(Recasts with share move; Adds executive and analyst comments,
By Aarthi Sivaraman
NEW YORK Aug 27 Brown Shoe Co Inc BWS.N
posted a lower-than-expected quarterly profit and cut its
full-year outlook and store growth plans as shoppers curb
spending, sending its shares down more than 6 percent.
The maker of shoe brands such as Naturalizer and Via Spiga
also cited higher commodity costs that raised its expenses for
the quarter, saying it sought to reduce those costs.
Brown Shoe, like other shoe and apparel companies, has seen
results suffer as shoppers allocate more money for necessities
such as food and gasoline, as those prices rise in a weak U.S.
"The consumer environment remains difficult," Chief
Financial Officer Mark Hood said on a conference call on
Wednesday, adding the company was less optimistic with its
outlook for the rest of 2008.
Net profit fell to $2.2 million, or 5 cents per share, in
its fiscal second quarter that ended Aug. 2, from $9.8 million,
or 22 cents per share, a year earlier. Profit for the second
quarter included a charge of 15 cents per share tied to the
relocation of its Famous Footwear unit's headquarters.
Sales fell 1.3 percent to $569.2 million.
Analysts, on average, expected earnings of 6 cents a share
on sales of $589.9 million, according to Reuters Estimates.
While Brown Shoe has taken steps like raising prices to
fight commodity pressures, costs remain a concern, said
Susquehanna Financial analyst Christopher Svezia.
"Increasing costs coming out of southern China and other
third party markets certainly adds pressure to their P&L
(profit and loss)," Svezia said.
Brown Shoe President and COO Diane Sullivan said the
company was working to reduce cost pressures from China.
Brown Shoes shares were down 4.1 percent at $15.22. They
fell as low as $14.39, earlier on the New York Stock Exchange.
Fashion shoe company Steven Madden (SHOO.O) fell 2.5 percent to
$24.86 on the Nasdaq.
Retail customers for Brown Shoe and its rivals have seen
weak sales trends, and have been placing fewer orders to better
cope with less demand.
Brown Shoe said it now expects full-year earnings to range
between $1.12 and $1.29 a share, and sales in the range of
$2.38 billion to $2.40 billion.
Previously, it had forecast fiscal 2008 per-share earnings
between $1.29 and $1.53, and sales of $2.43 billion to $2.48
"(The) outlook is certainly reflective of what's going on
in the marketplace. (It is) somewhat disappointing but
potentially the proper view to take given what's going on,"
Brown Shoe said it plans to open 90 Famous Footwear stores
for the full year, down from its previous plan to open 100 to
For the third quarter, Brown Shoe expects sales of $650
million to $660 million and per-share earnings of 31 cents to
(Editing by Dave Zimmerman and Maureen Bavdek)