Brown Shoe shares lower ahead of earnings report
Shares of Brown Shoe Company, Inc. (NYSE: BWS) are treading in the red, ahead of the shoe retailer’s earnings expected on Wednesday morning.
Seven analysts polled by Thomson Financial are on average forecasting the small-cap retailer to earn $0.64 per share, while five analysts are on average anticipating revenues of $677.01 million.
Susquehanna Financial analyst John Shanley is projecting earnings of $0.70 per share on revenues of $672 million. Management’s guidance is for sales of between $674 million to $684 million and earnings of $0.70 to $0.75.
“While we were encouraged by BWS’s longer-term assessment of its business prospects, management did note that, as with other footwear retailers, the weak economic environment and unseasonably warmer fall weather conditions across much of the nation during 3Q, could potentially negatively affect seasonal product sales, particularly boots,” Shanley wrote in a research note today.
The analyst noted, however, that the company’s tight inventory levels heading into the third quarter, coupled with cost savings from its earnings enhancement plan and the national presence of its Famous Footwear chain, could offset the adverse macroeconomic conditions facing the retailer.
Despite a bleak consumer spending outlook, pressured by rising gas prices and tighter credit, Shanley is maintaining a positive long-term outlook. For fiscal 2008, the analyst says he is comfortable that the company should be able to attain his sales and earnings growth estimates of 7% and 16%, respectively.
Additionally, Shanley says management believes that its Famous Footwear division has the potential to grow to a national chain with some 1,500 stores by 2011, yielding an additional $700 million to $800 million in sales volume through a combination of new store growth and comparable-store sales gains.
Shanley currently has a positive rating on the stock.
Shares of Brown Shoe (BWS) slid 4.41%, or $0.74, to $16.05 at 12:43 p.m. ET. Shares of Brown Shoe have been trading in the range of $15.70 to $37.68 for the past 52 weeks.
