Brown Shoe Q3 Declines But Beats Street

Shares of Brown Shoe Co. Inc. soared Tuesday morning as the firm topped analysts’ estimates in its third quarter.

A strong back-to-school season buoyed the St. Louis-based firm to increased revenues, although the continued portfolio realignment impacted the bottom line.

Net income was $24.3 million, or 56 cents a share, a 28 percent decrease from $33.7 million, or 79 cents, in 2011. Profit included a $21.6 million gain on the sale of AND 1, which was partially offset by portfolio realignment and integration related costs of $5.6 million.

On an adjusted basis, income improved 18.3 percent to $25.9 million, or 60 cents a share, from $21.9 million, or 51 cents.

Net sales advanced 2.6 percent to $732.2 million, from $713.8 million. Famous Footwear sales improved 4.9 percent, with good growth in boat shoes, running shoes and accessories.

Excluding exited brands, wholesale revenue improved 3.3 percent, with contemporary fashion up the most at 5.2 percent. The healthy living portfolio advanced 2.1 percent.

Analysts were expecting earnings of 46 cents a share on revenue of $703.3 million as polled by Yahoo Finance — pushing Brown’s stock up 5.5 percent to $16.60.

“With the third quarter, we delivered not only solid back-to-school results, but also overall strong quarterly same-store sales growth of 6.8 percent at Famous Footwear,” Diane Sullivan, president and CEO of Brown Shoe, said in a statement. “We also saw improvement in sales for both our contemporary fashion and healthy living brand portfolios as we continued to deliver trend-right products that are must-haves for consumers.”   

At quarter end, Brown Shoe had $40.9 million in cash and cash equivalents, while debt-to-capital ratio declined to 41.7 percent, from 50.1 percent.

The firm also raised its 2012 guidance. It now expects EPS to come in between $1.06 and $1.10 for the full year.

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