Brown Shoe Company, Inc. beat expectations in the third quarter and raised its guidance for the year.
For the period ended Oct. 30, earnings were $18.6 million, or 42 a share, up from $16.3 million, or 38 cents, in the third quarter of 2009.
The St. Louis, Mo.-based firm said net sales in the quarter increased 15 percent year-over-year to hit $716.1 million.
“Earnings were ahead of expectations,” said Ron Fromm, Brown Shoe’s chairman and CEO, in a statement.
Analysts were looking for earnings of 38 cents a share on revenue of $700.6 million, as polled by Yahoo Finance, and the company’s shares opened 11 percent higher in Tuesday morning trading.
Brown Shoe’s wholesale revenue rose 34 percent to $227.1 million, with increases by nearly all brands and across all channels of distribution. Momentum in the segment is driven by a 25 percent increase in backlog at the end of the quarter, said Fromm.
Famous Footwear net sales increased 8 percent to $421.5 million, driven by a 10.6 percent same-store sales increase, while net sales in the specialty retail division were $67.4 million, reflecting a 2.1 percent same-store sales increase for the segment, the firm said.
“Famous Footwear registered a record back-to-school season, driven by broad-based gains across athletics, dress and casual styles… with less promotional activity on a year-over-year basis, proof that our customers continue to respond positively to our enhanced assortments,” said Fromm.
As a percentage of net sales, gross profit slipped to 39.4 percent from 41.4 percent, due to lower initial margins driven by channel mix and somewhat higher product costs, as well as an increase in inventory markdowns.
Selling and administrative expenses decreased 100 basis points as a percentage of net sales.
At quarter-end, the company had cash and cash equivalents of $29.7 million, compared with $34.1 million previously.
The firm expects EPS for fiscal 2011 to be between $1.31 and $1.43.