Charges Hit DSW Q1 Profit, But Still Beats Estimate

Summer promotions at DSWColumbus, OH—Despite a sales boost from new stores, DSW Inc. today reported that its first quarter net income declined 13% hit by one-time charges.

For the quarter ended May 4, the footwear and accessories specialty retailer posted earnings of $34.5 million, or 75 cents a share, compared with $39.8 million, or 89 cents a share, in the same quarter last year. Excluding one-time charges, DSW’s adjusted earnings were $1 a share which beat analysts’ estimate for 89 cents a share.

Net revenue rose 7.7% to $601.4 million, beating analysts’ estimate for $558.6 million in sales. Comparable store sales declined 2.4%.

Like many retailers reporting in the last week, DSW said sales early in the quarter were hindered by cooler-than-normal weather, but they rebounded in the final weeks.

“DSW’s first quarter performance demonstrated remarkable execution flexibility in a time of unprecedented swings in weather patterns,” said Mike MacDonald, president/ceo. “Our merchandising and supply chain teams were able to adjust merchandise receipts in weather sensitive categories while continuing to support trending categories with fresh product flow. We were pleased with the strong sales rebound in the final four weeks of the quarter that allowed us to minimize our comparable sales decline and exit the quarter with well positioned inventories.”

MacDonald added that the company decided to raise its regular quarterly dividend by 39% from 18 cents a share to 25 cents a share.

“For the full year we expect same store sales to range from flat to 2% growth and adjusted EPS to range from $3.40 to $3.60 a share,” he added. Analysts’ consensus expects earnings of $3.49 a share.


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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology.