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DSW revenues increase 3.5 percent in FY16

By Prachi Singh

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Management

In 2016, DSW’s sales increased 3.5 percent to 2.7 billion dollars, including 83.9 million dollars from the company's acquisition of Ebuys. However, comparable sales decreased by 3 percent compared to last year's 0.8 percent increase. Sales increased 0.4 percent to 674.6 million dollars, including 27.9 million dollars of revenues from Ebuys in the fourth quarter, while comparable sales decreased 7 percent compared to last year's 0.7 percent increase.

"Our fourth quarter continued our return to year over year profitability growth, with top line results that met our comp guidance. Inventory management and a product-focused campaign drove significantly higher gross margin, which, coupled with better expense control, resulted in a 22 percent increase in adjusted earnings per share this fall season,” said Roger Rawlins, DSW’s Chief Executive Officer in a press release.

Fourth quarter and FY16 result highlights

Reported gross profit increased by 50 bps in the fourth quarter, driven by a significant reduction in markdowns and favourable sourcing costs, partially offset by the expected deleverage in occupancy expense, the increased mix of acquisition revenues, and 10 bps of inventory step up costs related to Ebuys. Reported operating expenses improved by 50 bps, partly offset by 20 bps from the amortization of Ebuys intangibles and restructuring expenses.

Reported net income was 30.5 million dollars or 0.38 dollar per diluted share, which included a net favourable adjustment of 0.18 dollar per share. Adjusted net income was 16.5 million dollars or 0.20 dollar per diluted share, an increase of 43 percent over last year.

Reported net income for the full year was 124.5 million dollars or 1.52 dollars per diluted share, which included a net favorable adjustment of 0.06 dollar per share. Adjusted net income was 120.1 million dollars or 1.46 dollars per diluted share, a 5 percent decrease from last year.

DSW's Board of Directors declared a quarterly cash dividend of 0.20 dollar per share.

Fiscal 2017 revenues expected to rise 3 to 5 percent

For the fifty-three week period ending February 3, 2018, the company expects revenue growth of 3 percent to 5 percent, with comparable sales to range from a flat to low single digit decline compared to the prior year. The company expects to open 12 to 15 net new locations.

Full year adjusted earnings per share is expected to range between 1.45 dollars to 1.55 dollars per diluted share, assuming a tax rate of 39 percent and 81 million shares outstanding. Guidance includes the estimated impact from the discontinuation of the company's leased business with Gordmans up to 0.10 dollar per share.

Picture:Facebook/DSW

DSW