ST. LOUIS (AP) — Brown Shoe Company Inc., which owns the Famous Footwear and Naturalizer shoe store chains, said Tuesday that its second-quarter loss shrank as it cut costs. But revenue fell slightly below expectations and the company said it remains cautious about the weak economy, sending shares tumbling.
High unemployment and uncertainty about the recovery have weighed on U.S. consumer spending in spring and early summer. Brown Shoe said
For the quarter ended July 28, the St. Louis-based company posted a loss of $2.5 million, or 6 cents per share, compared with a loss of $4.6 million, or 11 cents per share, in the same quarter last year. Excluding costs for exiting some of its brands and closing facilities, the company said it posted an adjusted profit of 16 cents per share. Analysts, on average, had expected a profit of just 3 cents per share, according to a FactSet poll.
Revenue fell 3 percent to $599.3 million from $620.6 million due to exiting some brands, an expected drop in Dr. Scholl's sales as the brand completes a turnaround effort and slightly light Naturalizer sales. That fell slightly short of the $607.2 million expected by analysts. The drop was offset in part by a 6 percent drop in selling and administrative expenses to $219.3 million. Gross profit margin or profitability improved to 39 percent from 37.6 percent in 2011.
Sales at the company's Famous Footwear chain rose nearly 2 percent to $350.3 million on higher demand for sandals and running shoes. A key retail metric that excludes newly opened of closed stores rose about 4 percent. Sales in the company's wholesale division fell 9 percent to $195 million. Brown Shoe expects sales in that unit to drop this year as it shuts down parts of the business.
Looking forward, the company lifted the bottom end of its 2012 profit forecast to 85 cents from 83 cents previously, but maintained the top end of the range at 95 cents per share. Analysts expect 88 cents per share, on average. Brown Shoe also backed its previous revenue prediction of $2.57 billion to $2.59 billion. Analysts expect $2.57 billion.
The stock initially jumped to a new 52-week high of $16.04 on the report but then fell as low as $13.91. In heavy afternoon trading, Brown Shoe shares were down $1.29, or 8.4 percent, to $14.11.
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