Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (March 2007)
29 slides from Caleres's investor presentation, Mar 13, 2007
Slide 1: Brown Shoe Company, Inc. Investor Update Spring 2007
Brown Shoe Company, Inc. Investor Update Spring 2007
Slide 2: Forward-looking statements
2 This document contains certain forward-looking statements and expectations regarding the Company's future performance and the future performance of its brands. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include (i) the
Slide 3: Brown Shoe At A Glance
3 Brown Shoe At A Glance Brown Shoe Today -- $2.5 Billion in Sales for 2006 . Integrated wholesale-retail platform. Consumer-driven enterprise that builds brands and retail concepts while gaining market share Department & Specialty Stores $650 million Mass Merchandisers $300 million Specialty Retail
Slide 4: Brown Shoe At A Glance
4 Brown Shoe At A Glance $0 $100 $200 $300 $400 $500 $600 Nine West Group Brown Shoe Clarks Companies Steve MaddenVCS Group Jimlar Corp Nike H H Brown Kenneth Cole Productions Deckers * Reflects NPD Group Reported POS Dollar Volume. 12 Months ending December 2006. Our Rank among Wholesalers Women’s
Slide 5: Brown Shoe Company Portfolio
5 Brown Shoe Company Portfolio No. 11 No. 3 Pureplay Ecommerce Footwear No. 8 No. 11 No. 2 Dr. Scholl’s Inside No. 3 No. 1 No. 11 No. 1 Branded Family Footwear FASHION = $32.3 B ATHLETIC = $11.4 B
Slide 6: Review of BWS Financials
6 Review of BWS Financials (all $’s in millions except EPS) *See Appendix for reconciliation 53 Weeks Ended 52 Weeks Ended February 3, 2007 January 28, 2006 % Chg. Consolidated Sales $2,470.9 $2,292.1 + 7.8% Net Earnings GAAP $65.7 $41.0 + 60.3% Adjusted* $71.0 $62.9 + 12.9% EPS GAAP $2.26 $1.45 + 5
Slide 7: Review of BWS Financials
7 Review of BWS Financials (all $’s in millions except EPS) 53 Weeks Ended 52 Weeks Ended February 3, 2007 January 28, 2006 % Chg. Famous Footwear Sales $1,282.1 $1,187.2 + 8.0% Operating Profit $89.8 $67.0 + 34.0% Wholesale Sales $930.8 $864.9 + 7.6% Operating Profit* $71.0 $80.1 - 11.4% Specialty
Slide 8: First Quarter 2007 & Full Year Guidance
8 First Quarter 2007 & Full Year Guidance As of March 8, 2007 and has not been updated First Quarter 2007 EPS: GAAP $0.27 to $0.29 Adjusted* $0.37 to $0.39 Full Year 2007 EPS: GAAP $2.28 to $2.33 Adjusted* $2.75 to $2.80 *See Appendix for reconciliation Other Estimates: Consolidated Sales: $2.48 - $
Slide 9: Shaping our Platform for Growth
9 Shaping our Platform for Growth 6.4% 7.6% 7.9% 12.2% 10.8% 0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 2002 2003 2004 2005 2006 Department Store Market Share Improvement at Wholesale* 0 500 1,000 1,500 2,000 2,500 2002 2003 2004 2005 2006 0 20 40 60 80 100 120 Sales and Operating Earnings Improvement for BWS
Slide 10: Brown Shoe Vision
10 Brown Shoe Vision: Brown Shoe Company is THE leading footwear marketer, winning loyal customers with compelling brands
Slide 11: Growth 2 Great: Brown Shoe Pillars
11 Brown Shoe Pillars Talent and Leadership Thoughtful Planning and Rigorous Execution Systems and Processes Best Practices Cross-Company Synergies (Vertical and Horizontal) Growth 2 Great Operational Excellence Platform Optimization Portfolio Optimization Market Intelligence Brand Power Consumer Dr
Slide 12: Brown Shoe Vision
12 Brown Shoe Vision . Partnership Model . Continue path towards being a world-class partner holistically in the industry: Vendor, Supplier, Customer, Consumer, Real Estate, Investor . Operational Excellence . Disciplined approach to profitability enhancement, efficiency and effectiveness . Portfoli
Slide 13: Brand Power
13 Brand Power . Building differentiated, market-leading brands driven by consumer preference 1. Developed Brown Brand-Building Model 2. Developing premier product and design capabilities 3. Increasing investments in marketing, merchandising, research and talent 4. Refining Consumer-Driven Model: 5.
Slide 14: Brands targeting key consumer segments
14 Brands targeting key consumer segments… Sexy, eye-catching, styles that she can wear with everything from jeans to dresses Segment Needs Style Profile Balancer Leader Sophisticate Explorer Brown Shoe Brands 16% Buying Power (% Total female spend) 18% 14% 24% BWS Consumer Seeks expressive, youthfu
Slide 15: Brand Power
15 Brand Power . Building differentiated, market-leading brands driven by consumer preference . Ø Creating Differentiation is key Ø Technology/redefining service
Slide 16: Brand Power
16 Brand Power . Building differentiated, market-leading brands driven by consumer preference . • Sell-through model; Fresh trend-right product • Extended brand essence to new categories and consumer touchpoints • Tightly-targeted consumer communications • Improved product delivered when she wants t
Slide 17: Brand Power: Brown New York
17 Brand Power . Building differentiated, market-leading brands driven by consumer preference . Brown New York • Allows us to play in new zones reaching new consumers • Strong emotional connection with consumer • Fashion/Style Credibility/Talent • Brand extension potential • Brown New York Transitio
Slide 18: Brand Power
18 Brand Power . Building differentiated, market-leading brands driven by consumer preference . • High brand recognition and strong equity • 97% brand awareness driven by insole TV and print advertising • Partnerships with Wal-Mart and Schering-Plough • Extend asset into new categories and channels
Slide 19: Brand Power: Direct-to-Consumer
19 Brand Power . Building differentiated, market-leading brands driven by consumer preference • Direct-to-Consumer • pure play • Branded web sites and multi-channel opportunities • Growth by winning in new and emerging markets Online Footwear: Projected to be over $6B market by 2011* $1.0 $1.7 $2.8
Slide 20: Increasing Prospects for Profitability
20 Increasing Prospects for Profitability Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Growth Survival Rebuild Improving Core Competencies • Reorganization of Executive Team • Focus on core activities • Secured financing and stabilized liquidity • IMPACT • Key management cha
Slide 21: Appendix
21 Appendix
Slide 22: Sales and EPS - 2001 to Estimated 2006
22 $1.00 $1.50 $2.00 $2.50 2002 2003 2004 2005 2006 2007 Est $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 2002 2003 2004 2005 2006 2007 Est Earnings Per Share Sales and EPS - 2001 to Estimated 2006* Sales in Billions $2.44 $2.22 $1.70 $1.66 $1.64 $2.26 $2.48 - $2.52 Billion GAAP EPS Adjusted EPS $1.45 $1.53 $2.75
Slide 23: Distinct Wholesale Portfolio - 2006
23 Distinct Wholesale Portfolio - 2006 Private Label Children’s Other
Slide 24: Famous Footwear -- Sales by category
24 14% 30% 20% 17% 6% 6% 7% Famous Footwear -- Sales by category Based on 12 months ended January 2007 Women’s Women’s Men’s Men’s Kid’s Kid’s Athletic Athletic Accessories Athletic
Slide 25: Strategic Earnings Enhancement Plan
25 Strategic Earnings Enhancement Plan During the second quarter of 2006, the Company introduced a strategic earnings enhancement plan designed to increase earnings and reallocate resources, through i) restructuring administrative and support areas; ii) redesigning logistics and distribution platfor
Slide 26: Strategic Earnings Enhancement Plan (continued)
26 Strategic Earnings Enhancement Plan (continued) While much has been accomplished, certain of the initiatives are still in early stages of development, and the Company expects to update cost and savings estimates as they are further developed. Current estimates are as follows: § In 2007, after-tax
Slide 27: Debt to Capital Ratio
27 Debt to Capital Ratio (Millions of dollars, except for Debt to Capital Ratio) * Total Debt Obligations include long term debt, borrowings under revolving credit agreement and capital lease obligations. ** Total Debt Obligations divided by Total Capital Debt to Capital Ratio 2006 2005 2004 2003 20
Slide 28: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 2006 v. 2005
28 After-tax $ Per diluted share After-tax $ Per diluted share Net earnings $65,708 $2.26 $41,000 $1.45 Strategic initiatives costs 3,927 0.13 Environmental insurance recoveries and charges (1,007) (0.03) Costs related to withdrawal from Bass license 2,337 0.08 Charges related to closing Naturalizer
Slide 29: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 2005 - 2007 Estimated
29 1st Quarter Diluted EPS Full Year Diluted EPS Net Earnings Diluted EPS Net Earnings Diluted EPS GAAP Results $0.27 - 0.29 $ 2.28 - 2.33 65.7 $ 2.26 $ 41.0 $ 1.45 $ Special Charges and Recoveries: Strategic Initiatives Costs 0.10 0.47 3.9 0.13 - - Incremental Bass Exit Costs - - 2.3 0.08 - - Insur