Why DSW Earnings Fell Short in Q4

When DSW Inc. (NYSE: DSW) released its fiscal fourth-quarter financial results before the markets opened on Tuesday, the shoe chain said that it had a net loss of $0.07 per share and $843.4 million in revenue. Consensus estimates had called for $0.04 in earnings per share (EPS) and $841.53 million in revenue. And the same period of last year reportedly had EPS of $0.38 and revenue of $719.98 million.

Overall total company comparable sales increased 5.4% year over year, which consisted of U.S. comparable retail sales of 5.3% and other ABG comparable sales of 6.8%.

In terms of its business segments, DSW reported:

  • U.S. Retail revenue decreased 1.8% year over year to $655.7 million.
  • Canada Retail revenue came in at $67.7 million.
  • Brand Portfolio revenue was reported as $86.1 million.
  • Other revenue decreased 48% to $29.0 million.

The company did not offer any guidance in the report. However, the consensus estimates call for $0.44 in EPS and $911.63 million in revenue for the fiscal first quarter.

The board of directors also declared a quarterly cash dividend of $0.25 per share. The dividend will be paid on April 12, 2019, to shareholders of record at the close of business on April 1.

CEO Roger Rawlins commented:

Fiscal 2018 was one of the best years in our Company’s history from a comparable sales and earnings growth standpoint. We crossed the $3 billion revenue threshold for the first time and drove a +6% increase in comparable sales as we strengthened connections with our customers. We built a compelling product assortment, including the expansion of DSW Kids, a differentiated services offering with our W Nail Bar partnership, and the relaunch of our award-winning loyalty program. At the same time, we strategically positioned our Company to grow share and enhance profitability through transformative acquisitions, creating an infrastructure that positions us to be a significant force in the footwear industry for years to come.

Shares of DSW were last seen down about 13% at $22.00, in a 52-week range of $20.99 to $34.63. The consensus price target is $29.33.