- Prachi Singh |
DSW has said that its third quarter sales decreased 0.6 percent to 666 million dollars compared to last year's sales of 670 million dollars. Comparable sales decreased by 3.9 percent compared to last year's increase of 2.6 percent and gross profit decreased by 270 bps driven by markdown activity and a valuation reserve on a special inventory purchase.
Mike MacDonald, President and Chief Executive Officer, commenting on the results said, “Our third quarter performance was disappointing. Unseasonably warm temperatures, cautious consumer spending and slower tourism contributed to weak sales trends and a difficult retail environment. In response to these challenges, we took actions to manage inventories and cancelled orders both within the quarter and for future periods, ending the quarter with total inventories nearly flat to the prior year on a cost per square foot basis. We remain cautious about the retail environment in the fourth quarter and are anticipating a highly promotional holiday season.”
Sales for nine months rise, outlook positive
Net income from continuing operations decreased by 20.7 percent to 39.3 million dollars and earnings per share from continuing operations decreased by 20 percent to 0.44 dollar per share, in line with previously announced guidance for 0.41 dollar to 0.44 dollar per share.
For the nine months ended October 31, 2015, sales increased 5 percent to 1.95 billion dollars compared to last year's sales of 1.86 billion dollars. Comparable sales increased by 0.9 percent compared to last year's decrease of 0.1 percent and net income from continuing operations increased by 1.7 percent to 124.3 million dollars. Earnings per share from continuing operations increased by 3.7 percent to 1.39 dollars per share compared to last year's 1.34 dollars per share.
DSW's Board of Directors declared a quarterly cash dividend payment of 0.20 dollar per share. The company also reiterated its earnings guidance for the year to be in the range of 1.40 dollars to 1.50 dollars per share, assuming approximately 4 percent revenue growth and flat comparable sales performance for the full year.
“Despite the challenging environment, we continue to make good progress on our omni-channel initiatives. As previously announced, Roger Rawlins, our Chief Innovation Officer will succeed me as DSW's Chief Executive Officer effective January 1, 2016. I am confident that we have the right plan in place and that under Roger's leadership, we will continue to execute the strategic initiatives crucial to driving DSW's future success,” added MacDonald.