* Third-quarter adjusted earnings/share $0.60 vs est $0.46
* Third-quarter revenue rises 3 pct to $732.2 mln
* Raises 2012 adjusted earnings/share view to $1.06-$1.10 vs
By Maria Ajit Thomas
Nov 20 Brown Shoe Co Inc said it will
stay away from promotions in the all-important holiday season as
it bets on its Sam Edelman line of women's shoes to boost sales.
Shares of the company, which also reported third-quarter
results that beat Wall Street forecasts, rose as much as 8
percent at $16.96 on the New York Stock Exchange on Tuesday.
"We really don't think (promotions are) the way to go ...
It's a short-lived strategy and doesn't really engage the
customer long-term," Chief Executive Diane Sullivan told
The company, which operates Famous Footwear and Naturalizer
stores, expects strong sales of its Sam Edelman shoes in the
holiday season and increased demand for its casual boots.
Brown Shoe bought the Sam Edelman brand in 2010. It is known
for trendy shoes and handbags priced between $65 and $300.
Brown Shoe has been tightly managing its inventory
throughout the year, cutting poor-performing brands from its
portfolio, to boost margins.
The company would exit another brand in the current quarter,
Sullivan said, but declined to give details of the brand. The
company would close 19 stores and open 12 stores in the quarter.
Inventory fell 7 percent to $539.4 million and gross margin
increased to 39.0 percent from 38.7 percent in the third
Costs would stabilize in the second half of 2013, Sullivan
said. Brown Shoe, which also sells brands such as Nike, Skechers
and Dr. Scholl's, is facing rising labor costs and expects
prices to rise slightly this year.
The company, which competes with DSW Inc and Genesco
Inc, raised its 2012 adjusted profit view to between
$1.06 and $1.10 per share, from its previous forecast of between
85 cents and 95 cents.
Analysts on average were expecting a profit of 92 cents per
share, according to Thomson Reuters I/B/E/S.
Brown Shoe also reported a profit that beat analysts'
estimates for the third straight quarter on a strong
back-to-school season and higher sales at its Famous Footwear
Same-store sales at Famous Footwear rose 6.8 percent, driven
by strong demand for boat shoes, running shoes and accessories.
Sales of its boat shoes more than doubled, while sales of
running shoes rose 13.4 percent, Sullivan said in a conference
call with analysts.
Total revenue rose 3 percent to $732.2 million, above the
average market estimate of $703.3 million.
Peer DSW Inc also reported quarterly results above
market estimates on Tuesday, as sales at its stores open for at
least a year rose 6.3 percent.