Brown Shoe Co Inc posted a smaller second-quarter loss but shares in the owner of Famous Footwear stores fell on a soft outlook as the shoe retailer said it remained wary of economic weakness.

Shares of the company fell as much as 8 percent to $14.16, making it one of the biggest percentage losers on the New York Stock Exchange on Tuesday. The stock has climbed more than 80 percent in the past year.

The company has trimmed its inventory, closed stores and cut some low-performing brands but only raised the lower end of its full-year profit forecast.

The retailer, which operates more than 1,300 Famous Footwear and Naturalizer stores, increased the lower end of its profit forecast by 2 cents and now expects full-year earnings of between 85 cents per share and 95 cents per share.

Excluding restructuring charges, the St. Louis, Missouri-based company earned 16 cents per share in the second quarter, well ahead of the 3 cents expected by analysts, so the lackluster annual forecast was a disappointment.

"They did not raise guidance on the amount of the beat so there is a little bit of trepidation there," said Steven Marotta, an analyst with C.L. King & Associates.

Chief Executive Dianne Sullivan said her company's outlook was conservative yet it was on the right track with its restructuring, which saw it close or relocate about 26 stores during the quarter.

For the year, Brown Shoe expects to close or relocate about 90 stores.

Brown Shoe during the quarter terminated a license agreement with fashion brand Etienne Aigner at a cost of $7 million due to a dispute, which Sullivan did not elaborate on.

The company has been tightly managing its inventory and has quit distributing children's shoes and some women's brands to boost profit. Inventory fell 1 percent to $621 million at the end of the quarter.

Sullivan was upbeat about the back-to-school season and said she expects boat shoes and athletic wear to continue to be popular.

Many shoppers have postponed spending this season - the second largest in the United States after the November-December holiday season - as they wait for schools to start before making purchases.

"They're buying much closer to the season and, in fact, it seems like their back-to-school ... is getting later and later and later," Sullivan said.

The company planned to step up marketing, cut input costs by about 3 percent and raise prices by about the same amount in the current quarter, Sullivan said.

Brown Shoe, which competes with Shoe Carnival SCVL.N and Genesco Inc (GCO.N), said gross margins rose to 39 percent in the second quarter.

The company's quarterly loss narrowed to $2.5 million, or 6 cents per share, compared with a loss of $4.6 million, or 11 cents per share, a year earlier, helped by its cost cutting and higher sales at its Famous Footwear stores.

While revenue fell 3 percent to $599.3 million, comparable store sales rose 3.9 percent in the quarter, Brown Shoe said.

Analysts on average expected revenue of $606.3 million, according to Thomson Reuters I/B/E/S.