Brown shoe lowers second quarter and full year earnings guidance
The US footwear retailer Brown Shoe Company, Inc. said last week that ongoing difficulties in the footwear retailing sector had resulted in lower-than-anticipated sales at its chain of 907 Famous Footwear stores.
When combined with higher-than-planned markdowns during Famous Footwear's spring inventory clearance, the trend is likely to result in earnings per share in the range of $0.37 to $0.40 for the second quarter, which ends August 4, compared to $0.51 in the year-ago quarter. Full year earnings will also be affected.
Continuing gains in the company's wholesale divisions, particularly Naturalizer, will not be enough to offset second quarter shortfalls at Famous Footwear.
However, Naturalizer, Brown Shoe's flagship women's brand, continues to capture market share; its sales for the quarter are expected to be up 40 percent over year-ago levels, and unshipped orders continue to run well ahead of last year. In contrast, Famous Footwear, the company's largest division, now expects to report mid- to high-single-digit negative same-store sales comparisons for the fiscal month of June, which ends July 7.
"At Famous Footwear, we are aggressively executing a second-quarter inventory clearance program, timed so that by mid-July our inventories will be fresh for the back-to-school selling season," said Brown Shoe Chairman and CEO Ron Fromm. "While pairs sold for the month-to-date are up more than 5 percent on a store-for-store basis, the difficult retail climate forced us to take steeper price cuts than originally planned, leading to a greater trade-off in second-quarter profitability."
