Footwear and accessories retailer,
) posted better-than-expected first-quarter fiscal 2013 results.
The adjusted quarterly earnings of $1.00 per share surpassed the
Zacks Consensus Estimate of 90 cents and rose by a couple of
cents when compared with the prior-year quarter.
Sales increased 7.7% year over year to $601.4 million and
surpassed the Zacks Consensus Estimate of $598 million. However,
comparable-store sales (comps) marked a decline of 2.4% during
the quarter compared with a 7.6% rise witnessed in the prior-year
Following healthy results, the company now expects to post
earnings in the range of $3.40 - $3.60 per share in fiscal 2013.
Moreover, comps are expected to remain flat or rise by 2%.
Margins & Store Expansion
Gross margin contracted by 100 basis points to 33.5%,
reflecting adverse sales mix and deleverage in the occupancy
expenses. Operating margin declined 50 basis points to 12.2%.
Of late, 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 customers.
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
The company opened 12 new DSW stores during the quarter,
bringing the total store count to 376. Moreover, it plans to add
25 to 30 stores during fiscal 2013.
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 in retaining customers but also attracts new buyers.
Other Financial Details
DSW ended the quarter with cash and investments of $429.7
million, while inventories were valued at $395.3 million.
Shareholders' equity totaled to $893.4 million.
The company raised its quarterly dividend by 39% to 25 cents a
share. The increased dividend is payable on Jun 28, 2013to the
stakeholders of record on Jun 18, 2013. Alongside, DSW extended
its current $100 million share buyback program.
Currently, shares of DSW hold a Zacks Rank #3 (Hold).
DSW INC CL-A (DSW): Free Stock Analysis
FOOT LOCKER INC (FL): Free Stock Analysis
PENNEY (JC) INC (JCP): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
To read this article on Zacks.com click here.