WRAPUP 2-DSW, Brown Shoe beat Q3 estimates; cut 2008 outlook

* DSW Q3 beats estimates

* Brown Shoe Q3 EPS beats estimates

* DSW cuts 2008 shr view to $0.62 to $0.72

* Brown Shoe sees "challenging" Q4, 2009 (Recasts; adds conference call details, analyst comments, updates share movement)

By Anne Pallivathuckal

BANGALORE, Nov 25 (Reuters) - Footwear retailers DSW Inc (DSW.N) and Brown Shoe Co Inc (BWS.N) reported better-than-expected quarterly profits, but cut their full-year earnings forecasts as U.S. consumer confidence weakens amid a gloomy economic environment.

The retailers, whose shares have lost more than half their value this year, and other shoe and apparel companies have been hurt by shoppers reining in spending to concentrate on essentials such as food as they combat falling home values and tighter lending conditions.

"Both companies have kind of indicated that they don't see anything on the horizon that's going to seriously change trends," Susquehanna Financial Group analyst Christopher Svezia said.

"It's not like someone's going to flick a switch and suddenly people are going to start buying shoes again."

Svezia has "neutral" ratings on DSW and Brown Shoe. Susquehanna Financial Group and or its affiliates benefically own 1 percent or more of DSW securities.

CUTS '08 OUTLOOK

DSW cut its 2008 earnings forecast to 62 cents to 72 cents a share from its previous view of 75 cents to 85 cents a share.

The company said on a conference call with analysts that it sees reducing its 2009 capital expenditures to about half of the $85 million it expects to spend in 2008.

Brown Shoe, which is planning for a "challenging" fourth quarter and 2009, now sees 2008 earnings of 9 cents to 18 cents a share on revenue of $2.27 billion to $2.29 billion.

It previously forecast full-year earnings of $1.12 to $1.29 a share on sales of $2.38 billion to $2.40 billion.

Brown Shoe also reduced store expansion plans for the 2009 to 2011 period and indefinitely paused their headquarters redevelopment initiative.

The seller of shoe brands such as Naturalizer, LifeStride and Via Spiga said it revised its forecast to reflect the weak economy and to eliminate a previously expected real estate gain related to the redevelopment of its headquarters facility.

Q3 BEATS

For the third quarter ended Nov. 1, DSW posted net income of $13.2 million, or 30 cents a share, beating analysts' average estimate of 25 cents a share.

Brown Shoe reported net income of $10.4 million, or 25 cents a share, above analysts' estimates of earnings of 17 cents a share.

Shares of DSW were trading up 6 percent at $9.00, while those of Brown Shoe were up 2 cents at $5.56 Tuesday afternoon on the New York Stock Exchange.

For the DSW news alerts, please double-click [ID:nWNAB7179] . For the press release, double-click [ID:nPnCLTU028] .

For the Brown Shoe news alerts, please double-click [ID:nWNAB7183] . For the press release, double-click [ID:nPnAQTU040] .