Brown Shoe Q2 profit jumps, introduces strategic earnings enhancement plan

23 Aug '06

4 min read

Shoe retailer Brown Shoe Company Inc reported improved results for the second quarter of fiscal 2006 ended July 29, 2006.

In addition, the company announced its intention to implement a strategic plan that is expected to increase earnings through cost reductions and efficiency initiatives while reallocating resources and investment to build its brands. It also announced plans to exit the Bass business.

For the second quarter of fiscal 2006:

-- Net sales increased 5.0 percent to $579,319,000, as compared to $551,480,000 in the second quarter of fiscal 2005;

-- Net earnings were $15,191,000, or $0.52 per diluted share, inclusive of $0.04 per diluted share for stock option expense, as compared to net earnings of $4,083,000, or $0.14 per diluted share, in the year-ago period; and

-- Net earnings adjusted to exclude costs related to the new strategic initiatives and net recoveries from insurance companies related to remediation costs associated with the Company's Denver, Colorado facility, were $11,990,000, or $0.41 per diluted share, inclusive of $0.04 per diluted share for stock option expense, in the second quarter of fiscal 2006.

"We are pleased to report a second quarter marked with continued progress toward achieving our key strategic goals," stated Brown Shoe Chairman and CEO Ron Fromm.

The company has begun to review and implement strategic initiatives, with the goal to increase earnings and reallocate resources and investment to drive consumer preference. Key elements of the plan include: i) restructuring administrative and support areas; ii) redesigning logistics and distribution platforms; iii) reorganizing to eliminate operational redundancies; iv) realigning strategic priorities; and v) refining the supply chain process and enhancing inventory utilization.

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