DSW Inc.’s Michael R. MacDonald will retire as CEO, effective Jan. 1, 2016. He will be succeeded by Roger Rawlins, executive vice president and chief innovation officer. The shoe retailer also sharply lowered its guidance for the year.

Following the news, shares of DSW (NYSE:DSW) closed at $22.59, down $1.92, or 7.83 percent, Nov. 4.

Prior to his current role, Rawlins served as DSW’s executive vice president, omni channel, senior vice president and general manager of DSW.com and vice president, finance and controller. Prior to joining DSW in 2006, Rawlins served in leadership positions at HER Real Living and L Brands Inc. Rawlins spearheaded many of DSW’s recent omni-channel efforts.

Jay Schottenstein, DSW's chairman, noted that DSW’s sales nearly doubled and profits increased fivefold since McDonald took over as CEO in 2009.

“Over the past three years we have made significant strides in our evolution to a more customer-centric company, and today we have a strong platform in place,” Schottenstein said. “Notwithstanding the challenging retail environment, I am confident we have the right plan – and that Roger is the right leader – to continue executing our strategy to meet our customers' needs and deliver long-term value for our shareholders.”

DSW cut its earnings guidance for the year to a range of $1.40 to $1.50 per share from $1.80 to $1.90 previously. The revision reflects “challenging sales trends” as well as a non-recurring charge of 6-cents per share recognized in the third quarter for a valuation reserve on a special inventory purchase. The negative impacts are partially offset by approximately $17 million in expense reductions, which are also reflected in the updated outlook.

For the third quarter ended Oct. 31, earnings are expected in the range of 41 to 44 cents a share, which compares to 56 cents a year ago. The decline reflects “the general slowing of U.S. retail traffic and weak sales within DSW's women's footwear category, due in part to unseasonably warm temperatures during the quarter.” Comps are expected to decline 3.9 percent.

In response to the challenges, DSW said it is taking actions to balance on-hand inventories, increase marketing/promotional activities, and emphasize more value to customers. Significant expense reductions, including lower incentive compensation costs, are also planned and its board approved an additional $200 million in share repurchases.

–Tom Ryan