27.08.2013 15:00:24

Brown Shoe Q2 Adj. Profit Tops View; Lifts FY13 Earnings Forecast

(RTTNews) - Footwear retailer and wholesaler Brown Shoe Co., Inc. (BWS) reported Tuesday a profit in its second quarter, compared to last year's loss, on sharply lower one-time costs. Adjusted earnings significantly surpassed Wall Street estimates n higher sales. Citing the good results, the company also raised its fiscal 2013 adjusted earnings view.

In pre-market activity, Brown Shoe shares were gaining $1.05 or 4.43 percent, and trading at $24.75.

Commenting on the future, the company said, "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..."

For the back half of the year, the company said it is maintaining a realistic but cautious stance, as it continues to monitor the macro retail environment.

For the second quarter, net earnings were $15.4 million or $0.35 per share, compared to last year's loss of $2.5 million or $0.06 per share. The latest results included $1.2 million or $0.02 per share of costs associated with portfolio realignment efforts, while the prior year's results included $9.3 million or $0.22 per share of costs related to the portfolio realignment and for other organizational changes.

Adjusted net earnings, which excluded items, were $14.2 million or $0.33 per share for the period, while last year's adjusted earnings were $6.8 million or $0.16 per share. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly consolidated net sales climbed 10.1 percent to $621.7 million from the prior year's $564.9 million, excluding sales from discontinued operations for both quarters. Five analysts estimated revenue of $596.73 million for the quarter. The company noted that some of the sales growth was timing related, due to a shift in sales - back-to-school and wholesale sales - to the second quarter from the third quarter. In the quarter, Famous Footwear segment's sales grew 10.8 percent, and same-store-sales increased 6.8 percent. The company attributed the strong performance to good sales growth in running, sandal and canvas shoe styles.

Sales from wholesale operations were up 12.4 percent mainly with strong growth in Healthy Living platform, reflecting double-digit sales growth at Naturalizer, LifeStride and Dr. Scholl's.

Specialty Retail sales, meanwhile, dropped 1.8 percent.

Diane Sullivan, president and chief executive officer , said, "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."

Gross profit grew 11.8 percent to $254.6 million, and gross profit margin for the second quarter of 2013 improved 70 basis points to 41.0 percent from 40.3 percent in 2012.

Looking ahead to fiscal 2013, Brown Shoe raised its adjusted earnings guidance to a range of $1.27 to $1.32 per share from the previous forecast of $1.22 to $1.29. Reported earnings per share are expected to be $0.73 to $0.78.

Meanwhile, the company trimmed its revenues outlook to a range of $2.53 billion to $2.56 billion from previously estimated $2.54 billion to $2.57 billion.

Street is currently looking for full-year 2013 earnings of $1.33 per share on annual revenues of $2.53 billion.

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