASG acquisition and integration-related costs
     675       441       0.01       6,457       4,519       0.11  
ASG cost of goods sold adjustment (1)
     -       -       -       4,189       2,477       0.05  
Loss on early extinguishment of debt
     -       -       -       1,003       638       0.02  
                                                 
Total charges/other items
   $ 32,902       21,102       0.49     $ 10,168       5,705       0.14  
                                                 
Adjusted earnings
          $ 48,593     $ 1.13             $ 30,294     $ 0.70  
                                                 
                                                 
(1) In accordance with GAAP, purchase accounting rules require the company to record inventory at fair value (i.e., expected selling price less costs to sell) on the acquisition date. This results in lower than typical gross margins when the acquired inventory is sold. This adjustment reflects the elimination of the unfavorable impact of lower gross margins for ASG product sold in the first and second quarters of 2011.
  
 

 
 
 

SCHEDULE 5
  
                                                             
BROWN SHOE COMPANY, INC.
  
SUMMARY FINANCIAL RESULTS BY SEGMENT
  
(Unaudited)
  
                                                             
                                                             
SUMMARY FINANCIAL RESULTS
                                                  
                                                             
   
Famous Footwear
  
Wholesale Operations
  
Specialty Retail
  
Other
  
Consolidated
   
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
   
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
(Thousands)
  
2013
  
2012
  
2013
  
2012
  
2013
  
2012
  
2013
  
2012
  
2013
  
2012
                                                             
Net Sales
  $ 380,112     $ 352,414     $ 194,452     $ 205,102     $ 65,612     $ 71,375     $ -     $ -     $ 640,176     $ 628,891  
                                                                                 
Gross Profit
   $ 167,376     $ 151,269     $ 58,101     $ 59,686     $ 26,222     $ 27,618     $ -     $ -     $ 251,699     $ 238,573  
Adjusted Gross Profit
   $ 167,376     $ 151,269     $ 58,229     $ 60,346     $ 26,305     $ 28,000     $ -     $ -     $ 251,910     $ 239,615  
                                                                                 
Gross Profit Rate
     44.0%       42.9%       29.9%       29.1%       40.0%       38.7%       -       -       39.3%       37.9%  
Adjusted Gross Profit Rate
     44.0%       42.9%       29.9%       29.4%       40.1%       39.2%       -       -       39.4%       38.1%  
                                                                                 
Operating Earnings (Loss)
   $ 19,731     $ 7,864     $ 2,753     $ (1,763 )   $ (1,299 )   $ (924)     $ (10,681 )   $ (13,070 )   $ 10,504     $ (7,893 )
Adjusted Operating Earnings (Loss)
   $ 19,813     $ 10,616     $ 5,315     $ 8,272     $ (1,108 )   $ 69     $ (10,574 )   $ (9,284 )   $ 13,446     $ 9,673  
                                                                                 
Operating Earnings (Loss) %
     5.2%       2.2%       1.4%       (0.9%)       (2.0%)       (1.3%)       -       -       1.6 %     (1.0%)  
Adjusted Operating Earnings (Loss) %
     5.2%       3.0%       2.7%       4.0%       (1.7%)       0.1%       -       -       2.1 %     1.5%  
                                                                                 
Same-store Sales % (on a 13-week basis)
     4.4%       (0.8%)       -       -       (7.1%)       4.7%       -       -       -       -  
                                                                                 
Number of Stores
     1,055       1,089       -       -       222       234       -       -       1,277       1,323  
                                                                                 
                                                                                 
                                                                                 
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)
                                                          
                                                                                 
   
Famous Footwear
  
Wholesale Operations
    
Specialty Retail
    
Other
  
Consolidated
   
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
  
14 Weeks Ended
  
13 Weeks Ended
   
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
(Thousands)
    2013    2012    2013    2012    2013    2012    2013    2012    2013    2012
                                                                                 
Gross Profit
   $ 167,376     $ 151,269     $ 58,101     $ 59,686     $ 26,222     $ 27,618     $ -     $ -     $ 251,699     $ 238,573  
                                                                                 
Charges/Other Items:
                                                                                
Portfolio realignment
                                                                                
Business exits and cost reductions
     -       -       128       660       83       382       -       -       211       1,042  
                                                                                 
Total charges/other items
     -       -       128       660       83       382       -       -       211       1,042  
                                                                                 
Adjusted Gross Profit
   $ 167,376     $ 151,269     $ 58,229     $ 60,346     $ 26,305     $ 28,000     $ -     $ -     $ 251,910     $ 239,615  
                                                                                 
                                                                                 
Operating Earnings (Loss)
   $ 19,731     $ 7,864     $ 2,753     $ (1,763 )   $ (1,299 )   $ (924 )   $ (10,681 )   $ (13,070 )   $ 10,504     $ (7,893 )
                                                                                 
Charges/Other Items:
                                                                                
Portfolio realignment
                                                                                
Business exits and cost reductions
     82       2,752       2,562       7,542       191       993       107       3,362       2,942       14,649  
ASG acquisition and integration-related costs
     -       -       -       2,493       -       -       -       424       -       2,917  
                                                                                 
Total charges/other items
     82       2,752       2,562       10,035       191       993       107       3,786       2,942       17,566  
                                                                                 
Adjusted Operating Earnings (Loss)
   $ 19,813     $ 10,616     $ 5,315     $ 8,272     $ (1,108 )   $ 69     $ (10,574 )   $ (9,284 )   $ 13,446     $ 9,673  

 
 
 

SCHEDULE 5 - CONTINUED
  
                                                             
BROWN SHOE COMPANY, INC.
  
SUMMARY FINANCIAL RESULTS BY SEGMENT
                                                             
                                                             
SUMMARY FINANCIAL RESULTS
                                                
                                                             
   
Famous Footwear
  
Wholesale Operations
  
Specialty Retail
  
Other
  
Consolidated
   
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
   
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
(Thousands)
  
2013
  
2012
  
2013
  
2012
  
2013
  
2012
  
2013
  
2012
  
2013
  
2012
                                                             
Net Sales
  $ 1,514,349     $ 1,456,314     $ 845,176     $ 870,873     $ 238,540     $ 255,637     $ -     $ -     $ 2,598,065     $ 2,582,824  
                                                                                 
Gross Profit
   $ 666,094     $ 635,221     $ 245,582     $ 256,346     $ 98,683     $ 105,073     $ -     $ -     $ 1,010,359     $ 996,640  
Adjusted Gross Profit
   $ 666,094     $ 635,221     $ 248,309     $ 262,092     $ 99,062     $ 105,455     $ -     $ -     $ 1,013,465     $ 1,002,768  
                                                                                 
Gross Profit Rate
     44.0%       43.6%       29.1%       29.4%       41.4%       41.1%       -       -       38.9%       38.6%  
Adjusted Gross Profit Rate
     44.0%       43.6%       29.4%       30.1%       41.5%       41.3%       -       -       39.0%       38.8%  
                                                                                 
Operating Earnings (Loss)
   $ 94,096     $ 62,515     $ 17,581     $ 16,739     $ (8,850 )   $ (7,627 )   $ (41,220 )   $ (36,077 )   $ 61,607     $ 35,550  
Adjusted Operating Earnings (Loss)
   $ 101,865     $ 65,267     $ 35,338     $ 35,468     $ (4,755 )   $ (6,634 )   $ (37,939 )   $ (28,751 )   $ 94,509     $ 65,350  
                                                                                 
Operating Earnings (Loss) %
     6.2%       4.3%       2.1%       1.9%       (3.7%)       (3.0%)       -       -       2.4%       1.4%  
Adjusted Operating Earnings (Loss) %
     6.7%       4.5%       4.2%       4.1%       (2.0%)       (2.6%)       -       -       3.6%       2.5%  
                                                                                 
Same-store Sales % (on a 52-week basis)
     4.5%       (1.2%)       -       -       0.6%       1.7%       -       -       -       -  
                                                                                 
Number of Stores
     1,055       1,089       -       -       222       234       -       -       1,277       1,323  
                                                                                 
                                                                                 
                                                                                 
RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP)
                                                          
                                                                                 
   
Famous Footwear
  
Wholesale Operations
  
Specialty Retail
  
Other
  
Consolidated
   
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
  
53 Weeks Ended
  
52 Weeks Ended
   
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
  
February 2,
  
January 28,
(Thousands)
    2013    2012    2013    2012    2013    2012    2013    2012    2013    2012
                                                                                 
Gross Profit
   $ 666,094     $ 635,221     $ 245,582     $ 256,346     $ 98,683     $ 105,073     $ -     $ -     $ 1,010,359     $ 996,640  
                                                                                 
Charges/Other Items:
                                                                                
Portfolio realignment
                                                                                
Business exits and cost reductions
     -       -       2,727       1,557       379       382       -       -       3,106       1,939  
ASG cost of good sold adjustment
     -       -       -       4,189       -       -       -       -       -       4,189  
                                                                                 
Total charges/other items
     -       -       2,727       5,746       379       382       -       -       3,106       6,128  
                                                                                 
Adjusted Gross Profit
   $ 666,094     $ 635,221     $ 248,309     $ 262,092     $ 99,062     $ 105,455     $ -     $ -     $ 1,013,465     $ 1,002,768  
                                                                                 
                                                                                 
Operating Earnings (Loss)
   $ 94,096     $ 62,515     $ 17,581     $ 16,739     $ (8,850 )   $ (7,627 )   $ (41,220 )   $ (36,077 )   $ 61,607     $ 35,550  
                                                                                 
Charges/Other Items:
                                                                                
Portfolio realignment
                                                                                
Business exits and cost reductions
     7,769       2,752       17,082       12,047       4,095       993       998       3,362       29,944       19,154  
Organizational change
     -       -       -       -       -       -       2,283       -       2,283       -  
ASG acquisition and integration-related costs
     -       -       675       2,493       -       -       -       3,964       675       6,457  
ASG cost of good sold adjustment
     -       -       -       4,189       -       -       -       -       -       4,189  
                                                                                 
Total charges/other items
     7,769       2,752       17,757       18,729       4,095       993       3,281       7,326       32,902       29,800  
                                                                                 
Adjusted Operating Earnings (Loss)
   $ 101,865     $ 65,267     $ 35,338     $ 35,468     $ (4,755 )   $ (6,634 )   $ (37,939 )   $ (28,751 )   $ 94,509     $ 65,350  

 
 
 

SCHEDULE 6
  
                         
BROWN SHOE COMPANY, INC.
  
BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION
  
                         
   
(Unaudited)
              
   
14 Weeks Ended
    
13 Weeks Ended
    
53 Weeks Ended
    
52 Weeks Ended
  
   
February 2,
    
January 28,
    
February 2,
    
January 28,
  
(Thousands, except per share data)
  
2013
    
2012
    
2013
    
2012
  
                         
Net earnings (loss) attributable to Brown Shoe Company, Inc.:
                        
Net earnings (loss) from continuing operations
   $ 4,003     $ (6,767 )   $ 27,204     $ 8,724  
Net loss (earnings) attributable to noncontrolling interests
     36       (46 )     287       199  
Net earnings allocated to participating securities
     (199 )     -       (1,365 )     (529 )
Net earnings (loss) from continuing operations
     3,840       (6,813 )     26,126       8,394  
                                 
Net (loss) earnings from discontinued operations
     -       (1,409 )     -       15,666  
Net earnings allocated to participating securities
     -       -       -       (668 )
Net (loss) earnings from discontinued operations
     -       (1,409 )     -       14,998  
                                 
Net earnings (loss) attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities
   $ 3,840     $ (8,222 )   $ 26,126     $ 23,392  
                                 
                                 
Basic and diluted common shares attributable to Brown Shoe Company, Inc.:
                                
Basic common shares for continuing operations and discontinued operations
     40,774       40,098       40,659       41,126  
Dilutive effect of share-based awards for continuing operations and discontinued operations
     335       570       135       542  
Diluted common shares for continuing operations and discontinued operations attributable to Brown Shoe Company, Inc.
     41,109       40,668       40,794       41,668  
                                 
Basic earnings (loss) per share:
                                
From continuing operations
   $ 0.09     $ (0.17 )   $ 0.64     $ 0.20  
From discontinued operations
     -       (0.04 )     -       0.37  
Basic earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
   $ 0.09     $ (0.21 )   $ 0.64     $ 0.57  
                                 
Diluted earnings (loss) per share:
                                
From continuing operations
   $ 0.09     $ (0.17 )   $ 0.64     $ 0.20  
From discontinued operations
     -       (0.04 )     -       0.36  
Diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
   $ 0.09     $ (0.21 )   $ 0.64     $ 0.56  
 

 
 
 

SCHEDULE 7
  
                         
BROWN SHOE COMPANY, INC.
  
BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION
  
                         
   
(Unaudited)
              
   
14 Weeks Ended
    
13 Weeks Ended
    
53 Weeks Ended
    
52 Weeks Ended
  
   
February 2,
    
January 28,
    
February 2,
    
January 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
   $ 5,830     $ 4,147     $ 48,306     $ 28,394  
Net loss (earnings) attributable to noncontrolling interests
     36       (46 )     287       199  
Net earnings allocated to participating securities
     (289 )     (182 )     (2,404 )     (1,234 )
Adjusted net earnings from continuing operations
     5,577       3,919       46,189       27,359  
                                 
Adjusted net earnings from discontinued operations
     -       -       -       1,701  
Net earnings allocated to participating securities
     -       -       -       (73 )
Net earnings from discontinued operations
     -       -       -       1,628  
                                 
Adjusted net earnings attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities
   $ 5,577     $ 3,919     $ 46,189     $ 28,987  
                                 
                                 
Basic and diluted common shares attributable to Brown Shoe Company, Inc.:
                                
Basic common shares for continuing operations and discontinued operations
     40,774       40,098       40,659       41,126  
Dilutive effect of share-based awards for continuing operations and discontinued operations
     335       570       135       542  
Diluted common shares for continuing operations and discontinued operations attributable to Brown Shoe Company, Inc.
     41,109       40,668       40,794       41,668  
                                 
Basic adjusted earnings per share:
                                
From continuing operations
   $ 0.14     $ 0.10     $ 1.14     $ 0.67  
From discontinued operations
     -       -       -       0.04  
Basic adjusted earnings per common share attributable to Brown Shoe Company, Inc. shareholders
   $ 0.14     $ 0.10     $ 1.14     $ 0.71  
                                 
Diluted adjusted earnings per share:
                                
From continuing operations
   $ 0.14     $ 0.10     $ 1.13     $ 0.66  
From discontinued operations
     -       -       -       0.04  
Diluted adjusted earnings per common share attributable to Brown Shoe Company, Inc. shareholders
   $ 0.14     $ 0.10     $ 1.13     $ 0.70