Brown Shoe Company, Inc. raised its full-year earnings guidance to $2.48 to $2.50 per share, from its previous guidance of $2.35 to $2.40 per share. The increased full-year guidance results from better-than-anticipated margins in January, higher wholesale shipments, and the completion of several Project IMPACT* initiatives at a lower cost than originally reserved.

Brown Shoe therefore anticipates after-tax recoveries of approximately $0.07 per diluted share from the company’s fiscal 2001 non-recurring charges associated with closing under-performing Naturalizer stores and consolidating redundant back office functions. Excluding these recoveries, earnings per share is expected to be $2.41 to $2.43.

“While pleased to have implemented these initiatives at a lower-than-anticipated cost, it was more important to beat January forecasts and end the year with strong momentum,” said Ron Fromm, Chairman and CEO of Brown Shoe. “At Famous Footwear, our January margins strengthened significantly, as consumer response to our fresher inventories pushed gross margin dollars well ahead of plan and last year. This was accomplished despite lower traffic levels and a same-store sales decline. Our wholesale footwear divisions benefited from broadly based increases in demand, leading to higher-than-anticipated shipments. Lastly, we benefited from continuing strength at Naturalizer Retail, as the improvement in same-store sales accelerated.”

Famous Footwear Retail Sales

Retail sales for Famous Footwear, the company’s 918-store chain selling brand name footwear for less, were $57,700,000 for the four-week January period ended February 1, 2003 compared to $59,600,000 for the comparable period ended February 2, 2002. Same-store sales for the period decreased 6.1 percent.

Fourth-quarter sales for Famous Footwear for the 13-week period reached $242,300,000 compared to $241,500,000 last year, and were down 2.9 percent for the quarter on a same-store basis. Sales for the 52-week fiscal year reached a record $1,075,200,000 compared to $1,044,700,000 for fiscal 2001. Same-store sales for the year were down 1.3 percent.

MONTH, QUARTER AND YEAR-TO-DATE SALES (millions)

                                             Same-
                       FY 2002    FY 2001    Store         Stores Open
                      (2/01/03)  (2/02/02)  % Change  02/01/03 vs. 02/02/02
    Jan. -Famous
      Footwear         $  57.7    $  59.6     (6.1)     918          920
    4th Q -Famous
      Footwear           242.3      241.5     (2.9)
    Y-T-D -Famous
      Footwear         1,075.2    1,044.7     (1.3)

    Jan. -Naturalizer  $   6.8    $   7.5      7.3      217          296
    4th Q -Naturalizer    30.8       34.3      8.1
    Y-T-D -Naturalizer   134.4      145.1      4.3