Brown Shoe Q4 Adj Profit Tops View, But Sales Miss

(RTTNews) - Footwear retailer Brown Shoe Co., Inc. (BWS) reported Wednesday a profit for the fourth quarter that more than doubled from last year, reflecting gains from disposal of Shoes.com as well as improved operating margins and net sales growth.

Adjusted earnings per share topped analysts' expectations, while quarterly net sales missed their estimates. The company provided earnings and sales guidance for the full-year 2015, below Street view.

"Both of our business segments helped drive fourth quarter results, with Famous Footwear delivering strong same-store-sales growth of 4.0% while Brand Portfolio sales improved 5.4%. Both segments also delivered good improvement in adjusted operating margin for the quarter, with Famous Footwear up 90 basis points and Brand Portfolio adjusted operating margin up 160 basis points," Chairman, President and CEO Diane Sullivan said in a statement.

The St. Louis, Missouri-based company posted net earnings of $16.24 million or $0.37 per share for the fourth quarter, higher than $6.16 million or $0.14 per share in the prior-year quarter.

Results for the latest quarter include net $0.17 per share of gains, primarily related to the sale of Shoes.com in December 2014.

Excluding items, adjusted net earnings for the latest quarter was $8.97 million or $0.20 per share. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 2.6 percent to $615.39 million from $599.96 million in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $626.00 million.

Famous Footwear sales edged up 0.8 percent to $369.4 million, including Shoes.com through December 12, 2014. Excluding Shoes.com, sales were up 3.6 percent. Same-store-sales grew 4.0 percent.

Brand Portfolio sales increased 5.4 percent to $246.0 million from last year, while same-sales declined 4.2 percent.

Consolidated operating margin for the quarter expanded 40 basis points to 2.1 percent, as selling, general and administrative expenses as a percentage of total sales, improved 90 basis points, while gross margin remained flat.

Inventory at the end of the fourth quarter was $543.1 million, down marginally from $547.5 million at the end of the prior-year quarter.

Looking ahead to fiscal 2015, Brown Shoe currently expects adjusted earnings in a range of $1.78 to $1.88 per share, on projected revenues between $2.61 billion and $2.63 billion. Street is currently looking for full-year 2015 earnings of $1.93 per share on annual revenues of $2.67 billion.

CFO Ken Hannah noted that, "While we're confident about our 2015 strategy, we are also cautious about the potential for product delays in the first half of the year, as the west coast port situation is gradually untangled. However, we believe the supply chain changes we implemented last fall should help mitigate most of the impact."

BWS closed Tuesday's regular trading session at $32.06, up $0.35 on a volume of 0.77 million shares.