DSW Keeps Momentum Going With Solid Fiscal First Quarter Results

 

Net earnings rose 27.2 percent to $38.4 million, or 85 cents a share, well above Wall Street’s consensus estimate of 75 cents a share.  Gross profit margin expanded 140 basis points to 34.2 percent of net sales.

On a conference call with analysts, company President and CEO Mike MacDonald said the first quarter represented “a continuation of the very positive momentum” seen in 2010 and partly reflected growing national awareness of the off-price shoe chain.

The comp gain reflected increases in customer traffic, customer conversion and units per transaction.  Strong growth was seen across categories and genders, led by strategic growth areas of accessories, men’s footwear, private brands, and key items.  Accessory comps grew 18 percent, driven by hosiery. Men’s comps climbed 16 percent.

Women’s footwear posted “solid” comps despite the cold and wet weather in the Northeast and Midwest regions of the country that particularly hurt sandals sales.  Sandal sales in the South and West were much stronger. 

Said MacDonald, “While sandals in total met our expectations, we had to redirect receipts in order to match inventory with demand by region.”

Debbie Ferree, vice chairman and chief merchandising officer, said many of the trend that were strong at the start of the quarter continued throughout. That includes vulcanized and lightweight on the athletic side as well as evening, plain pumps, strong bottom shoes and naturals on the dress side.

For the full year, the retailer now expects earnings per share between $2.65 and $2.80, up from a previous estimate of $2.60 to $2.75 per share. DSW expects revenue at stores open at least a year to increase by “mid-single digits.”