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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.

DSW Inc. Reports 2008 Second Quarter Financial Results; Reiterates Annual Outlook


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 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

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, DSW also supplied footwear to 383 leased locations in the United States. For store locations and additional information about DSW, visit

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.
                                (In thousands)

                                                   August 2,    February 2,
                                                        2008           2008

    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

    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.
                   (In thousands, except per share amounts)

                                 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
       Basic                       43,999     43,953      43,983     43,947
       Diluted                     44,242     44,338      44,195     44,349

    -0-                             08/28/2008
    /CONTACT:  Investor Relations for DSW Inc., +1-614-872-1474/
    /Photo:  NewsCom:
              AP Archive:
              PRN Photo Desk,
    /Web site: /

CO:  DSW Inc.
ST:  Ohio

-- CLTH028 --
0228 08/28/2008 07:00 EDT


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