After missing estimates in the fourth quarter, the firm’s president and CEO, Diane Sullivan, said significant improvements in the business should materialize in the back half of 2012.
“We are working to earn back our retail partners’ confidence,” she told analysts on a conference call. “We are regaining open-to-buy dollars. We are expanding our door distribution, which will help us improve wholesale growth margins. Honestly, execution is going to be the key.”
Execs at the company said they look forward to continued momentum in athletic footwear this year. Mark Hood, SVP and CFO, added boat shoes are still doing well across men’s, women’s and children’s, and there is a growing interest in wedges with cork and rope details.
Steven Marotta, analyst at CL King & Associates, said, “There’s a lot going on from a portfolio realignment standpoint. The second quarter is going to be the tightest.”
BB&T Capital Markets analyst Scott Krasik noted, “We are looking for operating margin expansion in 2012, which [should] drive the stock higher.”
Brown Shoe lost 21 cents a share in the fourth quarter, surprising Wall Street, which was expecting income of 20 cents a share.
Famous Footwear reported a 0.9 percent decrease in sales, hurt by a 59.3 percent drop in toning and 5.7 percent dip in boots.
Brown Shoe plans to relocate or close about 90 Famous doors this year. Hood said, “There are probably another 10 to 20 stores that are problematic that will be addressed [in 2013 and 2014].”
The firm expects fiscal 2012 earnings per share to come in between 78 cents and 92 cents, on revenue of $2.55 billion to $2.58 billion.