Columbus—Footwear and accessories retailer DSW Inc.’s fiscal second-quarter profit more than tripled as sales jumped and margins increased, beating retail analysts’ expectations despite a soaring tax bill.
The company, which reiterated its earnings target for the year, has been reporting strong results in recent quarters as price-conscious consumers seek out its off-price merchandise. DSW has also benefited from steadily improving margins which rose to 30.3% from 26.5%.
For the quarter ended July 31, DSW reported a profit of $23.5 million, or 52 cents a share, up from $7.6 million, or 17 cents, a year earlier. Retail analysts had most recently estimated 47 cents.
The company said earlier this month that the quarter’s revenue increased 12.3% to $415.1 million, up from $395.5 million in the same quarter 2009. Same-store sales also increased 12% after a 2.9% decrease a year earlier. Meanwhile, DSW’s income tax provision more than tripled to $14.8 million.
Full Year Forecast: Same-Store Sales Up 7% to 9%
DSW, which is nearly two-thirds owned by Retail Ventures Inc., also reported that its half year same-store sales for the 26 weeks ended July 31, increased 14.5% to $864.7 million from $755.3 million for the twenty-six weeks ended August 1, 2009.
While the company has seen its hard rise 57% in the last year, DSW reiterated its previous yearly forecast reflecting a more challenging second half for both sales and merchandise margins. Its forecast for annual comparable store sales shows an increase of approximately 7% to 9% and annual diluted earnings per share of approximately $1.80 to $1.95 for fiscal 2010. Fiscal 2009 annual diluted earnings per share were $1.23.
DSW operates 309 stores in 39 states, its e-commerce site, dsw.com, and supplies footwear to 353 leased locations in the United States.