DSW Inc. reported earnings fell 41.1% in the third quarter ended Nov. 3, to $13.2 million, or 30 cents a share, from $22.4 million, or 51 cents, a year ago. Revenues climbed 6.5% to $391.4 million from $367.4 million but same-store sales slipped 3%. The footwear retailer also slightly lowered its guidance for the full year.


In the nine months, net income was $34.4 million, or 78 cents share, on net sales of $1.11 billion, compared with net income of $52.7 million, or $1.19 a share, on sales of $1.07 billion the prior year. Same store sales decreased 5.5% for the comparable thirty-nine week period versus a decrease of 0.5% last year.


For the fiscal year ending Jan. 31, 2009, the company reiterated its estimated annual same store sales in the negative mid-single digits. Based on the performance through the third quarter reported today, annual 2008 diluted earnings per share are now estimated to be in the range of 62 cents to 72 cents, updated from the company's previously announced estimate of 75 cents to 85 cents. Annual earnings estimate includes a severance charge to be taken in the fourth quarter, uncollectible fees from the bankruptcy of Value City Department Stores and anticipated continued economic decline. The company plans to open 41 DSW stores during the current fiscal year.


As of Nov. 25, DSW operated 299 stores in 37 states. DSW also supplied footwear to 379 leased locations.



 
                                   DSW INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                   (In thousands, except per share amounts)

                                 (Unaudited)


                                Three months ended      Nine months ended

                               November 1, November 3, November 1, November 3,

                                   2008        2007        2008        2007


    Net sales                    $391,355    $367,380  $1,114,794  $1,073,095

    Cost of sales                (282,280)   (260,720)   (807,578)   (775,829)

    Gross profit                  109,075     106,660     307,216     297,266

    Operating expenses            (88,158)    (71,855)   (252,614)   (216,917)

    Operating profit               20,917      34,805      54,602      80,349

    Interest income, net              686       1,533       1,829       5,200

    Earnings before income taxes   21,603      36,338      56,431      85,549

    Income tax provision           (8,425)    (13,906)    (22,008)    (32,852)

    Net income                    $13,178     $22,432     $34,423     $52,697


    Basic and diluted earnings

     per share:

       Basic                        $0.30       $0.51       $0.78       $1.20

       Diluted                      $0.30       $0.51       $0.78       $1.19

    Shares used in per share

     calculations:

       Basic                       44,011      43,957      43,992      43,951

       Diluted                     44,240      44,274      44,210      44,324