Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Brown Shoe Company (NYSE: CAL ) were stepping up to the next level today, gaining as much 11% on a strong first-quarter earnings report.
So what: The parent of brands such as Dr. Scholls and Via Spiga posted a per-share profit of $0.35, better than estimates of $0.31, as revenue inched up 0.4% to $591.2 million, just short of expectations at $593.8 million. CEO Diane Sullivan said the performance in the quarter "exceeded expectations thanks to strong Contemporary Fashion platform sales" and more seasonable weather at the end of the quarter. Same-store sales were up 1.3% in the quarter, a sign that the company was able to overcome the severe weather many had retailers had complained about.
Now what: Looking ahead, the company raised its full-year EPS guidance to $1.47-$1.57, against estimates at $1.55, and expects revenue of $2.58-$2.6 billion, or a growth rate of 2.9%. That figure was in line with analyst estimates at $2.59 billion. Today's earnings beat was promising, and it was Brown's fifth in a row, a sign that more could come. But the company's top-line growth is also an indication that the stock's 70% appreciation in the past year cannot continue without inflating its value. I'd wait for a better entry point for a stock like this.
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