Brown Shoe Steps Over Estimates, Trips on Guidance

Brown Shoe Co. BWS has released its fourth quarter earnings Friday, flying in above estimates. The Saint Louis-based firm reports an EPS $0.14, easily surpassing its Q4 2011 performance of a $0.10 per share. EPS topped the Wall Street consensus of $0.08 per share, as well. Revenue closed up nearly two percent year-over-year at around $640 million. This also topped analysts' expectations, which averaged about $634 million. Full-year EPS climbed over 61 percent and finished at $1.13 per share, beating analysts' expectations of $1.08. Total 2012 revenue grew 0.6 percent and rounded out at approximately $2.6 billion, slipping by the $2.59 billion analysts hoped for. Brown Shoe Puts its Best Foot Forward in 2012 Brown Shoe's 2012 performance was its best to date in terms of sales. According to President and CEO Diane Sullivan, the company broke its sales record. Famous Footwear Steps Up Sales at Brown Shoe's Famous Footwear chain climbed nearly eight percent year-over-year during the fourth quarter. For the year, Famous Footwear's sales improved by four percent. Other Segments Tread Lightly Sales in the company's wholesale operations segment declined over five percent in the fourth quarter and three percent in 2012. Meanwhile, sales in the specialty retail segment dropped 8.1 percent during the fourth quarter and 6.7 percent for the year. Guidance Smells Bad The footwear giant expects revenue to finish in the $2.55 to $2.58 billion range in 2013. This is below the Wall Street consensus of $2.64 billion. EPS is also expected to come in below analysts expectations of $1.31. Brown Shoe anticipates earnings of $1.18 to $1.25 per share. On this note, CFO Russ Hammer stated, “…like many other peers, we are beginning to see the effect on our consumers of recent payroll tax changes and other fiscal events. As a result, we remain cognizant about the potential for changes in consumer discretionary spending in 2013 and any related impact on our results.” Stumbling on Wall Street Despite its successful fourth quarter and full-year earnings, Brown shoe is stumbling on Wall Street on Friday. Over the past seven months, the stock has held steady in the mid-to-high teens. And, it has been on a gradual climb since the end of February. On Thursday, it nearly reached $18.50 and closed at $18.40 - its highest price since January 2. However, the weak guidance has send the stock on a backslide in the pre-market thus far. It is falling toward $18. Brown Shoe is down around 1.5 percent on Friday.