For the quarter ended July 30, Brown Shoe reported a net loss of $4.6 million, or 11 cents a share, compared with earnings of $5.3 million, or 12 cents per share, during the prior-year period. Excluding acquisition-related costs and other items, the company’s adjusted loss was 6 cents per share.
Net revenue increased 7% to $628.1 million from $585.8 million. Its February acquisition of American Sporting Goods helped, accounting for 7.4% of total revenue.
The results missed analysts’ average estimate for earnings of 6 cents a share on sales of $637.1 million.
Sales at Famous Footwear declined 0.7% mostly due to softening sales of toning footwear, which had been strong in the prior year period. This sales weakness was somewhat offset by better sales of running shoes and sandals, the company said. Comparable store sales at Famous Footwear rose 0.2%.
Inventory rose 8.6 %primarily because of the American Sporting Goods acquisition.
The company also adjusted downward its full year forecast amid worries about rising costs and economic uncertainty.
Brown Shoe now anticipates full-year adjusted earnings of 85 cents to 97 cents per share, down from a previous outlook for adjusted earnings between $1.25 and $1.32 a share. Analysts’ average estimate expects earnings of $1.21 a share for the year.
In other news, Brown Shoe also announced that it is selling AND 1, a men’s basketball and lifestyle brand, to brand management company Galaxy International for $55 million in cash. AND 1 was part of Brown Shoe’s buyout of American Sporting Goods.
The company will use proceeds from the sale to reduce its debt. The deal is expected to close in the next 45 days.