DSW returns to Q4 comparable sales growth of 1.3 percent

DSW Inc. said that the total company revenues hit a new high of 2.8 billion dollars, a rise of 3.3 percent during the year with renewed momentum in the core business, with footwear posting positive comparable sales for three quarters in a row. Comparable sales decreased 0.4 percent compared to last year's 3 percent decrease. Fourth quarter sales increased 6.7 percent to 720 million dollars, including 35.6 million dollars from the extra week. For the thirteen-week period, comparable sales increased 1.3 percent compared to last year's 7 percent decrease.

Commenting on the company’s results, Roger Rawlins, Chief Executive Officer stated in a media statement: "Our fourth quarter performance capped our first year of adjusted earnings growth since 2013. Our initiatives drove comparable sales growth and strong margin improvement at the DSW Segment this quarter.”

Important highlights of DSW’s Q4 and full year results

The company also revitalized DSW's Power 35 locations; and expanded DSW Kids, with plans to complete the chain-wide roll-out in 2018. The year witnessed DSW’s strongest growth in digital demand in the last 9 years; and the first increase in operating profitability and EPS since 2013.

Reported gross profit during the fourth quarter increased by 150 bps, driven by favourable sourcing, lower markdowns and occupancy leverage. Reported net income was 11.7 million dollars or 0.15 dollar per diluted share, which included net after-tax charges of 18.8 million dollars or 0.23 dollar per diluted share, excluding costs related to Ebuys, restructuring, acquisition expenses related to Town Shoes and the impact of U.S. Tax Reform.

Adjusted net income was 30.5 million dollars or 0.38 dollar per diluted share, an increase of 90 percent. Excluding the impact of the 53rd week of $0.06 per diluted share, adjusted earnings per share increased by 60 percent.

Reported net income for the year was 67.3 million dollars or 0.83 dollar per diluted share, which included net after-tax charges of 55.5 million dollars or 0.69 dollar per diluted share, excluding costs related to Ebuys, restructuring costs, acquisition expenses related to Town Shoes and the impact of U.S. Tax Reform. Adjusted net income was 122.8 million dollars or 1.52 dollars per diluted share, a 4.1 percent increase to last year.

Quarterly cash dividend improves 25 percent

DSW's board of directors approved to increase its quarterly cash dividend by 25 percent to 0.25 dollar per share.

For the fifty-two week period ending February 2, 2019, the company expects revenue growth to decrease by 1 percent to 3 percent, with the exit of non-core businesses and the impact of the 53rd week. Excluding the exit of non-core businesses and the 53rd week, total revenues are expected to increase in the 2 percent to 4 percent range. This assumes comparable sales increase in the low single digit range and the opening of 3 to 6 net new locations for the DSW segment.

Full year adjusted earnings per share is expected to range between 1.52 dollars to 1.67 dollars per diluted share, representing earnings growth of 4 percent to 14 percent excluding the income from the 53rd week.

Picture:Facebook/DSW

 

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