DSW Inc. saw first quarter net income increase 150% to $17.5 million from $7.0 million for the same period last year. Net sales for the quarter increased 12.3% to $316.5 million from $281.8 million for the comparable period last year. Diluted earnings per share were 40 cents for the fiscal first quarter of 2006 compared with 25 cents for last year’s first quarter.
The first quarter 2005 results include $2.7 million of interest expense on a dividend note to the company’s controlling shareholder, Retail Ventures, Inc. and $6.5 million for the accrual for losses associated with the data theft announced March 2005. After adjusting for the dividend interest, the data theft accrual and the significant increase in shares as a result of the initial public offering in June 2005, pro forma net income for the first quarter of 2005 was $12.5 million, or 28 cents per share.
Comparable store sales for the first quarter of 2006 increased 4.2% compared with the same period last year.
Based on the first quarter performance reported today, the company raised its current estimate for fiscal 2006 annual diluted earnings per share to a range of $1.24 to $1.27, up from its previous estimate of $1.22 to $1.25. Comparable store sales are projected to increase 3-5%. The company also plans to open 30 DSW stores during the year.
DSW INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended April 29, April 30, 2006 2005 Net sales $316,487 $281,806 Cost of sales (223,200) (199,008) Gross Profit 93,287 82,798 Operating expenses (65,398) (67,745) Operating profit 27,889 15,053 Interest income (expense), net 1,324 (3,521) Earnings before income taxes 29,213 11,532 Income tax provision (11,694) (4,552) Net income $17,519 $6,980 Basic and diluted earnings per share: Basic $0.40 $0.25 Diluted $0.40 $0.25 Shares used in per share calculations: Basic 43,896 27,703 Diluted 44,144 27,703