Earnings Releases

BROWN SHOE REPORTS 8.6 PERCENT INCREASE IN THIRD QUARTER EPS;

ST. LOUIS, November 14, 2000 -- Brown Shoe Company, Inc. (NYSE:BWS) today reported an 8.6 percent increase in diluted earnings per share to 88 cents for the third quarter versus 81 cents last year. Due to strong wholesale reorders late in October and lower than estimated expenses, Brown Shoe earnings exceeded its previous estimate of 85 to 86 cents per share.

For the 13 weeks ended October 28, 2000 net income rose 5.8 percent to $15,615,000 from $14,763,000 for the year ago quarter. During the first nine months of the fiscal year, diluted earnings per share rose to $1.75 versus $1.74 for the year ago period, and net earnings were $31,361,000 versus $31,596,000. Consolidated net sales for the third quarter were up 7.9 percent, to $462,945,000 from $429,132,000.

"Given the current environment, we are pleased to have exceeded earnings estimates for the quarter," said Brown Shoe Chairman and CEO Ron Fromm. "Our women's wholesale businesses performed very well, strengthening late in the quarter, and contributing to the increase in earnings. The increase was led by very strong reorders of Naturalizer -- especially our new collection of boots and tailored women's mocs. This more than offset below-plan sales at Famous Footwear and Naturalizer Retail during the quarter."

"Naturalizer, our flagship brand, posted a 23.1 percent gain in wholesale sales versus the year-ago quarter, with a 33.3 percent increase in the month of October alone," Fromm said.

Famous Footwear, the company's 919-store family footwear chain, increased sales 11.3 percent to $292,813,000 for the quarter reflecting an increased store count from openings and the acquisition of the 26-store Mil-Mar chain on August 1. Operating earnings for Famous Footwear declined 5.4 percent to $22,257,000, due primarily to lower-than-planned volume. Same-store sales were down 2.0 percent.

"Sales performance at Famous Footwear was disappointing," said Fromm. "Chain management is focusing on more effective merchandising strategies and continuing its aggressive repositioning of the chain's real estate portfolio in order to improve store productivity. We continue to move the chain to slightly larger stores and are pleased with preliminary results. The larger format allows us to carry a broader selection of brand-name product, configure the store with high-impact brand focus areas, and improve the shopping experience for our customers.

"We expect to open 80 of these 8,000 to 12,000 square foot stores out of 100 total in fiscal 2001. During the first nine months of fiscal 2000, Famous Footwear opened 73 stores (excluding Mil-Mar) -- mostly in power strip malls -- and closed 47 stores in under-performing locations. The chain is on track to have 929 stores in operation by year-end."

Sales for the wholesale businesses, which include the Naturalizer, LifeStride, Brown Pagoda, Buster Brown & Co. kids' footwear and the company's Canadian wholesale operations, were up 2.9 percent to $120,106,000 from $116,715,000 for the year-ago quarter. Operating income increased 11.2 percent to $9,798,000 due to exceptionally strong sales in the private label and branded women's businesses.

"We have strategic initiatives underway to build on the momentum in our wholesale businesses," Fromm said. "The division is preparing to launch a new line in Spring 2001, Carlos by Carlos Santana, which has met with an excellent initial response. Our Buster Brown & Co. in-store clubhouse shops in 1,400 WalMart stores, launched in August, are generating a steady stream of incremental sales for our children's business. Naturalizer's updated image and product design continue to win sales at retail. And, our newly restyled LifeStride line, is enjoying a 12.4 percent increase in wholesale sales for this quarter versus a year ago."

Sales for the company's 498 Naturalizer stores in the U.S. and Canada rose 7.2 percent in the quarter to $50,026,000. While same-store sales declined 3.0 percent in the U.S., sales were robust in Canada, increasing 11.7 percent on a same-store basis due to effective merchandising strategies and excellent execution. In the third quarter, the division's operating loss improved by 9.3 percent to $1,775,000, compared with a loss of $1,956,000 for the year-ago quarter. The division continues to invest in updating its store designs to reflect the new Naturalizer image, expanding its customer catalog mailings, and intensifying its in-store merchandizing presentations.

For the nine month period, total sales were $1,275,923,000, compared with $1,236,058,000 for the year-ago period. Sales increased 8.2 percent at Famous Footwear to $783,837,000; 8.0 percent at Naturalizer Retail (U.S. and Canada) to $152,062,000, but decreased 6.4 percent at wholesale to $340,024,000. Operating earnings for the nine months declined by 4.3 percent to $46,757,000 at Famous Footwear; by 15.0 percent for wholesale to $23,364,000, and improved by 21.5 percent for Naturalizer Retail, which posted a loss of $1,788,000 for the first nine months.

Year-to-date negative cash flow from operations totaled $5.0 million, primarily reflecting the increased investment in inventory to support the 11 percent increase in retail square footage at Famous Footwear. The ratio of net debt-to-capital was 39.6 percent at the end of the quarter versus 37.4 percent last year.

During the third quarter of 2000, the company repurchased 345,300 shares of Brown Shoe common stock for approximately $3.5 million. Through the first nine months of fiscal 2000, the company has repurchased a total of 499,000 shares for approximately $5.4 million.

Fromm concluded, "Our strong wholesale order position speaks well for the holiday and spring seasons as our branded wholesale business is up 14 percent over year-ago levels led by Naturalizer. Our private label and licensed businesses are running ahead of plan. And at Famous Footwear, we are focusing our energies on moving quickly to ensure we have the right product and promotions in place for the upcoming holiday season."

WebCasting of Conference Call: The Brown Shoe Conference Call will be broadcast via a live web-cast to be hosted at http://www.streetevents.com. At the website, click on the Individual Investor Center to locate the broadcast. To listen to the webcast, your computer must have RealPlayer installed. If you do not have RealPlayer, go to http://www.streetevents.com or http://www.real.com prior to the call, where you can download RealPlayer Basic for free.

Safe Harbor Statement Under the Private Securities Litigation Act of 1995: This press release contains certain forward-looking statements that are subject to various risks and uncertainties that could cause actual results to differ materially. These include general economic conditions, competition, consumer apparel and footwear buying trends, and political and economic conditions in Brazil and China, which are significant footwear sourcing countries. The Company's reports to the Securities and Exchange Commission contain detailed information relating to such factors.

About Brown Shoe: Brown Shoe, is a $1.6 billion footwear company with worldwide operations. The Company operates the Famous Footwear and Naturalizer chains of footwear retail stores and markets leading brands including Naturalizer, LifeStride, NightLife, Buster Brown, and licensed brands including Dr. Scholl's, Carlos and Barbie, Digimon: Digital Monsters and Rugrats character footwear for children.

Brown Shoe is headquartered in St. Louis, MO. Its press releases are available by fax through PR Newswire's Company News On-Call fax service at 800-758-5804, extension 109435. Brown Shoe information also is available on the Company's Web site at http://www.brownshoe.com.
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