Improving shoe sales, increased traffic and a solid merchandising mix drove same-store sales for DSW Inc. to 10.1% growth for the third quarter ended Oct. 30. Net sales for the Columbus, OH-based branded footwear specialty retailer surged 10.0% to $489.3 million from $444.6 million a year ago on strength across most business segments.

 

Net income soared 33.4% to $35.5 million, or 79 cents per diluted share, compared to $26.5 million, or 60 cent s per diluted share, in the year-ago period.


Gross margins for the quarter narrowed by 60 basis points to 32.5% from 33.1% a year ago. Comps for the company’s leased business were up 4%.


In a conference call with analysts, management said comps were up 10% and 6% in the women’s and men’s categories, respectively, with 9% improvement from the athletic products and 19% improvement in accessories and hand bags.  Of note, management said the incorporation of the Nike assortment has added credibility to the company’s athletic category, which has historically been construed as “fashion-athletic.”


Management said the company’s incorporation of Nike product allowed it to take steps towards developing a reputation in the performance athletic category.


Traffic was up 6% in DSW stores and up 22% on dsw.com.
Due to the better-than-expected sales for the first three weeks of the fiscal Q4, DSW now expects full-year earnings per share of $2.30 to $2.40 compared to previously-issued guidance of between $2.20 and $2.30 per share. Comps are expected to improve 12% for the fiscal year.