“The performance reiterated the strength of the company and its focus on key initiatives to drive the business,” said Danielle McCoy, an analyst at Brean Capital LLC. “Each quarter we continue to see progress in Famous Footwear, and especially in this quarter, a lot of improvements [were made] in product from Naturalizer, Franco Sarto and Sam Edelman. There is a lot of upside for this company.”
“It was a really good quarter, and they are doing a great job,” said Scott Krasik, an analyst at BB&T Capital Markets. “It all turned [around] when Diane [Sullivan] took over as CEO. She instilled a culture change at the corporate level.”
For her part, Sullivan, president and CEO, told Footwear News last week the company’s success is the result of a repositioning and strategy shift that has been a long time coming. “We’re finally seeing the fruits of those efforts take hold in all our businesses,” she said. “It was an outstanding quarter, and the good news is that it was broad based in both our retail and wholesale segments.”
St. Louis-based Brown reported net earnings of $15.4 million, or 35 cents a diluted share, during the period, compared with a loss of $2.5 million, or 6 cents, for the second quarter of 2012. Net sales increased more than 10 percent to $621.7 million, from $564.9 million a year ago.
Analysts polled by Yahoo Finance had expected earnings per share of 22 cents on sales of $596.7 million.
On an adjusted basis, the company reported second-quarter earnings of $14.2 million, or 33 cents, compared with $6.8 million, or 16 cents, in the prior year.
During a conference call with investors and analysts, Sullivan said the company is modeling the current back-to-school selling season on last year’s success.
“Once again we targeted big brand ideas and invested in key product inventory,” she said. “We went in deep for these items and then amplified them [with] in-store signage, displays and end-caps to truly tell these brand stories.”
However, Sullivan cautioned that a calendar shift has impacted the firm’s earnings.
“While we look to be on track for a good back-to-school season … one week of back-to-school sales, or approximately $15 million of incremental sales, moved to the second quarter from the third quarter of this year,” she said.
The company also raised its full-year guidance, predicting EPS of $1.27 to $1.32, on sales of $2.56 billion.
“I believe we’re retaining an appropriate amount of realism for the back half despite our strong first half, based on the current macro retail environment,” Sullivan said.