Brown Shoe narrows 2Q loss on lower costs
ST. LOUIS (AP) — Brown Shoe Co., which owns the Famous Footwear and Naturalizer shoe store chains, said Tuesday that its second-quarter loss narrowed as it cut costs, offsetting a revenue drop.
Excluding costs related to leaving some of its businesses, Brown Shoe posted a profit that topped Wall Street expectations. But the company said it remains cautious about the weak economy. High unemployment and uncertainty about the recovery have weighed on U.S. consumer spending in spring and early summer. Brown Shoe shares fell 6 percent in midday trading.
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, expected a profit of 3 cents per share, according to a FactSet poll.
Revenue fell 3 percent to $599.3 million from $620.6 million, while analysts expected $607.2 million. Meanwhile, selling and administrative expenses fell 6 percent to $219.3 million.
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 its 2012 profit forecast to 85 cents to 95 cents per share from 83 cents to 95 cents per share. Analysts expect 88 cents per share.
Brown Shoe backed its previous revenue prediction of $2.57 billion to $2.59 billion. Analysts expect $2.57 billion.
In heavy midday trading, Brown Shoe shares fell 95 cents, or 6.2 percent, to $14.45, after initially jumping to a new 52-week high of $16.04, but then dropping as low as $14.16.