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Brown Shoe Company Reports Fourth Quarter and Full Year 2012 Results



  Brown Shoe Company Reports Fourth Quarter and Full Year 2012 Results

          Famous Footwear same-store-sales up 4.4% in fourth quarter

    Record breaking 52-week sales and operating profit at Famous Footwear

Business Wire

ST. LOUIS -- March 15, 2013

Brown Shoe Company, Inc. (NYSE: BWS, brownshoe.com) today reported fourth
quarter 2012 financial results, with net sales of $640.2 million versus fourth
quarter 2011 net sales of $628.9 million. Results for both the fourth quarter
of 2012 and 2011 included sales of $2.8 million and $16.5 million,
respectively, from brands and businesses the company has exited. Excluding
exited brands, year-over-year net sales were up 4.8% in the quarter.

Net earnings were $4.0 million, or $0.09 per diluted share, in the fourth
quarter of 2012 versus a loss of ($8.2) million, or ($0.21) per diluted share,
in the prior year. Fourth quarter 2012 results included portfolio realignment
costs of $2.9 million, while earnings for the fourth quarter of 2011 included
portfolio realignment and integration related costs of $18.5 million. On an
adjusted* basis, net earnings of $5.9 million, or $0.14 per diluted share,
improved 43.0% compared to $4.1 million, or $0.10 per diluted share, in the
prior year.

For full year 2012, net sales of $2,598.1 million compared to $2,582.8 million
in 2011. Results for both 2012 and 2011 included sales from exited brands and
businesses of $42.5 million and $92.5 million, respectively. Excluding exited
brands, 2012 sales were up 2.6% over 2011. Full year 2012 includes 53 weeks,
compared to 52 weeks in 2011, with the additional week occurring in the fourth
quarter. The 53^rd week increased net sales by $21.2 million and had an
immaterial impact on fourth quarter 2012 earnings.

Net earnings for 2012 were $27.5 million, or $0.64 per diluted share, versus
$24.6 million, or $0.56 per diluted share, in 2011. Earnings for 2012 included
portfolio realignment, organization change and integration related costs of
$32.9 million, while earnings for 2011 included portfolio realignment and
integration related costs of $30.8 million, which were partially offset by a
$20.6 million gain on the sale of AND 1. On an adjusted basis, 2012 net
earnings of $48.6 million, or $1.13 per diluted share, improved 60.4% compared
to $30.3 million, or $0.70 per diluted share, in 2011.

Gross profit margin for the fourth quarter of 2012 improved to 39.3% from
37.9% in 2011. For the full year, it improved to 38.9% from 38.6% in 2011.

“In 2012, we hit several milestones at Famous Footwear, by achieving
record-breaking sales for the 52-week year, as well as our highest annual
operating profit,” said Diane Sullivan, president and chief executive officer
of Brown Shoe Company. “We also strengthened our balance sheet, by reducing
short term borrowings by nearly $100 million and reduced our SG&A expenses by
$18.3 million. Thanks to the hard work of the entire Brown Shoe Company team,
we ended 2012 on a high note, as our share price increased by 106% over the
course of calendar 2012.”

                                                                        
US$M, except      14        13 Weeks   4Q        53 Weeks   52 Weeks   FY
per share         Weeks
(unaudited)       4Q’12     4Q’11      Change    4Q’12      4Q’11      Change
Consolidated      $640.2    $628.9     1.8%      $2,598.1   $2,582.8   0.6%
net sales
Famous Footwear   380.1     352.4      7.9%      1,514.3    1,456.3    4.0%
Wholesale         194.5     205.1      (5.2%)    845.2      870.9      (3.0%)
Operations
Specialty         65.6      71.4       (8.1%)    238.5      255.6      (6.7%)
Retail
Gross profit      251.7     238.6      5.5%      1,010.4    996.6      1.4%
Margin            39.3%     37.9%      140 bps   38.9%      38.6%      30 bps
SG&A              238.5     230.0      3.7%      919.0      937.3      (2.0%)
% of net sales    37.3%     36.6%      70 bps    35.4%      36.3%      - 90
                                                                       bps
Net
restructuring,    2.7       16.5       (83.5%)   24.0       23.7       1.5%
other special
charges
Impairment of
intangible        --        --         --        5.8        --         --
assets
Operating         10.5      (7.9)      n/m       61.6       35.6       73.3%
earnings (loss)
% of net sales    1.6%      (1.3%)     290 bps   2.4%       1.4%       100 bps
Net interest      5.9       5.8        0.4%      23.1       26.5       (13.0%)
expense
Earnings (loss)
before income     4.6       (13.7)     n/m       38.5       9.1        325.9%
tax
Tax rate          13.7%     50.7%                29.4%      3.6%        
Net earnings
(loss) from       --        (1.4)      --        --         15.7       --
discontinued
operations
Net earnings      $4.0      ($8.2)     149.1%    $27.5      $24.6      11.8%
(loss)
Per diluted       $0.09     ($0.21)    142.9%    $0.64      $0.56      14.3%
share
Adjusted net      $5.9      $4.1       43.0%     $48.6      $30.3      60.4%
earnings
Per diluted       $0.14     $0.10      40.0%     $1.13      $0.70      61.4%
share
                                                                        

Fourth Quarter Highlights

Famous Footwear reported record fourth quarter 2012 sales of $380.1 million, a
7.9% year-over-year improvement, with good growth in athletic shoes, boat
shoes and women’s boots. On a 52 week same-store-sales basis, the fourth
quarter was up 4.4% ^  over the prior year. During the quarter, the company
closed or relocated 18 stores and added 12 new stores, and average revenue per
square foot improved 6.9% year-over-year.

Contemporary Fashion platform wholesale sales were up slightly in the fourth
quarter, with the company’s Sam Edelman and Franco Sarto brands delivering
strong performance. In the Healthy Living portfolio, wholesale sales were up
1.8%, with contribution from LifeStride, Ryka and Dr. Scholl’s Shoes.
Excluding exited brands, Wholesale Operations sales were up 1.6%
year-over-year in the fourth quarter.

Consolidated gross profit was up in the fourth quarter, while gross profit
margin of 39.3% improved by approximately 140 basis points versus the prior
year. SG&A for the fourth quarter was $238.5 million, or 37.3% of net sales,
up approximately 70 basis points from 36.6% of net sales in the prior year.
For the quarter, adjusted operating earnings improved 39.0% to $13.4 million
from $9.7 million in the fourth quarter of 2011.

Inventory at the end of the fourth quarter was $533.3 million, down 5.1%
compared to $561.8 million in the prior year. Wholesale inventory was down
21.6%, while Famous Footwear inventory was up 2.3%.

At quarter-end, Brown Shoe Company had $380.6 million in availability under
its revolving credit facility and $68.2 million in cash and cash equivalents.
The company’s debt-to-capital ratio declined to 41.6% from 49.1% in the fourth
quarter of 2011.

Full Year Highlights

Famous Footwear reported full year 2012 sales of $1,514.3 million, a 4.0%
year-over-year improvement, with adjusted annual operating earnings topping
$100 million. On a 52-week basis, same-store-sales in 2012 were up 4.5% over
2011. During the year, the company closed or relocated 89 stores and added 55
new stores, and average revenue per square foot improved to $199.

Contemporary Fashion platform wholesale sales were up 11.0% in 2012, with the
company’s Sam Edelman brand closing in on the $100 million sales threshold. In
the Healthy Living portfolio, wholesale sales were down 3.5%. Excluding exited
brands, Wholesale Operations sales were up 1.6% year-over-year in 2012.

Consolidated gross profit was up in 2012, while gross profit margin of 38.9%
improved by approximately 30 basis points over 2011. SG&A for 2012 was $919.0
million, or 35.4% of net sales versus 36.3% in the prior year. For 2012,
adjusted operating earnings improved 44.6% to $94.5 million from $65.4 million
in 2011.

Financial Review and 2013 Outlook

“We’re pleased to have wrapped up a strong 2012, with adjusted diluted EPS of
$1.13, up more than 60% over the prior year,” said Russ Hammer, chief
financial officer of Brown Shoe Company. “However, like many other peers, we
are beginning to see the effect on our consumers of recent payroll tax changes
and other fiscal events. As a result, we remain cognizant about the potential
for changes in consumer discretionary spending in 2013 and any related impact
on our results.”

                                       
Metric                                FY’13
Consolidated net sales                $2.55 to $2.58 billion
Famous Footwear same-store sales      Up low-single digits
Wholesale Operations net sales        Down low- to mid-single digits,
                                      reflecting brand exits
Gross profit margin                   Up 10 to 40 basis points
SG&A                                  $900 to $910 million
Non-recurring costs                   $1.0 to $2.0 million
Net interest expense                  $21 to $23 million
Effective tax rate                    33% to 35%
Earnings per diluted share            $1.16 to $1.23
Adjusted earnings per diluted share   $1.18 to $1.25
Depreciation and amortization         $54 to $56 million
Capital expenditures                  $50 to $55 million
                                     

Investor Conference Call

Brown Shoe Company will webcast an investor conference call at 9:00 a.m. ET
today, Mar. 15, 2013. The webcast and accompanying slides will be available at
investor.brownshoe.com. A live conference call will be available at (877)
217-9089 for analysts in North America or (706) 679-1723 for international
analysts by using the conference ID 17574957. A replay will be available on
the website for a limited period. Investors may also access the replay by
dialing (855) 859-2056 in North America or (404) 537-3406 internationally and
using the conference ID 17574957 through Mar. 29, 2013.

* Non-GAAP Financial Measures

In this press release, the 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 estimated future operating earnings, net earnings and earnings
per diluted share adjusted to exclude certain gains, charges and recoveries,
which are non-GAAP financial measures. These results are included as a
complement to results provided in accordance with GAAP because management
believes these non-GAAP financial measures help identify underlying trends in
the company’s business and provide useful information to both management and
investors by excluding certain items that may not be indicative of the
company’s core operating results. These measures should not be considered a
substitute for or superior to GAAP results.

Definitions

All references in this press release, outside of the condensed consolidated
financial statements that follow, unless otherwise noted, related to net
earnings (loss) attributable to Brown Shoe Company, Inc. and diluted earnings
per common share attributable to Brown Shoe Company, Inc. shareholders, are
presented as net earnings and earnings per diluted share, respectively.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995

This press release contains certain forward-looking statements and
expectations regarding the company’s future performance and the performance of
its brands. Such statements are subject to various risks and uncertainties
that could cause actual results to differ materially. These risks include (i)
changing consumer demands, which may be influenced by consumers' disposable
income, which in turn can be influenced by general economic conditions; (ii)
intense competition within the footwear industry; (iii) rapidly changing
fashion trends and purchasing patterns; (iv) customer concentration and
increased consolidation in the retail industry; (v) political and economic
conditions or other threats to the continued and uninterrupted flow of
inventory from China, where ASG has manufacturing facilities and both ASG and
Brown Shoe Company rely heavily on third-party manufacturing facilities for a
significant amount of their inventory; (vi) the ability to recruit and retain
senior management and other key associates; (vii) the ability to attract,
retain and maintain good relationships with licensors and protect intellectual
property rights; (viii) the ability to secure/exit leases on favorable terms;
(ix) the ability to maintain relationships with current suppliers; (x)
compliance with applicable laws and standards with respect to lead content in
paint and other product safety issues; (xi) the ability to source product at a
pace consistent with increased demand for footwear; and (xii) the impact of
rising prices in a potentially inflationary global environment. The company's
reports to the Securities and Exchange Commission contain detailed information
relating to such factors, including, without limitation, the information under
the caption Risk Factors in Item 1A of the company’s Annual Report on Form
10-K for the year ended January 28, 2012, which information is incorporated by
reference herein and updated by the company’s Quarterly Reports on Form 10-Q.
The company does not undertake any obligation or plan to update these
forward-looking statements, even though its situation may change.

About Brown Shoe Company

Brown Shoe Company is a $2.6 billion, global footwear company whose shoes are
worn by people of all ages, from all walks of life. Our products are available
virtually everywhere — in the nearly 1,300 Famous Footwear and Naturalizer
retail stores we operate, in hundreds of major department and specialty
stores, on 14 branded ecommerce sites, and on many additional third-party
retail websites. Through our broad range of products, we serve three key
market segments. Our Family brands — Famous Footwear, Famous.com, and
shoes.com — are one-stop-shopping destinations for high quality, affordable
styles for a family’s every occasion. Active people who want comfort, style
and performance can look to our Healthy Living brands — Naturalizer, Dr.
Scholl's Shoes, LifeStride, Avia and Ryka. Our Contemporary Fashion brands —
Via Spiga, Vera Wang, Vince, Sam Edelman, Franco Sarto, Carlos Santana and
Fergie Footwear — keep fashionistas in step with the latest trends. At Brown
Shoe Company, we inspire people to feel good and live better... feet first!

SCHEDULE 1                                                      
                                                                  
BROWN SHOE
COMPANY, INC.
CONDENSED CONSOLIDATED                                            
STATEMENTS OF EARNINGS
                                                                  
                  (Unaudited)
                  14 Weeks Ended   13 Weeks      53 Weeks        52 Weeks
                                   Ended         Ended           Ended
(Thousands,       February 2,      January 28,   February 2,     January 28,
except per        2013             2012          2013            2012
share data)
                                                                  
Net sales         $  640,176       $ 628,891     $ 2,598,065     $ 2,582,824
Cost of goods        388,477         390,318       1,587,706       1,586,184  
sold
                                                                  
Gross profit         251,699         238,573       1,010,359       996,640    
                                                                  
Selling and
administrative       238,465         229,943       918,957         937,419
expenses
Restructuring
and other            2,730           16,523        24,018          23,671
special
charges, net
Impairment of
intangible           -               -             5,777           -          
assets
                                                                  
Operating            10,504          (7,893  )     61,607          35,550     
earnings (loss)
                                                                  
Interest             (5,954   )      (6,238  )     (23,382   )     (26,141   )
expense
Loss on early
extinguishment       -               -             -               (1,003    )
of debt
Interest income      86              396           322             644        
                                                                  
Earnings (loss)
before income
taxes from           4,636           (13,735 )     38,547          9,050      
continuing
operations
                                                                  
Income tax
(provision)          (633     )      6,968         (11,343   )     (326      )
benefit
                                                                  
Net earnings
(loss) from          4,003           (6,767  )     27,204          8,724      
continuing
operations
                                                                  
Discontinued
operations:
Earnings from
operations of
subsidiary, net      -               -             -               1,701
of tax of
$1,312 in 2011
(Loss) gain on
sale of
subsidiary, net
of tax of $474       -               (1,409  )     -               13,965     
and $6,670 in
2011,
respectively
                                                                  
Net (loss)
earnings from        -               (1,409  )     -               15,666     
discontinued
operations
                                                                  
Net earnings         4,003           (8,176  )     27,204          24,390     
(loss)
                                                                  
Net (loss)
earnings
attributable to      (36      )      46            (287      )     (199      )
noncontrolling
interests
                                                                  
Net earnings
(loss)
attributable to   $  4,039         $ (8,222  )   $ 27,491        $ 24,589     
Brown Shoe
Company, Inc.
                                                                  
Basic earnings
(loss) per
common share:
From continuing   $  0.09          $ (0.17   )   $ 0.64          $ 0.20
operations
From
discontinued         -               (0.04   )     -               0.37       
operations
Basic earnings
(loss) per
common share
attributable to
Brown Shoe
Company, Inc.     $  0.09          $ (0.21   )   $ 0.64          $ 0.57       
shareholders
                                                                  
Diluted
earnings (loss)
per common
share:
From continuing   $  0.09          $ (0.17   )   $ 0.64          $ 0.20
operations
From
discontinued         -               (0.04   )     -               0.36       
operations
Diluted
earnings (loss)
per common
share
attributable to
Brown Shoe
Company, Inc.     $  0.09          $ (0.21   )   $ 0.64          $ 0.56       
shareholders
                                                                  
Basic number of      40,774          40,098        40,659          41,126
shares
Diluted number       41,109          40,668        40,794          41,668     
of shares
                                                                              

                                                             
SCHEDULE 2
                                                               
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS                          
                                                               
(Thousands)                                February 2, 2013   January 28, 2012
ASSETS
                                                               
Cash and cash equivalents                  $    68,223        $    47,682
Receivables, net                                125,683            154,022
Inventories, net                                533,275            561,797
Deferred income taxes                           -                  14,432
Income taxes                                    3,069              5,145
Prepaid expenses and other current              42,178             32,060
assets
Total current assets                            772,428            815,138
                                                               
Property and equipment, net                     146,089            131,471
Deferred income taxes                           1,461              -
Goodwill and intangible assets, net             132,628            140,590
Other assets                                    118,653            140,277
Total assets                               $    1,171,259     $    1,227,476
                                                               
LIABILITIES AND EQUITY
                                                               
Borrowings under revolving credit          $    105,000       $    201,000
agreement
Trade accounts payable                          222,742            190,611
Deferred income taxes                           748                -
Other accrued expenses                          140,619            132,969
Total current liabilities                       469,109            524,580
                                                               
Long-term debt                                  198,823            198,633
Deferred rent                                   33,711             32,361
Deferred income taxes                           13,862             31,136
Other liabilities                               29,853             27,050
Total other liabilities                         276,249            289,180
                                                               
Total Brown Shoe Company, Inc.                  425,129            412,669
shareholders’ equity
Noncontrolling interests                        772                1,047
Total equity                                    425,901            413,716
Total liabilities and equity               $    1,171,259     $    1,227,476
                                                               

                                                             
SCHEDULE 3
                                                               
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF                           
CASH FLOWS
                                                               
                                           53 Weeks Ended     52 Weeks Ended
(Thousands)                                February 2, 2013   January 28, 2012
OPERATING ACTIVITIES:
Net earnings                               $    27,204        $  24,390
Adjustments to reconcile net earnings to
net cash provided by operating
activities:
Depreciation and amortization                   54,783           59,111
Amortization of debt issuance costs             2,561            2,338
Loss on early extinguishment of debt            -                1,003
Share-based compensation expense                6,489            5,633
Tax benefit related to share-based plans        (944      )      (1,000      )
Loss on disposal of facilities and              3,103            1,560
equipment
Impairment charges for facilities and           4,132            1,871
equipment
Impairment of intangible assets                 5,777            -
Deferred rent                                   1,350            (2,317      )
Deferred income taxes benefit                   (3,555    )      (112        )
Provision for doubtful accounts                 360              1,284
Gain on sale of subsidiary, net                 -                (13,965     )
Changes in operating assets and
liabilities, net of acquired and
discontinued operations:
Receivables                                     27,984           (26,298     )
Inventories                                     28,623           3,502
Prepaid expenses and other current and          (9,169    )      2,286
noncurrent assets
Trade accounts payable                          32,091           13,660
Accrued expenses and other liabilities          10,436           (35,117     )
Income taxes                                    2,076            12,512
Other, net                                      4,636            (2,255      )
Net cash provided by operating                  197,937          48,086       
activities
                                                               
INVESTING ACTIVITIES:
Capital Expenditures                            (63,729   )      (38,564     )
Acquisition cost                                (5,000    )      (156,636    )
Cash recognized on initial consolidation        -                3,121
Net proceeds from sale of subsidiary            -                55,350       
Net cash used for investing activities          (68,729   )      (136,729    )
                                                               
FINANCING ACTIVITIES:
Borrowings under revolving credit               805,000          1,595,500
agreement
Repayments under revolving credit               (901,000  )      (1,592,500  )
agreement
Proceeds from issuance of 2019 Senior           -                198,633
Notes
Redemption of 2012 Senior Notes                 -                (150,000    )
Dividends paid                                  (12,011   )      (12,076     )
Debt issuance costs                             -                (6,428      )
Acquisition of treasury stock                   -                (25,484     )
Issuance of common stock under                  (1,700    )      918
share-based plans, net
Tax benefit related to share-based plans        944              1,000
Contributions by noncontrolling interest        -                378          
Net cash (used for) provided by                 (108,767  )      9,941        
financing activities
Effect of exchange rate changes on cash         100              (164        )
and cash equivalents
Increase (decrease) in cash and cash            20,541           (78,866     )
equivalents
Cash and cash equivalents at beginning          47,682           126,548      
of period
                                                               
Cash and cash equivalents at end of        $    68,223        $  47,682       
period
                                                               

                                                                                       
SCHEDULE 4
                                                                                         
BROWN SHOE COMPANY,
INC.
RECONCILIATION OF NET EARNINGS AND DILUTED EARNINGS PER SHARE (GAAP BASIS) TO ADJUSTED NET
EARNINGS AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP BASIS)
                                                                                         
                      (Unaudited)                          (Unaudited)
                      14 Weeks Ended February 2, 2013      13 Weeks Ended January 28, 2012
                      Pre-Tax    Net Earnings                            Net (Loss)
                      Impact     Attributable   Diluted    Pre-Tax       Earnings       Diluted
(Thousands, except    of         to             Earnings   Impact of     Attributable   (Loss)
per share data)       Charges/   Brown Shoe     Per        Charges/      to             Earnings
                      Other      Company,       Share      Other Items   Brown Shoe     Per
                      Items      Inc.                                    Company,       Share
                                                                         Inc.
                                                                                         
GAAP earnings                    $   4,039      $  0.09                  $  (8,222  )   $ (0.21 )
(loss)
                                                                                         
Charges/Other
Items:
Portfolio
realignment
Business exits and    $ 2,942        1,827         0.05    $ 14,649         9,285         0.23
cost reductions
Loss on sale of         -            -             -         935            1,409         0.04
subsidiary
ASG
integration-related     -            -             -         2,917          1,629         0.04
costs
                                                                                         
Total charges/other   $ 2,942        1,827         0.05    $ 18,501         12,323        0.31   
items
                                                                                         
Adjusted earnings                $   5,866      $  0.14                  $  4,101       $ 0.10   
                                                                                         
                                                                                         
                      53 Weeks Ended February 2, 2013      52 Weeks Ended January 28, 2012
                      Pre-Tax    Net Earnings                            Net Earnings
                      Impact     Attributable   Diluted    Pre-Tax       Attributable   Diluted
(Thousands, except    of         to             Earnings   Impact of     to             Earnings
per share data)       Charges/   Brown Shoe     Per        Charges/      Brown Shoe     Per
                      Other      Company,       Share      Other Items   Company,       Share
                      Items      Inc.                                    Inc.
                                                                                         
GAAP earnings                    $   27,491     $  0.64                  $  24,589      $ 0.56
                                                                                         
Charges/Other
Items:
Portfolio
realignment
Gain on sale of       $ -            -             -       $ (20,635 )      (13,965 )     (0.32 )
subsidiary
Business exits and      29,944       19,266        0.45      19,154         12,036        0.28
cost reductions
Organizational          2,283        1,395         0.03      -              -             -
change
ASG acquisition and
integration-related     675          441           0.01      6,457          4,519         0.11
costs
ASG cost of goods       -            -             -         4,189          2,477         0.05
sold adjustment^(1)
Loss on early
extinguishment of       -            -             -         1,003          638           0.02
debt
                                                                                         
Total charges/other   $ 32,902       21,102        0.49    $ 10,168         5,705         0.14   
items
                                                                                         
Adjusted earnings                $   48,593     $  1.13                  $  30,294      $ 0.70   
                                                                                         
                                                                                         
(1) In accordance with GAAP, purchase accounting rules require the company to record inventory at
fair value (i.e., expected selling price less costs to sell) on the acquisition date. This
results in lower than typical gross margins when the acquired inventory is sold. This adjustment
reflects the elimination of the unfavorable impact of lower gross margins for ASG product sold in
the first and second quarters of 2011.
 

                                                                                                                                                     
SCHEDULE 5
                                                                                                                                                       
BROWN SHOE COMPANY,
INC.
SUMMARY FINANCIAL RESULTS BY
SEGMENT
(Unaudited)                                                                                                                                            
                                                                                                                                                       
 
SUMMARY FINANCIAL
RESULTS
                                                                                                                                                       
                      Famous Footwear              Wholesale Operations         Specialty Retail            Other                       Consolidated
                      14 Weeks      13 Weeks       14 Weeks      13 Weeks       14 Weeks      13 Weeks      14 Weeks      13 Weeks      14 Weeks      13 Weeks
                      Ended         Ended          Ended         Ended          Ended         Ended         Ended         Ended         Ended         Ended
                      February 2,   January 28,    February 2,   January 28,    February 2,   January 28,   February 2,   January 28,   February 2,   January 28,
(Thousands)           2013          2012           2013          2012           2013          2012          2013          2012          2013          2012
                                                                                                                                                       
Net Sales             $ 380,112     $ 352,414      $ 194,452     $ 205,102      $ 65,612      $ 71,375      $ -           $ -           $ 640,176     $ 628,891
                                                                                                                                                       
Gross Profit          $ 167,376     $ 151,269      $ 58,101      $ 59,686       $ 26,222      $ 27,618      $ -           $ -           $ 251,699     $ 238,573
Adjusted Gross        $ 167,376     $ 151,269      $ 58,229      $ 60,346       $ 26,305      $ 28,000      $ -           $ -           $ 251,910     $ 239,615
Profit
                                                                                                                                                       
Gross Profit Rate       44.0    %     42.9    %      29.9    %     29.1    %      40.0   %      38.7   %      -             -             39.3    %     37.9    %
Adjusted Gross          44.0    %     42.9    %      29.9    %     29.4    %      40.1   %      39.2   %      -             -             39.4    %     38.1    %
Profit Rate
                                                                                                                                                       
Operating Earnings    $ 19,731      $ 7,864        $ 2,753       $ (1,763  )    $ (1,299 )    $ (924   )    $ (10,681 )   $ (13,070 )   $ 10,504      $ (7,893  )
(Loss)
Adjusted Operating    $ 19,813      $ 10,616       $ 5,315       $ 8,272        $ (1,108 )    $ 69          $ (10,574 )   $ (9,284  )   $ 13,446      $ 9,673
Earnings (Loss)
                                                                                                                                                       
Operating Earnings      5.2     %     2.2     %      1.4     %     (0.9    %)     (2.0   %)     (1.3   %)     -             -             1.6     %     (1.3    %)
(Loss) %
Adjusted Operating      5.2     %     3.0     %      2.7     %     4.0     %      (1.7   %)     0.1    %      -             -             2.1     %     1.5     %
Earnings (Loss) %
                                                                                                                                                       
Same-store Sales %
(on a 13-week           4.4     %     (0.8    %)     -             -              (7.1   %)     4.7    %      -             -             -             -
basis)
                                                                                                                                                       
Number of Stores        1,055         1,089          -             -              222           234           -             -             1,277         1,323
                                                                                                                                                       
                                                                                                                                                       
 
RECONCILIATION OF ADJUSTED
RESULTS (NON-GAAP)
                                                                                                                                                       
                      Famous Footwear              Wholesale Operations         Specialty Retail            Other                       Consolidated
                      14 Weeks      13 Weeks       14 Weeks      13 Weeks       14 Weeks      13 Weeks      14 Weeks      13 Weeks      14 Weeks      13 Weeks
                      Ended         Ended          Ended         Ended          Ended         Ended         Ended         Ended         Ended         Ended
                      February 2,   January 28,    February 2,   January 28,    February 2,   January 28,   February 2,   January 28,   February 2,   January 28,
(Thousands)           2013          2012           2013          2012           2013          2012          2013          2012          2013          2012
                                                                                                                                                       
Gross Profit          $ 167,376     $ 151,269      $ 58,101      $ 59,686       $ 26,222      $ 27,618      $ -           $ -           $ 251,699     $ 238,573
                                                                                                                                                       
Charges/Other
Items:
Portfolio
realignment
Business exits and      -             -              128           660            83            382           -             -             211           1,042
cost reductions
                                                                                                                                                       
Total charges/other     -             -              128           660            83            382           -             -             211           1,042    
items
                                                                                                                                                       
Adjusted Gross        $ 167,376     $ 151,269      $ 58,229      $ 60,346       $ 26,305      $ 28,000      $ -           $ -           $ 251,910     $ 239,615  
Profit
                                                                                                                                                       
                                                                                                                                                       
Operating Earnings    $ 19,731      $ 7,864        $ 2,753       $ (1,763  )    $ (1,299 )    $ (924   )    $ (10,681 )   $ (13,070 )   $ 10,504      $ (7,893  )
(Loss)
                                                                                                                                                       
Charges/Other
Items:
Portfolio
realignment
Business exits and      82            2,752          2,562         7,542          191           993           107           3,362         2,942         14,649
cost reductions
ASG acquisition and
integration-related     -             -              -             2,493          -             -             -             424           -             2,917
costs
                                                                                                                                                       
Total charges/other     82            2,752          2,562         10,035         191           993           107           3,786         2,942         17,566   
items
                                                                                                                                                       
Adjusted Operating    $ 19,813      $ 10,616       $ 5,315       $ 8,272        $ (1,108 )    $ 69          $ (10,574 )   $ (9,284  )   $ 13,446      $ 9,673    
Earnings (Loss)
                                                                                                                                                       

SCHEDULE 5 -                                                                                                                                                
CONTINUED
                                                                                                                                                              
BROWN SHOE COMPANY,
INC.
SUMMARY FINANCIAL RESULTS BY                                                                                                                                  
SEGMENT
                                                                                                                                                              
 
SUMMARY FINANCIAL
RESULTS
                                                                                                                                                              
                      Famous Footwear                  Wholesale Operations        Specialty Retail              Other                       Consolidated
                      53 Weeks        52 Weeks Ended   53 Weeks      52 Weeks      53 Weeks       52 Weeks       53 Weeks      52 Weeks      53 Weeks        52 Weeks
                      Ended                            Ended         Ended         Ended          Ended          Ended         Ended         Ended           Ended
                      February 2,     January 28,      February 2,   January 28,   February 2,    January 28,    February 2,   January 28,   February 2,     January 28,
(Thousands)           2013            2012             2013          2012          2013           2012           2013          2012          2013            2012
                                                                                                                                                              
Net Sales             $ 1,514,349     $ 1,456,314      $ 845,176     $ 870,873     $ 238,540      $ 255,637      $ -           $ -           $ 2,598,065     $ 2,582,824
                                                                                                                                                              
Gross Profit          $ 666,094       $ 635,221        $ 245,582     $ 256,346     $ 98,683       $ 105,073      $ -           $ -           $ 1,010,359     $ 996,640
Adjusted Gross        $ 666,094       $ 635,221        $ 248,309     $ 262,092     $ 99,062       $ 105,455      $ -           $ -           $ 1,013,465     $ 1,002,768
Profit
                                                                                                                                                              
Gross Profit Rate       44.0      %     43.6      %      29.1    %     29.4    %     41.4    %      41.1    %      -             -             38.9      %     38.6      %
Adjusted Gross          44.0      %     43.6      %      29.4    %     30.1    %     41.5    %      41.3    %      -             -             39.0      %     38.8      %
Profit Rate
                                                                                                                                                              
Operating Earnings    $ 94,096        $ 62,515         $ 17,581      $ 16,739      $ (8,850  )    $ (7,627  )    $ (41,220 )   $ (36,077 )   $ 61,607        $ 35,550
(Loss)
Adjusted Operating    $ 101,865       $ 65,267         $ 35,338      $ 35,468      $ (4,755  )    $ (6,634  )    $ (37,939 )   $ (28,751 )   $ 94,509        $ 65,350
Earnings (Loss)
                                                                                                                                                              
Operating Earnings      6.2       %     4.3       %      2.1     %     1.9     %     (3.7    %)     (3.0    %)     -             -             2.4       %     1.4       %
(Loss) %
Adjusted Operating      6.7       %     4.5       %      4.2     %     4.1     %     (2.0    %)     (2.6    %)     -             -             3.6       %     2.5       %
Earnings (Loss) %
                                                                                                                                                              
Same-store Sales %
(on a 52-week           4.5       %     (1.2      %)     -             -             0.6     %      1.7     %      -             -             -               -
basis)
                                                                                                                                                              
Number of Stores        1,055           1,089            -             -             222            234            -             -             1,277           1,323
                                                                                                                                                              
                                                                                                                                                              
 
RECONCILIATION OF ADJUSTED RESULTS
(NON-GAAP)
                                                                                                                                                              
                      Famous Footwear                  Wholesale Operations        Specialty Retail              Other                       Consolidated
                      53 Weeks        52 Weeks Ended   53 Weeks      52 Weeks      53 Weeks       52 Weeks       53 Weeks      52 Weeks      53 Weeks        52 Weeks
                      Ended                            Ended         Ended         Ended          Ended          Ended         Ended         Ended           Ended
                      February 2,     January 28,      February 2,   January 28,   February 2,    January 28,    February 2,   January 28,   February 2,     January 28,
(Thousands)           2013            2012             2013          2012          2013           2012           2013          2012          2013            2012
                                                                                                                                                              
Gross Profit          $ 666,094       $ 635,221        $ 245,582     $ 256,346     $ 98,683       $ 105,073      $ -           $ -           $ 1,010,359     $ 996,640
                                                                                                                                                              
Charges/Other
Items:
Portfolio
realignment
Business exits and      -               -                2,727         1,557         379            382            -             -             3,106           1,939
cost reductions
ASG cost of good        -               -                -             4,189         -              -              -             -             -               4,189
sold adjustment
                                                                                                                                                              
Total charges/other     -               -                2,727         5,746         379            382            -             -             3,106           6,128      
items
                                                                                                                                                              
Adjusted Gross        $ 666,094       $ 635,221        $ 248,309     $ 262,092     $ 99,062       $ 105,455      $ -           $ -           $ 1,013,465     $ 1,002,768  
Profit
                                                                                                                                                              
                                                                                                                                                              
Operating Earnings    $ 94,096        $ 62,515         $ 17,581      $ 16,739      $ (8,850  )    $ (7,627  )    $ (41,220 )   $ (36,077 )   $ 61,607        $ 35,550
(Loss)
                                                                                                                                                              
Charges/Other
Items:
Portfolio
realignment
Business exits and      7,769           2,752            17,082        12,047        4,095          993            998           3,362         29,944          19,154
cost reductions
Organizational          -               -                -             -             -              -              2,283         -             2,283           -
change
ASG acquisition and
integration-related     -               -                675           2,493         -              -              -             3,964         675             6,457
costs
ASG cost of good        -               -                -             4,189         -              -              -             -             -               4,189
sold adjustment
                                                                                                                                                              
Total charges/other     7,769           2,752            17,757        18,729        4,095          993            3,281         7,326         32,902          29,800     
items
                                                                                                                                                              
Adjusted Operating    $ 101,865       $ 65,267         $ 35,338      $ 35,468      $ (4,755  )    $ (6,634  )    $ (37,939 )   $ (28,751 )   $ 94,509        $ 65,350     
Earnings (Loss)
                                                                                                                                                              

                                                                  
SCHEDULE 6
                                                                    
BROWN SHOE
COMPANY, INC.
BASIC AND DILUTED EARNINGS PER SHARE RECONCILIATION
                                                                    
                   (Unaudited)
                   14 Weeks        13 Weeks        53 Weeks        52 Weeks
                   Ended           Ended           Ended           Ended
                   February 2,     January 28,     February 2,     January 28,
(Thousands,
except per share   2013            2012            2013            2012
data)
                                                                    
Net earnings
(loss)
attributable to
Brown Shoe
Company, Inc.:
Net earnings
(loss) from        $  4,003        $  (6,767  )    $  27,204       $  8,724
continuing
operations
Net loss
(earnings)
attributable to       36              (46     )       287             199
noncontrolling
interests
Net earnings
allocated to          (199    )       -               (1,365  )       (529   )
participating
securities
Net earnings
(loss) from           3,840           (6,813  )       26,126          8,394   
continuing
operations
                                                                    
Net (loss)
earnings from         -               (1,409  )       -               15,666
discontinued
operations
Net earnings
allocated to          -               -               -               (668   )
participating
securities
Net (loss)
earnings from         -               (1,409  )       -               14,998  
discontinued
operations
                                                                    
Net earnings
(loss)
attributable to
Brown Shoe
Company, Inc.      $  3,840        $  (8,222  )    $  26,126       $  23,392  
after allocation
of earnings to
participating
securities
                                                                    
                                                                    
Basic and
diluted common
shares
attributable to
Brown Shoe
Company, Inc.:
Basic common
shares for
continuing            40,774          40,098          40,659          41,126
operations and
discontinued
operations
Dilutive effect
of share-based
awards for
continuing            335             570             135             542     
operations and
discontinued
operations
Diluted common
shares for
continuing
operations and
discontinued          41,109          40,668          40,794          41,668  
operations
attributable to
Brown Shoe
Company, Inc.
                                                                    
Basic earnings
(loss) per
share:
From continuing    $  0.09         $  (0.17   )    $  0.64         $  0.20
operations
From
discontinued          -               (0.04   )       -               0.37    
operations
Basic earnings
(loss) per
common share
attributable to    $  0.09         $  (0.21   )    $  0.64         $  0.57    
Brown Shoe
Company, Inc.
shareholders
                                                                    
Diluted earnings
(loss) per
share:
From continuing    $  0.09         $  (0.17   )    $  0.64         $  0.20
operations
From
discontinued          -               (0.04   )       -               0.36    
operations
Diluted earnings
(loss) per
common share
attributable to    $  0.09         $  (0.21   )    $  0.64         $  0.56    
Brown Shoe
Company, Inc.
shareholders
                                                                              

                                                                  
SCHEDULE 7
                                                                    
BROWN SHOE
COMPANY, INC.
BASIC AND DILUTED ADJUSTED EARNINGS PER SHARE RECONCILIATION
                                                                    
                   (Unaudited)
                   14 Weeks        13 Weeks        53 Weeks        52 Weeks
                   Ended           Ended           Ended           Ended
                   February 2,     January 28,     February 2,     January 28,
(Thousands,
except per share   2013            2012            2013            2012
data)
                                                                    
Adjusted net
earnings
attributable to
Brown Shoe
Company, Inc.:
Adjusted net
earnings from      $  5,830        $  4,147        $  48,306       $  28,394
continuing
operations
Net loss
(earnings)
attributable to       36              (46     )       287             199
noncontrolling
interests
Net earnings
allocated to          (289    )       (182    )       (2,404  )       (1,234 )
participating
securities
Adjusted net
earnings from         5,577           3,919           46,189          27,359  
continuing
operations
                                                                    
Adjusted net
earnings from         -               -               -               1,701
discontinued
operations
Net earnings
allocated to          -               -               -               (73    )
participating
securities
Net earnings
from                  -               -               -               1,628   
discontinued
operations
                                                                    
Adjusted net
earnings
attributable to
Brown Shoe
Company, Inc.      $  5,577        $  3,919        $  46,189       $  28,987  
after allocation
of earnings to
participating
securities
                                                                    
                                                                    
Basic and
diluted common
shares
attributable to
Brown Shoe
Company, Inc.:
Basic common
shares for
continuing            40,774          40,098          40,659          41,126
operations and
discontinued
operations
Dilutive effect
of share-based
awards for
continuing            335             570             135             542     
operations and
discontinued
operations
Diluted common
shares for
continuing
operations and
discontinued          41,109          40,668          40,794          41,668  
operations
attributable to
Brown Shoe
Company, Inc.
                                                                    
Basic adjusted
earnings per
share:
From continuing    $  0.14         $  0.10         $  1.14         $  0.67
operations
From
discontinued          -               -               -               0.04    
operations
Basic adjusted
earnings per
common share
attributable to    $  0.14         $  0.10         $  1.14         $  0.71    
Brown Shoe
Company, Inc.
shareholders
                                                                    
Diluted adjusted
earnings per
share:
From continuing    $  0.14         $  0.10         $  1.13         $  0.66
operations
From
discontinued          -               -               -               0.04    
operations
Diluted adjusted
earnings per
common share
attributable to    $  0.14         $  0.10         $  1.13         $  0.70    
Brown Shoe
Company, Inc.
shareholders
                                                                    

Contact:

Brown Shoe Company
Investors
Peggy Reilly Tharp, 314-854-4134
ptharp@brownshoe.com
or
Media
Kelly Malone, 314-854-4093
kmalone@brownshoe.com
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