DSW Upgraded to Strong Buy - Analyst Blog


On Jan 25, 2013, Zacks Investment Research upgraded DSW Inc. ( DSW ) to a Zacks Rank #1 (Strong Buy). The company has amassed a solid return of roughly 45.5% over the past one year.

Why the Upgrade?

DSW has been witnessing rising earnings estimates on the back of robust third-quarter fiscal 2012 results and a sturdy outlook for fiscal 2012. Moreover, this leading footwear and accessories retailer has outperformed the Zacks Consensus Estimate in 7 straight quarters by an average of 11.9%.

The company declared impressive third-quarter results on Nov 20, 2012, wherein earnings of $1.02 per share surpassed the Zacks Consensus Estimate of 89 cents by 14.6% and increased 15.9% from 88 cents earned in the prior-year quarter buoyed by top-line growth. Net sales rose 11.7% year over year to $592.7 million, and came ahead of the Zacks Consensus Estimate of $588 million. Comparable sales climbed 6.3%.

Robust top-line performance, healthy operating margin, rational store expansion strategy, strong financial position and a solid fiscal 2012 guidance justify the stock's Zacks Rank.

Based on its strong fundamentals, management anticipates fiscal 2012 earnings between $3.30 and $3.40 per share.

The Zacks Consensus Estimate for fiscal 2012 rose 2.1% to $3.38 per share over the last 90 days, and has a close proximity with the upper end of the company's guidance range. For fiscal 2013, the Zacks Consensus Estimate advanced 2.1% over the same timeframe to $3.87 per share.

Other Stocks to Consider

Other stocks in the retail apparel, shoe sector that you could consider are Citi Trends, Inc. ( CTRN ) and Destination Maternity Corporation ( DEST ), both of which hold a Zacks Rank #1 (Strong Buy), and are expected to continue with their upbeat performances. Another stock that should be merited is Abercrombie & Fitch Co. ( ANF ), which holds a Zacks Rank #2 (Buy) and is expected to continue with its positive earnings surprise trend.

ABERCROMBIE (ANF): Free Stock Analysis Report

CITI TRENDS INC (CTRN): Free Stock Analysis Report

DESTINATION MTR (DEST): Free Stock Analysis Report

DSW INC CL-A (DSW): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ANF , CTRN , DEST , DSW



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