Brown Shoe Company, Inc. Surges on Strong Earnings, Positive Outlook

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The stock price of Brown Shoe Company, Inc. (NYSE:BWS) surged after reporting strong financial results for the third quarter. The shares of the company were up more than 10% to $31.43 per share at the time of this writing during the mid-day trading.

Brown Shoe Company 3Q financial results

For the third quarter, Brown Shoe Company, Inc. (NYSE:BWS) reported net earnings of $33.1 million or $0.75 per diluted share, an increase of 21% from its net earnings of $27.3 million or $0.63 per diluted share in the year ago quarter.

The company said its net sales increased 3.8% to $702.8 million from $729.3 million in the same period last years.

Wall Street analysts expected Brown Shoe Company, Inc. (NYSE:BWS) to report $0.68 in earnings per share on $725.9 million in revenue for the quarter.

During the period, the company generated $242.6 million in sales from wholesale, up by 18%. Its healthy living platform wholesale sales increased 12% to $118.3 million while its contemporary fashion whole sale went up 24% to $124.1 million.

In a statement, Diane Sullivan, CEO, president and chairman of Brown Company, Inc. (NYSE:BWS) said, Wholesale overachieved again, with sales up 18.2% in third quarter, and both Healthy Living and Contemporary Fashion contributed strong double-digit sales improvement.” Sullivan is confident that the company will “deliver a strong 2014.”

Brown Shoe Company, Inc. (NYSE:BWS) said its gross margin for the quarter climbed 30 basis points to 39.9%.Its  SG&A was $237.5 million or 32.6% of net sales. The company said its operating margins improved approximately 90 basis points to 7.3% year-over-year.

The company ended the quarter with $567.8 million in inventory, $39 million in cash and equivalents as well as $14 million of borrowings against its revolving credit facility.

Business outlook

Brown Shoe Company, Inc. (NYSE:BWS) raised its full-year earnings guidance in the range of $1.65 to $1.69 per share.

According to the company’s CFO Russ Hammer, the increase was due to the strong wholesale results during the third quarter. He also said, “While we expect to end the year on a positive note, we remain aware of the promotional potential at retail for the holiday season and alert to possible shifts in consumer sentiment.”

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