Naturalizer, Famous Footwear parent Brown Shoe returns to 2Q profit on revenue gains

Famous Footwear parent Brown Shoe posts 2Q profit

ST. LOUIS — Brown Shoe Co. Inc. returned to a better-than-expected profit in its second quarter as revenue rose, particularly in its wholesale division, and the retailer relied on fewer promotions at its Famous Footwear chain.

But while the company said it is encouraged by early results of its back-to-school season, it expects sales for the year to grow in the low double-digit range. Previously it had said sales could range from high single-digit growth to low double-digits. Shares fell $1.88, or nearly 15 percent, to $10.92 in morning trading.

The company, which sells Dr. Scholl’s, Franco Sarto, Naturalizer and other brands, said Wednesday its quarterly net income after paying preferred dividends totaled $5.3 million, or 12 cents per share, in the three months ended July 31. That compares with a loss of $4.2 million, or 10 cents per share, a year earlier.

Excluding one-time items such as charges related to a technology initiative, the company earned 15 cents per share, compared with a loss of 7 cents per share a year earlier. Revenue rose more than 14 percent to $585.8 million.

The results topped the average estimates of analysts polled by Thomson Reuters, who expected the company to earn 9 cents per share on revenue of $579.5 million.

Net sales in the Famous Footwear division rose nearly 11 percent to $357.3 million, including a jump of 11.8 percent in revenue at stores open at least a year. That’s an important measurement for retailers because it isolates growth at existing locations rather than including new ones.

The wholesale division’s net revenue rose 26 percent to $178.6 million, with increases across all channels. Net revenue in the specialty retail division rose about 8 percent to $59.8 million.

The company plans to open between 30 and 35 Famous Footwear stores this year, while closing 50.