DSW (DSW) Up on Better Than Expected Revenues and Earnings

Shares of Columbus, Ohio, based DSW Inc. (DSW) rose on Tuesday, on a slightly higher day on Wall Street. DSW stock was up $2.62 per share, rising 9.24%, to close at $30.99 on volume of 8,503,841 shares. The company reported higher than expected sales and net income for its fiscal second quarter, as well as an increase in same store sales across all product segments.

Founded in 1969, DSW is a leading provider of footwear and accessories, operating as a specialty retailer offering brand name and designer dress-, casual- and athletic-footwear for men, women and children.
As of August 26, 2014, DSW had 11,000 employees and operated 410 stores in 42 states, the District of Columbia and Puerto Rico. It also operated 362 leased locations, as well as e-commerce and mobile website operations. For the fiscal year ended January 31, 2014, the company had net earnings of $151.3 million on revenues of $2.37 billion. The stock trades on the NYSE.

The company reported that sales increased 4.5% to $587 million for the fiscal second quarter, compared to last year's second quarter sales of $562 million. For the first six months of fiscal 2015, sales increased 1.9% to $1.19 billion compared to last year's sales of $1.16 billion. In one of the most watched metrics in the retail sector, DSW also reported that same-store sales for the most recent quarter increased 0.8%.

Net income for the second quarter was reported at $34.3 million, or $0.38 per diluted share on 91 million weighted average shares outstanding, which includes an after-tax gain related to income for RVI. This compares to net income in the second quarter of 2013 of $33.7 million, or $0.37 per diluted share, which included a net after-tax loss of $1.5 million, or $0.02 per share, from our luxury test, and a net charge of $9.3 million, or $0.10 per share, from the termination of the pension plan assumed in conjunction with the RVI merger. For comparison, analysts surveyed by Thomson Reuters had forecast revenue of $565 million, earnings of 32 cents a share.

DSW also increased its full year earnings per share guidance by five cents, with the expectation that per share earnings will come in between $1.50 and $1.65 for the fiscal year ending January 31, 2015.

"In the quarter we accomplished our goal of achieving improvement in the underlying sales trends and eliminating any inventory imbalances," said Mike MacDonald, DSW Inc. President and Chief Executive Officer. "All major categories recorded improved sales performance in the second quarter compared to the first quarter. In addition, we were encouraged by the sequential improvement in sales trends as the quarter progressed. The actions we took to balance inventories created margin pressure but inventories at the end of the quarter were current and below the prior year on a cost per square foot basis."

On August 19, 2014, DSW's Board of Directors approved a quarterly cash dividend payment of $0.1875 per share. The dividend will be paid on September 30, 2014 to shareholders of record at the close of business on September 19, 2014.

Other News About DSW
DSW Shares On Sale With New Initiatives
Shares down 35% on year, unjustly punished from poor first-quarter sales.
DSW Opens Store In Ontario: Can The Retailer Conquer The Canadian Market?
The Canadian market is hungry for anything American.

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Published on Aug 27, 2014
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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