Footwear and accessories retailer,
) stated that it seeks to split its common stock two-for-one.
Simply put, the move involves altering the number of shares
outstanding and proportionally adjusting the share
This makes the shares look more reasonably priced, though the
underlying value of the company remains constant. In a 2-for-1
stock split, every shareholder with one stock is given
an additional share.
However, it seems that DSW designed the stock split to trim
down the voting power of Class B shareholders. The Class A shares
carries one vote per share, while Class B carries eight.
Thus, if approved by the shareholders, the company would issue
one Class A share for each Class A or Class B share, which would
create about 90.2 million shares comprising 81.6 million Class A
shares and 8.6 million Class B shares and would curb the voting
power of the Class B shareholders to 46% from the current 65%
Alongside, the company stated that net sales for the second
quarter ended Aug 3, 2013 increased 9% year over year to $558
million. Same store sales increased 4.3% during the quarter
compared with a 4.2% rise witnessed in the year-ago quarter.
DSW also raised its fiscal 2013 earnings guidance. The company
now expects earnings to be in the range of $3.60 to $3.80 per
share, up from its earlier guidance range of $3.40 to $3.60 per
share. The company expects same store sales growth in the low
single digits for fiscal 2013.
DSW has been extensively using its cash flow to spread its
reach throughout the United States. We believe that the company's
aggressive store expansion plans signify its popularity among the
Moreover, its wedding shop collection provides exclusive
assortments for bridal parties and occasions and sets it apart
from its peers
Foot Locker, Inc
J. C. Penney Company Inc
Besides offering a wide range of designer shoes at discounted
prices for both men and women, DSW runs a free, award-winning
loyalty program 'DSW Rewards,' which issues certificates to
customers for future purchases at DSW. This initiative not only
helps retain customers but also attracts new buyers.
Currently, DSW holds a Zacks Rank #2 (Buy).
DSW INC CL-A (DSW): Free Stock Analysis
FOOT LOCKER INC (FL): Free Stock Analysis
PENNEY (JC) INC (JCP): Free Stock Analysis
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