Brown Shoe Co. reported that same-store sales in its Famous Footwear division declined 1.5% in the nine weeks ended Jan. 3 compared to the same period a year ago. Famous Footwear's gross margins declined 270 basis points versus the same period last year, as a result of a “highly promotional retail environment.” Additionally, during the nine weeks, unit volume increased by 5.3% and inventory decreased by 3.4% on an average store basis versus the comparable period last year.
Overall, Brown Shoe said its fourth-quarter earnings will come in at the lower end of its prior outlook, and that it was renegotiating its credit line.
Ron Fromm, Brown Shoe's chairman and CEO, stated, “The trade-off between greater sales and lower margin during the first two months of the quarter was in-line with our expectations. Importantly, velocity helped clear merchandise during this period and we feel good about our clean inventory position. As usual, the bulk of our wholesale orders are planned to ship in the last week of the quarter and, as always, shipping will be dependent upon whether our retail partners take receipt in the last week in January or in the first quarter. We now believe our adjusted earnings per share for the fourth quarter will fall within the low-end of our previously established guidance range. Furthermore, we are working to renew and extend our $350 million revolving credit facility for five more years and have thus far received commitments of over $350 million. These commitments are subject to typical and standard conditions, and we expect to finalize and close the amendment prior to the end of the fiscal year.”
