Caleres, Inc. · NYSE:CAL
Caleres — Brown Shoe — Investor Presentation (October 2006)
22 slides from Caleres's investor presentation, Oct 20, 2006
Slide 1: Investor Update Fall 2006
Investor Update Fait 2006 oo Via Spiga Naturalizer Franco Sarto Carlos by Carlos Santana Etienne Aigner LifeStride Dr. Scholl's Original Nickels Soft Buster Brown Famous Footwear Shoes.com BROWN SHOE
Slide 2: Forward-looking statements
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 p
Slide 3: Agenda – NYSE: BWS
Agenda – NYSE: BWS 1) Reshaping Our Platform 2) Brown Shoe Today 3) 2005 Accomplishments 4) Strategies for Long-Term Growth – 2006 Guidance* * Note: Guidance was issued on August 23, 2006 and has not been updated. 3
Slide 4: Reshaped our Platform – 2001 - 2005
Reshaped our Platform – 2001 - 2005 Sales and Operating Operating Margin Department Store Market Earnings Improvement Improvement at Famous Share Improvement at for BWS (millions $) Footwear Wholesale* 12.5% 7.0% Sales Operating 2,000 80 Earnings 10.0% 6.0% 5.0% 1,500 60 7.5% 4.0% 12.2% 5.0% 1,000 4
Slide 5: Brown Shoe Today -- $2.5 Billion in Sales Projected for 2006
Brown Shoe Today -- $2.5 Billion in Sales Projected for 2006 Unique wholesale-retail platform. Building our brands and retail concepts to gain market share while delivering style to the consumer. Mass 39% Wholesale Merchandisers 61% Retail $300 million § 80 million pairs § 1300 stores § 2000 retail
Slide 6: Overview of our Branded Wholesale Business
Overview of our Branded Wholesale Business: $600 Our Rank among Wholesalers Women’s Fashion Footwear Sales in U.S. Department Stores* $500 Ranked by Parent Company ($ in millions) $400 $300 $200 $100 $0 e n e p oe p n Nik orp rou Sh Grou nies dde r C ns Brow iborn tG n S p a a la tio H la es Brow VC
Slide 7: Our Portfolio of Brands
Our Portfolio of Brands Zone Zone Sales/Yr Bridge No. 11 $746MM* (Women’s) No. 12 Better No. 2 $806MM* No. 8 (Women’s) Moderate $467MM* (Women’s) No. 12 No. 3 juniors No. 1 Mass $6.7B** (Men, Women, & Children) Private Label * Zone Sales from NPD Group Reported POS reflects Women’s Fashion footwear
Slide 8: Overview of our Retail Businesses
Overview of our Retail Businesses: 7 6 No. 1- Family Branded* 5 Our Rank Among Top Footwear Retailers % Share of Dollars Share of Footwear Sales by Retailer* 4 3 2 1 No. 4- Women's Specialty* 0 W art ars s et 's art Fin ny ted Fe ss m hl' e s F ker rd DS rg r Km l Lin ea va Se yle M tro n Ko lla Ta
Slide 9: 2005 Continued Strong Performance
2005 Continued Strong Performance 1) Sales growth of 18% to $2.3 billion; EPS $1.45 – up 31% on an adjusted basis to $2.22* 2) Retail § Famous Footwear progress continued – operating earnings up 11% § Restructured Naturalizer store base § Doubled e-commerce sales 3) Wholesale – operating earnings up
Slide 10: 2006 Priorities and Growth Drivers; Success Metrics
2006 Priorities and Growth Drivers Success Metrics 1) Increased traction at Famous Footwear 1) Comp-store sales for the First-Half were up 0.9%; Operating Profit increased 7.8% for § Comp-store sales planned at 2%-3% the First-Half 2) Potential of new Wholesale "sell-through" 2) Wholesale sales in F
Slide 11: First-Half 2006 Performance; Full-Year Guidance
First-Half 2006 Performance § Sales up 7.5% – driven by Famous Footwear and a full-half of Bennett business § EPS of $0.87 on a GAAP basis, compared to $0.28 last year. § Both years include unusual items which affect comparability. See Appendix for reconciliation. § Adjusted EPS** of $0.76, inclusiv
Slide 12: Key Strategies for Long-Term Growth
Key Strategies for Long-Term Growth: 1) Create differentiation – for our stores, our footwear, our brands 2) Create consumer preference with compelling footwear design & styles 3) Lead in Speed-to-Market – to increase sell-throughs and reduce markdown risk. 4) Build our portfolio of brands Balance G
Slide 13: Long-Term Goal – High single-digit revenue growth and 10-15% earnings growth
Long-Term Goal – Targeting high single-digit revenue growth and 10-15% compound earnings growth rate. Longer-term growth drivers: n Famous Footwear – creating differentiation with preference to provide the basis for significant door count expansion n Wholesale – achieving margin and market share opp
Slide 14: Strategic Earnings Enhancement Plan
Strategic Earnings Enhancement Plan Early stages of reviewing and implementing strategic initiatives with the goal of increasing earnings and reallocating resources and investment to drive consumer preference. Key elements of the plan include: 1) Restructuring administrative and support areas; 2) Re
Slide 15: Appendix
BROWN SHOE Appendix
Slide 16: Sales and EPS – 2001 to Estimated 2006
Sales and EPS – 2001 to Estimated 2006* Sales in Billions $2.46 Billion Earnings Per Share $2.5 $2.50 $2.25 – $2.30* $2.22 $2.08 – $2.0 $2.00 $2.17 $1.82 $1.70 $1.64 Adjusted EPS $1.5 $1.50 $1.53 GAAP EPS $1.45 $1.0 $1.00 $0.5 $0.50 -$0.20 $0.0 $0.00 2001 2002 2003 2004 2005 2006 2001 2002 2003 2004
Slide 17: Distinct Wholesale Portfolio
Distinct Wholesale Portfolio Projected for 2006 17
Slide 18: Famous Footwear -- Sales by category
Famous Footwear -- Sales by category Based on 12 months ended January 2006 Accessories 4% 4% 5% 5% Athletic 9% 9% Kid’s 29% 29% 17% 17% Women’s Men’s Athletic 15% 15% Athletic 21% 21% 18
Slide 19: Strategic Earnings Enhancement Plan – Estimated Costs and Benefits
Strategic Earnings Enhancement Plan Estimated ranges for costs and benefits were as follows: § In 2006, benefits related to the strategic initiatives are expected to be minor with after-tax implementation costs estimated at $6 million to $7 million; § In 2007, after-tax benefits are estimated to be
Slide 20: Debt to Capital Ratio
Debt to Capital Ratio (Millions of dollars, except for Debt to Capital Ratio) Debt to Capital Ratio Jul-06 2005 2004 2003 2002 2001 Total Debt Obligations* $ 200 $ 200 $ 142 $ 120 $ 152 $ 216 Total Shareholders' Equity 469 434 391 350 292 253 Total Capital $ 669 $ 634 $ 533 $ 470 $ 444 $ 469 Debt to
Slide 21: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 1st Half 2006 v. 1st Half 2005
Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 1st Half 2006 v. 1st Half 2005 1st Half 2006* 1st Half 2005 Per diluted Per diluted After-tax $ share After-tax $ share Net earnings $25,222 $0.87 $7,862 $0.28 Strategic initiatives costs 1,231 0.04 Insurance recoveries, net (4,432) (0.15
Slide 22: Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 2004 – 2006 Estimated
Reconciliation of GAAP Net Earnings to Adjusted Net Earnings: 2004 – 2006 Estimated** 2006 Estimated Range * Low - High 2005 2004 Net Net Net (in millions, except EPS data) Earnings EPS Earnings EPS Earnings EPS GAAP Results $ 60.0 - 63.0 $ 2.08 - 2.17 $ 41.0 $ 1.45 $ 43.3 $ 1.53 Special Charges and