Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (October 2010)
28 slides from Caleres's investor presentation, Oct 18, 2010
Slide 1: Investor Update
Investor U d t Update BROWN SHOE COMPANY, INC. October 2010
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
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: Why Invest in Brown Shoe?
Why Invest in Brown Shoe? Powerful brands that command leading market share Clear opportunities to grow sales and margins Strategic initiatives in place to maximize favorable footwear cycle Portfolio aligned with macro consumer trends of family, healthy living, and contemporary fashion Str
Slide 4: At A Glance
At A Glance Our Company A leading footwear company with $2.4 billion in sales (TTM*) Adjusted EPS** of $1.00 (TTM) Market capitalization of more than $500 million Our Brands Famous Footwear – leading family branded footwear retailer Naturalizer – one of the world’s largest women’s comfort
Slide 5: Brown Shoe Business Mix
Brown Shoe Business Mix $2.4 billion in sales (Trailing 12 Months July 31,2010) $ in millions B i Business Mi Mix B d Mi Brand Mix All Other Contemporary Wholesale Fashion 28% Retail 72% 4
Slide 6: Leading Footwear Retailer and Wholesaler
Leading Footwear Retailer and Wholesaler Top Footwear Retailers* $ in millions 12 Mo End Jul10 12 Mo End Jul09 12 Mo End Jul08 $2,500 $2,000 $1,500 $1,000 $500 *Trailing 12 months July according to NPD’s Consumer Panel $0 Top Women Women’s s Fashion Wholesalers Wholesalers* $ in millions 12 Mo End J
Slide 7: $$ naturalizer
$$ naturalizer puma (YK a ¢€ DOCKERS Famous Footwear Kia Caee Goun nue BIRKENSTOCK
Slide 8: Famous Footwear
Famous Footwear Leading family branded footwear retailer Represents 61% of total Company sales Sales of $1.4 billion and operating margin of 6.0% (TTM). Peak operating margin of 7.0% in 2006 and sales per square foot of $185 St Strong broad-based b db d sales l momentum t ffor th the ttraili
Slide 9: Famous Footwear
Famous Footwear Sales per Square Foot Adjusted Operating Earnings ($mm) $190 $100 $89.8 8% $185 $84.1 $86.4 $90 $185 7.0% 7% $180 $180 $80 $179 $67.0 6.4% $180 $70 6.0% 6% $60 $ 5.6% $175 $50 $44.6 5% $170 $168 $167 $40 $34.3 $30 4% $165 $20 3.3% 3% $160 $10 2.6% $155 $0 2% 2005 2006 2007 2008 2009
Slide 10: Famous Footwear – Growth Initiatives
Famous Footwear – Growth Initiatives Growth targets: Annual same-store sales increase in low-single digits Operating margin goal of 10% Real Estate Portfolio: Increasing store productivity through real estate portfolio improvements Stricter opening and closing criteria leading to new sto
Slide 11: Famous Footwear – Growth Initiatives (Continued)
Famous Footwear – Growth Initiatives (Continued) Marketing: Increasing brand awareness by strengthening Make Today Famous across all customer touchpoints Driving differentiation through innovative marketing while at the same time significantly reducing promotional cadence Increasing annual m
Slide 12: Famous Footwear – Growth Initiatives (Continued)
Famous Footwear – Growth Initiatives (Continued) Customer Engagement: Evolving the customer retail experience Conversion was the primary driver of same-store performance in first half of 2010 Energized associate base connecting with consumers throughout store experience and purchase process
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Slide 14: Wholesale Brands
Wholesale Brands Diverse portfolio of brands targeting a broad array of consumer segments and spanning distribution channels, from mass merchants to premium department stores Represents 28% of total Company sales Sales of $674.3 million (TTM), a 2.6% increase versus the prior period, and adjus
Slide 15: Wholesale Brands
Wholesale Brands Naturalizer Global comfort brand with distribution in over 50 countries Approximately $500 million in net sales at retail worldwide Top 4 women’s women s fashion brand across domestic channels* channels Dr. Scholl’s Leading global health and wellness brand that spans gen
Slide 16: Wholesale – Growth Initiatives
Wholesale – Growth Initiatives Goal of low-double digit operating margin driven by mid-single digit annual sales growth Enhancing product innovation and trend-right product styling across brands b d and db bringing i i new products, d t concepts, t and d technologies to market Driving growth a
Slide 17: Global Sourcing
Global Sourcing Brown Shoe sourcing operations source the majority of the Company’s footwear for both Wholesale and the Specialty Retail segments and a portion of the footwear sold by Famous Footwear Sourcing, sales, and design operations in China, Italy, Brazil, Hong Kong, and Macau In 2009,
Slide 18: Financial Results
Financial Results Execution of strategy has led to strong improvement over last four quarters Trailing twelve month adjusted EPS* EPS of $1$1.00, 00 achieved in faster timeframe than originally anticipated Improving sales and gross margins across segments Adjusted EBITDA* increased 150% for
Slide 19: Appendix – Non-GAAP Financial Measures
A Appendix di Non-GAAP Financial Measures In this document, document the Company’s Company s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic and estimate
Slide 20: Consolidated Results Trailing Twelve Months
Consolidated Results Trailing Twelve Months 12 Months Ended 12 Months Ended ($ in millions except EPS) July y 31,, 2010 August g 1,, 2009 % Chg. g Net Sales $2,375.1 $2,203.0 7.8% Operating Earnings (Loss) GAAP $77.1 ($204.2) ++ Adjusted** $88.0 $2.1 ++ EPS* GAAP $0.84 ($3.72) ++ Adjusted** $1.00 $0
Slide 21: Segment Operating Results Trailing Twelve Months
Segment Operating Results Trailing Twelve Months Famous Footwear Wholesale Operations Specialty Retail 12 Mos. Ended 12 Mos. Ended 12 Mos. Ended 12 Mos. Ended 12 Mos. Ended 12 Mos. Ended ($ in millions)) July 31, 31 2010 August 1, 1 2009 July 31, 31 2010 August 1, 1 2009 July 31, 31 2010 August 1, 1
Slide 22: Outlook
Outlook The Company has provided perspective on certain operating and balance sheet metrics to enhance transparency and provide insight into management expectations. The below metrics were provided on August 25, 2010 and this should not be considered an interim change, update, or affirmation of thes
Slide 23: Balance Sheet
Balance Sheet July 31, August 1, January 30, ($ in thousands) 2010 2009 2010 ASSETS Cash and cash equivalents $ 30,724 30 724 $ 37,274 37 274 $ 125,833 125 833 Receivables 106,149 72,156 84,297 Inventories 578,085 526,808 456,682 Prepaid expenses and other current assets 33,206 41,877 41,437 Total c
Slide 24: Income Statement
Income Statement Thirteen Weeks Ended Twenty six Weeks Ended Twenty-six July 31, August 1, July 31, August 1, ($ in thousands, except per share data) 2010 2009 2010 2009 Net sales $ 585,756 $ 511,621 $ 1,183,474 $ 1,050,361 Cost of goods sold 347 286 347,286 307 981 307,981 697 444 697,444 638 557 6
Slide 25: Reconciliation of GAAP to Adjusted (Non-GAAP) Earnings
Reconciliation of GAAP to Adjusted (Non-GAAP) Earnings Twelve Months Ended July 31, 2010 Twelve Months Ended August 1, 2009 Net Earnings Diluted Net (Loss) Diluted (Loss) Earnings Earnings (Loss) Operating Attributable to (Loss) Operating Attributable to Earnings ($ in thousands, except per Earnings
Slide 26: Debt-to-Capital Ratio
Debt-to-Capital Ratio ($ in millions) July 31, 2010 August 1, 2009 Total Debt Obligations* $185.5 $197.5 T t l Equity Total E it $391 5 $391.5 $388 3 $388.3 Total Capital $577.0 $585.8 Debt-to-Capital Ratio** 32.1% 33.7% * Includes long-term debt and borrowings under revolving credit agreement ** To
Slide 27: Reconciliation of Operating Earnings (Loss) to Adjusted EBITDA
Reconciliation of Operating Earnings (Loss) to Adjusted EBITDA 12 Months Ended 12 Months Ended ($ in millions) July 31, 2010 August 1, 2009 Operating Earnings (Loss) $77.1 ($204.2) Charges / Other Items* 10.9 206.3 Adjusted Earnings Before Interest and Taxes (EBIT) $88.0 $2.1 Depreciation & Amortiza
Slide 28: Famous Footwear – Store Economics
Famous Footwear – Store Economics O Operating ti Performance P f C h Investment Cash I t t Average Sales $1,246 Fixed Assets $201 Tenant Allowances ($113) % of Sales Operating Profit $79 6 3% 6.3% Inventory $271 Depreciation & Amortization $18 Accounts Payable ($92) EBITDA $97 $ 7.8% % Net Cash $267