DSW Inc. reiterated its 2012 outlook for the year ending Feb. 2, 2013. The company continues to expect comparable sales to increase in the 3 percent to 5 percent range for the full year. In addition, the company confirms its previous guidance for full year earnings per diluted share of $3.25 to $3.40, excluding any impact from the RVI merger and related items. This compares to 2011 adjusted earnings per diluted share of $3.00 for the year ended January 28, 2012.
Based on more normalized gross margin performance in the second quarter and previously announced pre-opening costs associated with the acceleration in the Company's store expansion, the Company expects second quarter fiscal 2012 adjusted earnings per diluted share for the period ending July 28, 2012 in the range of $0.60 to $0.64, excluding any impact from the RVI merger and related items. This compares to second quarter fiscal 2011 adjusted earnings per share of $0.74 for the period ended July 30, 2011.
“Growth in comparable sales for the second quarter is in line with our expectations of between 2 percent and 4 percent; however, we are seeing a more normalized mix of regular-priced and clearance-priced sales. This contrasts with the second quarter of last year when regular-priced sales accelerated, driving a +12 percent comparable sales increase and all-time record high merchandise margins,” stated Mike MacDonald, President and Chief Executive Officer of DSW Inc. “Although DSW has traditionally only provided annual earnings guidance, we elected to provide additional insight to second quarter expectations given the disparity between our expectations and those of the investment community, and in anticipation of our participation in an investment conference tomorrow.”
Separately, the Company announced that its Board of Directors has authorized the Company to repurchase up to $100.0 million of Company common stock over the next twelve months. The repurchase program will be funded using the Company's available cash. The Company is authorized to repurchase from time to time shares of its outstanding common stock on the open market or in privately negotiated transactions. The timing and amount of stock repurchases will depend on a variety of factors, including market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the program. The Company intends to make all repurchases in compliance with applicable regulatory guidelines and to administer the plan in accordance with applicable laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
MacDonald commented, “Our business continues to generate significant free cash flow, and we are pleased that our Board has approved the share repurchase program, which will allow us to opportunistically return value to our shareholders as market conditions warrant.”
MacDonald concluded, “DSW's business is strong and we remain on track to open 35 to 40 new stores in 2012. Solid execution on our growth initiatives gives us confidence in our ability to achieve our objectives in 2012 as we expand our store footprint, grow our market share and gain additional recognition as a destination for great brands, fashion and value in the footwear industry.”
