Despite Winter Sales Freeze, Brown Shoe Q4 Profit Jumps 53%

Franco Sarto Spring campaign

Franco Sarto Spring campaign

St. Louis—Though winter storms may have hit its sales, Brown Shoe Co. reported Friday that its fourth quarter profit jumped 53% on lower costs and an improved wholesale business. The footwear company also revealed it purchased the Franco Sarto brand for $65 million.

For the quarter ended Feb. 1, Brown Shoe posted net earnings of $6.16 million, or 14 cents a share, compared with earnings of $4.04 million, or 9 cents a share, a year ago. Excluding items, adjusted earnings were $6.16 million, or 14 cents a share. That beat analysts’ average estimate for 10 cents a share.

Net revenue decreased 3% to $599.96 million, missing analysts’ consensus for $621.15 million in sales. Its comparable store sales were down 1.8%.

Sales apparently were hurt by severe winter weather which hurt its running shoe business but actually helped its boot sales. .

Expanding Sam Edelman Brand

“Unfortunately, a fabulous 2013 ended with one of the snowiest and coldest winters in recent memory, and in total we lost nearly 4%  of our potential selling days in the fourth quarter due to weather,” Chairman/CEO Diane Sullivan told analysts on a conference call.

For the full year, Brown Shoe’s net sales increased 1.4% to $2.5 billion. Its full year profit increased to $38.1 million, or 88 cents a share, up from $27.5 million or 64 cents a share, in 2012.

The winter weather especially hurt its Famous Footwear business, which posted a 9% decline.

Meanwhile, wholesale sales rose 14% to $196.3 million. At its Healthy Living division, wholesale sales were up 4% to $107.2 million, led by a double-digit improvement at Naturalizer.

Contemporary Fashion wholesale sales increased 28% to $89.1 million, with double digit increases at Sam Edelman and Franco Sarto.

“In 2014, we’re going to be investing heavily in our Sam Edelman brand, including the expansion of talent, marketing, e-commerce, and branded retail stores,” Sullivan said.

The Franco Sarto brand grew in the low-double digits in 2013. After a license agreement, Brown Shoe bought Franco Sarto last month.

Gross profit margin for the quarter widened to 40.2% from 40.0% in the year-ago period.

Looking ahead, Brown Shoe said it forecast total net sales this year to range between between $2.58 billion and $2.6 billion.

 

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com