Why DSW Is Tuesday's Big Earnings Winner

Chris Lange

When DSW Inc. (NYSE: DSW) released its fiscal third-quarter financial results before the markets opened on Tuesday, the company said that it had $0.70 in earnings per share (EPS) and $833 million in revenue. The consensus estimates had called for $0.51 in EPS and $794.36 million in revenue, and it the same period of last year DSW said it had EPS of $0.45 on $708.31 million in revenue.

During the most recent quarter, comparable sales increased 7.3% year over year.

The company reported its segments as follows:

  • U.S. Retail segment net sales increased 10% to $721.75 million.
  • Canada Retail segment net sales totaled $80.07 million.
  • Other net sales decreased 44.4% at $29.85 million.

Looking ahead to the fiscal full year, the company expects to see EPS in the range of $1.70 to $1.85 and revenues increasing 12% to 14%. Consensus estimates call for $1.72 in EPS and $3.03 billion in revenue.

On the books, DSW cash, cash equivalents and investments totaled $294.3 million at the end of the quarter, down from $300.5 million at the end of the previous fiscal year.

CEO Roger Rawlins commented:

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.

Shares of DSW were last seen up about 9% at $25.14, in a 52-week range of $18.01 to $34.63. The consensus analyst price target is $30.30.