Slide 1: Brown Shoe
BROWN SHOE
Slide 2: Forward-looking statements
This document 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) the p
Slide 3: Brown Shoe At A Glance
Brown Shoe At A Glance BROWN SHOE TODAY - $2.5 Billion in Sales for 2006 Integrated wholesale-retail platform Consumer-driven enterprise that builds brands and retail concepts while gaining market share Mass Merchandisers 38% Wholesale $300 million 62% Retail 91 million pairs sourced Appx. 1,300
Slide 4: Brown Shoe At A Glance
Brown Shoe At A Glance Our Rank among Wholesalers Our Rank Among Top Footwear Retailers Women’s Fashion Footwear Sales in all NPD POS Dollar Sales and Store Count by Retailer* Channels* Ranked by Parent Company $’s in mm $’s in mm # Stores $800 $7,000 5,000 $700 4,500 $6,000 4,000 $600 $5,000 3,500
Slide 5: Brown Shoe Company Portfolio
*Dept Store Zone rank according to NPD 12 months ending April 30 Brown Shoe Company Portfolio Fashion = $33.3 B Athletic = $11.5 B Salon Bridge No. 12 in Bridge Zone at Dept. Store No. 3 Pureplay Ecommerce Footwear Impulse No. 8 in Impulse Zone at Dept. Store Better No. 2 in Better Zone at Dept. Sto
Slide 6: Review of BWS Financials
Review of BWS Financials (all $’s in millions except EPS) May 5, 2007 April 29, 2006 % Chg. Sales $566.3 $575.5 -1.6% Net Earnings GAAP $9.6 $10.0 -3.9% Adjusted* $13.0 $10.0 29.2% EPS GAAP $0.22 $0.23 -4.3% Adjusted* $0.29 $0.23 26.1% Gross Margin 40.6% 38.7% Debt/Cap* 22.7% 30.6% Cash Flow from Op
Slide 7: Review of BWS Financials
Review of BWS Financials 13 Weeks Ended 13 Weeks Ended May 5, 2007 April 29, 2006 % Chg. Famous Footwear Sales $325.3 $302.3 7.6% Operating Profit $21.0 $15.9 31.8% Same-Store Sales 3.4% 1.9% Specialty Retail Sales $60.3 $56.4 6.9% Operating Profit* -$2.9 -$2.9 0.0% Same-Store Sales 3.4% 0.6% *Inclu
Slide 8: Second Quarter 2007 & Full Year Guidance
Second Quarter 2007 & Full Year Guidance As of May 24, 2007 and has not been updated Second Quarter 2007 EPS: GAAP $0.22 to $0.24 Adjusted* $0.30 to $0.32 Full Year 2007 EPS: GAAP $1.55 to $1.59 Adjusted* $1.86 to $1.90 *See Appendix for reconciliation Other Annual Estimates: Consolidated Sales: $2.
Slide 9: Shaping our Platform for Growth
Shaping our Platform for Growth Sales and Operating Operating Margin Department Store Market Earnings Improvement Improvement at Famous Share Improvement at for BWS (millions $) Footwear Wholesale* 12.5% 2,500 120 7.0% Sales Operating Earnings 100 10.0% 2,000 6.0% 80 5.0% 7.5% 1,500 4.0% 12.2% 60 7.
Slide 10: Brown Shoe Vision
Brown Shoe Vision: Brown Shoe Company is a leading fashion footwear marketer, winning loyal customers with compelling global brands 10
Slide 11: Brown Shoe Pillars
Brown Shoe Pillars Vision: Brown Shoe is a leading fashion footwear marketer, winning loyal customers with compelling global brands ENABLING STRATEGIES GROWTH STRATEGIES Partnership Platform Market Consumer-Driven Initiatives Optimization Intelligence Model CROSS-COMPANY SYNERGIES [VERTICAL AND HORI
Slide 12: Brown Shoe Vision
Brown Shoe Vision PARTNERSHIP MODEL Continue path towards being a world-class partner holistically in the industry: Vendor, Supplier, Customer, Consumer, Real Estate, Investor OPERATIONAL EXCELLENCE Disciplined approach to profitability enhancement, efficiency and effectiveness PORTFOLIO OPTIMIZATIO
Slide 13: Brown Shoe Platform
Brown Shoe Platform RETAIL WHOLESALE ● 1,300 total retail doors – 1,000+ ● World class global sourcing network Famous Footwear, 250+ Naturalizer, Brown Shoe Closet, FX LaSalle, and ● All BWS wholesale brands play across branded concepts one or more BWS retail/ecommerce concepts ● 2,000 customers ser
Slide 14: Brand Power
Brand Power Building differentiated, market-leading brands driven by consumer preference 1. Developed Brand-Building Model 2. Developing premier product and design capabilities New York Design Studio State of the Art Design and Technology Center 3. Increasing investments in marketing, merchandising,
Slide 15: Brand Power: Marketing Initiatives
Brand Power Marketing Initiatives – investing in our flagship brands and increasing spend against our consumers FAMOUS FOOTWEAR ● Partnering with Ogilvy to refine brand positioning ● Broadcast media and CRM focus ● Using consumer database to drive Rewards program VIA SPIGA ● Brand strategy and consu
Slide 16: Brand Power: Product & Design Initiatives
Brand Power Product & Design Initiatives – Investments into enhancing and broadening our product development, design, and sourcing capabilities ● Test & Learn ● Via Spiga Design Team ● Broadening Designer Inputs ● New York Design Studio ● Style & Trend ● Design Internship Program 16
Slide 17: Brands targeting key consumer segments
Brands targeting key consumer segments… BWS Consumer Brown Shoe Style Profile Segment Needs Buying Power Brands (% Total female spend) EXPLORER Seeks expressive, Sexy, eye-catching, youthful brands. styles that she can Wants to experiment wear with with fashion at an 16% everything from affordable p
Slide 18: Brand Power
Brand Power Building differentiated, market-leading brands driven by consumer preference Profitable Market More Shoes, Optimization More Ways (Real Estate) Merchant Localization (Tailoring Inventory Assortment Optimization by Region) Balance & Value ● Trend-right product - Differentiating mix of ath
Slide 19: Brand Power
Brand Power Building differentiated, market-leading brands driven by consumer preference ● Sell-through model; Fresh trend-right product ● Extended brand essence to new categories and consumer touchpoints ● Tightly-targeted consumer communications $125-$300 ● Improved product delivered when she want
Slide 20: Brand Power: Brown New York
Brand Power Building differentiated, market-leading brands driven by consumer preference Brown New York: ● Allows us to play in new zones reaching new consumers ● Strong emotional connection with consumer ● Fashion/Style Credibility/Talent ● Brand extension potential ● Brown New York Transition work
Slide 21: Brand Power
Brand Power Building differentiated, market-leading brands driven by consumer preference ● High brand recognition and strong equity ● 97% brand awareness driven by insole TV and print advertising ● Partnerships with Wal-Mart and Schering-Plough ● Extend asset into new categories and channels ● Growt
Slide 22: Brand Power: Online footwear
Brand Power Building differentiated, market-leading brands driven by consumer preference ● Direct-to-Consumer pure play ● Branded web sites and multi-channel opportunities $6.3 $5.5 ● Growth by winning in new and emerging markets $4.2 $4.8 $3.7 $2.8 $3.2 $ Billions Online Footwear: Projected to be $
Slide 23: Share Price
Positioning for Growth Growth Increasing Prospects for • Growing portfolio Profitability •Organic Improving •Consolidation Core • Earnings • Focus on best brands Enhancement Plan Competencies and market • Brown NY integration opportunities • Accelerating Famous • Consumer-Driven growth Rebuild • Str
Slide 24: Appendix
Appendix Ly < Ni@ % THE LEADER IN FOOTWEAR® BROWN SHOE 24
Slide 25: Sales and EPS – 2001 to Estimated 2007
Adjusted EPS Sales and EPS – 2001 to Estimated 2007* GAAP EPS Sales in Billions Earnings Per Share $1.86 – $1.90 $2.48 - $2.52 Billion $1.63 $2.5 $1.48 $1.51 $1.50 $1.55 – $1.59 $2.0 $1.13 $1.09 $1.11 $1.02 $1.5 $1.00 $0.96 $1.0 $0.50 $0.5 $0.0 $0.00 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005
Slide 26: Distinct Wholesale Portfolio - 2006
Distinct Wholesale Portfolio - 2006 Private Label Children’s Other 26
Slide 27: Famous Footwear -- Sales by category 2006
Famous Footwear -- Sales by category 2006 Accessories 7% 14% 6% Athletic 6% Kid’s Athletic Women’s 17% Men’s 30% Athletic 20% 27
Slide 28: Strategic Earnings Enhancement Plan
Strategic Earnings Enhancement Plan During the second quarter of 2006, the Company introduced a strategic earnings enhancement plan designed to increase earnings and reallocate resources, through i) restructuring administrative and support areas; ii) redesigning logistics and distribution platforms;
Slide 29: Debt to Capital Ratio
Debt to Capital Ratio (Millions of dollars, except for Debt to Capital Ratio) Debt to Capital Ratio May-07 2006 2005 2004 2003 2002 Total Debt Obligations* $ 160 $ 151 $ 200 $ 142 $ 120 $ 152 Total Shareholders' Equity 544 524 434 391 350 292 Total Capital $ 704 $ 675 $ 634 $ 533 $ 470 $ 444 Debt to
Slide 30: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: Q1 2007 v. Q1 2006
Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: Q1 2007 v. Q1 2006 1st Quarter 2007 1st Quarter 2006 After-tax Net After-tax Net Earnings EPS Earnings EPS Net earnings $9,636 $0.22 $10,031 $0.23 Charges/Other Items: Strategic initiatives costs 3,324 0.07 - - Adjusted net earnings $12,9
Slide 31: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 2005 – 2007 Estimated
Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 2005 – 2007 Estimated** 2007 Estimated Range Low - High 2006* 2005 Full Year 2nd Quarter Diluted Net Diluted Net Diluted (in millions, except EPS data) Diluted EPS EPS Earnings EPS Earnings EPS GAAP Results $0.22 - 0.24 $1.55 - 1.59 $ 65.
Slide 32: www.brownshoe.com
www.brownshoe.com