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DSW Delivers In-Line Q3 Earnings - Analyst Blog
DSW Inc. ( DSW ) reported third-quarter fiscal 2013 earnings of 58 cents a share, which were in line with the Zacks Consensus Estimate but rose 14% from 51 cents delivered in the year-ago quarter. Management cited top-line growth and effective inventory management to be the driving factors for the bottom line's year-on-year increase.
Including results of luxury test and other charges, DSW posted earnings of 60 cents a share, up from 55 cents in the prior-year period.
The Quarterly Numbers
Total sales climbed 6.8% year on year to $633 million, thanks to improved traffic in the later part of the quarter. However, sales fell short of the Zacks Consensus Estimate of $649 million. By segments, the DSW segment witnessed growth of 6.8% to $597.3 million and Affiliated Business Group also increased 6.8% to $35.7 million.
Comparable-store sales fell marginally by 0.7% versus an increase of 6.3% in the prior-year quarter. By segments, comps fell 1% at DSW, but jumped 3.6% at Affiliated Business Group during the quarter.
Gross profit rose 6.3% to $212.9 million, whereas gross profit margin contracted 20 basis points to 33.6%. Operating profit increased 12.5% to $88.3 million, while operating margin expanded 70 basis points to 13.9%.
This branded footwear and accessories retailer opened 16 new outlets, including 2 small format stores during the quarter. As of Nov 26, 2013, DSW operated 393 outlets in 42 states, the District of Columbia and Puerto Rico.
Other Financial Aspects
DSW ended the quarter with cash and equivalents of $84.4 million, short-term investments of $195.2 million, and shareholders' equity of $981.2 million.
The company declared a quarterly dividend of 12.5 cents a share, payable on Dec 31, 2013 to stakeholders of record as of Dec 19. Capital expenditures in the quarter were $22.4 million. The company did not repurchase any share in the quarter.
Management projects adjusted earnings between $1.80 and $1.90 per share for fiscal 2013, and expects comparable-store sales to remain flat. DSW also forecasts adjusted sales growth of 4% to 5% for fiscal 2013.
DSW currently holds a Zacks Rank #2 (Buy). Other better ranked stocks worth considering in the retail sector include Hanesbrands Inc. ( HBI ), carrying a Zacks Rank #1 (Strong Buy), and Nike, Inc. ( NKE ) and Deckers Outdoor Corp. ( DECK ), both carrying a Zacks Rank #2 (Buy).
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DSW INC CL-A (DSW): Free Stock Analysis Report
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