Attached files
| file | filename |
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| EX-99.1 - PRESENTATION - PDF - CALERES INC | bws8k031010ex99_1.pdf |
| 8-K - FORM 8-K - CALERES INC | bws8k031010.htm |
Investor
Presentation
BROWN
SHOE COMPANY, INC.
March
2010
Safe
Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
This
investor update contains certain forward-looking statements and expectations
regarding the Company’s future performance and the future performance of its
brands. Such statements are subject to various risks and uncertainties that
could cause actual results to differ materially. These include (i) changing
consumer demands, which may be influenced by consumers' disposable income, which
in turn can be influenced by general economic conditions; (ii) the timing and
uncertainty of activities and costs related to the Company’s information
technology initiatives, including software implementation and business
transformation; (iii) potential disruption to the Company’s business and
operations as it implements its information technology initiatives; (iv) the
Company’s ability to utilize its new information technology system to
successfully execute its business model; (v) intense competition within the
footwear industry; (vi) rapidly changing fashion trends and purchasing patterns;
(vii) customer concentration and increased consolidation in the retail industry;
(viii) political and economic conditions or other threats to continued and
uninterrupted flow of inventory from China and Brazil, where the Company relies
heavily on third-party manufacturing facilities for a significant amount of its
inventory; (ix) the Company's ability to attract and retain licensors and
protect its intellectual property; (x) the Company's ability to secure/exit
leases on favorable terms; (xi) the Company's ability to maintain relationships
with current suppliers; (xii) compliance with applicable laws and standards with
respect to lead content in paint and other product safety issues; and (xiii) the
Company’s ability to successfully execute its international growth strategy. The
Company's reports to the Securities and Exchange Commission contain detailed
information relating to such factors, including, without limitation, the
information under the caption “Risk Factors” in Item 1A of the Company’s Annual
Report on Form 10-K for the year ended January 31, 2009, which information is
incorporated by reference herein and updated by the Company’s Quarterly Reports
on Form 10-Q. The Company does not undertake any obligation or plan to update
these forward-looking statements, even though its situation may
change.
- March
10, 2010
NOTE: During
fiscal 2010, the Company did not issue formal earnings per share guidance for
either full-year or quarterly results in its earnings releases and conference
calls. However, on March 3, 2010, it did supply a perspective on a
number of operating metrics in its press release and conference
call. This presentation does not represent an interim change, update,
or affirmation of the metrics presented on March 3,
2010.
BROWN SHOE THE LEADER IN FOOTWEAR
[graphics - BROWN
SHOE]
At a
glance
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§
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Powerful
Portfolio of Global Brands Consumers Love and
Trust
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§
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Famous
Footwear – leading family branded footwear
retailer
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§
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Naturalizer
– one of the world’s largest women’s
brands
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Dr.
Scholl’s – iconic global comfort
brand
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§
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Wholesale
portfolio of leading fashion brands
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Diversified,
Synergistic Business Model
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Multi-channel
platform
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Broad
retail portfolio of over 1,400
stores
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Diversified
brand portfolio that spans consumer segments, categories, channels, and
geographies
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Powerful
Direct-to-Consumer platform
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Vertical
brands and incubation
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International
growth
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Trend-right
Product Delivered Efficiently Across Channels and
Geographies
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Global
sourcing, design, and distribution
expertise
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More
than 600 people in sourcing offices in
China
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Leading-edge
design studios and product development
capabilities
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[graphics - Our Partners]
[graphics - Our Brands]
[graphics - Powerful Brands &]
[graphics - Trend-Right Product]
[graphics - Famous Footwear]
[graphics - FAMOUS
FOOTWEAR]
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Great
Brands, Great Value
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Leading
family branded footwear retailer with over 1,100 stores in all 50
states
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More
than 80 top fashion and athletic footwear brands including Nike, Skechers,
New Balance, DC, adidas, Converse, Dr. Scholl’s, Reebok, Steve Madden,
Puma, Naturalizer, and LifeStride
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Strong
Recent Performance
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Same-store
sales increased 9.0% in Q409, following a strong 4.7% gain in Q309, driven
by on-trend product, enhanced store and online environments, and impactful
consumer engagement
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“Make
Today Famous” Campaign
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Inspiring
a woman’s walk through life. Overarching brand communications platform,
highlighting great brands, value, and the consumer shoe shopping
experience
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360
degree consumer communications: In-store, national TV, radio, print, viral
marketing, social networking
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Increasing
media presence in Spring ‘10 with additional mass-reach elements and
digital outreach
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Leading
the Charge in Toning Category
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Strong
connection with Famous Footwear consumer and longstanding partnerships
with leading toning brands
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Mind,
Body, Sole Tour launched in Spring ’10. Fits toning into the
context of the Famous Footwear brand and enhances in-store
presentation. Partnering with Ali Vincent, winner of The
Biggest Loser, as “Famous
Ambassador”
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[graphics - MAKE TODAY SPORTY]
[graphics - MAKE TODAY FLOAT]
[graphics - MAKE TODAY MIGHTY]
[graphics - MAKE TODAY FIERCE]
[graphics - MAKE TODAY COAST]
[graphics - MAKE TODAY FAMOUS]
[graphics]
[graphics -
NATURALIZER]
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Global
brand with distribution in 45
countries
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Approximately
$500 million in sales at retail around the
world
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Top
4 women’s fashion brand across domestic
channels*
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Lifestyle
Brand
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Delivering
a strong value proposition for consumers with comfort, style, and
quality…Work, Play, Everyday
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Strong
consumer response to evolution of N5 comfort technology
system
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Global
design studio
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Multi-Channel
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Approximately
250 branded specialty stores in North
America
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Strong
second-half 2009 performance in Naturalizer stores, with mid-single digit
same-store sales increase, and double digit growth at
Naturalizer.com
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Growing
Naturalizer Brand Family
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New
premium comfort, eco-friendly brand, Naya, will be distributed in select
better department stores, dot-com’s, and independents in Spring
2010
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*FY09
according to NPD’s POS Retail Tracking Service
[graphics - Paramus, NJ]
[graphics - Tokyo, Japan]
[graphics - International]
[graphics - ad]
[graphics - Multi-channel Platform]
[graphics]
[graphics - DR.
SCHOLL'S]
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Iconic
Global Brand
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Striving
to deliver the most comfortable shoes in the
world
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Connecting
to a wide range of consumer lifestyles across multiple channels and price
points -- healthy living, career, sport,
fashion
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Delivering
the Promise of the Dr. Scholl’s
Brand
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Unique,
proprietary comfort technology and
design
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Leveraging
consumer and product learnings across categories to drive quality,
comfort, foot health, and value
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Strong
value proposition in health and wellness category
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Strengthening
partnership with Walmart – rolling-out Dr. Scholl’s focus shops and
branded presentations in approximately 3,000 Walmart stores
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[graphics]
[graphics - BROWN
SHOE]
Current
Initiatives
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Enhancing
Retail Productivity
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Improving
store-level economics through greater conversion and increased transaction
value
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Increasing
productivity of real estate
portfolio
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Leveraging
strong multi-channel platform to reach consumers across shopping
occasions
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Driving
Wholesale Growth
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Enhancing
product innovation and trend-right product
styling
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Growth
of Naturalizer, Dr. Scholl’s, and contemporary
fashion
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International
expansion
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Sharpening
Focus and Increasing Investment in
Marketing
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Investing
in and growing the core – Famous Footwear, Naturalizer, Dr.
Scholl’s
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Evolution
of “Make Today Famous”
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Expansion
of direct media across portfolio – more intimate dialogue with
consumers
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Embracing
new consumers, trends, and media
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Doubling
Earnings in Next 12 to 15 Months
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Driving
efficiencies from recent infrastructure
investments
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Balancing
earnings and investments for growth
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[graphics - BROWN
SHOE]
Appendix
Outlook:
The
Company has provided perspective on certain operating and balance sheet metrics
to enhance transparency and provide insight into management
expectations. The below metrics were provided on March 3, 2010 and
this should not be considered an interim change, update, or affirmation of these
metrics. All following metrics are for the full year 2010 unless
otherwise noted.
| Consolidated Net Sales: | Expected to grow in the mid-single digit range for the full year 2010 and in the low-single digits in the first quarter | |
| Famous Footwear: | Same-store sales for the full year 2010 are expected to grow in the low- to mid-single digit range with first quarter same-store sales expected to increase in the high-single digit range. Expected to open 25 new stores during the year while closing 50 stores | |
| Wholesale: | Net sales are expected to grow in the high-single to low-double digit range for the full year with flat to low-single digit growth in the first quarter | |
| Selling and Administrative Expenses: | 37.5% to 38.0% of net sales, excludes approximately $7.0 to $7.5 million in expense for IT initiatives | |
| Depreciation & Amortization*: | $51 to $53 million | |
| Interest Expense, Net: | $21 to $22 million | |
| Taxes: | Rate of 33% to 34% | |
| Capital Expenditures**: | $60 to $65 million, primarily related to information technology initiatives, new stores and remodels, and general infrastructure | |
*Excludes
amortization of debt issuance costs
**Includes
purchases of property and equipment and capitalized software
Review of
Brown Shoe Results
| (all $'s in millions except EPS) |
52
Weeks Ended
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52
Weeks Ended
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||||
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January 30, 2010
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January 31, 2009
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% Chg.
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||||
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Net
Sales
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$2,242.0
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$2,276.4
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-1.5%
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|||
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Net
Earnings (Loss)*
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||||||
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GAAP
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$9.5
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($133.2)
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++
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|||
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Adjusted**
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$17.0
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$19.5
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-13.0%
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|||
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EPS*
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||||||
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GAAP
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$0.22
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($3.21)
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++
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|||
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Adjusted**
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$0.40
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$0.47
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-14.9%
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Gross
Margin
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40.3%
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38.8%
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Adjusted
EBITDA**
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$94.5
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$85.2
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Debt/Cap**
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37.3%
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39.5%
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Net
Cash Provided By
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||||||
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Operating
Activites
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$118.1
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$34.3
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243.9%
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|||
*
Net earnings (loss) attributable to Brown Shoe Company, Inc. (hereafter “Net
Earnings (Loss)”) and diluted earnings (loss) per common share attributable to
Brown Shoe Company, Inc. shareholders (hereafter “Earnings (Loss) Per Diluted
Share”)
**See
following pages for reconciliation
Reconciliation of
GAAP to Adjusted (Non-GAAP) Earnings
| 2009 | 2008 | |||||||||||
|
(Millions,
except per share data)
|
Operating
Earnings
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Net
Earnings Attributable to Brown Shoe Company, Inc.
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Diluted
Earnings Per Share
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Operating
(Loss) Earnings
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Net
(Loss) Earnings Attributable to Brown Shoe Company, Inc.
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Diluted
(Loss) Earnings Per Share
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||||||
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GAAP
earnings (loss)
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$31.5
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$9.5
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$0.22
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($173.3)
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($133.2)
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($3.21)
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||||||
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Charges / Other
Items:
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||||||||||||
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Impairment
of goodwill and intangible assets
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-
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-
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-
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149.2
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119.2
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2.87
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||||||
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Expense
and capital containment initiatives
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-
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-
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-
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30.9
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19.1
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0.46
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Headquarters
consolidation
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(1.9)
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(1.1)
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(0.03)
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29.8
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18.2
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0.44
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||||||
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IT
initiatives
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9.2
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5.8
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0.14
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3.7
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2.4
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0.06
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||||||
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Insurance
recoveries, net
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-
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-
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-
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(10.2)
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(6.2)
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(0.15)
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||||||
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Organizational
changes
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4.6
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2.8
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0.07
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-
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-
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-
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||||||
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Total
charges / other items
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11.9
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7.5
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0.18
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203.4
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152.7
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3.68
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||||||
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Adjusted
earnings (loss)
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$43.4
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$17.0
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$0.40
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$30.1
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$19.5
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$0.47
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||||||
Non-GAAP
Financial Measures
In this
document, the Company’s financial results are provided both in accordance with
generally accepted accounting principles (GAAP) and using certain non-GAAP
financial measures. In particular, the Company provides historic and estimated
future net earnings (loss) and earnings (loss) per diluted share adjusted to
exclude certain charges and recoveries, which are non-GAAP financial measures.
These results are included as a complement to results provided in accordance
with GAAP because management believes these non-GAAP financial measures help
identify underlying trends in the Company’s business and provide useful
information to both management and investors by excluding certain items that may
not be indicative of the Company’s core operating results. These measures should
not be considered a substitute for or superior to GAAP results.
Reconciliation
of Operating Earnings (Loss) to Adjusted EBITDA
(Millions
of dollars)
|
52
Weeks Ended
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52
Weeks Ended
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|||
|
January 30, 2010
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January 31, 2009
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Operating
Earnings (Loss)
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$31.5
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($173.3)
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Special
Charges*
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11.9
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203.6
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||
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Adjusted
Earnings Before Interest and Taxes (EBIT)
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43.4
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30.3
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||
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Depreciation
& Amortization**
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51.1
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54.9
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||
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Adjusted
EBITDA
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$94.5
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$85.2
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*
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Includes
impairment of goodwill and intangible assets, net restructuring and other
special charges, and equity in net loss of nonconsolidated
affiliate
|
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**
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Excludes
amortization of debt issuance costs
|
Non-GAAP
Financial Measures
In this
document, the Company’s financial results are provided both in accordance with
generally accepted accounting principles (GAAP) and using certain non-GAAP
financial measures. In particular, the Company provides historic and estimated
future net earnings (loss) and earnings (loss) per diluted share adjusted to
exclude certain charges and recoveries, which are non-GAAP financial measures.
These results are included as a complement to results provided in accordance
with GAAP because management believes these non-GAAP financial measures help
identify underlying trends in the Company’s business and provide useful
information to both management and investors by excluding certain items that may
not be indicative of the Company’s core operating results. These measures should
not be considered a substitute for or superior to GAAP results.
Debt to
Capital Ratio
(Dollars
in millions)
|
January 30, 2010
|
January 31, 2009
|
||||
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Total
Debt Obligations*
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$244.5
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$262.5
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|||
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Total
Equity
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$411.2
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$402.2
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|||
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Total
Capital
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$655.7
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$664.7
|
|||
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Debt
to Capital Ratio**
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37.3%
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39.5%
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|||
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*
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Includes
long-term debt and borrowings under revolving credit
agreement
|
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**
|
Total
Debt Obligations divided by Total
Capital
|