Earnings Releases

BROWN SHOE REPORTS FIRST QUARTER EARNINGS PER SHARE OF $0.36, MATCHING YEAR-EARLIER RESULTS

ST. LOUIS, MISSOURI, May 22, 2001 -- Brown Shoe Company, Inc. (NYSE: BWS) reported net earnings of $6,411,000, or $0.36 per diluted share, for the first fiscal quarter ended May 5, 2001, compared to net earnings of $6,548,000, or $0.36 per diluted share, in the first quarter of 2000. These results are in line with the company's previous guidance.

Consolidated net sales for the first quarter of 2001 were $436,138,000 compared to $394,757,000 in last year's first quarter, an increase of 10.5 percent.

Sales gains were recorded in all segments. Operating earnings increased across all divisions with the exception of Famous Footwear, which had lower-than expected spring sales. Earnings gains were particularly strong for the wholesale businesses, which posted a 41.0 percent increase over the year-ago quarter.

"We are extremely pleased with the strong growth in our wholesale businesses, led by a 35.5 percent sales increase for our flagship Naturalizer brand," said Brown Shoe Chairman and CEO Ron Fromm. "The retail environment for Famous Footwear, however, was challenging, and we are aggressively working to improve our merchandising effort. A slowdown in outlet center traffic, combined with advertising that unfortunately coincided with poor weather early in the quarter, also contributed to the chain's decline in comparable store sales.

"As we look toward the remainder of fiscal 2001, we are encouraged by consumer demand for the Naturalizer line, evidenced by strong department store gains and positive same-store sales in both our domestic and Canadian Naturalizer retail chains," Fromm continued. "Order positions continue to run up double-digits for our women's private label/licensed business at the mass merchandiser channel, and our children's business is off to a strong start. Our highest priority right now is to improve merchandising practices at Famous Footwear and to prepare for the back-to-school retailing season."

As previously reported, total sales at Famous Footwear, the company's 919-store family footwear chain, increased by $18.8 million or 7.9 percent to $255,728,000 for the quarter, from $236,952,000 for the same 13-week period last year. Same-store sales for the period were down 3.7 percent. Operating earnings were $9,854,000, a 10.6 percent decrease compared to year-ago operating earnings of $11,018,000. While expenses were better than plan, lower-than-anticipated comparable store sales negatively affected margin dollars and operating earnings.

Naturalizer Retail, the company's 475-store chain selling the Naturalizer brand of women's shoes in both the U.S. and Canada, posted an 8.5 percent sales increase for the first quarter: $50,985,000 compared to $46,982,000 for the same period last year. The chain's operating loss narrowed significantly, improving to $561,000 from $1,724,000 in the year-ago quarter. These results include a charge of approximately $600,000 relating to the closure of under-performing stores during the first quarter.

"Naturalizer Retail's first quarter same-store sales increases of 5.9 percent in the U.S. and 15.1 percent in Canada highlight the growing demand for the product as well as the favorable impact of our real-estate strategy," Fromm said.

"Overall, the building demand for the Naturalizer brand is underscored by a 34.9 percent increase in sales to the department store channel. Attractive, trend-right product supported by effective advertising and strong visual merchandising continues to drive these gains," Fromm continued.

Operating earnings for the wholesale businesses, which include branded, private label, kids' and the company's Canadian wholesale operations, increased by 41.0 percent to $11,362,000 from $8,060,000 for the prior year quarter. Sales for the quarter were $129,422,000 versus $110,823,000 last year. This increase in operating earnings reflects strong orders throughout all channels. Unshipped orders for all wholesale businesses continue to be strong.

On a consolidated basis, operating earnings increased 8.0 percent for the first quarter. "While we achieved some economies of scale within our base businesses, we continue our more fundamental work on corporate-wide initiatives to improve our operating model and return on investment," Fromm said.

"Towards that end, we have completed the analyses and preliminary design on two initial programs, which we believe represent significant opportunities for earnings enhancement: the first focuses on optimizing inventory flow, and the second on creating new efficiencies within our logistics network. We recently began pilot implementations in both areas. We expect to be able to detail the potential impact of these enterprise-wide opportunities in our third quarter," Fromm said.

Inventories at quarter-end were on plan, increasing 6.6 percent versus last year. The overall increase reflects 49 additional Famous Footwear stores open versus a year ago.

During the quarter, the company repurchased 122,400 shares of Brown Shoe common stock for approximately $2.2 million. Through the end of first quarter 2001, the company has repurchased a total of 905,400 shares for approximately $10.9 million as part of its stock repurchase program initiated in May 2000.

With respect to forward-looking guidance, Brown Shoe continues to be comfortable with the current earnings per share expectations of $0.59 (First Call) for the second quarter and $2.25 for the full year.


First Quarter Earnings and Conference Call
Brown Shoe will hold a conference call to discuss First Quarter results this afternoon, Tuesday, May 22 at 4:30 p.m. EST. While the question-and-answer session of the call will be limited to institutional analysts and investors, retail brokers and individual investors are invited to attend via a live web-cast to be hosted at http://www.streetevents.com. At the website, click on the Individual Investor Center to locate the broadcast. To listen to the webcast, your computer must have RealPlayer installed. If you do not have RealPlayer, go to http://www.streetevents.com prior to the call, where you can download RealPlayer for free.

Safe Harbor Statement Under the Private Securities Litigation Act of 1995: This press release contains certain forward-looking statements that are subject to various risks and uncertainties that could cause actual results to differ materially. These include general economic conditions, competition, consumer apparel and footwear buying trends, and political and economic conditions in Brazil and China, which are significant footwear sourcing countries. Brown Shoe Company, Inc. reports to the Securities and Exchange Commission including its Annual Report on Form 10-K contain detailed information relating to such factors.

Brown Shoe is a $1.7 billion footwear company with worldwide operations. The company operates the Famous Footwear and Naturalizer chains of footwear retail stores and markets leading brands including Naturalizer, LifeStride, Buster Brown, and licensed brands including Dr. Scholl's, Barbie, and other kids' character footwear. Brown Shoe press releases are available by fax through PR Newswire's Company News On-Call fax service at 800-758-5804, extension 109435. Brown Shoe information also is available on the Company's web site at http://www.brownshoe.com.


(Thousands, except per share)

	Thirteen Weeks Ended
	May 5, 2001	April 29, 2000
Net Sales	$436,138	$394,757
Cost of Goods Sold	261,090	232,783
Gross Profit	175,048	161,974
Selling and Administrative Expenses	160,049	147,943
Interest Expense	5,517	4,265
Other (Income) Expense	55	(174)
Earnings Before Income Taxes	9,427	9,940
Income Tax Provision	3,016	3,392
Net Earnings	$6,411	$6,548
Basic Net Earnings per Common Share	$.37	$.37
Diluted Net Earnings per Common Share	$.36	$.36
Basic Number of Shares	17,145	17,919
Diluted Number of Shares	17,646	18,060

(Thousands)

	May 5, 2001		April 29, 2000
ASSETS
Cash and Cash Investments	$35,971		$32,509
Receivables, Net	54,605		56,360
Inventories, Net	452,170		424,101
Other Current Assets	20,375		20,164
Total Current Assets	563,121		533,134
Property, Plant and Equipment Net	90,138		83,993
Other Assets	86,422		77,918
	$739,681		$695,045
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes Payable	$75,000		$16,743
Trade Accounts Payable	128,469		149,945
Accrued Expenses	76,556		78,806
Income Taxes	3,345		3,321
Current Maturities of Long-Term Debt	25,000		10,000
Total Current Liabilities	308,370		258,815
Long-Term Debt and Capitalized leases	137,039		162,035
Other Liabilities	21,138		20,149
Shareholders' Equity	273,134		254,046
	$739,681		$695,045