Brown Shoe Reaches 52-Week High - Analyst Blog

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Shares of footwear retailer Brown Shoe Co. Inc. ( BWS ) reached a 52-week high of $27.72 on Dec 20. The company's share price has been rising ever since the company reported improved third quarter 2013 results and an increase in guidance on Nov 26, 2013.

Shares of Brown Shoe Co. eventually closed at $27.68 on Dec 20, with share prices rising 52.3% year-to-date. Average volume of shares traded over the last three months came in at approximately 320K.

Solid Third Quarter Results

On Nov 26, Brown Shoe Co. delivered solid third quarter results, beating the Zacks Consensus Estimate for both revenue and earnings. Adjusted earnings per share of 63 cents almost doubled from 33 cents reported in the prior-quarter on the back of improved performance in every category. Earnings also increased 5% from the prior-year quarter.

Net sales rose 1% to $702.8 million driven by a 4.9% growth in same-store sales. The upswing in the same-store sales was led by growth in sport slides, canvas shoe styles, sandals and lightweight running products.

Same-store sales spurred 5.6% during the back-to-school season (August-September). During the quarter, the company closed or relocated 22 stores and added 11 new stores, as average revenue per square foot continued to improve.

Though gross profit as a percentage of net sales declined 50 basis points (bps) to 39.6% in the quarter, the company's operating margin improved 50 bps to 6.4%, owing to a 70 bps decline in selling, general and administration expense ratio.

Guidance Upped

Following better-than-expected third quarter results, management at Brown Shoe Company raised its earnings guidance for 2013 to a range of $1.36-$1.40 compared to the earlier expected range of $1.27-$1.32 per share. The company is hopeful that its product portfolio and expense management initiatives will fuel growth in the upcoming quarters. Brown Shoe Co. holds a Zacks Rank #3 (Hold).

Other Stocks to Consider

Better-ranked stocks in the footwear industry include Deckers Outdoor Corp ( DECK ), Iconix Brand Group, Inc. ( ICON ) and Sequential Brands Group, Inc. ( SQBG ). All of them hold a Zacks Rank #2 (Buy).



BROWN SHOE CO (BWS): Free Stock Analysis Report

DECKERS OUTDOOR (DECK): Free Stock Analysis Report

ICONIX BRAND GP (ICON): Free Stock Analysis Report

SEQUENTIAL BRND (SQBG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BWS , DECK , ICON , SQBG

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