Brown Shoe Company Inc. (BWS, Financial) filed Quarterly Report for the period ended 2010-05-01.
Brown Shoe Company Inc. has a market cap of $655.2 million; its shares were traded at around $15.09 with a P/E ratio of 18.9 and P/S ratio of 0.3. The dividend yield of Brown Shoe Company Inc. stocks is 1.9%.BWS is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
During 2008, we began implementation of an integrated ERP information technology system provided by third-party vendors. The ERP information technology system is replacing select existing internally developed and certain other third-party applications, and is expected to support our business model. We expect the implementation will enhance our profitability through improved management and execution of our business operations, financial systems, supply chain efficiency and planning and employee productivity. The phased implementation began during 2008 and is expected to be substantially complete in early 2011. We incurred expenses of $1.7 million ($1.2 million on an after-tax basis, or $0.03 per diluted share) during the thirteen weeks ended May 1, 2010, as a component of restructuring and other special charges, net related to these initiatives. We incurred expenses of $2.6 million ($1.7 million on an after-tax basis, or $0.04 per diluted share) during the thirteen weeks ended May 2, 2009, as a component of restructuring and other special charges, net related to these initiatives.
During November 2009, we made a series of changes within our leadership team as two executives announced plans to retire in early to mid-2010. During 2009, we incurred charges of $4.6 million ($2.8 million on an after-tax basis, or $0.07 per diluted share), related to their retirement. All of the costs recorded during 2009 were reflected within our Other segment as a component of restructuring and other special charges, net. During the first quarter of 2010, no additional charges were incurred. We recorded settlements of $2.2 million in connection with the retirement of one of the executives, resulting in a remaining liability of $2.4 million as of May 1, 2010.
Net sales increased $59.0 million, or 10.9%, to $597.7 million for the first quarter of 2010, compared to $538.7 million for the first quarter of last year. All segments experienced net sales increases during the first quarter of 2010 as compared to the first quarter of 2009. Our Famous Footwear segment reported a $44.6 million increase in net sales, reflecting a 15.5% same-store sales increase, resulting from a higher conversion rate in our stores, higher average retail prices and higher traffic levels. The net sales of our Specialty Retail segment increased by $8.4 million, reflecting a 16.2% same-store sales increase in our retail stores, an increase in the Canadian dollar exchange rate and higher net sales at Shoes.com. Our Wholesale Operations segment reported a $5.9 million increase in net sales, primarily as a result of strong demand and sales growth in many of our brands, including primarily our Naturalizer, Sam Edelman, Via Spiga, Vera Wang Lavender and Carlos by Carlos Santana divisions.
Gross profit increased $39.4 million, or 18.9%, to $247.6 million for the first quarter of 2010, compared to $208.2 million in the first quarter of last year, resulting from higher net sales and a higher gross profit rate. As a percent of net sales, our gross profit increased to 41.4% for the first quarter of 2010 from 38.6% for the first quarter of last year. The most significant improvement in the gross profit rate was recognized by our Wholesale Operations segment as a result of lower provisions for customer allowances and markdowns, resulting from improved sell-through rates at retail, and an increased mix of higher-margin branded sales. An increase in mix of our retail business, which generates a higher gross profit rate than our wholesale business, also contributed to the increase in gross profit rate. Our Famous Footwear segment contributed to the increase in gross profit rate as the segment experienced strong sales of higher-margin categories, improved sell-through associated with its sharper focus on trend-right merchandise across all categories and decreased promotional activity during the quarter. In addition, our Specialty Retail segment also contributed to the increase in gross profit rate as the segment experienced a strong performance with improved retail sell-through resulting in lower markdowns for our retail stores.
Selling and administrative expenses increased $11.8 million, or 5.5%, to $224.6 million for the first quarter of 2010, compared to $212.8 million in the first quarter of last year. The increase was primarily related to an increase of $4.9 million due to changes in expected payments under our incentive plans, as well as other increases associated with merit increases, variable retail store payroll expenses, director compensation and expenses associated with our information technology platform. As a percent of net sales, selling and administrative expenses decreased to 37.5% for the first quarter of 2010 from 39.4% for the first quarter of last year, reflecting the factors discussed above and the leveraging of our expense base over the higher net sales volume.
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Brown Shoe Company Inc. has a market cap of $655.2 million; its shares were traded at around $15.09 with a P/E ratio of 18.9 and P/S ratio of 0.3. The dividend yield of Brown Shoe Company Inc. stocks is 1.9%.BWS is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Our debt-to-capital ratio, the ratio of our debt obligations to the sum of our debt obligations and equity, decreased to 26.3% at May 1, 2010, compared to 32.5% at May 2, 2009, primarily due to the $39.0 million decline in borrowings under our revolving credit agreement, partially offset by an increase in total Brown Shoe Company, Inc. shareholders equity as a result of our net earnings attributable to Brown Shoe Company, Inc. in the first quarter of 2010 and the second half of 2009. Our debt-to-capital ratio decreased from 37.3% at January 30, 2010 primarily due to the $94.5 million decline in borrowings under our revolving credit agreement. Our current ratio, the relationship of current assets to current liabilities, was 1.97 to 1 at May 1, 2010, compared to 1.91 to 1 at May 2, 2009 and 1.71 to 1 at January 30, 2010. Inventories at May 1, 2010 were $431.5 million, up from $408.5 million at the end of the first quarter last year, primarily due to an increase in inventories for our Famous Footwear segment, in support of higher sales, and our investments in the women s wellness initiatives and accessories.During 2008, we began implementation of an integrated ERP information technology system provided by third-party vendors. The ERP information technology system is replacing select existing internally developed and certain other third-party applications, and is expected to support our business model. We expect the implementation will enhance our profitability through improved management and execution of our business operations, financial systems, supply chain efficiency and planning and employee productivity. The phased implementation began during 2008 and is expected to be substantially complete in early 2011. We incurred expenses of $1.7 million ($1.2 million on an after-tax basis, or $0.03 per diluted share) during the thirteen weeks ended May 1, 2010, as a component of restructuring and other special charges, net related to these initiatives. We incurred expenses of $2.6 million ($1.7 million on an after-tax basis, or $0.04 per diluted share) during the thirteen weeks ended May 2, 2009, as a component of restructuring and other special charges, net related to these initiatives.
During November 2009, we made a series of changes within our leadership team as two executives announced plans to retire in early to mid-2010. During 2009, we incurred charges of $4.6 million ($2.8 million on an after-tax basis, or $0.07 per diluted share), related to their retirement. All of the costs recorded during 2009 were reflected within our Other segment as a component of restructuring and other special charges, net. During the first quarter of 2010, no additional charges were incurred. We recorded settlements of $2.2 million in connection with the retirement of one of the executives, resulting in a remaining liability of $2.4 million as of May 1, 2010.
Net sales increased $59.0 million, or 10.9%, to $597.7 million for the first quarter of 2010, compared to $538.7 million for the first quarter of last year. All segments experienced net sales increases during the first quarter of 2010 as compared to the first quarter of 2009. Our Famous Footwear segment reported a $44.6 million increase in net sales, reflecting a 15.5% same-store sales increase, resulting from a higher conversion rate in our stores, higher average retail prices and higher traffic levels. The net sales of our Specialty Retail segment increased by $8.4 million, reflecting a 16.2% same-store sales increase in our retail stores, an increase in the Canadian dollar exchange rate and higher net sales at Shoes.com. Our Wholesale Operations segment reported a $5.9 million increase in net sales, primarily as a result of strong demand and sales growth in many of our brands, including primarily our Naturalizer, Sam Edelman, Via Spiga, Vera Wang Lavender and Carlos by Carlos Santana divisions.
Gross profit increased $39.4 million, or 18.9%, to $247.6 million for the first quarter of 2010, compared to $208.2 million in the first quarter of last year, resulting from higher net sales and a higher gross profit rate. As a percent of net sales, our gross profit increased to 41.4% for the first quarter of 2010 from 38.6% for the first quarter of last year. The most significant improvement in the gross profit rate was recognized by our Wholesale Operations segment as a result of lower provisions for customer allowances and markdowns, resulting from improved sell-through rates at retail, and an increased mix of higher-margin branded sales. An increase in mix of our retail business, which generates a higher gross profit rate than our wholesale business, also contributed to the increase in gross profit rate. Our Famous Footwear segment contributed to the increase in gross profit rate as the segment experienced strong sales of higher-margin categories, improved sell-through associated with its sharper focus on trend-right merchandise across all categories and decreased promotional activity during the quarter. In addition, our Specialty Retail segment also contributed to the increase in gross profit rate as the segment experienced a strong performance with improved retail sell-through resulting in lower markdowns for our retail stores.
Selling and administrative expenses increased $11.8 million, or 5.5%, to $224.6 million for the first quarter of 2010, compared to $212.8 million in the first quarter of last year. The increase was primarily related to an increase of $4.9 million due to changes in expected payments under our incentive plans, as well as other increases associated with merit increases, variable retail store payroll expenses, director compensation and expenses associated with our information technology platform. As a percent of net sales, selling and administrative expenses decreased to 37.5% for the first quarter of 2010 from 39.4% for the first quarter of last year, reflecting the factors discussed above and the leveraging of our expense base over the higher net sales volume.
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