Brown Shoe announced fourth quarter net sales of 615.4 million US dollars, up by 2.6% compared to similar quarter in 2013, with reported net earnings of 16.2 million US dollars, or 0.37 US dollars per diluted share (includes 0.17 US dollars per diluted share of adjustments, primarily related to the sale of Shoes.com in December 2014).

Adjusted net earnings of 9.0 million US dollars were up by 45.5% compared to reported net earnings of 6.2 million US dollars in the fourth quarter of 2013. Gross margin was flat year-over-year, at 40.2%, while operating earnings of 12.7 million US dollars were up by 24.7%.

For the full year, Brown Shoe reported net sales of 2 571.7 million US dollars up by 2.3% versus 2013 net sales of 2 513.1 million US dollars. Reported net earnings for 2014 totaled 82.8 million US dollars (1.89 US dollars per diluted share) versus 38.1 million US dollars (0.88 US dollars per diluted share) in 2013. Adjusted net earnings for 2014 were 75.6 million US dollars, or 1.72 US dollars per diluted share, and were up 23.0% compared to 2013. Gross margin was flat year-over-year, at 40.4%, while operating earnings of 125.9 million US dollars were up 27.7%.

“Both of our business segments helped drive fourth quarter results, with Famous Footwear delivering strong same-store-sales growth of 4.0% while Brand Portfolio sales improved 5.4%. Both segments also delivered good improvement in adjusted operating margin for the quarter, with Famous Footwear up 90 basis points and Brand Portfolio adjusted operating margin up 160 basis points”, stated Diane Sullivan, CEO, President and Chairman of Brown Shoe Company, adding: “This is in addition to record adjusted operating earnings for 2014 and good year-over-year improvement in adjusted operating margin - up 80 basis points to 5.0%.”

Fourth Quarter
Famous Footwear fourth quarter 2014 sales totaled 369.4 million US dollars, up by 0.8% year-over-year. Excluding Shoes.com, whose sale was announced in December by the company, fourth quarter sales were up 3.6%. For the quarter, same-store-sales increased 4.0%, with the performance mainly driven by continued steady improvement in athletics and a good performance in boots. During the quarter, 13 stores were closed and 10 new stores were added. Brand Portfolio sales of 246.0 million US dollars were up 5.4% in the fourth quarter, mainly the result of a 22.8% improvement in Contemporary Fashion sales, offset by a 4.7% decline in Healthy Living sales. Consolidated gross profit of 247.4 million US dollars was up by 2.5% in the fourth quarter, while gross margin was flat year-over-year at 40.2%.

Full Year
Famous Footwear reported full year 2014 sales of 1 589.3 million US dollars, roughly flat year-over-year. If Shoes.com sales were up 1.1% in 2014, while same-store-sales were up 1.5%. During the year, 56 stores were closed and 50 new stores were added, as average revenue per square foot improved to 215 US dollars.

Brand Portfolio sales of 982.5 million US dollars were up 6.3% over 924.6 million US dollars in 2013. For the year, strong Contemporary Fashion sales growth of 20.0% was offset by a slight decline in Healthy Living sales of 1.6%.

For 2014, consolidated gross profit of 1 040.1 million US dollars was up 2.5%, while gross margin of 40.4% was flat year-over-year. For the year, adjusted operating margins improved by 80 basis points to 5.0%.

2015 Outlook
“We’re looking forward to following up a strong 2014 with additional growth in 2015, and we expect to deliver diluted EPS between 1.78 US dollars and 1.88 US dollars this year,” said Ken Hannah, Chief Financial Officer of Brown Shoe Company, adding:  “While we’re confident about our 2015 strategy, we are also cautious about the potential for product delays in the first half of the year, as the west coast port situation is gradually untangled. However, we believe the supply chain changes we implemented last fall should help mitigate most of the impact.”