Exhibit 99.1
News
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| | |
| | Contact: |
| | Investors and Media |
| | Peggy Reilly Tharp, Brown Shoe Company |
| | (314) 854-4134, ptharp@brownshoe.com |
Brown Shoe Company Reports Third Quarter 2014 Results
Earnings per share up 19% year-over-year
Raising full-year EPS guidance range to $1.65 to $1.69
ST. LOUIS, November 25, 2014 - Brown Shoe Company (NYSE: BWS, brownshoe.com) today reported third quarter 2014 financial results, with net sales of $729.3 million up 3.8% versus third quarter 2013 net sales of $702.8 million. Third quarter 2014 net earnings of $33.1 million, or $0.75 per diluted share, were up 21.2% compared to net earnings of $27.3 million, or $0.63 per diluted share, in the third quarter of 2013. Gross margin for the third quarter of 2014 was 39.9% up 30 basis points compared to 39.6% in the prior year.
“Wholesale overachieved again, with sales up 18.2% in third quarter, and both Healthy Living and Contemporary Fashion contributed strong double-digit sales improvement. At Famous Footwear, our focus on big ideas for back-to-school continued to deliver. Same-store-sales were up 1.6%, for the 10 weeks that make up this key selling season,” said Diane Sullivan, CEO, president and chairman of Brown Shoe Company. “Although our biggest quarter of the year is past, with nine strong months behind us -- and an easier comp ahead of us for the fourth quarter -- we expect to deliver a strong 2014.”
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| US$M, except per share (unaudited) | 13 Weeks 3Q'14 | 13 Weeks 3Q’13 | 3Q |
| | Change |
| Consolidated net sales | $ | 729.3 |
| $ | 702.8 |
| 3.8 | % |
| Famous Footwear | 435.4 |
| 439.6 |
| (1.0 | )% |
| Wholesale Operations | 242.6 |
| 205.3 |
| 18.2 | % |
| Specialty Retail | 51.3 |
| 57.9 |
| (11.4 | )% |
| Gross profit | 290.7 |
| 278.2 |
| 4.5 | % |
| Margin | 39.9 | % | 39.6 | % | 30 bps |
|
| SG&A | 237.5 |
| 233.5 |
| 1.7 | % |
| % of net sales | 32.6 | % | 33.2 | % | (60 bps) |
|
| Operating earnings | 53.2 |
| 44.7 |
| 19.1 | % |
| Margin | 7.3 | % | 6.4 | % | 90 bps |
|
| Net interest expense | 5.1 |
| 5.2 |
| (0.5 | )% |
| Earnings from continuing operations before income taxes | 48.1 |
| 39.5 |
| 21.7 | % |
| Tax rate | 30.9 | % | 31.6 | % | (70 bps) |
|
| Net earnings from discontinued operations | — |
| 0.2 |
| (100.0 | )% |
| Net earnings | 33.1 |
| 27.3 |
| 21.2 | % |
| Per diluted share | $ | 0.75 |
| $ | 0.63 |
| 19.0 | % |
Third Quarter Highlights
Famous Footwear third quarter 2014 sales of $435.4 million were down 1.0% year-over-year, with same-store-sales down 0.2%. For the back-to-school selling season, weeks 24 through 33, same-store-sales were up 1.6%. Performance in the quarter was driven by continued strong growth in canvas and aided by an increase in both sandals and boots. During the quarter, six stores were closed or relocated and 12 new stores were added.
Wholesale sales of $242.6 million were up 18.2% in the third quarter. For the Healthy Living platform, wholesale sales of $118.3 million were up 12.4%, while Contemporary Fashion wholesale sales of $124.1 million were up 24.4%.
Consolidated gross profit of $290.7 million was up 4.5% in the third quarter, while gross margin improved by 30 basis points to 39.9%. SG&A for the third quarter was $237.5 million, or 32.6% of net sales, which was down approximately 60 basis points versus the prior year. For the quarter, operating margins improved approximately 90 basis points year-over-year to 7.3%.
Inventory at the end of the third quarter was $567.8 million, up 4.3% from $544.6 million in the prior year. Famous Footwear inventory was down 1.2%, while Wholesale inventory was up 31.0%. At quarter-end, Brown Shoe Company had $14.0 million of borrowings against its revolving credit facility and $39.1 million of cash and equivalents. The company’s debt-to-capital ratio improved to 28.3% from 30.6% in the third quarter of 2013.
Financial Review and 2014 Outlook
“Thanks to strong wholesale results in the third quarter, along with steady performance at Famous Footwear, we are raising our full-year EPS guidance to $1.65 to $1.69,” said Russ Hammer, chief financial officer of Brown Shoe Company. “While we expect to end the year on a positive note, we remain aware of the promotional potential at retail for the holiday season and alert to possible shifts in consumer sentiment.”
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| Guidance Metric | FY’14 |
| Consolidated net sales | $2.58 to $2.59 billion |
| Famous Footwear same-store sales | Up low-single digits |
| Specialty Retail net sales | Down high-single digits |
| Wholesale Operations net sales | Up mid- to high-single digits |
| Gross margin | Up approximately 10 bps |
| SG&A | $920 to $925 million |
| Net interest expense | $20 to $21 million |
| Effective tax rate | 30% to 32% |
| Earnings per diluted share | $1.65 to $1.69 |
| Depreciation and amortization | $51 to $53 million |
| Capital expenditures | $56 to $59 million |
Investor Conference Call: Brown Shoe Company will webcast an investor conference call at 9:00 a.m. ET today, November 25, 2014. 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 26708713. 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 26708713 through Tuesday, December 2, 2014.
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.
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.
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) rapidly changing fashion trends and purchasing patterns; (iii) intense competition within the footwear industry; (iv) the ability to accurately forecast sales and manage inventory levels; (v) political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China and other countries, where the company relies heavily on third-party manufacturing facilities for a significant amount of its inventory; (vi) cybersecurity threats or other major disruption to the company’s information technology systems; (vii) customer concentration and increased consolidation in the retail industry; (viii) a disruption in the company’s distribution centers; (ix) foreign currency fluctuations; (x) additional duties, quotas, tariffs or other trade restrictions;(xi) compliance with applicable laws and standards with respect to labor, trade and product safety issues; (xii) the ability to recruit and retain senior management and other key associates; (xiii) the ability to attract, retain and maintain good relationships with licensors and protect intellectual property rights; (xiv) the ability to secure/exit leases on favorable terms; and (xv) the ability to maintain relationships with current suppliers. 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 February 1, 2014, 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 $2.5 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 over 1,200 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, LifeStride and Ryka. Our Contemporary Fashion brands - Sam Edelman, Franco Sarto, Vince, Via Spiga, Fergie Footwear and Carlos Santana - keep fashionistas in step with the latest trends. At Brown Shoe Company, we inspire people to feel good and live better... feet first!
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| SCHEDULE 1 |
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| BROWN SHOE COMPANY, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
| | | |
| | (Unaudited) | (Unaudited) |
| | Thirteen Weeks Ended | Thirty-nine Weeks Ended |
| (Thousands, except per share data) | November 1, 2014 |
| November 2, 2013 |
| November 1, 2014 |
| November 2, 2013 |
|
| Net sales | $ | 729,277 |
| $ | 702,788 |
| $ | 1,956,316 |
| $ | 1,913,150 |
|
| Cost of goods sold | 438,547 |
| 424,548 |
| 1,163,603 |
| 1,140,268 |
|
| Gross profit | 290,730 |
| 278,240 |
| 792,713 |
| 772,882 |
|
| Selling and administrative expenses | 237,517 |
| 233,572 |
| 679,472 |
| 678,522 |
|
| Restructuring and other special charges, net | — |
| — |
| — |
| 1,262 |
|
| Impairment of assets held for sale | — |
| — |
| — |
| 4,660 |
|
| Operating earnings | 53,213 |
| 44,668 |
| 113,241 |
| 88,438 |
|
| Interest expense | (5,207 | ) | (5,254 | ) | (15,637 | ) | (16,167 | ) |
| Interest income | 109 |
| 132 |
| 294 |
| 282 |
|
| Earnings before income taxes from continuing operations | 48,115 |
| 39,546 |
| 97,898 |
| 72,553 |
|
| Income tax provision | (14,878 | ) | (12,495 | ) | (31,146 | ) | (24,522 | ) |
| Net earnings from continuing operations | 33,237 |
| 27,051 |
| 66,752 |
| 48,031 |
|
| Discontinued operations: | | | | |
| Earnings (loss) from discontinued operations, net of tax (expense) benefit of $0, ($114), $0 and $6,057, respectively | — |
| 233 |
| — |
| (4,784 | ) |
| Disposition/impairment of discontinued operations, net of tax of $0 | — |
| — |
| — |
| (11,512 | ) |
| Net earnings (loss) from discontinued operations | — |
| 233 |
| — |
| (16,296 | ) |
| Net earnings | 33,237 |
| 27,284 |
| 66,752 |
| 31,735 |
|
| Net earnings (loss) attributable to noncontrolling interests | 124 |
| (30 | ) | 146 |
| (174 | ) |
| Net earnings attributable to Brown Shoe Company, Inc. | $ | 33,113 |
| $ | 27,314 |
| $ | 66,606 |
| $ | 31,909 |
|
| | | | | |
| Basic earnings (loss) per common share: | | | | |
| From continuing operations | $ | 0.76 |
| $ | 0.63 |
| $ | 1.53 |
| $ | 1.12 |
|
| From discontinued operations | — |
| — |
| — |
| (0.38 | ) |
| Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders | $ | 0.76 |
| $ | 0.63 |
| $ | 1.53 |
| $ | 0.74 |
|
| | |
|
|
|
| Diluted earnings (loss) per common share: | | | | |
| From continuing operations | $ | 0.75 |
| $ | 0.62 |
| $ | 1.52 |
| $ | 1.11 |
|
| From discontinued operations | — |
| 0.01 |
| — |
| (0.38 | ) |
| Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders | $ | 0.75 |
| $ | 0.63 |
| $ | 1.52 |
| $ | 0.73 |
|
| | | | | |
| Basic number of shares | 42,144 |
| 41,447 |
| 42,035 |
| 41,288 |
|
| Diluted number of shares | 42,328 |
| 41,766 |
| 42,245 |
| 41,571 |
|
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| SCHEDULE 2 |
| | | |
| BROWN SHOE COMPANY, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| | (Unaudited) | |
| | November 1, 2014 |
| November 2, 2013 |
| February 1, 2014 |
|
| (Thousands) | | | |
| ASSETS | | | |
| | | | |
| Cash and cash equivalents | $ | 39,080 |
| $ | 42,406 |
| $ | 82,546 |
|
| Receivables, net | 138,217 |
| 112,491 |
| 129,217 |
|
| Inventories, net | 567,777 |
| 544,589 |
| 547,531 |
|
| Prepaid expenses and other current assets | 37,845 |
| 52,234 |
| 33,136 |
|
| Current assets - discontinued operations | — |
| 181 |
| 119 |
|
| Total current assets | 782,919 |
| 751,901 |
| 792,549 |
|
|
|
|
|
| Property and equipment, net | 151,289 |
| 148,182 |
| 143,560 |
|
| Goodwill and intangible assets, net | 135,774 |
| 75,181 |
| 73,673 |
|
| Other assets | 139,878 |
| 111,647 |
| 139,621 |
|
| Total assets | $ | 1,209,860 |
| $ | 1,086,911 |
| $ | 1,149,403 |
|
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|
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| LIABILITIES AND EQUITY | |
|
|
| |
|
|
| Borrowings under revolving credit agreement | $ | 14,000 |
| $ | — |
| $ | 7,000 |
|
| Trade accounts payable | 203,062 |
| 200,706 |
| 226,602 |
|
| Other accrued expenses | 172,077 |
| 151,142 |
| 152,545 |
|
| Current liabilities - discontinued operations | — |
| 2,110 |
| 708 |
|
| Total current liabilities | 389,139 |
| 353,958 |
| 386,855 |
|
|
|
|
|
| Long-term debt | 199,150 |
| 198,963 |
| 199,010 |
|
| Deferred rent | 37,571 |
| 37,548 |
| 38,593 |
|
| Other liabilities | 42,983 |
| 44,483 |
| 47,583 |
|
| Total other liabilities | 279,704 |
| 280,994 |
| 285,186 |
|
|
|
|
|
| Total Brown Shoe Company, Inc. shareholders’ equity | 540,254 |
| 451,301 |
| 476,699 |
|
| Noncontrolling interests | 763 |
| 658 |
| 663 |
|
| Total equity | 541,017 |
| 451,959 |
| 477,362 |
|
| Total liabilities and equity | $ | 1,209,860 |
| $ | 1,086,911 |
| $ | 1,149,403 |
|
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| SCHEDULE 3 |
| | | |
| BROWN SHOE COMPANY, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| | (Unaudited) |
| | Thirty-nine Weeks Ended |
| (Thousands) | November 1, 2014 | November 2, 2013 |
| OPERATING ACTIVITIES: | | |
| Net earnings | $ | 66,752 |
| $ | 31,735 |
|
| Adjustments to reconcile net earnings to net cash provided by operating activities: | | |
| Depreciation and amortization | 38,545 |
| 41,114 |
|
| Amortization of debt issuance costs and debt discount | 1,885 |
| 1,885 |
|
| Share-based compensation expense | 4,568 |
| 4,066 |
|
| Tax benefit related to share-based plans | (2,482 | ) | (2,581 | ) |
| Loss on disposal of facilities and equipment | 1,400 |
| 960 |
|
| Impairment charges for facilities and equipment | 1,248 |
| 1,072 |
|
| Impairment of assets held for sale | — |
| 4,660 |
|
| Disposition/impairment of discontinued operations | — |
| 11,512 |
|
| Net loss on sale of subsidiaries | — |
| 576 |
|
| Deferred rent | (1,022 | ) | 3,837 |
|
| Provision for doubtful accounts | 298 |
| 388 |
|
| Changes in operating assets and liabilities, net of dispositions: | | |
| Receivables | (9,328 | ) | (385 | ) |
| Inventories | (20,241 | ) | (41,180 | ) |
| Prepaid expenses and other current and noncurrent assets | (1,201 | ) | (6,748 | ) |
| Trade accounts payable | (23,661 | ) | (12,933 | ) |
| Accrued expenses and other liabilities | 14,376 |
| 23,848 |
|
| Other, net | (2,635 | ) | 159 |
|
| Net cash provided by operating activities | 68,502 |
| 61,985 |
|
| | | |
| INVESTING ACTIVITIES: | | |
| Capital expenditures | (40,380 | ) | (41,603 | ) |
| Acquisition of trademarks | (65,065 | ) | — |
|
| Investment in nonconsolidated affiliate | (7,000 | ) | — |
|
| Net proceeds from sale of subsidiaries | — |
| 69,347 |
|
| Net cash (used for) provided by investing activities | (112,445 | ) | 27,744 |
|
| | | |
| FINANCING ACTIVITIES: | | |
| Borrowings under revolving credit agreement | 741,000 |
| 966,000 |
|
| Repayments under revolving credit agreement | (734,000 | ) | (1,071,000 | ) |
| Dividends paid | (9,173 | ) | (9,073 | ) |
| Issuance of common stock under share-based plans, net | 237 |
| (2,406 | ) |
| Tax benefit related to share-based plans | 2,482 |
| 2,581 |
|
| Net cash provided by (used for) financing activities | 546 |
| (113,898 | ) |
| Effect of exchange rate changes on cash and cash equivalents | (69 | ) | (1,648 | ) |
| Decrease in cash and cash equivalents | (43,466 | ) | (25,817 | ) |
| Cash and cash equivalents at beginning of period | 82,546 |
| 68,223 |
|
| Cash and cash equivalents at end of period | $ | 39,080 |
| $ | 42,406 |
|
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| 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) |
| | Thirteen Weeks Ended November 1, 2014 | Thirteen Weeks Ended November 2, 2013 |
| (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 | | $ | 33,113 |
| $ | 0.75 |
| | $ | 27,314 |
| $ | 0.63 |
|
| | | | | | | |
| Charges/Other Items - Continuing Operations: | | | | | |
| Portfolio realignment | | | | | | |
| Business exits and cost reductions | — |
| — |
| — |
| — |
| — |
| — |
|
| Total Continuing Operations | — |
| — |
| — |
| — |
| — |
| — |
|
| | | | | | | |
| Charges/Other Items - Discontinued Operations: | | | | | |
| Portfolio realignment | | | | | | |
| Business exits and cost reductions | — |
| — |
| — |
| — |
| — |
| — |
|
| Total Discontinued Operations | — |
| — |
| — |
| — |
| — |
| — |
|
| Total charges/other items | $ | — |
| — |
| — |
| $ | — |
| $ | — |
| $ | — |
|
| Adjusted earnings | | $ | 33,113 |
| $ | 0.75 |
| | $ | 27,314 |
| $ | 0.63 |
|
| | | | | | | |
| | (Unaudited) | (Unaudited) |
| | Thirty-nine Weeks Ended November 1, 2014 | Thirty-nine Weeks Ended November 2, 2013 |
| (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 | | $ | 66,606 |
| $ | 1.52 |
| | $ | 31,909 |
| $ | 0.73 |
|
| | | | | | | |
| Charges/Other Items - Continuing Operations: | | | | | |
| Portfolio realignment | | | | | | |
| Business exits and cost reductions | $ | — |
| — |
| — |
| $ | 1,262 |
| 803 |
| 0.02 |
|
| Non-cash impairments/dispositions | — |
| — |
| — |
| 4,660 |
| 4,660 |
| 0.11 |
|
| Total Continuing Operations | — |
| — |
| — |
| 5,922 |
| 5,463 |
| 0.13 |
|
| | | | | | | |
| Charges/Other Items - Discontinued Operations: | | | | | |
| Portfolio realignment | | | | | | |
| Business exits and cost reductions | — |
| — |
| — |
| 13,233 |
| 6,414 |
| 0.13 |
|
| Non-cash impairments/dispositions | — |
| — |
| — |
| 11,512 |
| 11,512 |
| 0.28 |
|
| Total Discontinued Operations | — |
| — |
| — |
| 24,745 |
| 17,926 |
| 0.41 |
|
| Total charges/other items | $ | — |
| — |
| — |
| $ | 30,667 |
| 23,389 |
| 0.54 |
|
| Adjusted earnings | | $ | 66,606 |
| $ | 1.52 |
| | $ | 55,298 |
| $ | 1.27 |
|
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| SCHEDULE 5 |
| | | | | | | | | | | |
| BROWN SHOE COMPANY, INC. |
| SUMMARY FINANCIAL RESULTS BY SEGMENT |
| (Unaudited) |
| | | | | | | | | | | |
| SUMMARY FINANCIAL RESULTS | | | | | | | |
| | | | | | | | | | | |
| | Thirteen Weeks Ended |
| | Famous Footwear | Wholesale Operations | Specialty Retail | Other | Consolidated |
| (Thousands) | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 |
| Net Sales | $ | 435,380 |
| $ | 439,605 |
| $ | 242,562 |
| $ | 205,269 |
| $ | 51,335 |
| $ | 57,914 |
| $ | — |
| $ | — |
| $ | 729,277 |
| $ | 702,788 |
|
| Gross Profit | $ | 188,858 |
| $ | 187,286 |
| $ | 79,803 |
| $ | 65,177 |
| $ | 22,069 |
| $ | 25,777 |
| $ | — |
| $ | — |
| $ | 290,730 |
| $ | 278,240 |
|
| Adjusted Gross Profit | $ | 188,858 |
| $ | 187,286 |
| $ | 79,803 |
| $ | 65,177 |
| $ | 22,069 |
| $ | 25,777 |
| $ | — |
| $ | — |
| $ | 290,730 |
| $ | 278,240 |
|
| Gross Profit Rate | 43.4 | % | 42.6 | % | 32.9 | % | 31.8 | % | 43.0 | % | 44.5 | % | — | % | — | % | 39.9 | % | 39.6 | % |
| Adjusted Gross Profit Rate | 43.4 | % | 42.6 | % | 32.9 | % | 31.8 | % | 43.0 | % | 44.5 | % | — | % | — | % | 39.9 | % | 39.6 | % |
| Operating earnings (loss) | $ | 37,554 |
| $ | 37,047 |
| $ | 27,848 |
| $ | 16,782 |
| $ | (355 | ) | $ | 221 |
| $ | (11,834 | ) | $ | (9,382 | ) | $ | 53,213 |
| $ | 44,668 |
|
| Adjusted Operating Earnings (Loss) | $ | 37,554 |
| $ | 37,047 |
| $ | 27,848 |
| $ | 16,782 |
| $ | (355 | ) | $ | 221 |
| $ | (11,834 | ) | $ | (9,382 | ) | $ | 53,213 |
| $ | 44,668 |
|
| Operating Earnings (Loss) % | 8.6 | % | 8.4 | % | 11.5 | % | 8.2 | % | (0.7 | )% | 0.4 | % | — | % | — | % | 7.3 | % | 6.4 | % |
| Adjusted Operating Earnings (Loss) % | 8.6 | % | 8.4 | % | 11.5 | % | 8.2 | % | (0.7 | )% | 0.4 | % | — | % | — | % | 7.3 | % | 6.4 | % |
| Same-store Sales % (on a 13-week basis) | (0.2 | )% | 4.9 | % | — | % | — | % | (6.9 | )% | 0.6 | % | — | % | — | % | — | % | — | % |
| Number of Stores | 1,041 |
| 1,048 |
| — |
| — |
| 172 |
| 185 |
| — |
| — |
| 1,213 |
| 1,233 |
|
| | | | | | | | | | | |
| RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) | | | | | | |
| | | | | | | | | | | |
| | Thirteen Weeks Ended |
| | Famous Footwear | Wholesale Operations | Specialty Retail | Other | Consolidated |
| (Thousands) | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 |
| Gross Profit | $ | 188,858 |
| $ | 187,286 |
| $ | 79,803 |
| $ | 65,177 |
| $ | 22,069 |
| $ | 25,777 |
| $ | — |
| $ | — |
| $ | 290,730 |
| $ | 278,240 |
|
| Charges/Other Items: | | | | | | | | | | |
| Portfolio realignment | | | | | | | | | | |
| Business exits and cost reductions | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Total charges/other items | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Adjusted Gross Profit | $ | 188,858 |
| $ | 187,286 |
| $ | 79,803 |
| $ | 65,177 |
| $ | 22,069 |
| $ | 25,777 |
| $ | — |
| $ | — |
| $ | 290,730 |
| $ | 278,240 |
|
| Operating earnings (loss) | $ | 37,554 |
| $ | 37,047 |
| $ | 27,848 |
| $ | 16,782 |
| $ | (355 | ) | $ | 221 |
| $ | (11,834 | ) | $ | (9,382 | ) | $ | 53,213 |
| $ | 44,668 |
|
| Charges/Other Items: | | | | | | | | | | |
| Portfolio realignment | | | | | | | | | | |
| Business exits and cost reductions | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Total charges/other items | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Adjusted Operating Earnings (Loss) | $ | 37,554 |
| $ | 37,047 |
| $ | 27,848 |
| $ | 16,782 |
| $ | (355 | ) | $ | 221 |
| $ | (11,834 | ) | $ | (9,382 | ) | $ | 53,213 |
| $ | 44,668 |
|
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SCHEDULE 5 - CONTINUED |
| | | | | | | | | | | |
| BROWN SHOE COMPANY, INC. |
| SUMMARY FINANCIAL RESULTS BY SEGMENT |
| (Unaudited) |
| | | | | | | | | | | |
| SUMMARY FINANCIAL RESULTS | | | | | | | |
| | | | | | | | | | | |
| | Thirty-nine Weeks Ended |
| | Famous Footwear | Wholesale Operations | Specialty Retail | Other | Consolidated |
| (Thousands) | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 |
| Net Sales | $ | 1,183,633 |
| $ | 1,180,143 |
| $ | 628,616 |
| $ | 567,334 |
| $ | 144,067 |
| $ | 165,673 |
| $ | — |
| $ | — |
| $ | 1,956,316 |
| $ | 1,913,150 |
|
| Gross Profit | $ | 528,286 |
| $ | 523,022 |
| $ | 205,103 |
| $ | 178,859 |
| $ | 59,324 |
| $ | 71,001 |
| $ | — |
| $ | — |
| $ | 792,713 |
| $ | 772,882 |
|
| Adjusted Gross Profit | $ | 528,286 |
| $ | 523,022 |
| $ | 205,103 |
| $ | 178,859 |
| $ | 59,324 |
| $ | 71,001 |
| $ | — |
| $ | — |
| $ | 792,713 |
| $ | 772,882 |
|
| Gross Profit Rate | 44.6 | % | 44.3 | % | 32.6 | % | 31.5 | % | 41.2 | % | 42.9 | % | — | % | — | % | 40.5 | % | 40.4 | % |
| Adjusted Gross Profit Rate | 44.6 | % | 44.3 | % | 32.6 | % | 31.5 | % | 41.2 | % | 42.9 | % | — | % | — | % | 40.5 | % | 40.4 | % |
| Operating Earnings (Loss) | $ | 91,983 |
| $ | 95,057 |
| $ | 60,851 |
| $ | 28,085 |
| $ | (6,833 | ) | $ | (2,934 | ) | $ | (32,760 | ) | $ | (31,770 | ) | $ | 113,241 |
| $ | 88,438 |
|
| Adjusted Operating Earnings (Loss) | $ | 91,983 |
| $ | 95,057 |
| $ | 60,851 |
| $ | 33,991 |
| $ | (6,833 | ) | $ | (2,934 | ) | $ | (32,760 | ) | $ | (31,754 | ) | $ | 113,241 |
| $ | 94,360 |
|
| Operating Earnings (Loss) % | 7.8 | % | 8.1 | % | 9.7 | % | 5.0 | % | (4.7 | )% | (1.8 | )% | — | % | — | % | 5.8 | % | 4.6 | % |
| Adjusted Operating Earnings (Loss) % | 7.8 | % | 8.1 | % | 9.7 | % | 6.0 | % | (4.7 | )% | (1.8 | )% | — | % | — | % | 5.8 | % | 4.9 | % |
| Same-store Sales % (on a 39-week basis) | 0.8 | % | 4.3 | % | — | % | — | % | (3.5 | )% | 1.7 | % | — | % | — | % | — | % | — | % |
| Number of Stores | 1,041 |
| 1,048 |
| — |
| — |
| 172 |
| 185 |
| — |
| — |
| 1,213 |
| 1,233 |
|
| | | | | | | | | | | |
| RECONCILIATION OF ADJUSTED RESULTS (NON-GAAP) | | | | | | |
| | | | | | | | | | | |
| | Thirty-nine Weeks Ended |
| | Famous Footwear | Wholesale Operations | Specialty Retail | Other | Consolidated |
| (Thousands) | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 |
| Gross Profit | $ | 528,286 |
| $ | 523,022 |
| $ | 205,103 |
| $ | 178,859 |
| $ | 59,324 |
| $ | 71,001 |
| $ | — |
| $ | — |
| $ | 792,713 |
| $ | 772,882 |
|
| Charges/Other Items: | | | | | | | | | | |
| Portfolio realignment | | | | | | | | | | |
| Business exits and cost reductions | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Total charges/other items | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Adjusted Gross Profit | $ | 528,286 |
| $ | 523,022 |
| $ | 205,103 |
| $ | 178,859 |
| $ | 59,324 |
| $ | 71,001 |
| $ | — |
| $ | — |
| $ | 792,713 |
| $ | 772,882 |
|
| Operating Earnings (Loss) | $ | 91,983 |
| $ | 95,057 |
| $ | 60,851 |
| $ | 28,085 |
| $ | (6,833 | ) | $ | (2,934 | ) | $ | (32,760 | ) | $ | (31,770 | ) | $ | 113,241 |
| $ | 88,438 |
|
| Charges/Other Items: | | | | | | | | | | |
| Portfolio realignment | | | | | | | | | | |
| Non-cash impairments/dispositions | — |
| — |
| — |
| 4,660 |
| — |
| — |
| — |
| — |
| — |
| 4,660 |
|
| Business exits and cost reductions | — |
| — |
| — |
| 1,246 |
| — |
| — |
| — |
| 16 |
| — |
| 1,262 |
|
| Total charges/other items | — |
| — |
| — |
| 5,906 |
| — |
| — |
| — |
| 16 |
| — |
| 5,922 |
|
| Adjusted Operating Earnings (Loss) | $ | 91,983 |
| $ | 95,057 |
| $ | 60,851 |
| $ | 33,991 |
| $ | (6,833 | ) | $ | (2,934 | ) | $ | (32,760 | ) | $ | (31,754 | ) | $ | 113,241 |
| $ | 94,360 |
|
|
| | | | | | | | | | | | |
| SCHEDULE 6 |
| | | | | |
| BROWN SHOE COMPANY, INC. |
| BASIC AND DILUTED EARNINGS (LOSS) PER SHARE RECONCILIATION |
| | | | | |
| | (Unaudited) | (Unaudited) |
| | Thirteen Weeks Ended | Thirty-nine Weeks Ended |
| (Thousands, except per share data) | November 1, 2014 |
| November 2, 2013 |
| November 1, 2014 |
| November 2, 2013 |
|
| | | | | |
| Net earnings attributable to Brown Shoe Company, Inc.: | | | | |
| Net earnings from continuing operations | $ | 33,237 |
| $ | 27,051 |
| $ | 66,752 |
| $ | 48,031 |
|
| Net (earnings) loss attributable to noncontrolling interests | (124 | ) | 30 |
| (146 | ) | 174 |
|
| Net earnings allocated to participating securities | (1,208 | ) | (1,097 | ) | (2,486 | ) | (2,098 | ) |
| Net earnings from continuing operations | 31,905 |
| 25,984 |
| 64,120 |
| 46,107 |
|
| Net earnings (loss) from discontinued operations | — |
| 233 |
| — |
| (16,296 | ) |
| Net (earnings) loss allocated to participating securities | — |
| (9 | ) | — |
| 712 |
|
| Net earnings (loss) from discontinued operations | — |
| 224 |
| — |
| (15,584 | ) |
| Net earnings attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities | $ | 31,905 |
| $ | 26,208 |
| $ | 64,120 |
| $ | 30,523 |
|
| | | | | |
| Basic and diluted common shares attributable to Brown Shoe Company, Inc.: | | | | |
| Basic common shares for continuing operations and discontinued operations | 42,144 |
| 41,447 |
| 42,035 |
| 41,288 |
|
| Dilutive effect of share-based awards for continuing operations and discontinued operations | 184 |
| 319 |
| 210 |
| 283 |
|
| Diluted common shares for continuing operations and discontinued operations attributable to Brown Shoe Company, Inc. | 42,328 |
| 41,766 |
| 42,245 |
| 41,571 |
|
| | | | | |
| Basic earnings (loss) per common share: | | | | |
| From continuing operations | $ | 0.76 |
| $ | 0.63 |
| $ | 1.53 |
| $ | 1.12 |
|
| From discontinued operations | — |
| — |
| — |
| (0.38 | ) |
| Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders | $ | 0.76 |
| $ | 0.63 |
| $ | 1.53 |
| $ | 0.74 |
|
| | | | | |
| Diluted earnings (loss) per common share: | | | | |
| From continuing operations | $ | 0.75 |
| $ | 0.62 |
| $ | 1.52 |
| $ | 1.11 |
|
| From discontinued operations | — |
| 0.01 |
| — |
| (0.38 | ) |
| Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders | $ | 0.75 |
| $ | 0.63 |
| $ | 1.52 |
| $ | 0.73 |
|
|
| | | | | | | | | | | | |
| SCHEDULE 7 |
| | | | | |
| BROWN SHOE COMPANY, INC. |
| BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION |
| | | | | |
| | (Unaudited) | (Unaudited) |
| | Thirteen Weeks Ended | Thirty-nine Weeks Ended |
| (Thousands, except per share data) | November 1, 2014 |
| November 2, 2013 |
| November 1, 2014 |
| November 2, 2013 |
|
| | | | | |
| Adjusted net earnings attributable to Brown Shoe Company, Inc.: | | | | |
| Adjusted net earnings from continuing operations | $ | 33,237 |
| $ | 27,051 |
| $ | 66,752 |
| $ | 53,493 |
|
| Net (earnings) loss attributable to noncontrolling interests | (124 | ) | 30 |
| (146 | ) | 174 |
|
| Net earnings allocated to participating securities | (1,208 | ) | (1,097 | ) | (2,486 | ) | (2,336 | ) |
| Adjusted net earnings from continuing operations | 31,905 |
| 25,984 |
| 64,120 |
| 51,331 |
|
| Adjusted net earnings from discontinued operations | — |
| 233 |
| — |
| 1,630 |
|
| Net earnings allocated to participating securities | — |
| (9 | ) | — |
| (71 | ) |
| Net earnings from discontinued operations | — |
| 224 |
| — |
| 1,559 |
|
| Adjusted net earnings attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities | $ | 31,905 |
| $ | 26,208 |
| $ | 64,120 |
| $ | 52,890 |
|
| | | | | |
| Basic and diluted common shares attributable to Brown Shoe Company, Inc.: | | | | |
| Basic common shares for continuing operations and discontinued operations | 42,144 |
| 41,447 |
| 42,035 |
| 41,288 |
|
| Dilutive effect of share-based awards for continuing operations and discontinued operations | 184 |
| 319 |
| 210 |
| 283 |
|
| Diluted common shares for continuing operations and discontinued operations attributable to Brown Shoe Company, Inc. | 42,328 |
| 41,766 |
| 42,245 |
| 41,571 |
|
| | | | | |
| Basic adjusted earnings per common share: | | | | |
| From continuing operations | $ | 0.76 |
| $ | 0.63 |
| $ | 1.53 |
| $ | 1.24 |
|
| From discontinued operations | — |
| — |
| — |
| 0.04 |
|
| Basic adjusted earnings per common share attributable to Brown Shoe Company, Inc. shareholders | $ | 0.76 |
| $ | 0.63 |
| $ | 1.53 |
| $ | 1.28 |
|
| | | | | |
| Diluted adjusted earnings per common share: | | | | |
| From continuing operations | $ | 0.75 |
| $ | 0.62 |
| $ | 1.52 |
| $ | 1.23 |
|
| From discontinued operations | — |
| 0.01 |
| — |
| 0.04 |
|
| Diluted adjusted earnings per common share attributable to Brown Shoe Company, Inc. shareholders | $ | 0.75 |
| $ | 0.63 |
| $ | 1.52 |
| $ | 1.27 |
|
