Brown Shoes said pricing and pairs per transaction showed “nice improvement” at Famous Footwear over the holiday period but traffic and conversion were down.
Speaking at the ICR Xchange investor conference last week, Diane Sullivan, president and CEO at Brown Shoe, said it was clearly evident that there was “a significant increase in promotional activity across the entire footwear space” and implied that Famous might have lost some traffic because it held consistent with its promotional calendar.
The holiday period saw six BOGO events at Famous, the same as last year. Overall, Famous has been significantly reducing its use of BOGO events from 34 in 2010 to 15 last year.
Sullivan also said the price-sensitive consumer was also notable as many consumers in its Rewards programs responded to its target coupons. About 62 percent of Famous' purchases stem from Rewards members.
Merchandise-wise, she noted that dress and casual styles were still performing well and met plan but cold-weather boots as well as more stylish boots featuring fur and shearling had “really underperformed so far in the quarter” due to the mild weather seen across the country.
One bright spot has been the growth and increasing importance of athletic, driven by particular strength in running. She said athletic was “almost strong enough for the first time” to offset the decline in the toning category over the holiday selling period. The company also saw “tremendous strength” in its online business with famousfootwear.com up “significantly” so far this quarter.
Overall, she said Famous' performance was “pretty much in line” with expectations.
Sullivan said it's still too early to gauge Brown's wholesale side of the business given that January is a key shipping month. But overall, Sullivan said the company's core consumer continues to be cautious given the uncertainty in the marketplace. Said Sullivan, “Mid-tier consumers are really trying to be prudent with their spending. So at the moment, we really don’t see any sign of shifts in the consumer.”
On Nov. 21, when it released third-quarter results, Brown Shoe Co. lowered its EPS guidance for the current year due to plans to exit some of its wholesale brands, IT implementation expenses, and eroding sales trends at retail. The new forecast called for EPS of 73 to 85 cents for 2011, down from a range of 85 cents to 97 cents provided in late August. The company also revealed plans to shutter about 13 percent of its Famous Footwear store base and license out its Buster Brown, Sam Edelman and Avia wholesale children’s brands.
