Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (March 2011)
32 slides from Caleres's investor presentation, Mar 28, 2011
Slide 1: Investor Update
Investor Update March 2011 BROWN SHOE
Slide 2: Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This investor update contains certain forward-looking statements and expectations regarding the Company’s future performance and the future performance of its brands. Such statements are subject to various risks and un
Slide 3: Brown Shoe Business Mix
Brown Shoe Business Mix $2.5 billion* in net sales in 2010 B i Business Mi Mix B d Mi Brand Mix All Other Wholesale Contemporary Fashion 30% Retail 70% * Note: Unless otherwise specified, all 2010 Brown Shoe Company, Inc. consolidated and segment 2 financial results included in this presentation exc
Slide 4: At A Glance
At A Glance Portfolio of footwear brands commanding leading market share $2.5 billion in net sales in 2010, an increase of 11.7%, and adjusted dj t d EPS* off $0 $0.97, 97 an iincrease off 143% Diversified, synergistic global business model 70% Retail and 30% Wholesale Appx. 1,400 stores i
Slide 5: Our Mission
Our Mission “To inspire p p people p to feel g good and live better… FEET FIRST!” Product Innovation Design g Capabilities Casual & Fitness Lifestyle 4
Slide 6: Continuing Momentum
Continuing Momentum 2010 represented a year of significant achievement and progress on our strategic path Record consolidated net sales Record Famous Footwear net sales and operating profit Wholesale net sales increased 19.4% Ecommerce net sales surpassed $120 million Portfolio enhanceme
Slide 7: SX, Intense b-o-c puma’
SX, Intense b-o-c puma’ crocs” Lolanks oni 4 _ AVA @® RockPorRT Keds F A M O U S Reebok Saucony» @footwear 4... K°eSWISS MAKE TODAY FAMOUS °® CONVERSE QO ASIC. ‘S. $$ naturalizer VANS VASMAND 1
Slide 8: Famous Footwear
Famous Footwear Leading family branded footwear retailer Represents 60% of total Company net sales Net sales of $1 $1.5 5 billion and operating margin of 6 6.1% 1% in 2010 Strong broad-based sales momentum in 2010 Record net sales and operating profit for full year Record net sales resul
Slide 9: Famous Footwear
Famous Footwear Sales per Square Foot Operating Earnings ($mm) $190 $187 $100 $89.8 $90.4 8% $185 $90 $84.1 $185 7.0% 7% $180 $180 $80 $180 $67.0 6.4% $70 6.1% 6% $175 $60 5.6% $50 $44.6 5% $170 $168 $167 $40 $27.0 4% $165 $30 $20 3.3% $160 3% $10 $155 $0 2.0% 2% 2005 2006 2007 2008 2009 2010 2005 2
Slide 10: Famous Footwear – Growth Initiatives
Famous Footwear – Growth Initiatives Long-term growth targets: Annual same-store sales increase in low-single digits Opportunity for 1,500+ stores Operating margin goal of 10% Real Estate Portfolio: Increasing store productivity through real estate portfolio improvements Stricter openi
Slide 11: Famous Footwear – Growth Initiatives (Continued)
Famous Footwear – Growth Initiatives (Continued) Marketing: Increase brand awareness by strengthening “Make Today Famous” across all customer touchpoints Maintain 2010 rate of annual marketing investment investment, which was increased to 3.7% of net sales from prior four-year average of 3.1%
Slide 12: Famous Footwear – Growth Initiatives (Continued)
Famous Footwear – Growth Initiatives (Continued) Customer Engagement: Evolving the customer retail experience Conversion primary driver of same-store performance in 2010 Energized associate base connecting with consumers throughout store experience and purchase process Increasing depth in
Slide 13: TAIL
RE $300 $50 TAIL A vVoE Nay FRANCO SARTO naturalfou/ fYHO © ETIENNE AIGNER Fe, ALP nes 33 naturalizer libby. edelman > FASHION 12
Slide 14: Wholesale Brands
Wholesale Brands Diversified portfolio of brands, representing 30% of total Company net sales targeting a broad array of consumer segments and spanning sales, distribution channels, from mass merchants to premium department stores Net sales of $754.4 million in 2010, a 19.4% increase versus 2009
Slide 15: Naturalizer Brand Family
Naturalizer Brand Family Premium Comfort Maan ger—. N5 7/CONTOUR $1 00 - $160 Career / Dress Naya Organic Comfort $59 - $85 $$ naturalizer beautiful feels so good — naturalfou/ Value Comfort
Slide 16: Wholesale Brands
Wholesale Brands Naturalizer N t li Global comfort brand with distribution in over 50 countries Approximately $500 million in net sales at retail worldwide Naturalizer brand family was a top three women’s fashion brand across domestic d ti channels* h l * iin 2010 Dr. Scholl’s Leading he
Slide 17: American Sporting Goods
American Sporting Goods ASG company sales ranked seventh in the U.S. performance athletic footwear market for the calendar year 2010, according to NPD’s POS Tracking Service Avia - a more than 30-year history of offering technical running, walking and fitness footwear featuring innovative techno
Slide 18: Wholesale
Wholesale Keys to success in 2011: Continue to deliver compelling, differentiated product to the marketplace Stabilize new enterprise resource planning system and business process change Manage sourcing and supply chain environment and limiting impact of input cost inflation. In second year wi
Slide 19: Consolidated Financial Results & Outlook
Consolidated Financial Results & Outlook 2010: Execution of strategy has led to strong broad-based performance Consolidated net sales increased 11.7% vs. 2009 to record levels Adjusted EPS* increased by 143% Adjusted EBITDA* increased 38% 2011: Consolidated net sales expected to grow in lo
Slide 20: Appendix: Non-GAAP Financial Measures
A Appendix di Non-GAAP Financial Measures In this document, document the Company’s Company s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic and estimate
Slide 21: Outlook
Outlook Full Year & First Quarter 2011 Consolidated Net Sales Low double-digit percent increase for the full year and a high-single digit increase for the first quarter Famous Footwear Same-Store Sales Low- to mid-single digits for full year and low-single digits for first quarter. Expects to open 4
Slide 22: Acquisition of American Sporting Goods
Acquisition of American Sporting Goods Acquired American Sporting Goods Corporation (ASG) in February 2011 for $145 million in cash plus assumed net debt Core brands include Avia, rykä, AND1 - performance and lifestyle athletic brands recognized for delivering a strong value proposition through
Slide 23: Leading Footwear Retailer and Wholesaler
Leading Footwear Retailer and Wholesaler Top p Footwear Retailers* $ in millions 12 Mo End Jan11 12 Mo End Jan10 12 Mo End Jan09 $3,000 $2,500 $2,000 $1,500 *Trailing 12 months January $1,000 2011 according to NPD Consumer Panel data. $500 $‐ Walmart Payless Macy's Kohl's DSW Famous Foot Locker J.C.
Slide 24: Consolidated Results 2010 vs. 2009
Consolidated Results 2010 vs. 2009 ($ in millions except EPS) 2010 2009 % Chg. g Net Sales $2,504.1 $2,242.0 11.7% Operating Earnings GAAP $72.7 $31.5 130.5% Adjusted** $80.6 $43.4 85.5% EPS* GAAP $0.85 $0.22 286.4% Adjusted** $0.97 $0.40 142.5% Gross Profit Rate 40.1% 40.3% Adjusted EBITDA** $130.9
Slide 25: Major Segment Operating Results 2010 vs. 2009
Major Segment Operating Results 2010 vs. 2009 Famous Footwear Wholesale Operations Specialty Retail (($ millions)) 2010 2009 2010 2009 2010 2009 Net Sales $1,486.5 $1,363.6 $754.4 $631.8 $263.2 $246.6 Gross Profit $669.0 $592.9 $222.0 $205.8 $112.5 $104.4 G Gross Profit P fit Rate R t 45 0% 45.0% 43
Slide 26: Famous Footwear – Store Economics
Famous Footwear – Store Economics Operating Performance Cash Investment Average Sales $1,311 Fixed Assets $211 Tenant Allowances ($115) % of Sales Operating Profit $83 6 3% 6.3% Inventory $288 Depreciation & Amortization $19 Accounts Payable ($89) EBITDA $102 7 8% 7.8% N t Cash Net C h $295 Return o
Slide 27: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet (Unaudited) ( (Thousands) ) January y 29, 2011 January y 30, 2010 ASSETS Cash and cash equivalents $ 126,548 $ 125,833 Receivables 113,937 84,297 Inventories 524,250 456,682 Deferred income taxes 4,503 17,894 Income taxes 10,195 4,163 Prepaid expenses and other c
Slide 28: Condensed Consolidated Income Statement
Condensed Consolidated Income Statement (Unaudited) Thirteen Weeks Ended Fifty two Weeks Ended Fifty-two January 29, January 30, January 29, January 30, (Thousands, except per share data) 2011 2010 2011 2010 Net sales $ 604,524 $ 565,972 $ 2,504,091 $ 2,241,968 Cost of g goods sold 369,219 , 333,580
Slide 29: Reconciliation of GAAP to Adjusted (Non-GAAP) Earnings
Reconciliation of GAAP to Adjusted (Non-GAAP) Earnings 2010 2009 Net Net Earnings Earnings Att ib t bl Attributable Att ib t bl Attributable to Brown Diluted to Brown Diluted Shoe Earnings Shoe Earnings (Thousands, except per share Operating Company, Per Operating Company, Per data) Earnings Inc. Sh
Slide 30: Reconciliation of Diluted EPS (GAAP) to Adjusted Diluted EPS
Reconciliation of Diluted Earnings Per Share (GAAP Basis) to Adjusted Diluted Earnings Per Share (Non-GAAP Basis) 2011 Guided 2010 Diluted Diluted Earnings Earnings Per Per Share Share GAAP earnings $ 1.25 - $ 1.32 $ 0.85 Charges / Other Items: IT initiatives – 0.10 Acquisition-related costs – 0.02
Slide 31: Debt-to-Capital Ratio
Debt-to-Capital Ratio January 29, January 30, ($ in millions) 2011 2010 Total Debt Obligations* $348.0 $244.5 T t l Equity Total E it $415 9 $415.9 $411 2 $411.2 Total Capital $763.9 $655.7 Debt-to-Capital Ratio** 45.6% 37.3% * Includes long-term debt and borrowings under revolving credit agreement
Slide 32: Reconciliation of Consolidated Operating Earnings to Adjusted EBITDA
Reconciliation of Consolidated Operating Earnings to Adjusted EBITDA ($ in millions) 2010 2009 Operating Earnings $72.7 $31.5 Charges / Other Items* 7.9 11.9 Adjusted Earnings Before Interest and Taxes (EBIT) $80.6 $43.4 Depreciation & Amortization** 50.3 51.1 Adjusted EBITDA $130.9 $94.5 * Includes