Famous Footwear 2013 Annual Report Download - page 33

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2013 BROWN SHOE COMPANY, INC. FORM 10-K 31
Operating earnings increased $18.5 million, or 158.1%, to $30.2 million in 2012 compared to $11.7 million in 2011.
The increase was primarily driven by lower selling and administrative expenses and restructuring and other special
charges, net. As a percentage of net sales, operating earnings increased to 4.2% in 2012 compared to 1.6% in 2011.
SPECIALTY RETAIL
2013 2012 2011
% of % of % of
($ millions, except sales per square foot) Net Sales Net Sales Net Sales
Operating Results
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 221.9 100.0% $ 238.5 100.0% $ 255.6 100.0%
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127.9 57.6% 139.8 58.6% 150.5 58.9%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.0 42.4% 98.7 41.4% 105.1 41 .1%
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . 99.0 44.6% 103.9 43.5% 11 2.1 43.9%
Restructuring and other special charges, net . . . . . . . . . . . . . . – – 3.7 1.6% 0.6 0.2%
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (5.0) (2.2)% $ (8.9) (3.7)% $ (7.6) (3.0)%
Key Metrics
Same-store sales % change (on a 52-week basis) . . . . . . . . . . . . 1.6% 0.6% 1.7%
Same-store sales $ change (on a 52-week basis) . . . . . . . . . . . . $ 2.2 $ 0.8 $ 2.8
Sales from 53rd week . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3.1) $ 3.1 $ –
Sales change from new and closed stores, net (on a 52-week basis) . $ (6.6) $ (14.9) $ (10.7)
Impact of changes in Canadian exchange rate on sales . . . . . . . . $ (2.4) $ (0.4) $ 2.6
Sales change of e-commerce subsidiary (on a 52-week basis) . . . . $ (6.7) $ (5.7) $ (2.3)
Sales per square foot, excluding e-commerce (on a 52-week basis) . $ 397 $ 396 $ 399
Square footage (thousand sq. ft.). . . . . . . . . . . . . . . . . . . . . 319 346 369
Stores opened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 29 25
Stores closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 41 50
Ending stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 222 234
Net Sales
Net sales decreased $16.6 million, or 7.0%, to $221.9 million in 2013 compared to $238.5 million last year due to lower net
sales at Shoes.com, our lower store count, the impact of the 53rd week in 2012, and a lower Canadian dollar exchange
rate, partially oset by an increase in same-store sales of 1.6%. On a 52-week basis, net sales of Shoes.com decreased
$6.7 million, or 9.7%, to $63.2 million in 2013 compared to $69.9 million last year. We opened 11 stores and closed
54 stores during 2013, resulting in a total of 179 stores at the end of 2013 compared to 222 stores at the end of last year.
During 2013, closed stores include 28 Naturalizer stores in China that were either closed or transferred to our joint venture
partner. Sales per square foot, excluding e-commerce, increased 0.4% to $397 compared to $396 last year. The 53rd week
impacted net sales by $3.1 million.
Net sales decreased $17.1 million, or 6.7%, to $238.5 million in 2012 compared to $255.6 million in 2011 due to our lower store
count, lower net sales at Shoes.com, and a lower Canadian dollar exchange rate, partially oset by the impact of the 53rd
week in 2012 and an increase in same-store sales of 0.6%. The 53rd week contributed $3.1 million in net sales. On a 52-week
basis, net sales of Shoes.com decreased $5.7 million, or 7.5%, to $69.9 million in 2012 compared to $75.6 million in 2011.
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 2011. Sales per square foot, excluding e-commerce,
decreased 0.9% to $396 compared to $399 in 2011 due to lower net sales.
Gross Profit
Gross profit decreased $4.7 million, or 4.8%, to $94.0 million in 2013 compared to $98.7 million last year, reflecting lower
net sales, partially oset by an increase in gross profit rate. As a percentage of net sales, our gross profit rate increased
to 42.4% in 2013, from 41.4% last year, driven by a better sales mix of higher-margin footwear and lower freight costs.
Gross profit decreased $6.4 million, or 6.1%, to $98.7 million in 2012 compared to $105.1 million in 2011, reflecting lower
net sales, partially oset by an increase in gross profit rate. As a percentage of net sales, our gross profit rate increased
to 41.4% in 2012, from 41.1% in 2011, driven by a better sales mix of higher-margin footwear.
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.