Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (April 2008)
33 slides from Caleres's investor presentation, Apr 30, 2008
Slide 1: Investor Update
Investor Update BROWN SHOE COMPANY, INC. April 2008 E V E R Y P E R S O N, E V E R Y D A Y, E V E R Y M O M E N T 1
Slide 2: Forward-looking statements
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 uncertainties that could cause actual results to differ materially. These include (i
Slide 3: Brown Shoe Fits the World
BROWN SHOE FITS THE WORLD… with lifestyle footwear that expresses the individual consumer’s fashion sensibility. Whether at play, at work or on the town, people trust Brown Shoe’s signature brands to walk them through the stories of their lives. Brown Shoe is proud to offer a Every day, people aroun
Slide 4: Brown Shoe - $2.4 Billion in Sales for 2007
Brown Shoe - $2.4 Billion in Sales for 2007 Total BWS Direct-to-Consumer $110 million (Includes FamousFootwear.com, Naturalizer.com, Naturalizer Catalog, Shoes.com) Specialty Retail Appx. 300 stores 67% Retail in the U.S. 33% Wholesale $263 million Spec. Stores Dept. Stores 18% 22% Wholesale Mid-Tie
Slide 5: Brown Shoe Platform
Brown Shoe Platform A greatly connected footwear company with an integrated, synergistic wholesale-retail platform RETAIL WHOLESALE • Appx. 1,400 total retail doors – appx. 1,100 • World class global sourcing network. Famous Footwear, appx. 300 Naturalizer, Sourced 76 million pairs at wholesale and
Slide 6: Brown Shoe Platform
Brown Shoe Platform Power of the Integrated Wholesale/Retail Model x Driving Growth, Profitability, and Value Creation • Fragmentation of the consumer has significantly expanded Control the the matrix of style preferences and retail options Customer Experience • Integrated model allows a wide variet
Slide 7: Brown Shoe Portfolio
*Source: NPD. 12 months ending February 1, 2008. This NPD Brown Shoe Portfolio data is confidential and proprietary and cannot be reproduced or disseminated by third parties without prior written consent. Fashion Athletic Domestic Sales = $32.7B* Domestic Sales = $10.8B* Salon Bridge Impulse Better
Slide 8: Brown Shoe Vision
Brown Shoe Vision Brown Shoe is the leading fashion footwear marketer, winning loyal customers with compelling global brands. Doubling our rate of profitability while doubling our sales over the next five years. E V E R Y P E R S O N, E V E R Y D A Y, E V E R Y M O M E N T 8
Slide 9: Growth and Profit Drivers
Growth and Profit Drivers 1. Build powerful consumer brands • Grow brand equity of flagship brands • Test, incubate, and grow new brands Logos • Search for strategic opportunities that fit our growth criteria 2. Drive brands through owned retail • Leverage vertical & multi-channel businesses • Maxim
Slide 10: Famous Footwear
Famous Footwear “Shoe Love Is True Love” ● Growth opportunity to a minimum of 1,500 doors. As new stores mature, operating performance will improve across the store base ● Real estate strategy to maximize markets ● Leading inventory management disciplines ● Leveraging multi-channel platform ● Using
Slide 11: Naturalizer
Naturalizer “Beautiful Feels So Good” ● Extended brand essence to new categories and consumer touchpoints ● Tightly-targeted consumer communications ● Sell-through model; fresh trend-right product ● Improved product delivered when she wants to buy ● All-in brand (retail and wholesale combined) contr
Slide 12: Direct To Consumer
Direct To Consumer “My Own Private Shoe Store” ● Growth by winning in new and emerging markets ● $350 to $450 million opportunity in next 5 years ● Integrated platform. Consolidated Shoes.com into St. Louis in 2007 ● Re-launched Shoes.com in Spring 2008 ● Branded web sites and multi-channel opportun
Slide 13: Brown New York
Brown New York • Provides fashion halo to portfolio • Strong emotional connection with consumer • Fashion, Style Credibility, Talent • Brand extension and lifestyle potential • Expect double-digit sales increase in 2008 E V E R Y P E R S O N, E V E R Y D A Y, E V E R Y M O M E N T 13
Slide 14: Dr. Scholl's
Dr. Scholl’s ® • Innovation and technology ● High brand recognition and strong equity ● Partnerships with Wal-Mart and Schering-Plough ● Extending asset into new categories and channels ● Original Dr. Scholl’s ● Feel Crazy Green – sustainability product ● Dr. Scholl’s Studio – Mid-Tier brand extensi
Slide 15: Positioning For Growth
Positioning For Growth Sustainable Growth Increasing • Growing portfolio Prospects for •Organic Profitability •Consolidation Improving • Earnings Core • Focus on best brands Enhancement Plan Competencies and market • Brown NY integration opportunities • Madison relocation • Consumer-Driven • Acceler
Slide 16: Appendix: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures In the following pages, the Company’s financial results and measures 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 estimated fu
Slide 17: Recent Events
Recent Events On April 10 2008, announced the relocation of Madison office to St. Louis This move will create one greatly connected footwear company • Will aid in achieving our vision of being a leading footwear marketer and doubling our rate of profitability while doubling sales, as it will foster
Slide 18: First Quarter 2008 & Full Year Guidance
First Quarter 2008 & Full Year Guidance Guidance was issued on March 5, 2008 and has not been updated The below figures do not reflect the impact of costs related to the Madison relocation Consolidated Sales: 2008 estimated 2007 actual First Quarter $575 - $585 million $566 million Full Year $2.50 -
Slide 19: Sales and EPS – 2003 to Estimated 2008
Adjusted EPS GAAP EPS Sales and EPS – 2003 to Estimated 2008 Guidance range Guidance was issued on March 5, 2008 and has not been updated Sales in Billions Earnings Per Share $1.63 $1.65 $2.5 $2.55 – $1.62 – $2.50 $1.52* Billion* $1.48 $1.51 $1.50 $1.37 $2.0 $1.13 $1.10 $1.5 $1.02 $0.96 $1.00 $1.0 $
Slide 20: Review of BWS Financials
Review of BWS Financials (all $’s in millions except EPS) 52 Weeks Ended 53 Weeks Ended Feb. 2, 2008 Feb. 3, 2007 % Chg. Sales $2,359.9 $2,470.9 -4.5% Net Earnings GAAP $60.4 $65.7 -8.0% Adjusted $72.8 $71.0 2.5% EPS GAAP $1.37 $1.51 -9.3% Adjusted $1.65 $1.63 1.2% Gross Margin 40.0% 39.3% Debt/Cap*
Slide 21: Earnings Enhancement Plan
Earnings Enhancement Plan: Savings of $26 million to date Key Accomplishments in 2007: Reorganization of Brown Shoe Retail and associated consolidation of key functions: • Blended all retail field operations and store support functions, across all retail formats • Created enterprise-wide D2C organiz
Slide 22: Capital Expenditure Schedule
Capital Expenditure Schedule (all $’s in millions) 2008 Est. 2007 New Stores $ 22.0 to $ 24.0 $ 22.8 Remodel 19.0 to 23.0 13.8 Logistics 22.0 to 22.0 0.1 Infrastructure (Incl. IT hardw are) 12.0 to 16.0 4.8 Total $ 75.0 to $ 85.0 $ 41.5 E V E R Y P E R S O N, E V E R Y D A Y, E V E R Y M O M E N T 2
Slide 23: Debt to Capital Ratio
Debt to Capital Ratio ($’s in millions, except for Dept to Capital Ratio) Debt to Capital Ratio 2007 2006 2005 2004 2003 2002 Total Debt Obligations* $ 165 $ 151 $ 200 $ 142 $ 120 $ 152 Total Shareholders' Equity 559 524 434 391 350 292 Total Capital $ 724 $ 675 $ 634 $ 533 $ 470 $ 444 Debt to Capit
Slide 24: EBITDA Reconciliation
EBITDA Reconciliation (all $’s in millions) 2007 2006 Operating Profit $ 95.7 $ 108.1 Depreciation & Amortization * 50.8 49.3 EBITDA $ 146.5 $ 157.4 * Depreciation and amortization excludes amortization of debt issuance costs in the amount of $1.5 million in both 2007 and 2006 NOTE: Please see page
Slide 25: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings
Reconciliation of GAAP Net Earnings to Adjusted Net Earnings (2007 vs. 2006) 2007 2006 ($'s in thousands) Net Earnings EPS Net Earnings EPS GAAP Net Earnings $60,427 $1.37 $65,708 $1.51 Charges/Other Items: Earnings Enhancement Plan 12,351 0.28 3,927 0.09 Bass Exit Costs - - 2,337 0.05 Insurance Rec
Slide 26: Review of Segment Financials
Review of Segment Financials Fiscal 2007 Fiscal 2006 52 Weeks Ended 53 Weeks Ended Feb. 2, 2008 Feb. 3, 2007 % Chg. ($'s in millions) Famous Footwear Sales $1,313.2 $1,282.2 2.4% Operating Profit $84.1 $89.8 -6.3% Same-Store Sales -0.6% 3.4% Specialty Retail Sales $263.2 $257.9 2.0% Operating Profit
Slide 27: Wholesale Portfolio - 2007
Wholesale Portfolio - 2007 Private Label / Private Brand Children’s E V E R Y P E R S O N, E V E R Y D A Y, E V E R Y M O M E N T 27
Slide 28: Famous Footwear: Sales by Category 2007
Famous Footwear: Sales by Category 2007 Athletic Product = 43% Fashion Product = 57% Accessories 5% 15% 6% Athletic 8% Kid’s Athletic Women’s 16% 30% Men’s Athletic 20% E V E R Y P E R S O N, E V E R Y D A Y, E V E R Y M O M E N T 28
Slide 29: Famous Footwear: Rewards Program
Famous Footwear: Rewards Program Through increased focus on customer relationship management, the Famous Footwear Rewards Program has shown continued improvement and currently contributes more than 50% of Famous Footwear sales. The Rewards customer spends more per transaction, buys more units per tr
Slide 30: Famous Footwear: Store Maturity
Famous Footwear: Store Maturity 2007 Sales per Square Foot $300 $250 $242 $210 $211 $195 Sales Per Square Foot $200 $185 $187 $182 $171 $170 $152 $150 $139 $100 $50 $- er ar s s s s s s s s s ar ar ar ar ar ar ar ar ar ld Ye Ye Ye Ye Ye Ye Ye Ye Ye Ye O 1 2 3 4 5 6 7 8 9 10 Number of Years Open NOTE
Slide 31: Famous Footwear: New Store Sales Performance
Famous Footwear: New Store Sales Performance Represents average sales per square foot results for all stores opened during the 2001-2006 period $185 $180 $178 $175 $174 $171 $170 Sales Per Square Foot $165 $161 $160 $155 $150 $150 $145 $140 $135 1st Year Avg. 2nd Year Avg. 3rd Year Avg. 4th Year Avg
Slide 32: Famous Footwear: Unit-level Store Economics
Famous Footwear: Unit-level Store Economics (all $’s in thousands) 2007 Operating Performance Cash Investment (Average store for all stores more than 2 yrs old) (Average for stores opened during last 3 years) Sales $ 1,317 Fixed Assets $ 176 $ per Square Ft. $ 188 Tenant Allowances (98) % of Sales I
Slide 33: Global Expansion
- Global Expansion Current and future international store base 2007 2012 Est. US 133 Canada 120 *Central & S. America 25 *Pacific Rim 38 **China 26 Current Domestic Markets Total 342 700 - 750 Current International Markets *All Central and South American and Pacific Rim stores are franchised **21 of