Designer Brands is one of North America’s largest designers, producers and retailers of footwear and accessories. Our business segments include world-class design and sourcing operations, a robust wholesaling business, and more than 1,000 points of distribution.
COLUMBUS, Ohio, Aug. 28 /PRNewswire-FirstCall/ -- DSW Inc. (NYSE: DSW), a leading branded footwear specialty retailer, announced net income of $11.0 million on net sales of $357.2 million for the second quarter ended August 2, 2008, compared with net income of $6.5 million on net sales of $348.7 million for the second quarter ended August 4, 2007. Same store sales decreased 6.9% for the comparable period versus an increase of 5.9% last year.
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Diluted earnings per share were $0.25 for the second quarter this year compared with $0.15 last year. The Company said the year-over-year increase in second quarter earnings was attributed to merchandise margin rate.
Six Month Results
Net income was $21.2 million on net sales of $723.4 million for the six months ended August 2, 2008, compared with net income of $30.3 million on net sales of $705.7 million for the six months ended August 4, 2007. Same store sales decreased 6.2% for the comparable six month period versus an increase of 0.9% last year.
Diluted earnings per share were $0.48 for the six months ended August 2, 2008, compared with $0.68 for the same period last year.
2008 Outlook
For the fiscal year ending January 31, 2009, the Company reiterates its estimated annual same store sales in the negative mid-single digits and annual earnings per diluted share in the range of $0.75 to $0.85. The Company plans to open at least 35 DSW stores during the year.
Webcast and Conference Call
To hear the Company's live earnings conference call, log on to www.dswinc.com today at 8:00 AM Eastern, Thursday, August 28, 2008 or call 1- 866-800-8649 and reference passcode 89256908. To hear a replay of the earnings call, which will be available approximately two hours after the conference call ends, dial 1-888-286-8010, followed by passcode 39833458. An audio replay of the conference call, as well as additional financial information, will also be available at www.dswinc.com.
About DSW Inc.
DSW Inc. is a leading branded footwear specialty retailer that offers a wide selection of brand name and designer dress, casual and athletic footwear for women and men. As of August 28, 2008, DSW operated 278 stores in 37 states and operated an e-commerce site, www.dsw.com. DSW also supplied footwear to 383 leased locations in the United States. For store locations and additional information about DSW, visit www.dswinc.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Any statements in this release that are not historical facts, including the statements made in our "Outlook," are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's current expectations and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: our success in opening and operating new stores on a timely and profitable basis; continuation of our supply agreements with our leased departments; maintaining good relationships with our vendors; our ability to anticipate and respond to fashion trends; fluctuation of our comparable store sales and quarterly financial performance; disruption of our distribution operations; impact of the change in the shared services agreement; the risk of Value City Department Stores ("Value City") deciding to discontinue operations or otherwise not pay its obligations for the transition services; impact of the disposition of a majority interest in Value City by Retail Ventures on the allocation of expenses pursuant to the shared services agreement with RVI; failure to retain our key executives or attract qualified new personnel; our competitiveness with respect to style, price, brand availability and customer service; declining general economic conditions; risks inherent to international trade with countries that are major manufacturers of footwear; the success of our e-commerce business; liquidity risks related to our investments; and security risks related to our electronic processing and transmission of confidential customer information. Additional factors that could cause our actual results to differ materially from our expectations are described in the Company's latest annual or quarterly report, as filed with the SEC. All forward-looking statements speak only as of the time when made. The Company undertakes no obligation to revise the forward- looking statements included in this press release to reflect any future events or circumstances.
DSW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
August 2, February 2,
2008 2008
ASSETS
Cash and equivalents $57,687 $61,801
Short-term investments 75,480 70,005
Accounts receivable, net 11,881 14,343
Inventories 286,869 262,037
Prepaid expenses and other current assets 24,850 23,134
Deferred income taxes 21,903 20,302
Total current assets 478,670 451,622
Property and equipment, net 220,554 192,772
Long-term investments 5,760 12,500
Goodwill 25,899 25,899
Tradenames and other intangibles, net 4,095 4,522
Deferred income taxes and other assets 3,646 6,567
Total assets $738,624 $693,882
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $125,192 $114,595
Accrued expenses 60,567 54,310
Total current liabilities 185,759 168,905
Deferred income taxes and other non-current
liabilities 95,782 91,497
Total shareholders' equity 457,083 433,480
Total liabilities and shareholders' equity $738,624 $693,882
DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
August 2, August 4, August 2, August 4,
2008 2007 2008 2007
Net Sales $357,175 $348,718 $723,439 $705,715
Cost of sales (256,081) (267,368) (525,298) (515,109)
Gross profit 101,094 81,350 198,141 190,606
Operating Expense (83,415) (73,024) (164,456) (145,062)
Operating Profit 17,679 8,326 33,685 45,544
Interest income, net 420 1,948 1,143 3,667
Earnings before income taxes 18,099 10,274 34,828 49,211
Income tax provision (7,142) (3,753) (13,583) (18,946)
Net Income $10,957 $6,521 $21,245 $30,265
Basic and diluted earnings
per share:
Basic $0.25 $0.15 $0.48 $0.69
Diluted $0.25 $0.15 $0.48 $0.68
Shares used in per share
calculations:
Basic 43,999 43,953 43,983 43,947
Diluted 44,242 44,338 44,195 44,349
SOURCE DSW Inc.
-0- 08/28/2008
/CONTACT: Investor Relations for DSW Inc., +1-614-872-1474/
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/Web site: http://www.dswinc.com /
(DSW)
CO: DSW Inc.
ST: Ohio
IN: REA FAS
SU: ERN ERP CCA
TP-JR
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0228 08/28/2008 07:00 EDT http://www.prnewswire.com
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