Earnings Releases
Brown Group, Inc. (NYSE: BG) reported net earnings of $1,542,000 or 9 cents per share in the first fiscal quarter ended May 3, 1997 compared to net earnings of $527,000 or 3 cents per share in the 1996 first quarter.
St. Louis, MO (Wire News), May 22, 1997 -- Brown Group, Inc. (NYSE: BG) reported net earnings of $1,542,000 or 9 cents per share in the first fiscal quarter ended May 3, 1997 compared to net earnings of $527,000 or 3 cents per share in the 1996 first quarter. The 1996 first quarter earnings included an aftertax nonrecurring gain of $2.0 million or 11 cents per share from the liquidation of LIFO inventories.
Consolidated net sales for the first quarter of 1997 were $391,815,000 compared to $355,785,000 in last year's first quarter, an increase of 10.1 percent. Announcement of the first quarter results was made at the annual meeting of the Company's shareholders held in St. Louis, Missouri, by B. A. Bridgewater, Jr., chairman of the board, president and chief executive officer, who said:
"Brown Group's better-than-planned first quarter results were led by solid gains at Famous Footwear and strong performance by Brown Shoe Company's wholesale operations. We are pleased with this continued progress, which reflects higher sales and improved expense leverage in our seasonally most difficult quarter. "At Famous Footwear, sales increased 8.8 percent to $199.9 million in the first quarter compared to $183.7 million in last year's first quarter. Same-store sales were up 3.5 percent, with very good Easter period sales partially offset by a same-store sales decline in April. After achieving a 44 percent gain in operating earnings in fiscal year 1996, Famous Footwear reported operating earnings of $6.7 million in the first quarter of 1997, more than double last year's $3.3 million first quarter operating earnings. This gain was the result of higher sales, better margins and continued improved leveraging of the expense base. At quarter-end, Famous Footwear had 803 stores in operation."Brown Shoe Company's combined wholesale operations -- Brown Branded Marketing and Pagoda -- also reported better-than-planned results in the first quarter. Sales increased 17.2 percent to $142.3 million compared to $121.4 million in last year's first quarter. The sales gain was driven by higher sales of the Naturalizer and NaturalSPORT brands, strong performance by the Original Dr. Scholl's Exercise Sandal line, and higher shipments by Pagoda U.S.A. "Sales gains in the Naturalizer brand are particularly encouraging, and reflect a positive consumer response to improved quality, more fashionable product and more aggressive marketing. We are also pleased by higher Naturalizer and NaturalSPORT 'sell-through' in department stores. "As a result of these gains, operating earnings were up 18.5 percent to $4.8 million compared to $4.0 million in the first quarter of 1996. Last year's first quarter results included a $3.1 million (pre tax) LIFO credit associated with the sale of shoes manufactured in the Company's domestic plants that were closed in 1995.
"During the first quarter, sales at Naturalizer Retail declined 6.2 percent to $31.0 million and were down 5.5 percent on a same-store basis. These results reflect a reduction in promotional merchandise compared to last year, when aggressive promotions led to a 6.4 percent same-store gain in our mall-based stores during the quarter. Continuing slower dress shoe sales also contributed to the decline. These lower sales at Naturalizer Retail led to an operating loss for the period. There were 346 stores in operation at the quarter-end. "The Company's Canadian Operations continued their steady performance in the quarter, with combined sales up 5.3 percent to $18.6 million versus $17.6 million in last year's first quarter. Same-store sales in the Retail division were up 4.0 percent for the quarter; sales were up 2.9 percent at the Wholesale division. Operating earnings of $1.3 million for the combined businesses were up 5.1 percent.
"In summary, we are pleased with the sales and earnings gains achieved in the first quarter. These gains continue to reflect the value of the opportunity we now have for sales increases in our operations to bring improved earnings to the bottom line. We are cautious about the second quarter due to the widely publicized pattern of slower April footwear retail sales, that has continued into May. However, we expect continued improvements in our operations during the year and particularly in the seasonally strong third quarter."
At its meeting held today, the Board of Directors of Brown Group declared a regular quarterly dividend of 25 cents per share. This will be the 298th consecutive quarterly dividend paid by the Company.
In other business at the annual shareholders' meeting, four directors were elected to serve three-year terms: Joseph L. Bower, Harry E. Rich, Jerry E. Ritter and Thomas A. Williams. Eight other directors continue in office: B. A. Bridgewater, Jr., Julie C. Esrey, Richard A. Liddy, John Peters MacCarthy, John D. Macomber, William E. Maritz, General Edward C. Meyer and Daniel R. Toll. 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 from time to time contain detailed information relating to such factors.
Brown Group, Inc. is a $1.5 billion footwear company with worldwide operations. The Company operates the Famous Footwear, Naturalizer and F. X. LaSalle chains of footwear retail stores and markets leading brands including Naturalizer, Life Stride, NaturalSPORT, the Larry Stuart Collection, le coq sportif athletic footwear, and licensed brands including Dr. Scholl's, Star Wars and Disney character footwear.
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BROWN GROUP, INC. Consolidated Statements of Earnings | ||
|---|---|---|
| (Thousands, except per share) | ||
| Thirteen Weeks Ended | ||
| May 3, 1997 | May 4, 1996 | |
| Net Sales | 245,982 | 219,908 |
| Cost of Goods Sold | $391,815 | $355,785 |
| Gross Profit | 145,833 | 135,877 |
| Selling and Administrative Expenses | 138,007 | 130,684 |
| Interest Expense | 5,765 | 4,733 |
| Other (Income) | (436) | (401) |
| Earnings from Continuing Operations Before Income Taxes 2,497 861 Income Tax (Provision) | (955) | (334) |
| Net Earnings | $1,542 | $527 |
| Net Earnings per Common Share | $.09 | $.03 |
| Average Shares of Common Stock Outstanding | 17,746 | 17,615 | $ 718,913 |
|
Brown Group, Inc. Condensed Consolidated Balance Sheets | ||
|---|---|---|
| (Thousands) | ||
| August 2, 1997 | August 3, 1996 | |
| Assets | 1997 | 1996 |
| Cash and Cash Investments | $28,168 | $22,146 |
| Receivables | 87,312 | 76,582 |
| Inventories (less reserve for valuation to last-in, first-out cost at May 3, 1997 of $17,578 and May 4, 1996 of $24,968) | 401,123 | 374,272 |
| Other Current Assets | 39,257 | 42,340 |
| Total Current Assets | 555,860 | 515,340 |
| Other Assets | 71,784 | 68,881 |
| Property, Plant and Equipment - Net | 84,226 | 86,285 |
| $711,870 | $670,506 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
|---|---|---|
| Notes Payable and Current Maturities of Long-Term Debt | $55,000 | $146,500 |
| Other Current Liabilities | 202,739 | 164,172 |
| Total Current Liabilities | 257,739 | 310,672 |
| Long-Term Debt and Capitalized Leases | 197,025 | 104,022 |
| Other Liabilities | 24,490 | 27,167 |
| Shareholders' Equity | 232,616 | 228,645 |
| $711,870 | $670,506 | |
Brown Group, Inc.
For more information contact:
Mary Sylvia Siverts
8300 Maryland Avenue
Post Office Box 29
St. Louis, Missouri 63166-0029
(314) 854-4000
Vice President - Public Affairs
(314) 854-4093