ST. LOUIS (AP) - Brown Shoe returned to a profit in its second quarter, helped by lower costs and double-digit revenue growth.
Adjusted earnings and revenue easily beat Wall Street's expectations.
The company, which runs the Famous Footwear and Naturalizer stores, also increased its fiscal 2013 adjusted earnings forecast on Tuesday due to its better-than-expected performance in the year's first half.
The results show that the company's efforts under CEO Diane Sullivan, president and CEO, to spin off or exit non-strategic brands, including Avia, Nevados, Etienne and Vera Wang and improve the inventory flow within existing brands are working.
"It's really starting to pay dividends," Sullivan said in an interview with The Associated Press.
For the period ended Aug. 3, Brown Shoe Co. earned $15.4 million, or 35 cents per share. That compares with a loss of $2.5 million, or 6 cents per share, a year ago.
The current quarter included 2 cents per share in costs related to portfolio realignment efforts. The prior-year period included 22 cents per share in costs related to the portfolio realignment and other organizational changes.
Stripping out these costs, earnings were 33 cents per share in the latest period. Analysts forecast earnings of 22 cents per share, according to FactSet.
Revenue rose 10 percent to $621.7 million from $564.9 million. Wall Street expected revenue of $593.6 million.
The revenue performance benefited from double-digit sales growth at Famous Footwear and at its wholesale operations, which include Healthy Living and Contemporary Fashion.
Healthy Living reported strength in the Naturalizer, LifeStride and Dr. Scholl's brands, while Contemporary Fashion saw growth in Sam Edelman and Franco Sarto.
Revenue at Famous Footwear locations open at least a year climbed 6.8 percent thanks to increased sales of running and canvas shoes and sandals. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Brown Shoe has almost 1,300 Famous Footwear and Naturalizer stores
Brown Shoe now expects full-year adjusted earnings of $1.27 to $1.32 per share. Previously, the company predicted earnings in a range of $1.22 to $1.29 per share. Analysts expect full-year earnings of $1.33 per share.
It also lowered its revenue outlook to a range of $2.53 billion to $2.56 billion, down from a prior guidance of $2.54 billion to $2.57 billion. Analysts expect full-year revenue of $2.53 billion.
Chief Financial Officer Russ Hammer said in a statement that about $22 million of back-to-school and wholesale sales, or about 9 cents per share of adjusted earnings, shifted to the second quarter from the third quarter this year and are already accounted for in the quarterly results.
That may have upset some investors worried about the earnings outlook. Brown Shoe shares fell $2.19, or 9.2 percent, to $21.51 in afternoon trading after rising as high as $24 earlier in the day.