Brown Shoe Q2 net sales up 2.3 percent

REPORT_For the second quarter Brown Shoe Company net sales were up 2.3 percent. Net earnings were up 17.6 percent.

Gross margin for the second quarter of 2014 was 40.8 percent compared to 41 percent in the prior year.

Despite a continued, industry-wide decline in traffic patterns and an overall tough retail environment, the company was able to deliver against expectations in the second quarter. “Our second quarter results reflect the health of both our retail and wholesale businesses, as we continue to benefit from and expand on our portfolio realignment efforts,” said Diane Sullivan, CEO, president and chairman. “At Famous Footwear, our focus on delivering a seamless omni-channel experience to our consumers helped kick off our back-to-school selling season. At our wholesale brands, our trend-right merchandise is resonating with both consumers and retailers.”

Consolidated gross profit was up 2 percent in the second quarter while gross margin decreased by 20 basis points to 40.8 percent. SG&A for the second quarter was 35.9 percent of net sales, which was down approximately 130 basis points versus the prior year. For the quarter, operating margins improved approximately 120 basis points year-over-year to 4.9 percent.

Inventory at the end of the second quarter was up 6.8 percent. Wholesale inventory was up 22.9 percent while Famous Footwear inventory was up 2.5 percent. At quarter-end, Brown Shoe Company had no borrowings against its revolving credit facility. The company’s debt-to-capital ratio improved to 28.1 percent from 34.2 percent in the second quarter of 2013.