Famous Footwear 2012 Annual Report Download - page 35

2012 BROWN SHOE COMPANY, INC. FORM 10-K 33
SPECIALTY RETAIL
2012 2011 2010
% of % of % of
($ millions, except sales per square foot) Net Sales Net Sales Net Sales
Operating Results
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 238.5 100.0% $ 255.6 100.0% $ 263.2 100.0%
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.8 58.6% 150.5 58.9% 150.7 57.2%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98.7 41.4% 105.1 41 .1% 112.5 42.8%
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . 103.9 43.5% 1 12.1 43.9% 118.5 45.1%
Restructuring and other special charges, net . . . . . . . . . . . . . . 3.7 1.6% 0.6 0.2% – –
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (8.9) (3.7)% $ (7.6) (3.0)% $ (6.0) (2.3)%
Key Metrics
Same-store sales % change (on a 52-week basis) . . . . . . . . . . . . 0.6% 1.7% 6.6%
Same-store sales $ change (on a 52-week basis) . . . . . . . . . . . . $ 0.8 $ 2.8 $ 10.5
Sales from 53rd week . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.1 $ – $ –
Sales change from new and closed stores, net (on a 52-week basis) . $ (14.9) $ (10.7) $ (9.7)
Impact of changes in Canadian exchange rate on sales . . . . . . . . $ (0.4) $ 2.6 $ 6.0
Sales change of e-commerce subsidiary (on a 52-week basis) . . . . $ (5.7) $ (2.3) $ 9.8
Sales per square foot, excluding e-commerce (on a 52-week basis) . $ 396 $ 399 $ 381
Square footage (thousand sq. ft.). . . . . . . . . . . . . . . . . . . . . 346 369 417
Stores opened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 25 15
Stores closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 50 38
Ending stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 234 259
Net Sales
Net sales decreased $17.1 million, or 6.7%, to $238.5 million in 2012 compared to $255.6 million last year due to our lower
store count, lower net sales at Shoes.com and a lower Canadian dollar exchange rate, partially oset by an increase in
same-store sales of 0.6% and the impact of the 53rd week. On a 52-week basis, the net sales of Shoes.com decreased
$5.7 million, or 7.5%, to $69.9 million in 2012 compared to $75.6 million last year. We opened 29 stores (including
13 Naturalizer stores in China) and closed 41 stores (including 10 Naturalizer stores in China) during 2012, resulting in
a total of 222 stores (including 26 Naturalizer stores in China) at the end of 2012 compared to 234 stores (including
23 Naturalizer stores in China) at the end of last year. Sales per square foot, excluding e-commerce, decreased 0.9% to
$396 compared to $399 last year due to lower net sales. The 53rd week contributed $3.1 million in net sales.
Net sales decreased $7.6 million, or 2.9%, to $255.6 million in 2011 compared to $263.2 million in 2010 due to our lower store
count, a decrease in sales of toning footwear and a decrease in net sales at Shoes.com. However, same-store sales increased
1.7% and we experienced an increase in the Canadian dollar exchange rate. The net sales of Shoes.com decreased $2.3 million,
or 2.9%, to $75.6 million in 2011 compared to $77.9 million in 2010, reflecting a decrease in site visits. We opened 25 new stores
(including nine new Naturalizer stores in China) and closed 50 stores (including one Naturalizer store in China) during 2011,
resulting in a total of 234 stores (including 23 Naturalizer stores in China) at the end of 2011 compared to 259 stores (including
15 Naturalizer stores in China) at the end of 2010. Sales per square foot, excluding e-commerce, increased 4.7% to $399
compared to $381 in 2010 due to the closure of underperforming stores as part of our portfolio realignment.
Gross Profit
Gross profit decreased $6.4 million, or 6.1%, to $98.7 million in 2012 compared to $105.1 million last year, reflecting lower net
sales, partially oset by an increase in gross profit rate. As a percent of net sales, our gross profit rate increased to 41.4% in
2012, from 41.1% last year, driven by a better sales mix of higher-margin footwear.
Gross profit decreased $7.4 million, or 6.6%, to $105.1 million in 2011 compared to $112.5 million in 2010, reflecting lower
net sales and a decrease in our gross profit rate. As a percent of net sales, our gross profit rate decreased to 41.1% in 2011,
from 42.8% in 2010, due to lower sales of high-margin products, such as toning footwear and boots, partially oset by an
increased gross profit rate for Shoes.com.
Our Naturalizer stores purchase the majority of their inventory from our Wholesale Operations segment. In general, we
have priced the inventory to recognize a customary profit rate on these products in our Wholesale Operations segment.
The Specialty Retail segment recognizes an additional profit rate based on the retail sale to the consumer.
Selling and Administrative Expenses
Selling and administrative expenses decreased $8.2 million, or 7.4%, to $103.9 million during 2012 compared to
$112.1 million last year, primarily resulting from the lower store count, partially oset by higher expected payouts
under both our cash and stock-based plans and the impact of the 53rd week. As a percent of net sales, selling and
administrative expenses decreased to 43.5% in 2012 compared to 43.9% last year.