DSW LOWERS FULL-YEAR GUIDANCE EVEN AS FIRST QUARTER SALES INCREASE

Footwear and accessories retailer DSW reported an increase in sales for its first quarter, ending April 30, 2016, but other financial results were mixed.

Sales increased 3.9 percent to $681 million, while comparable sales decreased by 1.6 percent as compared to last year’s increase of 5.1 percent.  Reported net income was $30.0 million, or $0.36 per diluted share,, while adjusted net income was $32.8 million, or $0.40 per diluted share.

Over the past three years, we have invested heavily in technology, stores, marketing and support services.  These investments have driven sales, but we haven’t grown our bottom line,” said CEO Roger Rawlins. “We have begun an assessment of our cost structure to improve earnings and reinforce our competitive position in a rapidly changing environment.”

DSW revised its full year earnings guidance to $1.32 to $1.42 per share, reflecting expectations for softer sales for the balance of the year in a challenging retail environment. “This is the prudent action to take so that inventory, expenses and capital investments are aligned to maximize profitability and positioned to expand earnings as our trend improves,” said Rawlins.