Brown Shoe Company reported net earnings of $7,814,000 for the second fiscal quarter ended July 31, 2004, compared to year-ago earnings of $11,556,000, a decrease of 32.4%. Earnings per diluted share for the period were 41 cents, versus 62 cents per diluted share last year. Consolidated net sales for the second quarter of 2004 were $458.7 million compared to $458.4 in last year's second quarter.

For the first half of fiscal 2004, net earnings were $16,381,000 or $0.86
per diluted share, down from $20,559,000, or $1.11 per diluted share, the year
before. Sales increased 5.0 percent during the six months to $950,489,000,
compared with $904,828,000 last year.

“Clearly, we are disappointed in the fact that we were not able to meet
our second quarter expectations and continue the strong momentum we
experienced in the first quarter,” said Brown Shoe Chairman and CEO Ron Fromm.
“Factors that negatively impacted the quarter included weakness within our
children's and Bass wholesale segments; Bass transition costs — which are now
complete; and weakness in our Naturalizer Retail segment. Limited
availability of common carrier trucks at the close of our second quarter
impacted shipping and further caused us to fall short of our expectations.
Offsetting these factors were benefits from reduced compensation costs
associated with stock-based and incentive compensation plans. On a positive
note, Famous Footwear achieved its earnings plan for the quarter, but slightly
lagged last year due to a calendar shift in tax-free days and a later start to
back-to-school,” Fromm said.

Brown Shoe maintained its strong balance sheet position. Inventories at
quarter-end are fresh and clean at $453 million, up from $418 million last
year due to higher levels of new back-to-school merchandise, additional stores
at Famous Footwear, and the addition of Bass. The Company's debt-to-capital
ratio at the end of the quarter improved to 25.5 percent from 29.2 percent at
the end of the year-ago quarter.

Second Quarter Retail Results

As previously reported, total sales at Famous Footwear, the company's
915-store family footwear chain, were $269,812,000 for the quarter, versus
$268,931,000 for the same 13-week period last year. Same-store sales for the
period were down 2.5 percent, reflecting lower traffic counts, however gross
margin rates continued to improve and were higher than last year by 80 basis
points. Operating earnings for the chain declined slightly to $12,631,000,
versus year-ago operating earnings of $12,904,000.

Naturalizer Retail, the company's 380-store chain selling the Naturalizer
brand of women's shoes in both the U.S. and Canada, posted combined second
quarter sales of $48,264,000, compared to $49,673,000 for the same period last
year. Combined same-store sales decreased 3.9 percent during the quarter:
Same-store sales for the 209 U.S.-based stores decreased 3.0 percent, and for
the 171 Canadian stores, same-store sales decreased 5.4 percent. The
operating loss for the chain was $2,551,000 for the quarter, compared to an
operating loss of $1,012,000 in the year-ago quarter, primarily due to the
lackluster performance of seasonal footwear, lower margins and higher
markdowns in Canada, and a difficult outlet store business in the U.S.

Year-to-date, Famous Footwear has opened 38 new stores and closed 16
stores; Naturalizer U.S. has opened six new stores and closed five; and
Naturalizer Canada has opened three new stores and closed six.

Second Quarter Wholesale Results

Wholesale sales for the quarter were $136,886,000, compared to
$137,903,000 last year. Operating earnings for the wholesale businesses were
$8,963,000, compared to $12,594,000 for the prior-year quarter, a decrease of
28.8 percent, due primarily to lower sales in the children's footwear business
and lower-than-expected sales and margins in the Bass business, as well as
costs of $1.5 million associated with the transition of this business into the
Brown Shoe model.

While wholesale sales for Naturalizer and LifeStride were down slightly
versus the year ago quarter, both brands gained market share in the department
store channel as measured by NPD. For the five months ended June 30,
Naturalizer was the No. 2 brand in U.S. department stores and LifeStride the
No. 9 brand on a dollars basis. Sales gains were achieved by the Company's
Carlos by Carlos Santana brand, which quadrupled its sales versus last year,
and the Dr. Scholl's business.

At the end of the quarter, unshipped wholesale orders were up 13 percent
versus quarter-end last year, including 5 percent associated with the Bass
brand.

Forward-Looking Guidance:

“Looking ahead,” Fromm said, “we already have undertaken a number of
initiatives aimed at improving results within each of our weaker businesses.
At the same time, we believe we have a competitive plan in place for
back-to-school at Famous Footwear. On the wholesale side, our outlook is
improving. In total, we remain focused and committed to building a portfolio
of premier brands with high consumer preference at retail, utilizing our great
talent and stylish assortments supported by superior execution. We believe
this strategy will position us to gain market share in the footwear industry
going forward.”

Due to the late start of the back-to-school period and numerous calendar
shifts in tax-free sales days, the back-to-school season has opened at a
slower pace, with sales and gross margin dollars mixed by market, but
generally lagging expectations. Because a disproportionate amount of sales
and earnings come from its Famous Footwear chain during this important period
— as compared to other quarters during the year — the Company believes it
prudent to wait until the back-to-school season develops before providing
earnings guidance for the third quarter.

                           


                             BROWN SHOE COMPANY, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)

    (Thousands, except per share data)

                              Thirteen Weeks Ended  Twenty-six Weeks Ended
                               July 31,   August 2,    July 31,   August 2,
                                  2004        2003        2004        2003

    Net Sales                $ 458,657   $ 458,384   $ 950,489   $ 904,828
    Cost of Goods Sold         269,411     270,519     561,879     531,836

    Gross Profit               189,246     187,865     388,610     372,992
     - % of Sales                 41.3%       41.0%       40.9%       41.2%

    Selling & Administrative
     Expenses                  175,968     169,249     360,415     339,039
     - % of Sales                 38.4%       36.9%       37.9%       37.5%

    Operating Earnings          13,278      18,616      28,195      33,953

    Interest Expense, Net        1,971       2,413       4,324       5,223

    Earnings Before
     Income Taxes               11,307      16,203      23,871      28,730

    Income Tax Provision         3,493       4,647       7,490       8,171

    NET EARNINGS              $  7,814   $  11,556   $  16,381   $  20,559

    Basic Net Earnings
     per Common Share         $    .44   $     .66   $     .92   $    1.17

    Diluted Net Earnings
     per Common Share         $    .41   $     .62   $     .86   $    1.11

    Basic Number of Shares      17,921      17,631      17,881      17,570

    Diluted Number of Shares    18,987      18,532      18,953      18,463