DSW posts strong Q3, raises full year outlook

For its third quarter, DSW Inc. said that total revenue increased by 17.2 percent to 833 million dollars, including 80.1 million dollars from the consolidation of the Canadian retail business. Comparable sales for the period increased 7.3 percent excluding results from the Canada retail segment. Reported gross profit, as a percent of sales, increased by 320 bps, due to favourable merchandise margin. Reported net income was 39.3 million dollars or 48 cents per diluted share, while adjusted net income was 57.9 million dollars or 70 cents per diluted share, a 56 percent increase to last year.

Commenting on the trading, the company’s Chief Executive Officer, Roger Rawlins said in a press release: "Our investments in merchandising, marketing and talent drove continued top line momentum, with comp growth across all businesses. Additionally, the nationwide roll-out of DSW kids drove the most successful back-to-school season in our history and our recently acquired Canadian business delivered the best results in the last five years. Our acquisition of Camuto Group brings powerful design and sourcing capabilities in-house and new streams of revenue from one of the leading lifestyle brands in fashion footwear.”

DSW’s revenues for the nine months up by 12.2 percent

DSW’s total revenue for the nine months increased 12.2 percent to 2.3 billion dollars, including 152.6 million dollars from the consolidation of the Canadian retail business. Comparable sales for the period increased 6.3 percent compared to last year's 1 percent decrease. Reported gross profit, as a percent of sales, increased by 220 bps. Reported net income was 25.3 million dollars or 31 cents per diluted share and adjusted net income was 140.3 million dollars or 1.72 dollars per diluted share, a 51 percent increase to last year.

DSW's board of directors declared a quarterly cash dividend of 25 cents per share to be paid on January 4, 2019 to shareholders of record at the close of business on December 21, 2018.

The company has raised its full year outlook for adjusted EPS in the range of 1.70 dollars to 1.85 dollars per diluted share, compared to its previous range of 1.60 dollars to 1.75 dollars per diluted share. The company expects revenue increase of 12 to 14 percent compared to prior outlook of an increase between 6 to 9 percent and comparable sales growth of mid to high single digit against previous outlook of low to medium single digits. Camuto group acquisition is expected to generate revenues of 100 million dollars.

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