Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (December 2005)
30 slides from Caleres's investor presentation, Dec 5, 2005
Slide 1: Brown Shoe Company
Famous © Footwear. BARTS LifeStride fashion. aarue ea SP ISom Bass @ ETIENNE AIGNER Gres JJickets —$oft— Buster Brown shoes.com BROWN SHOE
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, Earnings Per Share (EPS), Net Earnings, Adjusted Net Earnings, EBITDA, Adjusted EBITDA and Debt to Capital ratio. Suc
Slide 3: Today's Topics
Today’s Topics – NYSE: BWS 1) The BWS Story – Re-Shaping Our Platform 2) Enterprise-wide strategies 3) Financial results 3
Slide 4: Brown Shoe Today -- $2.3 Billion in Sales Projected for 2005
Brown Shoe Today -- $2.3 Billion in Sales Projected for 2005 Unique wholesale-retail platform. Building our brands and retail concepts to gain market share while delivering style to the consumer. 2001 Projected 2005 38% Mass 62% Retail Merchandisers Wholesale $250 million Department & Specialty Stor
Slide 5: Remaking BWS
Remaking BWS – 6.0% 1) Operating Earnings – from 2001 to 2005, GAAP operating earnings are expected to grow from $11mm to approximately $84mm; on an adjusted basis, operating earnings are expected to nearly double from $50mm to about $100mm. Please see Appendix for calculation of this measure. 4.0%
Slide 6: Overview of our Wholesale Businesses
Overview of our Wholesale Businesses: $600 Our Rank among Wholesalers $500 Women’s Fashion Footwear Sales in U.S. Department Stores* Ranked by Parent Company $400 ($ in millions) After Acquisition $300 Brown Wholesale Bennett Footwear Group $200 $100 $0 p oe n p Nike rne rp. rou Sh dde nies Grou ns
Slide 7: Our Portfolio of Brands – Moderate Zone Market Share
Overview of our Wholesale Businesses: Our Portfolio of Brands – 46% Market Share in Moderate Zone (women’s) No. 3 men Zone No. 1 No. 3 No. 11 No. 18 women Rank Moderate Moderate Moderate Junior Source: NPD Group Reported POS Dollar Volume. 12 Months ending July, 2005. 7
Slide 8: Our Portfolio of Better/Bridge Brands
Overview of our Wholesale Businesses: Our Portfolio of Better/Bridge Brands – 17% Market Share in Better Zone Zone No. 9 No. 2 No. 9 No. 13 Rank Bridge Better Better Better Source: NPD Group Reported POS Dollar Volume. 12 Months ending July, 2005. 8
Slide 9: Our Portfolio of Brands – Mid-tier and Mass
Overview of our Wholesale Businesses: Our Portfolio of Brands – Mid-tier and Mass A leading footwear vendor at Wal-Mart, Target & Payless 9
Slide 10: Our Rank Among Top Footwear Retailers
Overview of our Retail Businesses: 8 7 Our Rank Among Top Footwear Retailers 6 Share of Footwear Sales by Retailer* % Share of Dollars 5 4 3 2 1 0 W et ars art hl's t ss 's Fin m e ar ey er l rg iva ay DS rd Lin Km r yle M o Se ea Ko ck nn Ta lla str M rn al- Pa tlo ish tw Pe Di + Ca rd W ed o oo No
Slide 11: Our Portfolio of Retail Concepts
Overview of our Retail Businesses: Our Portfolio of Retail Concepts – 1300 Stores, 5 Web-stores Zone No. 1 No. 4 No. 3 Rank Family, branded Women’s specialty Internet footwear Retail Famous Footwear Naturalizer Shoes.com Brands Factory Brand Shoes Via Spiga stores Naturalizer.com FX LaSalle Famousfo
Slide 12: Enterprise-Wide Strategies for Sustainable Growth
BWS Enterprise-Wide Strategies for Sustainable Growth: 1) Create differentiation –creating competitive advantage by differentiating our stores, our footwear, and our brands 2) Delight consumers with style – raising the style quotient of our footwear assortments to win consumer preference for our bra
Slide 13: Creating Differentiation at Famous Footwear
Enterprise-wide Strategy # 1 Creating Differentiation at Famous Footwear n Improved Product: More brands, more current, more trend-right n Redesigned Stores n Improved shopping experience è Fashion + Branded Value, not Price n Innovative marketing 13
Slide 14: Creating Differentiation at Naturalizer
Enterprise-wide Strategy # 1 Creating Differentiation at Naturalizer n Introducing a new sense of style for brand n Improving our retail platform n Improved our wholesale business model n Enhanced product styling Market Share Rank in U.S. 1 Department Store Channel* 2nd 2 3rd 3rd 3 4th 4 5 6th 6 7th
Slide 15: Delighting the Consumer with Style
Enterprise-wide Strategy # 2 Delighting the Consumer with Style -- Top Department Store Brands n Leading designers (e.g. Franco Sarto) acquired with Bennett n Product development and Style & Trend functions centralized; augmented with Italian design talent n Exclusive product programs with major ret
Slide 16: Speed-to-Market
Enterprise-wide Speed-to-Market Strategy # 3 n Providing the consumer with fashion closer to need n Enhancing Retail Planning & Analysis n Stronger focus on sell-through and inventory flow n Standardizing Design, Development, & Production n World-class logistics and customer support n Worldwide sour
Slide 17: Building our Portfolio -- Recent Acquisitions of Brands and Licenses
Enterprise-wide Strategy # 4 Building our Portfolio -- Recent Acquisitions of Brands and Licenses n Creating a portfolio of brands and licenses that garners greater market penetration Bennett Footwear Group 2001 2001 February 2004 August 2004 April 2005 17
Slide 18: Growing our Portfolio – Bennett acquisition
Enterprise-wide Strategy # 4 Growing our Portfolio – Bennett acquisition – the perfect fit for BWS n Strong brands in better and bridge zones complement our strength in moderate n Increases our share-of-market in women’s fashion footwear n Growing business with strong market share and healthy operat
Slide 19: Earnings & Guidance
Earnings & Guidance stars in her oWhJife THE LEADER IN FOOTWEAR
Slide 20: 2005 Guidance – Updated 11/22/2005
2005 Guidance – Updated 11/22/2005 Diluted Earnings Per Share 2005 Estimated 2004 Guidance (GAAP Basis) $1.92 - $2.07 $2.30 Actual EPS (GAAP Basis) Tax cost to repatriate foreign earnings $0.55 $0.18 Bass transition costs Cost to restructure Naturalizer $0.50 - $0.45 $0.12 Bond guarantee charge Brid
Slide 21: EBITDA
EBITDA* 2005 Estimated Range (in millions) 2003 2004 Low -- High EBITDA* $ 103.6 $ 95.7 $ 120.9 $ 125.0 Special Charges Naturalizer Restructuring - - 16.0 14.0 Bass Transition Costs - 5.6 - - Bond Guarantee Charge - 3.5 - - Environmental Litigation 3.1 0.6 - - Canada Factory Closure 4.5 - - - Adjust
Slide 22: Conclusion
Conclusion Short Term – Projecting $2.3 Billion in Sales and $1.92-$2.07 EPS (GAAP) or $3.00-$3.10 Adjusted EPS*(non-GAAP) in 2005 n Bennett expected to be accretive by $0.15-$0.20 in 2005 n Famous Footwear expected to produce a solid year n Improved operating results expected in Naturalizer, Carlos
Slide 23: Financial Highlights & Appendix
Financial Highlights & Appendix 23
Slide 24: Sales and EPS – 2001 to 2005
Sales and EPS – 2001 to 2005 Sales in Billions Earnings Per Share $2.3 Billion $2.0 $2.50 $2.00 $1.92 – $2.07* $1.5 $1.50 * Includes $0.55 per share of incremental tax $1.0 charges from repatriating $1.00 foreign earnings, $0.45-$0.50 per share of incremental $0.5 expense in $0.50 connection with th
Slide 25: Distinct Wholesale Portfolio
Distinct Wholesale Portfolio Based on 2004 Pro Forma Sales* * The 2004 Pro Forma Sales detail includes the Bennett brands as if they had been acquired by Brown Shoe on February 1, 2004. These results are not necessarily indicative of the results that would have been achieved had the acquisition occu
Slide 26: Famous Footwear -- Sales by category
Famous Footwear -- Sales by category Based on 12 months ended January 2005 Accessories 4% 4% 5% 5% Athletic 9% 9% Kid’s 28% 28% 17% 17% Women’s Men’s Athletic 16% 16% Athletic 21% 21% 26
Slide 27: Reconciliation of Net Earnings to Adjusted Net Earnings
Appendix: Reconciliation of Net Earnings to Adjusted Net Earnings 2005 Estimated Range 2003 2004 Low High Net Net Net Net Earnings EPS Earnings EPS Earnings EPS Earnings EPS GAAP Results $ 46.2 $ 2.48 $ 43.3 $ 2.30 $ 36.4 $ 1.92 $ 39.3 $ 2.07 Special Charges and Recoveries: Naturalizer Restructuring
Slide 28: Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Appendix: Reconciliation of Net Earnings to EBITDA* and Adjusted EBITDA 2005 Estimated Range 2003 2004 Low -- High Net Earnings $ 46.2 $ 43.3 $ 36.4 $ 39.3 Interest Expense, net 9.3 7.5 18.0 18.0 Income Tax Provision 17.4 13.0 27.8 29.0 Depreciation and Amortization 30.7 31.9 38.7 38.7 EBITDA* $ 103
Slide 29: Debt to Capital Ratio
Appendix: Debt to Capital Ratio (Millions of dollars, except for Debt to Capital Ratio) Debt to Capital Ratio 2005-Est 2004 2003 2002 2001 Total Debt Obligations* $ 235 $ 142 $ 120 $ 152 $ 216 Total Shareholders' Equity 430 391 350 292 253 Total Capital $ 665 $ 533 $ 470 $ 444 $ 469 Debt to Capital
Slide 30: Reconciliation of Operating Earnings to Adjusted Operating Earnings
Appendix: Reconciliation of Operating Earnings to Adjusted Operating Earnings 2005 Estimated Range (in millions) Low High 2004 2003 2002 2001 Operating Earnings $ 82.2 $ 86.3 $ 63.8 $ 72.9 $ 71.7 $ 11.1 Special Charges and Recoveries Naturalizer Restructuring 16.0 14.0 - - (0.8) 16.8 Famous Footwear