Good morning and welcome to the third quarter 2009 Brown Shoe Co., Inc. earnings call. I would now like to turn the call over to Ken Golden, Director of Investor Relations; please go ahead sir.

Thanks Carrey. Good morning everyone and thanks for joining us for the Brown Shoe third quarter 2009 financial results conference call. This call is being made accessible to the public via webcast in accordance with the SEC’s Regulation FD. Before I turn the call over to Ron Fromm, I’d like to remind you of the company’s Safe Harbor language. During this conference call, the company will make certain forward-looking statements to help you better understand its financial results and competitive outlook. Discussion of the company’s future plans and other statements in this call that are not current or historical facts are forward-looking statements. These involve known and unknown risks and uncertainties that could cause the actual results to materially differ from historical results or from any future results expressed or implied by any forward-looking statements. Factors that could cause actual results to differ materially include those listed in our press release issued this morning and available on our 8-K filed prior to this call and other risk factors listed from time-to-time in the company’s SEC reports. Copies of the company’s reports are available online and from the company’s Investor Relations Department. The company does not undertake any obligation or plan to update these forward-looking statements even though the situation may change. Now, I’d like to turn the call over to Ron Fromm, Chairman and CEO.

Welcome everyone. Good morning and thank you for joining us. With me on the call are: Diane Sullivan, our President and Chief Operating Officer; Mark Hood, our Chief Financial Officer: and Joe Wood, the President of Retail. Following my opening remarks, Mark will discuss our financial performance in more detail as well as review our outlook and then Diane will provide additional insight into our operating performance, following this as always we will be available to answer all of your questions. We are pleased to deliver solid third quarter results with increased same store sales, increased gross margins, as well as growth in earnings per share. During the quarter, we successfully capitalized on the back-to-school selling season with great brands and product, while we strategically maximized our marketing by emphasizing the most important weeks of the season. This lead to better than expected performance of Famous Footwear as well as great results and are naturalize of retail locations. Before I delve in to the quarter’s performance of more detail, I’d just like to address the organizational changes we announce last week. To recap, Gary Rich, Division President of Wholesale, and Joe Wood, Division President of Retail, will be retiring in early 2010. Both Gary and Joe have been with us a long time, and have been integral to the success of Brown Shoe. A testament to their contributions that both have been made over the years is the great talent that they have developed across and throughout the organization. It also speaks to the importance of our organization and how we place importance on attracting strong talent. This combination gave us the ability to utilize our solid bench strength and promote from within. We have been preparing for these success and changes overtime to ensure we have the right team…

Thanks, Ron and good morning, everyone. This morning I will review our third quarter financial results in more detail as well as offer some additional incites into the quarter and update on our outlook for the remainder of the year. I’ll start with a full review of the income statement. Net sales were $625.6 million, a decrease of 1% compared to $631.7 million in the third quarter of 2008. The key drivers of our sales performance were, 4.7% same store sales increase at Famous Footwear in the quarter resulting from strong traffic trends and a 4.1% same store sales increase at specialty retail driven by strong domestic Naturalizer sales. These decreases were offset by an inline decline of 16.5% in our wholesale business. As you recall, we had provided an outlook of mid to high-teens net sales decline for the third quarter on our last call. Our gross margin rate in the quarter improved 210 basis points to 41.4% of net sales from 39.3% in the third quarter of last year. The main drivers for the year-over-year change were, a 390 basis point increase in wholesale gross margin rate driven by a greater mix of higher margin branded business, improved retail sell through rates across the division, leading to lower allowances as well as increased vertical profit from the strong performance of Naturalizer retail and the Brown Shoe brands at Famous Footwear. In greater mix of retail sales accounted for 73% of consolidated net sales in the third quarter of 2009 versus 68% of net sales in the same period last year. As a reminder, retail sales carry a higher gross margin rate than wholesale and lastly, an improved retail gross margin driven by 350 basis point rate increase at specialty retail, resulting from better full price selling, offset by…

Thanks, Mark and good morning everyone. Before I begin my comments on the quarter, I do want to take a moment to thank Gary and Joe for their countless contributions to Brown Shoe. It really has been an honor to collaborate with them as partners over the years, and a true privilege to count them as my friends. Their work has no doubt positioned us well for the next stage in the building of Brown Shoe. I also have to say I’m really energized by the great week of planning meetings that we just had with our new leadership team as they begin the transition process that will continue in to early next year. These individuals combined bring to their rolls a broad based background in footwear and retail with top companies and we’re going to apply this diverse expertise across our portfolio as we continue to grow our brands. Now turning to review of the third quarter, the progress we made in the quarter was significant and reflects the effort energy and new strategies put forth by our associates across the company to position us for when the consumer was ready to buy. Starting with Famous Footwear, we are very pleased with Famous is third quarter results with both sales and operating earnings exceeding our expectation. We did make some solid back as we planned the quarter and we’re intensely focused on executing well during this all important period. In this tough environment, we knew our promotional and product strategies needed to be innovative to drive traffic and transactions and as a result of these efforts, we were pleased to see a significant up tick in sharper turnout this fall at our Famous Footwear stores with an increase of roughly 3% versus the trend earlier in the year of…

Thanks, Diane. I really appreciate the outstanding results for the quarter, and with that, we’ll open it up to questions.

(Operator instructions) Your first question comes from Chris Svezia - Susquehanna Financial.

I guess, first question on a wholesale business, in the quarter it seemed like it was roughly inline to a degree to how you kind of guided indicated. Looks like fourth quarter relative to how you’re looking at it about a quarter ago, it’s not as strong. I’m just curious if you can talk about the puts and takes to that business as you look at the fourth quarter, and I guess more importantly as you look to spring of next year in terms of what’s going on, what are the drivers and what are some of the weaker elements of the business?

Let me give you a little flavor for that. Yes, you’re right. As we looked at our forecast now for the fourth quarter is a little bit less than what we had said at the end of the second quarter. Let me talk about the positive highlights first. I think, there’s no doubt about it, as I mentioned our contemporary fashion brands continue to gain momentum, and they are looking strong into their fourth quarter, and we really believe they’re going to continue to be strong in to 2010. Our Naturalizer business again was inline with expectations and really, their velocity and selling at retail is improving on both, not only our wholesale side of the business, but also in our own retail stores and internationally. So we really see that as being an important driver of our overall performance for any fourth quarter and as we turn the coroner to 2010. Same with show’s that was really, a short of a difficult second and third for a whole lot of reasons that we chatted about, but as we can see for the fourth quarter and into next year, we have so many initiatives lined up there, that I know that’s going to really drive the sales and earnings power of that brand next year. So we feel very confident in that and along with LifeStride. So the real challenge is continued to be really around our women’s specialty and private brands business along with kids, Chris, and that is the one that really has been the most challenging to try to reverse or stabilize that business and not have it decline at the rate that it has been. As I look into 2010, it certainly appears that we have reached virtually the bottom of what that business should deteriorate at, and as I think about the fourth quarter, and I look at our on order to support the forecast that Mark talked about in his comments. We feel very confident that we have the on order to support that kind of look. I don’t know, Mark, if you had any other thoughts on that question?

No, again, I think as we said, the forecast we have more on order than the forecast and good order flow into the first quarter of next year.

Diane, I might miss it, but you said that you look the Naturalizer order book. Is that just based on your comp trend at retail? What’s happening on the wholesale under that business?

It’s absolutely solid, where they are pulling out a sheet here for me to take a look at, but now overall it’s been very good, Chris, and one of the things that I think is allowing us to continue to perform is the unique combination now of Naturalizer, Natural Soul and we’re actually going to be launching a new brand next year called Naya. So in combination, those three things I think it really not fitting in a very interesting part of this new health and wellness piece of the marketplace, but I think those three pieces of business will help us continue that momentum and I’m just looking at the Mark pulled up the on order…

I have a follow-up question. I guess where you’re looking at just on the product cost side?

Yes.

Just kind of your thoughts in terms of what you’re seeing now? Based on the order book, it’s kind of look to obviously fourth quarter, but more importantly as you head out to spring in terms of what’s happening there as well?

It’s holding pretty steady. We haven’t seen many significant changes at all on that, Chris. We’re also doing some things about shifting more of our productions to different parts of China that’s allowing us to pickup additional gross margin dollars next year. So don’t see that really as an issue at this time.

I have a question from Mark. When I think about your sort of thought process in our fourth quarter, you’ve given a lot of elements in your guidance here, except given a finite number. So to whatever degree you might be able to add some color to this, but it seems like kind of the way I’m framing these numbers, it seems like if you have revenues, you setup low to mid digits 3% or 4% or so, it looks like SG&A dollars should be down in dollars year-over-year X onetime items. Now, would you assume that’s your gross margin would have to be up substantially to be profitable. So I guess one question is what gives you the confidence on the gross margin side? I guess obviously the comparisons, but if there’s anything else I’m missing and to what degree do you sort of, but I think two specific quantify profitability. There could be a lot of different numbers. It could be $500,000 it could be $10 million. So I’m just curious if you could add a little bit more color in and around those items.

That’s a lot of questions, and I guess we try to give as much guidance around that, given our shift earlier in the year to not giving specific EPS guidance, but I think obviously the gross margin improvement is an element of expectation in our outlook as we have delivered strong gross margin improvement, quite honestly in each of the second and third quarters, and the fourth quarter gross margins a year ago were pretty deplorable. So I think, it down that that’s where the real opportunity comes in terms of the guidance we’ve given.

Chris, obviously that margin is not driven by necessarily cost of goods savings. It’s much more driven by the no need for the excessive markdown cost that we built in and had last year.

There are no further questions at this time.

Thank you very much. We know that when we pre-announced and the fact that’s a very busy day in our sector. We’re somewhat expected not to have too many calls. So we really appreciate your continued support and anyone of you that listening in later on, just make sure you give us a call if you have any other questions. Thanks a lot.

This concludes today’s conference. Thank you for your participation. You may now disconnect.