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, Nov. 25 /PRNewswire-FirstCall/ -- DSW Inc. (NYSE: DSW), a leading branded footwear specialty retailer, announced net income of $13.2 million on net sales of $391.4 million for the third quarter ended November 1, 2008, compared with net income of $22.4 million on net sales of $367.4 million for the third quarter ended November 3, 2007. Same store sales decreased 4.1% for the comparable period versus a decrease of 3.0% last year.
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Diluted earnings per share were $0.30 for the third quarter this year compared with $0.51 last year.
Nine Month Results
Net income was $34.4 million on net sales of $1.11 billion for the thirty-nine week year-to-date period ended November 1, 2008, compared with net income of $52.7 million on net sales of $1.07 billion for the thirty-nine week year-to-date period ended November 3, 2007. Same store sales decreased 5.5% for the comparable thirty-nine week period versus a decrease of 0.5% last year.
Diluted earnings per share were $0.78 for the thirty-nine week year-to-date period ended November 1, 2008, compared with $1.19 for the same period last year.
2008 Outlook
For the fiscal year ending January 31, 2009, the Company reiterated its estimated annual same store sales in the negative mid-single digits. Based on the performance through the third quarter reported today, annual 2008 diluted earnings per share are now estimated to be in the range of $0.62 to $0.72, updated from the Company's previously announced estimate of $0.75 to $0.85. Annual earnings estimate includes a severance charge to be taken in the fourth quarter, uncollectible fees from the bankruptcy of Value City Department Stores and anticipated continued economic decline. The Company plans to open 41 DSW stores during the current fiscal 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, or call 1-866-831-6243 and reference passcode 83119093. 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 17987583. 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 November 25, 2008, DSW operated 299 stores in 37 states and operated an e-commerce site, www.dsw.com. DSW also supplied footwear to 379 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, performance 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") not paying 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 dsw.com; 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)
November 1, February 2,
2008 2008
ASSETS
Cash and equivalents $45,570 $61,801
Short-term investments 84,915 70,005
Accounts receivable, net 11,888 14,343
Inventories 319,244 262,037
Prepaid expenses and other current assets 24,237 23,134
Deferred income taxes 26,276 20,302
Total current assets 512,130 451,622
Property and equipment, net 233,631 192,772
Long-term investments 4,493 12,500
Goodwill 25,899 25,899
Tradenames and other intangibles, net 3,882 4,522
Deferred income taxes and other assets 5,348 6,567
Total assets $785,383 $693,882
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $136,405 $114,595
Accrued expenses 79,148 54,310
Total current liabilities 215,553 168,905
Deferred income taxes and other non-current
liabilities 99,044 91,497
Total shareholders' equity 470,786 433,480
Total liabilities and shareholders' equity $785,383 $693,882
DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
November 1, November 3, November 1, November 3,
2008 2007 2008 2007
Net sales $391,355 $367,380 $1,114,794 $1,073,095
Cost of sales (282,280) (260,720) (807,578) (775,829)
Gross profit 109,075 106,660 307,216 297,266
Operating expenses (88,158) (71,855) (252,614) (216,917)
Operating profit 20,917 34,805 54,602 80,349
Interest income, net 686 1,533 1,829 5,200
Earnings before income taxes 21,603 36,338 56,431 85,549
Income tax provision (8,425) (13,906) (22,008) (32,852)
Net income $13,178 $22,432 $34,423 $52,697
Basic and diluted earnings
per share:
Basic $0.30 $0.51 $0.78 $1.20
Diluted $0.30 $0.51 $0.78 $1.19
Shares used in per share
calculations:
Basic 44,011 43,957 43,992 43,951
Diluted 44,240 44,274 44,210 44,324
SOURCE DSW Inc.
CONTACT: Investor Relations for DSW Inc., +1-614-872-1474/
Web site: http://www.dswinc.com
http://www.dsw.com
(DSW)
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