Brown Shoe Company announced dramatically higher earnings for fiscal 2002 as a direct result of management’s turnaround initiatives. With the effects of nonrecurring gains and nonrecurring losses factored out, the company’s earnings rose 56% for the year. Even with this progress, shares dipped 2.3%

Sales rose 4.9% to $1.8 billion. Net income — including after-tax recoveries of $1.2 million of nonrecurring charges recorded in fiscal 2001 — was $45.2 million, or $2.52 per diluted share, compared with a net loss of $4.0 million, or 23 cents per diluted share, in 2001.

Famous Footwear saw fiscal 2002 sales inch up 2.9% to $1.075 billion, reflecting higher sales from new stores and increased square footage.

Same-store sales were down 1.3%.

The same-store sales decline resulted from lower traffic counts through most of the year. However, the percentage of customers making purchases increased. FF had 918 stores at year’s end.

Fiscal 2002 operating earnings for Famous surged 81.6% to $46.3 million vs. $25.5 million in 2001. Inventories at year-end on a per square foot basis have been reduced 21% over the past 24 months, with the percentage of aged inventory at historically low levels.

Brown Shoe Chairman and CEO Ron Fromm was quite complimentary to the new Famous Footwear president appointed last January, stating in a release, “Under the leadership of Joe Wood, our new management team has done an outstanding job in their first year. We look for metrics to improve even further in 2003.”

The company sees EPS estimates of $2.75 for fiscal year 2003, on sales of $1.9 billion. Comps sales at FF are expected to be up in the low single digits.


  • Q4 sales were up 8.9% to $452.1 million
  • Q4 net income was $9.3 million vs. a loss of $28.0 million in 2001
  • FF February comps were down nearly 10%
  • Net cash increased nearly five-fold to $103.7 million
  • Reduced debt down $64 million to $152 million
  • Debt to capital ratio improved to 34.0% from 45.7% last year.
  • Wholesale sales were $566.4 million, up 12.5%.
  • Operating earnings were $55.2 million, up 6.0%.

>>> Solid retail practices result in dramatic improvements in profit. (And they achieved all of this while cutting the number of BOGO’s in half). When a company has a strong merchant team, with a clear vision of their customer, the dependence on price promotions is reduced.