28 May Famous Footwear Fiscal Q1 Sales Driven by Canvas Athletic Category
Brown Shoe Company reported net sales of $591.2 million in the fiscal first quarter ended May 3, up slightly versus first quarter 2013 net sales of $588.7 million.
First quarter 2014 net earnings of $15.4 million, or $0.35 per diluted share, were up compared to a net loss of ($10.8) million, or ($0.26) per diluted share, in the first quarter of 2013. Gross profit margin for the first quarter of 2014 improved to 41.0% from 40.8% in the prior year.
“First quarter results exceeded our expectations, thanks to strong Contemporary Fashion platform sales and a return to more seasonal weather for the last two weeks of April,” said Diane Sullivan, CEO, president and chairman of Brown Shoe Company. “We feel optimistic about second quarter and the potential to benefit from pent-up spring shoe demand.”
Famous Footwear first quarter 2014 sales of $354.6 million were up 0.7% year-over-year, with same-store-sales up 1.3%. Performance in the quarter was driven by athletics — specifically canvas, which continued to do well. During the quarter, 21 stores were closed or relocated and 11 new stores were added.
Wholesale sales of $191.8 million were up 5.6% in the first quarter. For the Healthy Living platform, wholesale sales of $104.7 million were up 0.7%. Contemporary Fashion wholesale sales of $86.9 million were up 12.3% in the first quarter, with strong improvement coming from the Via Spiga brand.
Consolidated gross profit of $242.3 million was up 1.0% in the first quarter, while gross margin increased by 20 basis points to 41.0%. SG&A for the first quarter was $213.6 million, or 36.1% of net sales, which was down 20 basis points from 36.3% of net sales in the prior year. For the quarter, operating margins improved 130 basis points year-over-year to 4.9%.
Inventory at the end of the first quarter was $512.8 million, up 5.5% from $485.9 million in the prior year. Wholesale inventory was up 6.2%, while Famous Footwear inventory was up 5.8%. At quarter-end, Brown Shoe Company had no borrowings against its revolving credit facility and $36.7 million of cash and equivalents. The company’s debt-to-capital ratio improved to 28.8% from 39.1% in the first quarter of 2013.
“We’re pleased with our first quarter results — especially with the weather-related headwinds we faced in February and March — and we are optimistic about the remainder of the year,” said Russ Hammer, chief financial officer of Brown Shoe Company. “To account for a better-than-anticipated first quarter, we are raising our annual guidance range to $1.47 to $1.57, as we’re also slightly more positive regarding our potential at Wholesale for the year.”