Famous Footwear 2012 Annual Report Download - page 32

30 2012 BROWN SHOE COMPANY, INC. FORM 10-K
FAMOUS FOOTWEAR
2012 2011 2010
% of % of % of
($ millions, except sales per square foot) Net Sales Net Sales Net Sales
Operating Results
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,514.3 100.0% $ 1,456.3 100.0% $ 1,486.5 100.0%
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 848.2 56.0% 821.1 56.4% 817.5 55.0%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666.1 44.0% 635.2 43.6% 669.0 45.0%
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . 564.2 37.3% 569.9 39.1% 578.6 38.9%
Restructuring and other special charges, net . . . . . . . . . . . . . . 7.8 0.5% 2.8 0.2% – –
Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94.1 6.2% $ 62.5 4.3% $ 90.4 6.1%
Key Metrics
Same-store sales % change (on a 52-week basis) . . . . . . . . . . . . 4.5% (1.2)% 10.5%
Same-store sales $ change (on a 52-week basis) . . . . . . . . . . . . $ 62.2 $ (17.3) $ 138.0
Sales from 53rd week . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18.1 $ – $ –
Sales change from new and closed stores, net (on a 52-week basis) . $ (22.3) $ (12.9) $ (15.1)
Sales per square foot, excluding e-commerce (on a 52-week basis) . $ 199 $ 186 $ 187
Square footage (thousand sq. ft.). . . . . . . . . . . . . . . . . . . . . 7,205 7,484 7,677
Stores opened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 49 32
Stores closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 70 51
Ending stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055 1,089 1 ,1 10
Net Sales
Net sales increased $58.0 million, or 4.0%, to $1,514.3 million in 2012 compared to $1,456.3 million last year. During 2012,
same-store sales increased 4.5%, or $62.2 million, reflecting improved average retail prices, conversion rate and customer
trac, partially oset by lower pairs per transaction. The impact of the 53rd week in 2012 increased sales by $18.1 million.
In addition, we saw strong growth from boat shoes, athletic shoes and boots. As a result of the same-store sales increase,
sales per square foot, excluding e-commerce, increased 7.3% to $199, compared to $186 last year. Net closed stores resulted
in a $22.3 million decrease in net sales due to the relocation of certain stores and the closure of underperforming stores.
In 2012, we expanded our eorts to connect with and engage our customers to build a strong brand preference for Famous
Footwear through our loyalty program, Rewards. As a result, in 2012 approximately 66% of our net sales were to Rewards
members, compared to 62% in 2011 and 61% in 2010.
Net sales decreased $30.2 million, or 2.0%, to $1,456.3 million in 2011 compared to $1,486.5 million in 2010. During 2011,
same-store sales decreased 1.2%, or $17.3 million, reflecting lower consumer trac and pairs per transaction, partially
oset by higher average retail prices and an improved consumer conversion rate. The decrease in net sales was also due
to a decline in sales of high-margin products, such as toning footwear. As a result of the same-store sales decrease, sales
per square foot, excluding e-commerce, decreased 0.5% to $186, compared to $187 in 2010. Net closed stores resulted in
a $12.9 million decrease in net sales due to the relocation of certain stores and the closure of underperforming stores.
Gross Profit
Gross profit increased $30.9 million, or 4.9%, to $666.1 million in 2012 compared to $635.2 million last year due to higher
net sales and gross profit rate. As a percent of net sales, our gross profit rate increased to 44.0% in 2012 compared to
43.6% last year. The increase in our gross profit rate was driven by lower inventory markdown requirements resulting
from a better aged inventory position.
Gross profit decreased $33.8 million, or 5.1%, to $635.2 million in 2011 compared to $669.0 million in 2010 due to a lower
gross profit rate and net sales. As a percent of net sales, our gross profit rate decreased to 43.6% in 2011 compared to
45.0% in 2010. The decrease in our gross profit rate was driven by lower sales of toning footwear and an increase in
promotional activity.
Selling and Administrative Expenses
Selling and administrative expenses decreased $5.7 million, or 1.0%, to $564.2 million during 2012 compared
to $569.9 million last year. The decrease was primarily attributable to lower, net facilities costs, as our portfolio
realignment actions more than oset new store costs, and lower marketing expenses, partially oset by an
incremental week of expenses associated with the 53rd week and higher expected payouts under both our cash
and stock-based plans. As a percent of net sales, selling and administrative expenses decreased to 37.3% in 2012
from 39.1% last year, reflecting higher net sales and the closure of underperforming stores.
Selling and administrative expenses decreased $8.7 million, or 1.5%, to $569.9 million during 2011 compared to
$578.6 million in 2010. The decrease was primarily attributable to lower variable payroll and facilities expenses
and a decrease in expected payouts under both our cash and stock-based plans ($3.8 million). These decreases
were partially oset by higher marketing expenses. As a percent of net sales, selling and administrative expenses
increased to 39.1% in 2011 from 38.9% in 2010, reflecting the lower net sales volume.