DSW Inc. recorded a net loss for the fourth quarter despite an
increase in net sales. Sales rose 4.7% to $348.2 million for the
quarter from $332.5 million last year, but comparable store sales
dropped 7.2% after a 1.7% slip for the year-ago period. As a result,
the company reported a net loss of $7.5 million for the quarter after
net income of $1.1 million last year.

Diluted loss per share was 17 cents for the fourth quarter compared with diluted earnings per share of 2 cents last year.

Annual Results

Net income was $26.9 million on net sales of $1.46 billion for the
year-to-date period ended January 31, 2009 compared with net income of
$53.8 million on net sales of $1.41 billion for the year-to-date period
ended February 2, 2008. Same store sales decreased 5.9% versus a
decrease of 0.8% last year.

Diluted earnings per share were 61 cents for the year-to-date period compared with $1.21 last year.

Fiscal 2009 Outlook

The company anticipates a mid-single digit decrease in comparable
store sales and expects to open approximately 10 new DSW stores
compared to 41 new stores in 2008. Capital expenditures are expected to
decrease to approximately $35 million from $81 million in 2008.

                                     DSW INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share amounts)
                                   (Unaudited)

                                    Thirteen              Fifty two
                                   weeks ended           weeks ended
                            January 31, February 2, January 31, February 2,
                                  2008        2009        2008        2009

    Net sales                 $348,150    $332,520  $1,462,944  $1,405,615
    Cost of sales             (276,267)   (259,651) (1,083,845) (1,035,480)
    Gross profit                71,883      72,869     379,099     370,135
    Operating expenses         (83,672)    (71,897)   (336,286)   (288,814)
    Operating (loss) profit    (11,789)        972      42,813      81,321
    Interest income, net           777         770       2,606       5,970
    Other-than-temporary
     impairment charge on
     investments                (1,134)                 (1,134)
    (Loss) earnings before
     income taxes              (12,146)      1,742      44,285      87,291
    Income tax benefit
     (provision)                 4,625        (664)    (17,383)    (33,516)
    Net (loss) income          $(7,521)     $1,078     $26,902     $53,775
    Basic and diluted (loss)
     earnings per share:
        Basic                   $(0.17)      $0.02       $0.61       $1.22
        Diluted                 $(0.17)      $0.02       $0.61       $1.21

    Shares used in per share
     calculations:
        Basic                   44,016      43,959      43,998      43,953
        Diluted                 44,016      44,118      44,218      44,273