Bakers Footwear Reports Third Quarter and First Nine Months Fiscal 2006 Results

  
    
  
  
    
      Bakers Footwear Group, Inc. (Nasdaq: BKRS), a leading specialty 
      retailer of moderately priced fashion footwear for young women, today 
      announced results for the thirteen and thirty-nine weeks ended October 
      28, 2006.
    
    
      For the third quarter, the thirteen weeks ended October 28, 2006:
    
    
      
        Net sales increased 7.7%, to $46.6 million from $43.2 million for the 
        thirteen weeks ended October 29, 2005. Comparable store sales 
        decreased 4.2% compared to a 21.0% increase last year;
      
      
        Gross profit in the third quarter was $12.1 million, or 26.0% of net 
        sales, compared to $11.8 million, or 27.4% of net sales, in the third 
        quarter of fiscal 2005.
      
      
        Operating loss was $4.0 million, as compared to an operating loss of 
        $1.7 million in the same period a year ago;
      
      
        Net loss was $2.6 million, or $0.40 per share, as compared to a net 
        loss of $1.1 million, or $0.17 per share in the third quarter of 2005;
      
      
        Included in third quarter fiscal 2006 net loss per share was $0.04 per 
        share related to expenses incurred in considering potential equity 
        financing earlier in the year, and
      
      
        As a result of adopting FAS 123R, the Company recognized $0.02 per 
        share related to stock- based compensation expense in the third 
        quarter of 2006. The Company recognized no stock-based compensation 
        expense in the third quarter of 2005.
      
    
    
      Peter Edison, Chairman and Chief Executive Officer of Bakers Footwear 
      Group, stated: “We were disappointed with our 
      third quarter operating results, which reflected the difficult 
      comparison to last year. We also experienced sales and margin pressure 
      due to our efforts to clear seasonal sandal inventory, as well as higher 
      operating costs throughout the quarter associated with operating 27 net 
      new stores, since the third quarter last year.
    
    
      “As we begin the fourth quarter, sales remain 
      challenging with November comparable store sales declining by 12.4% 
      versus a comparable store sales increase of 29.0% last year,” 
      Mr. Edison continued. “The comparable store 
      sales decrease can be attributed to our boot and bootie category, which 
      was very strong last year. We expect this comparable sales trend to 
      continue through the remainder of the fourth quarter. We continue to 
      remain excited by our opportunities for long-term sales and earnings 
      growth and believe that our strategies position us to increase value for 
      Bakers Footwear shareholders.”
    
    
      Additionally, during the third quarter, the Company:
    
    
      
        Opened 15 new stores and at quarter-end operated 261 stores in 38 
        states; and
      
      
        Remodeled 3 stores and at quarter-end operated 156 stores, or 68% of 
        its Bakers stores in the new store format;
      
    
    
      For the nine months fiscal 2006, the first thirty-nine weeks ended 
      October 28, 2006:
    
    
      
        Net sales increased 7.6%, to $143.5 million from $133.4 million for 
        the thirty-nine weeks ended October 29, 2005. Comparable store sales 
        decreased 3.8% compared to a 13.4% increase last year;
      
      
        Gross profit in the first nine months of fiscal 2006 was $41.9 
        million, or 29.2% of net sales, compared to $42.2 million, or 31.6% of 
        net sales, in the first thirty-nine weeks of fiscal 2005
      
      
        Operating loss was $4.2 million, compared to operating income of $3.4 
        million, in the same period a year ago;
      
      
        Net loss was $3.0 million or $0.46 per share, as compared to net 
        income of $2.0 million, or $0.33 per diluted share in the first 
        thirty-nine weeks of 2005.
      
      
        As a result of adopting FAS 123R, the Company recognized $0.07 per 
        share related to stock- based compensation expense in the first thirty 
        nine weeks of fiscal 2006. The Company recognized no stock-based 
        compensation expense in the first thirty-nine weeks of fiscal 2005.
      
    
    
      Michele Bergerac, President of Bakers Footwear, said: “We 
      currently expect to open between 12 to 18 new stores in fiscal 2007 with 
      half of these stores opening in the first half of the year. We continue 
      to believe that we have the opportunity to operate 600 stores with our 
      Bakers and Wild Pair concepts and hope to increase the pace of our new 
      store openings in fiscal 2008.”
    
    
      Conference Call
    
    
      The Company announced that it will conduct a conference call to discuss 
      its third quarter and first thirty-nine weeks of fiscal 2006 results 
      today, Friday, December 8, 2006 at 9:00 a.m. Eastern Time. Investors and 
      analysts interested in participating in the call are invited to dial 
      [phone], approximately five minutes prior to the start of the 
      call. The conference call will also be web-cast live at http://viavid.net/dce.aspx?sid=000038BF. 
      A replay of this call will be available until December 15, 2006 and can 
      be accessed by dialing [phone] and entering code 2647862. The 
      web-cast will be available until January 8, 2006 at the same web address.
    
    
      About Bakers Footwear Group, Inc.
    
    
      Bakers Footwear Group is a national, mall-based, specialty retailer of 
      distinctive footwear and accessories for young women. The Company’s 
      merchandise includes private label and national brand dress, casual and 
      sport shoes, boots, sandals and accessories. The Company currently 
      operates more than 260 stores nationwide under its Bakers and Wild Pair 
      formats. Bakers stores focus on women between the ages of 16 and 35. 
      Wild Pair stores offer fashion-forward footwear to both women and men 
      between the ages of 17 and 29.
    
    
      THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS (WITHIN THE 
      MEANING OF SECTION 27(A) OF THE SECURITIES ACT OF 1933 AND SECTION 21(E) 
      OF THE SECURITIES EXCHANGE ACT OF 1934). BAKERS FOOTWEAR HAS NO DUTY TO 
      UPDATE SUCH STATEMENTS. ACTUAL FUTURE EVENTS AND CIRCUMSTANCES COULD 
      DIFFER MATERIALLY FROM THOSE SET FORTH IN THIS STATEMENT DUE TO VARIOUS 
      FACTORS. FACTORS THAT COULD CAUSE THESE CONDITIONS NOT TO BE SATISFIED 
      INCLUDE MATERIAL CHANGES IN CAPITAL MARKET CONDITIONS OR IN BAKERS 
      FOOTWEAR’S BUSINESS, PROSPECTS, RESULTS OF 
      OPERATIONS OR FINANCIAL CONDITION AND OTHER RISKS AND UNCERTAINTIES, 
      INCLUDING THOSE DETAILED IN BAKERS FOOTWEAR’S 
      FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
    
    
      
        
          BAKERS FOOTWEAR GROUP, INC.

          
             
          
          
             
          
          
            Income Statement Data
          
        
        
           
        
        
          
            ThirteenWeeksEndedOctober 
            28,2006
          
        
        
           
        
        
          
            ThirteenWeeksEndedOctober 
            29,2005
          
        
        
           
        
        
          
            Thirty-nineWeeksEnded
          
          
            October 28,2006
          
        
        
           
        
        
          
            Thirty-nineWeeksEndedOctober 
            29,2005
          
        
      
      
        
          (in thousands except per share data)
        
        
        
        
          Unaudited
        
        
        
        
          Unaudited
        
        
        
        
          Unaudited
        
        
        
        
          Unaudited
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
        
        
          $
        
        
          46,553 
        
        
        
        
          $
        
        
          43,243 
        
        
        
        
          $
        
        
          143,542 
        
        
        
        
          $
        
        
          133,441 
        
      
      
        
          Cost of merchandise sold, occupancy, and buying expenses
        
        
        
        
           
        
        
          34,430 
        
        
           
        
        
           
        
        
          31,403 
        
        
           
        
        
           
        
        
          101,611 
        
        
           
        
        
           
        
        
          91,211 
        
      
      
        
          Gross profit
        
        
        
        
        
        
          12,123 
        
        
        
        
        
        
          11,840 
        
        
        
        
        
        
          41,931 
        
        
        
        
        
        
          42,230 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Selling
        
        
        
        
        
        
          10,980 
        
        
        
        
        
        
          9,353 
        
        
        
        
        
        
          32,054 
        
        
        
        
        
        
          27,107 
        
      
      
        
          General and administrative
        
        
        
        
        
        
          4,987 
        
        
        
        
        
        
          3,968 
        
        
        
        
        
        
          13,883 
        
        
        
        
        
        
          11,317 
        
      
      
        
          Loss on disposal of property and equipment
        
        
        
        
           
        
        
          115 
        
        
           
        
        
           
        
        
          231 
        
        
           
        
        
           
        
        
          243 
        
        
           
        
        
           
        
        
          430 
        
      
      
        
          Operating income (loss)
        
        
        
        
        
        
          (3,959)
        
        
        
        
        
        
          (1,712)
        
        
        
        
        
        
          (4,249)
        
        
        
        
        
        
          3,376 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expense):
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest expense
        
        
        
        
        
        
          (320)
        
        
        
        
        
        
          (96)
        
        
        
        
        
        
          (617)
        
        
        
        
        
        
          (309)
        
      
      
        
          Other, net
        
        
        
        
           
        
        
          67 
        
        
           
        
        
           
        
        
          20 
        
        
           
        
        
           
        
        
          101 
        
        
           
        
        
           
        
        
          123 
        
      
      
        
          Income (loss) before income taxes
        
        
        
        
        
        
          (4,212)
        
        
        
        
        
        
          (1,788)
        
        
        
        
        
        
          (4,765)
        
        
        
        
        
        
          3,190 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Provision for (benefit from) income taxes
        
        
        
        
           
        
        
          (1,610)
        
        
           
        
        
           
        
        
          738 
        
        
           
        
        
           
        
        
          (1,805)
        
        
           
        
        
           
        
        
          1,165 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income (loss)
        
        
        
        
          $
        
        
          (2,602)
        
        
           
        
        
          $
        
        
          (1,050)
        
        
           
        
        
          $
        
        
          (2,960)
        
        
           
        
        
          $
        
        
          2,025 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic earnings (loss) per share
        
        
        
        
          $
        
        
          (0.40)
        
        
           
        
        
          $
        
        
          (0.17)
        
        
           
        
        
          $
        
        
          (0.46)
        
        
           
        
        
          $
        
        
          0.34 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted earnings (loss) per share
        
        
        
        
          $
        
        
          (0.40)
        
        
           
        
        
          $
        
        
          (0.17)
        
        
           
        
        
          $
        
        
          (0.46)
        
        
           
        
        
          $
        
        
          0.33 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
        
        
          6,493 
        
        
        
        
        
        
          6,198 
        
        
        
        
        
        
          6,439 
        
        
        
        
        
        
          5,896 
        
      
      
        
          Diluted
        
        
        
        
        
        
          6,493 
        
        
        
        
        
        
          6,198 
        
        
        
        
        
        
          6,439 
        
        
        
        
        
        
          6,165 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash Flow Data
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash provided by (used in) operating activities
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          (7,605)
        
        
        
        
          $
        
        
          3,543 
        
      
      
        
          Cash used in investing activities
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (17,214)
        
        
        
        
        
        
          (17,020)
        
      
      
        
          Cash provided by financing activities
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          21,074 
        
        
        
        
        
        
          12,173 
        
      
      
        
          Net decrease in cash and cash equivalents
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (3,745)
        
        
        
        
        
        
          (1,304)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Supplemental Data
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Comparable store sales increase (decrease)
        
        
        
        
        
        
          (4.2%)
        
        
        
        
        
        
          21.0%
        
        
        
        
        
        
          (3.8%)
        
        
        
        
        
        
          13.4%
        
      
      
        
          Gross profit percentage
        
        
        
        
        
        
          26.0%
        
        
        
        
        
        
          27.4%
        
        
        
        
        
        
          29.2%
        
        
        
        
        
        
          31.6%
        
      
      
        
          Number of stores at end of period
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          261 
        
        
        
        
        
        
          234 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Balance Sheet Data
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
          October 28, 2006
        
        
           
        
        
          October 29, 2005
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          Unaudited
        
        
        
        
          Unaudited
        
      
      
        
          Cash
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          180 
        
        
        
        
          $
        
        
          128 
        
      
      
        
          Accounts receivable
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          3,146 
        
        
        
        
        
        
          2,747 
        
      
      
        
          Inventories
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          27,260 
        
        
        
        
        
        
          24,951 
        
      
      
        
          Other current assets
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          4,777 
        
        
           
        
        
           
        
        
          4,292 
        
      
      
        
          Current assets
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          35,363 
        
        
        
        
        
        
          32,118 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          50,193 
        
        
        
        
        
        
          34,596 
        
      
      
        
          Other assets
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          1,324 
        
        
           
        
        
           
        
        
          553 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          86,880 
        
        
           
        
        
          $
        
        
          67,267 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current liabilities
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          38,044 
        
        
        
        
          $
        
        
          25,645 
        
      
      
        
          Noncurrent liabilities
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          9,137 
        
        
        
        
        
        
          6,510 
        
      
      
        
          Shareholders’ equity
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
          39,699 
        
        
           
        
        
           
        
        
          35,112 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          $
        
        
          86,880 
        
        
           
        
        
          $
        
        
          67,267