Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (March 2006)
22 slides from Caleres's investor presentation, Mar 13, 2006
Slide 1: Famous Footwear, Naturalizer, Franco Sarto, LifeStride
Famous Footwear Naturalizer Franco Sarto LifeStride
Slide 2: Forward-looking statements
This presentation by Brown Shoe Company, Inc. contains certain forward-looking statements, including without limitation, statements made concerning forward looking guidance on Sales, Operating Earnings and future growth segments of the business. Such statements are subject to various risks and uncer
Slide 3: Agenda – NYSE: BWS
Agenda – NYSE: BWS 1) Reshaping our platform 2) Brown Shoe today 3) 2005 accomplishments 4) Strategies for long-term growth – 2006 Guidance 3
Slide 4: Reshaped our Platform – 2001 - 2005
Reshaped our Platform – 2001 - 2005 Sales and Operating Operating Margin Department Store Market Earnings Improvement Improvement at Famous Share Improvement at for BWS (millions $) Footwear Wholesale* 12.5% 7.0% Operating 2,000 80 Earnings 10.0% 6.0% 5.0% 1,500 60 7.5% 4.0% 12.2% 5.0% 1,000 Sales 4
Slide 5: Brown Shoe Today -- $2.5 Billion in Sales Projected for 2006
Brown Shoe Today -- $2.5 Billion in Sales Projected for 2006 Unique wholesale-retail platform. Building our brands and retail concepts to gain market share while delivering style to the consumer. Mass 39% Wholesale Merchandisers 61% Retail $300 million § 80 million pairs § 1300 stores § 2000 retail
Slide 6: Overview of our Branded Wholesale Business
Overview of our Branded Wholesale Business: $600 $500 Our Rank among Wholesalers Women’s Fashion Footwear Sales in U.S. Department Stores* $400 Ranked by Parent Company ($ in millions) $300 After Acquisition $200 Bennett Footwear Group Brown Wholesale $100 $0 p oe n p Nike e n rou Sh nies dde Grou n
Slide 7: Our Portfolio of Brands
Our Portfolio of Brands Zone Bridge No. 8 No. 11 No. 2 Better No. 9 Moderate No. 3 men; No. 11 No. 3 junior No. 15 women No. 1 Mass Private Label * Reflects NPD Group Reported POS Dollar Volume. 12 Months ending January 2006. 7
Slide 8: Overview of our Retail Businesses
Overview of our Retail Businesses: 8 7 6 No. 1- Family Branded Our Rank Among Top Footwear Retailers % Share of Dollars 5 Share of Footwear Sales by Retailer* 4 3 2 1 0 No. 4- Women's Specialty W s ars et art t 's ss y ar ted e hl' l m iva r nn rd rg DS ke Lin Km r yle M Se ea tro Ko lla Ta ra Pe rn
Slide 9: 2005 Accomplishments
2005 Accomplishments 1) Gained traction at Famous Footwear: § Record 3Q/4Q; Traffic up; Same-store sales up 2.5% for year 2) Acquired Bennett: upscale brands; accretive by $0.17 per share 3) Achieved rebound in key areas of wholesale business: strengthened operating margins 4) Restructured Naturaliz
Slide 10: 2005 Financial Accomplishments
2005 Financial Accomplishments 1) Sales growth of 18% to $2.3 billion (half from Bennett) 2) EPS $2.17 – up 29% on an adjusted basis* to $3.32 § Famous Footwear operating earnings rise 11% § Wholesale operating earnings increased 78% § Bennett delivering as expected 3) Strengthened Balance Sheet and
Slide 11: Key Strategies for Long-Term Growth
Key Strategies for Long-Term Growth: 1) Create differentiation – for our stores, our footwear, our brands 2) Create consumer preference with compelling footwear design & styles 3) Lead in Speed-to-Market – to increase sell-throughs and reduce markdown risk. 4) Build our portfolio of brands Balance G
Slide 12: 2006 Growth Drivers and Guidance
2006 Growth drivers include: 2006 Guidance § Famous Footwear traction Annual § Bennett acquisition § Sales up 8% to $2.48 billion § EPS up 50% (8% on adjusted basis*) § Wholesale "sell-through" business model § Famous Footwear comps of 2 to 3% § Shifting of earnings between Q1/Q2 § Specialty Retail
Slide 13: Long-Term Goal and Growth Drivers
Long-Term Goal – Targeting high single-digit revenue growth and 10-15% compound earnings growth rate. Longer term growth drivers: n Famous Footwear – creating differentiation with preference to provide the basis for significant door count expansion n Wholesale – achieving margin and market share opp
Slide 14: Financial Highlights & Appendix
Financial Highlights & Appendix 14
Slide 15: Sales and EPS – 2001 to Estimated 2006
Sales and EPS – 2001 to Estimated 2006 Sales in Billions Earnings Per Share $2.48 Billion $2.5 $3.50 $3.35 – $3.45 $3.00 $2.0 $2.50 $1.5 $2.00 * Includes $1.15 per share of charges from $1.50 closing $1.0 unproductive stores, acquiring $1.00 Bennett and repatriating foreign earnings. $0.5 $0.50 $0.0
Slide 16: Debt to Capital Ratio
Debt to Capital Ratio (Millions of dollars, except for Debt to Capital Ratio) Debt to Capital Ratio 2005 2004 2003 2002 2001 Total Debt Obligations* $ 200 $ 142 $ 120 $ 152 $ 216 Total Shareholders' Equity 434 391 350 292 253 Total Capital $ 634 $ 533 $ 470 $ 444 $ 469 Debt to Capital Ratio** 31.5%
Slide 17: Distinct Wholesale Portfolio
Distinct Wholesale Portfolio Projected for 2006 17
Slide 18: Famous Footwear -- Sales by category
Famous Footwear -- Sales by category Based on 12 months ended January 2006 Accessories 4% 4% 5% 5% Athletic 9% 9% Kid’s 29% 29% 17% 17% Women’s Men’s Athletic 15% 15% Athletic 21% 21% 18
Slide 19: Reconciliation of Net Earnings to Adjusted Net Earnings
Appendix: Schedule 1 Reconciliation of Net Earnings to Adjusted Net Earnings 2003 – 2006 Estimated 2006 Estimated Range Low - High 2005 2004 2003 Net Net Net Net Earnings EPS Earnings EPS Earnings EPS Earnings EPS GAAP Results $ 64.7-66.7 $ 3.35-3.45 $ 41.0 $ 2.17 $ 43.3 $ 2.30 $ 46.2 $ 2.48 Special
Slide 20: Reconciliation of EPS Guidance to Adjusted EPS Guidance
Appendix: Schedule 2 Reconciliation of EPS Guidance (GAAP Basis) to EPS Guidance Adjusted to Exclude Charges (Non-GAAP) st nd Estimated 1 Quarter Estimated 2 Quarter st nd 1 Quarter 2006 2005 2 Quarter 2006 2005 Diluted Diluted Diluted EPS Diluted Diluted Diluted EPS EPS (low) EPS(high) EPS (low) EP
Slide 21: Reconciliation of Operating Earnings to Adjusted Operating Earnings
Appendix: Schedule 3 Reconciliation of Operating Earnings to Adjusted Operating Earnings (in millions) 2005 2004 2003 2002 2001 Operating Earnings $ 88.6 $ 63.8 $ 72.9 $ 71.7 $ 11.1 Special Charges and Recoveries Naturalizer Restructuring 14.7 - - (0.5) 16.8 Famous Footwear Inventory Write-Down - -
Slide 22: Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Appendix: Schedule 4 Reconciliation of Net Earnings to EBITDA* and Adjusted EBITDA 2005 2004 2003 Net Earnings $ 41.0 $ 43.3 $ 46.2 Interest Expense, net 17.5 7.5 9.3 Income Tax Provision 30.1 13.0 17.3 Depreciation and Amortization 40.3 31.9 30.7 EBITDA* $ 128.9 $ 95.7 $ 103.5 Special Charges Natur