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28 2013 BROWN SHOE COMPANY, INC. FORM 10-K
Net Earnings Attributable to Brown Shoe Company, Inc.
We reported net earnings attributable to Brown Shoe Company, Inc. of $38.1 million in 2013, compared to $27.5 million
last year, and $24.6 million in 2011.
Geographic Results
We have both domestic and foreign operations. Domestic operations include the nationwide operation of our Famous
Footwear and Specialty Retail footwear stores, the wholesale distribution of footwear to numerous retail customers, and
the operation of our e-commerce websites. Foreign operations primarily consist of wholesale operations in the Far East
and Canada, retailing operations in Canada, and the operation of our international e-commerce websites. In addition,
we license certain of our trademarks to third parties who distribute and/or operate retail locations internationally.
The Far East operations include first-cost transactions, where footwear is sold at foreign ports to customers who then
import the footwear into the United States and other countries. The breakdown of domestic and foreign net sales and
earnings before income taxes was as follows:
2013 2012 2011
(Loss)
Earnings Before Earnings Before Earnings Before
($ millions) Net Sales Income Taxes Net Sales Income Taxes Net Sales Income Taxes
Domestic . . . . . . . . . . . . . . . $2,258.6 $40.9 $2,251.1 $23.8 $2,227.7 ($15.5)
Foreign . . . . . . . . . . . . . . . . 254.5 36.8 226.7 28.0 207.1 20.2
$2,513.1 $77.7 $2,477.8 $51.8 $2,434.8 $4.7
The pre-tax profitability on foreign sales is higher than on domestic sales because of a lower cost structure and the inclusion in
domestic earnings of the unallocated corporate administrative and other costs.
We recognized earnings before income taxes both domestically and in foreign jurisdictions in 2013. Our domestic earnings
reflected increases in net sales at our Famous Footwear and Wholesale Operations segments, an increase in gross profit, and a
decrease in restructuring and other special charges, net, partially oset by an increase in selling and administrative expenses.
We recognized earnings before income taxes both domestically and in foreign jurisdictions in 2012. Our domestic earnings
reflected increases in net sales at our Famous Footwear segment, an increase in gross profit, and a decrease in selling and
administrative expenses.
We recognized a domestic loss before income taxes and had foreign earnings before income taxes in 2011. Our domestic loss
reflected decreases in net sales at our Famous Footwear and Specialty Retail segments, a decrease in gross profit, an increase
in selling and administrative expenses, and an increase in restructuring and other special charges, net.
FAMOUS FOOTWEAR
2013 2012 2011
% of % of % of
($ millions, except sales per square foot) Net Sales Net Sales Net Sales
Operating Results
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,527.5 100.0% $ 1,514.3 100.0% $ 1,456.3 100.0%
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846.4 55.4% 848.2 56.0% 821.1 56.4%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681.1 44.6% 666.1 44.0% 635.2 43.6%
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . 574.0 37.6% 564.2 37.3% 569.9 39.1%
Restructuring and other special charges, net . . . . . . . . . . . . . . – – 7.8 0.5% 2.8 0.2%
Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 107.1 7.0% $ 94.1 6.2% $ 62.5 4.3%
Key Metrics
Same-store sales % change (on a 52-week basis) . . . . . . . . . . . . 2.9% 4.5% (1.2)%
Same-store sales $ change (on a 52-week basis) . . . . . . . . . . . . $ 41.1 $ 62.2 $ (17.3)
Sales from 53rd week . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (18.1) $ 18.1 $ –
Sales change from new and closed stores, net (on a 52-week basis) . $ (9.8) $ (22.3) $ (12.9)
Sales per square foot, excluding e-commerce (on a 52-week basis) . $ 207 $ 199 $ 186
Square footage (thousand sq. ft.). . . . . . . . . . . . . . . . . . . . . 7,059 7,205 7,484
Stores opened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 55 49
Stores closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 89 70
Ending stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044 1,055 1,089