DSW Inc. net income was $22.4 million on net sales of $367.4 million for the third quarter ended November 3, 2007, compared with net income of $16.0 million on net sales of $332.2 million for the thirteen-week quarter ended October 28, 2006. Same store sales decreased 3.0% versus an increase of 2.6% last year. Diluted earnings per share were 51 cents for the third quarter of 2007 compared with 36 cents for the same period last year.

Nine Month Results

Net income was $52.7 million on net sales of $1.07 billion for the thirty- nine week year-to-date period ended November 3, 2007, compared with net income of $48.9 million on net sales of $950.0 million for the thirty-nine week year- to-date period ended October 28, 2006. Same store sales decreased 0.5% for the comparable thirty-nine week period versus an increase of 3.0% last year.

Diluted earnings per share were $1.19 for the nine months ended November 3, 2007, compared with $1.11 for the same period last year.

2007 Outlook

Based on the performance through the third quarter reported today, annual 2007 diluted earnings per share are now estimated to be in the range of $1.24 to $1.29, updated from the Company's previously announced estimate of at least 10% below last year's reported diluted earnings per share of $1.48.

Annual comparable store sales are now estimated to be in the range of flat to down 1% for fiscal 2007, updated from the Company's previously announced estimate of flat to down 2%. The Company is maintaining its plans to open at least 35 new DSW stores during the year.

                                   DSW INC.


                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME


                   (In thousands, except per share amounts)


                                 (Unaudited)



                              Three Months Ended           Nine Months Ended


                           November 3,  October 28,  November 3,  October 28,


                                 2007         2006         2007          2006



    Net sales              $  367,380   $  332,219   $1,073,095    $  950,008


    Cost of sales            (260,720)    (233,544)    (775,829)     (672,944)


    Gross profit              106,660       98,675      297,266       277,064


    Operating expenses        (71,855)     (73,451)    (216,917)     (200,854)


    Operating profit           34,805       25,224       80,349        76,210


    Interest income, net        1,533        1,563        5,200         4,862


    Earnings before income


     taxes                     36,338       26,787       85,549        81,072


    Income tax provision      (13,906)     (10,786)     (32,852)      (32,211)


    Net income             $   22,432   $   16,001   $   52,697    $   48,861



    Basic and diluted earnings per share:


      Basic                     $0.51        $0.36        $1.20         $1.11


      Diluted                   $0.51        $0.36        $1.19         $1.11



    Shares used in per share calculations:


      Basic                    43,957       43,922       43,951        43,909


      Diluted                  44,274       44,226       44,324        44,193