For the quarter ended August 2, DSW earned $34.3 million, or 38 cents per share. A year earlier it earned $33.7 million, or 37 cents per share. Excluding certain items, earnings were 37 cents per share. That topped the average estimate of analysts who expected earnings of 30 cents per share.
Net sales increased 4.5% to $587 million in the three months to August 2, compared to last year’s sales of $562 million. That beat analysts’ estimate for $552 million in sales.
Operating expenses declined to $118.6 million from $129.5 million.
Comparable store sales rose 0.8%. This metric is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.
CEO Mike MacDonald said: “In the quarter we accomplished our goal of achieving improvement in the underlying sales trends and eliminating any inventory imbalances. 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.”
For the full year, the company expects adjusted earnings per share to range from $1.50 to $1.65 a share. This assumes flattish comps and total revenue growth in the mid single digit range.