Famous Footwear saw a broader assortment of exclusive and trend-right product and a new store format drive incremental traffic in the first quarter as consumers responded to improved assortments in performance athletic product. The resulting gains in average selling prices helped boost comparable store sales 1.5% for the period ended April 30. Total sales were $288.7 million for the quarter, up 6.1% from $272.1 million in the year-ago period.

Joe Wood, president of Famous Footwear, said that athletics, which represents the largest percentage of sales for the retailer, continued on its positive pace. Wood said they saw double-digit gains in both men’s and women’s athletics and posted a high-single-digit gain in children’s athletics. The men’s running business was up 14% for the period and women’s running jumped almost 19% for the period. Both the Nike and adidas businesses were called out as “extremely strong” and the Reebok business was said to be trending up for the first time in “quite a few quarters.” The new Reebok NBA product they launched in May has shown “nice gains.” Asics and K-Swiss were also called out as key performers. Wood said they have not seen much of a slow down in classics, nor do they expect to for the back-to-school period.

The women’s non-athletic business was flat to last year, but the men’s non-athletic business saw solid growth and the kid’s non-athletic posted a mid-single-digit increase. Sandals were called out as a soft category and the women’s casual and dress categories did not meet expectations. Wood did say that they were “fairly positive” about the sandal business going into the second quarter as the category went from “deep negatives” to flat over the last five to seven days. While weather was not called out as the clear culprit here, Wood did say that the retailer’s southern stores were selling sandals and other open-toed product “extremely well” while the category was “simply terrible” in the northern stores.

Gross margin improvement, along with the leveraging of the sales growth, helped drive operating margins up 34.1% for the quarter to $16.5 million, compared to $12.3 million in Q1 last year.

Second quarter is starting out as a difficult period, but Wood said Famous is “positioned well” for the back of the year. He said they plan to drive sales through a robust athletic business, exclusive product, trend-right product at a value, and continued support of a multi-channel marketing initiative.

Famous opened 20 new stores in the period for a total of 927 stores at quarter-end. The retailer remodeled another 73 stores to bring the total of new format stores to 60% of the store base. They expect to remodel 110 stores this year, with most completed before the back-to-school selling season, and plan to open 80 stores for the year, while closing another 35 to 40 stores.

Total Brown Shoe Company consolidated net sales rose 6.4% to $523.3 million in Q1 from $491.8 million in the year-ago period. Net income fell 55.7% to $3.8 million, or 20 cents per diluted share, for the quarter, versus net earnings of $8.5 million, or 45 cents per diluted share, in the first quarter of 2004. Excluding extraordinary charges, EPS increased 32.1% to 74 cents per share versus 56 cents per share in the Q1 last year.

BWS currently estimates diluted EPS for Q2 will be in the range of 27 cents to 32 cents, versus 40 cents for the second quarter of last year, an estimate that includes six cents dilution from lower margins on the acquired Bennett Footwear inventory. For the full year, the company sees EPS in the range of $2.30 to $2.45, as compared to its previous guidance of $2.55 to $2.65 per diluted share and last year’s diluted earnings per share of $2.30. Excluding incremental tax costs, the estimated 2005 diluted adjusted earnings per share are anticipated to be in the range of $2.85 to $3.00.