Brown Shoe Company’s net earnings for the fiscal year ended Feb. 3, 2007 rose to $65.7 million, as compared to $41.0 million in the prior year. Net sales were up by 7.8 percent to $2.47 billion. The gross margin inched up by 10 basis points to 39.3 percent. Earnings before interest and taxes (EBIT) slid by 2.6 percent to $18.3 million, however.
In the 4th quarter, net turnover improved by 6.6 percent to $639.3 million. There were 53 weeks in the company’s recent fiscal year, and the extra 7 days landed in the 4th quarter, adding $22.5 million to sales, though it had no effect on earnings. Net earnings for the period were $13.6 million, against $13.4 million, and included charges related to the exit of the Bass license, to environmental remediation activities at a plant in Colorado and to the implementation of the company’s «earnings enhancement» strategy. Adjusted net earnings totaled $20.6 million. The quarterly gross margin increased by 90 basis points to 39.7 percent. Operating earnings fell by 9.2 percent to $21.3 million.
The company’s Famous Footwear chain pulled in sales of $320.9 million in the quarter, an increase of 13.0 percent. Same-store sales in 999-store chain were up by 2.9 percent. It opened 28 stores in the period and closed eight. The chain had a 110 basis point improvement in gross margin. Operating earnings grew by 49.2 percent to $22.5 million. The company said that all categories of footwear did well for Famous Footwear during the quarter.
Wholesale turnover fell by 2.1 percent to $244.5 million, as increased sales of the Naturalizer, Dr. Scholl’s, LifeStride and children’s brands were offset by lagging sales for the company’s Brown New York brands, which were in a period of transition. The division’s operating earnings dropped to $17.8 million, as compared to $27.1 million in the year-ago period, and included $4.7 million in pre-tax costs related to the end of the Bass license.
For its current fiscal year, Brown Shoe has issued sales guidance of $2.48-2.52 billion, reflecting a rise in same-stores sales of 2.5-3.5 percent with the opening of 110 new Famous Footwear doors while closing 45. The company plans to increase the marketing spend for the year by about $4 million. Earnings are expected to rise on an adjusted basis by 13-15 percent.