DSW Inc. announced a 15.2% jump in net sales to $302.2 million from $2662.4 million for the third quarter last year. Net income was $10.9 million, up 15.6% from $9.4 million during the year-ago period. Comparable sales for the quarter were up 3.5% on top of a slight 0.8% gain during last year's third quarter.
Diluted earnings per share were 25 cents for the third quarter of 2005 compared with 34 cents for last year's third quarter.
Comparable store sales for the third quarter of 2005 increased 3.5% compared with an increase of 0.8% for the same period last year.
On June 29, 2005, DSW's initial public offering of 16.2 million shares of Class A common stock, which included the underwriters' over-allotment option of 2.1 million shares, was sold at $19.00 per share. The company received net proceeds of $277.9 million and used $196.6 million of the net proceeds to repay in full $190.0 million in dividend notes and accrued interest to the company's controlling shareholder, Retail Ventures, Inc.
For the nine months ended October 29, 2005, net income was $27.1 million on net sales of $860.3 million, compared with net income for the like period last year of $26.2 million on net sales of $729.4 million. The fiscal 2005 nine-month results include $6.6 million of dividend interest expense on the notes to RVI, and $6.5 million for the accrual for losses associated with the data theft announced in March 2005.
Diluted earnings per share for the nine months were 77 cents compared with 94 cents for the comparable nine-month period last year.
After adjusting for the dividend interest, the data theft accrual, and the significant increase in shares as a result of the initial public offering, pro forma net income for the nine months was $35.0 million, or 79 cents per share, compared with $26.2 million, or 59 cents per share, for the nine-month period last year.
DSW opened 13 stores and added four leased shoe departments during the third quarter of 2005. As of October 29, 2005, the Company operated 197 DSW stores and 236 leased shoe departments. Since that date, the Company has opened one additional store and added two more leased shoe departments.
DSW INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended October 29, October 30, October 29, October 30, 2005 2004 2005 2004 Net sales $302,240 $262,444 $860,257 $729,406 Cost of sales (219,221) (184,991) (618,077) (517,427) Gross profit 83,019 77,453 242,180 211,979 Operating expenses (65,292) (60,664) (188,712) (165,751) Operating profit 17,727 16,789 53,468 46,228 Interest income (expense), net 149 (989) (8,384) (2,460) Earnings before income taxes 17,876 15,800 45,084 43,768 Income tax provision (6,965) (6,358) (17,942) (17,613) Net income $10,911 $9,442 $27,142 $26,155 Basic and diluted earnings per share: Basic $0.25 $0.34 $0.78 $0.94 Diluted $0.25 $0.34 $0.77 $0.94