Scott Krasik, analyst at BB&T Capital Markets, said the company’s quarterly result was a long-awaited one.
“I’m cautiously optimistic [and] encouraged by the favorable trends at Famous Footwear, the solid growth in contemporary fashion brands, the positive inflection of the Dr. Scholl’s brand and an aggressive approach to expenses,” the analyst said.
Brown Shoe President and CEO Diane Sullivan called out Sam Edelman and Franco Sarto — which are up 36 percent and 20 percent season-to-date, respectively — as large drivers of the business going forward.
“[We’re] really at that right opportunity now to take a much closer look at retail [for Sam Edelman] and we have just opened our East Hampton store again for the summer season,” Sullivan told analysts on a call. “We’re working to get our new Spring Street store in Soho opened in early September. We’re really looking forward to the consumer reaction to both of those stores.”
According to CFO Mark Hood, sandal sales are expected to continue improving into the height of the summer season. They were up 15 percent in the first quarter, while the running category was up 18 percent.
“We’ve adjusted our sandal allocation plan for this year to ensure we’re getting fresh stock in the right doors at the right times. Additionally, we saw good growth in other styles during the quarter, including kids’ athletics, boat shoes, and women’s and girls’ wedges,” Hood said on the call.
Brown Shoe raised its full-year EPS guidance to between 83 cents and 95 cents after reporting its first quarter results on Friday.
While revenue eked out a 1.1 percent increase to $626.4 million, net income was $1.7 million, or 4 cents a share, down from $3.7 million, or 8 cents, in 2011. Gross profit margin was down to 38.2 percent, from 40 percent. Famous Footwear saw a 1.3 percent increase in net sales for the quarter, while same store sales rose 2.5 percent, thanks to better weather that drove growth in running and sandals. Average revenue per square foot improved 4.5 percent over the quarter, the firm said.
Wholesale revenue advanced 2.8 percent as sales of ongoing brands exceeded the decline in sales for exited brands. The company’s contemporary fashion portfolio surged 20.8 percent, driven by Franco Sarto and Sam Edelman. The Healthy Living brands were down 6.6 percent.
At quarter-end, Brown Shoe had $39.8 million in cash and cash equivalents, and $198.7 million in debt.