Earnings Releases
Brown Group, Inc. reported net earnings of $527,000 or 3 cents per share in the first fiscal quarter ended May 4, 1996 compared to a net loss of $4,411,000 or 25 cents per share in the 1995 first quarter.
ST. LOUIS (WIRE NEWS), May 23, 1996 -- Brown Group, Inc. reported net earnings of $527,000 or 3 cents per share in the first fiscal quarter ended May 4, 1996 compared to a net loss of $4,411,000 or 25 cents per share in the 1995 first quarter.
Consolidated net sales for the first quarter of 1996 were $355,785,000 compared to $357,442,000 in last year's first quarter. 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 first quarter results were slightly better than planned and significantly improved over last year's first quarter loss. They reflect a return to solid profitability at Brown Shoe Company, tightly controlled operations and improved performance at Famous Footwear, and continuing aggressive expense control throughout the business.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 294th consecutive quarterly dividend paid by the company."The performance of Brown Shoe Company in the quarter was particularly encouraging. Although sales declined slightly from $63.1 million to $60.3 million, operating earnings improved from a loss of $4.4 million last year, to earnings of $3.4 million. Good acceptance of the Naturalizer, NaturalSport and Life Stride brands, and higher margins related to the shift of all remaining production to offshore factories, contributed to this improvement. These results also benefited from a $3.1 million (pre tax) LIFO credit associated with the sale of shoes manufactured in domestic plants which we closed last fall.
"The company's Naturalizer Retail stores also showed substantial improvement during the quarter, with sales up 6.5 percent to $28.9 million and a 6.4 percent increase in same-store sales at the mall-based stores. Higher sales at the Naturalizer stores reflect strong consumer acceptance of the updated styling of the Naturalizer product and increasing interest in the NaturalSport line of casual and walking shoes.
"The effect of improved sales at the Naturalizer stores was partially offset by results from the transfer of 40 outlet stores from Famous Footwear. Reduced sales during the transition period were due to low inventory levels and the impact of poor weather conditions on outlet malls in general. Although Naturalizer Retail thus reported an operating loss of $300,000 compared to an operating loss of $500,000 in last year's first quarter, we are very encouraged about the prospects for this brand and business.
"Pagoda's sales and operating earnings declined in the quarter, largely reflecting a shift in the timing of orders and wholesale shipments which will lead to a much stronger second quarter. Overall, operating earnings from our wholesale businesses increased by $5.5 million in the quarter.
"At Famous Footwear, first quarter sales increased 10.6 percent to $183.7 million, but declined 1.9 percent on a same-store basis. Operating earnings were $3.3 million, compared to an operating profit of $1.7 million last year (restated to reflect the transfer of 40 outlet stores to the Naturalizer Retail division.) This improvement was achieved despite continuing depressed traffic and sales levels in strip centers and outlet malls, as the improved retail business seen in enclosed malls this year has not yet extended to discount venues. Earnings reflect improved margins and better leveraging of Famous Footwear's expense base as the 340 stores opened since the beginning of 1994 'mature.' There were 789 stores in operation at quarter-end, 77 more than last year.
"Our Canadian Operations continued to show progress, with operating earnings of $1.3 million compared to $.7 million last year. Retail operations in Canada recorded a same-store sales gain of 12.0 percent for the quarter; wholesale sales were 12.2 percent higher than in last year's first quarter.
"In summary, first quarter results are encouraging. They reflect a good consumer response to our product improvements and marketing programs, better acceptance of our brands and the positive impact of the steps we took last year to reduce costs and improve all aspects of our operations. We have created the opportunity for sales increases to bring better earnings to the bottom line, and we expect results to continue to improve in the seasonally stronger second and third quarters."
In other business at the annual shareholders' meeting, four directors were elected to serve three-year terms: John Peters MacCarthy, John D. Macomber, William E. Maritz and General Edward C. Meyer. Daniel R. Toll was elected to serve a two-year term, and Jerry E. Ritter was elected to serve for a term of one year. Five other directors continue in office: B. A. Bridgewater, Jr., Joseph L. Bower, Julie C. Esrey, Richard A. Liddy and Harry E. Rich. Also at the meeting, an amendment to the Brown Group, Inc. Stock Option and Restricted Stock Plan of 1994 was ratified and approved.
| BROWN GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||
|---|---|---|
| Three Months Ended | ||
| May 4 1996 | April 29 1995 | |
| Net Earnings (Loss) per Common Share | $.03 | $ (.25) |
| Net Sales | $355,785 | $357,442 |
| Earnings (Loss) Before Taxes | 861 | (7,029) |
| Income Taxes | 334 | (2,618) |
| Net Earnings (Loss) | $527 | $(4,411) |
| Average Shares of Common Stock Outstanding | $17,615 | $17,608 |
| BROWN GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS | ||
|---|---|---|
| ASSETS | May 4 1996 | April 29 1995 |
| Cash and Cash Investments | $ 22,146 | $ 20,457 |
| Receivables | 76,582 | 91,159 |
| Inventories (less reserve for valuation to last-in, first-out cost at May 4, 1996 of $24,968 and April 29, 1995 of $37,566) | 374,272 | 336,746 |
| Other Current Assets | 42,340 | 54,753 |
| Total Current Assets | 515,340 | 503,115 |
| Other Assets | 68,881 | 62,895 |
| Property, Plant and Equipment - Net | 86,285 | 94,347 |
| $ 670,506 | $ 660,357 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
|---|---|---|
| Notes Payable and Current Maturities of Long-Term Debt | $ 146,500 | $ 128,030 |
| Other Current Liabilities | 164,172 | 202,238 |
| Total Current Liabilities | 310,672 | 330,268 |
| Long-Term Debt and Capitalized Leases | 104,022 | 57,465 |
| Other Liabilities | 27,167 | 33,169 |
| Shareholders' Equity | 228,645 | 239,455 |
| $ 670,506 | $ 660,357 | |
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