- Prachi Singh |
DSW’s reported net income was 30 million dollars or 0.36 dollar per diluted share for the thirteen week period ended April 30, 2016. Adjusted net income was 32.8 million dollars or 0.40 dollar per diluted share. Sales increased 3.9 percent to 681 million dollars including 15.1 million dollars from Ebuys.
“We have reduced our sales and earnings guidance to reflect the current trend of our business in a challenging retail environment. 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 Roger Rawlins, Chief Executive Officer of the company.
First quarter comparable sales decline
Comparable sales decreased by 1.6 percent compared to last year's increase of 5.1 percent. Adjusted gross profit decreased by 250 bps due to higher markdowns and the addition of Ebuys. DSW's Board of Directors declared a quarterly cash dividend payment of 0.20 dollar per share.
Cuts fiscal 2016 outlook
The company has revised its full year earnings guidance to 1.32 dollars to 1.42 dollars per share, reflecting expectations for softer sales for the balance of the year in a challenging retail environment. Guidance does not include the impact of purchase price accounting, transaction costs and fair market value accounting for Ebuys contingent consideration of approximately 0.11 dollar to 0.13 dollar per share. This assumes approximately 6 percent revenue growth driven by a comparable sales decline in the 1 percent to 2 percent range.