World Footwear


DSW results impacted by the weather

Nov 22, 2017 United States
DSW results impacted by the weather
Net sales increased slightly in the third quarter. Results were impact by the hurricane season and the company has adjusted the outlook for the year, as a result
Roger Rawlins, DSW Chief Executive Officer commented: "Much of our core business performed in-line with expectations this quarter, despite an unusually severe hurricane season which impacted comps and earnings. Additionally, cold weather related product struggled to gain the traction we had anticipated; however, tight inventory management protected our bottom line from excessive markdowns and we ended the quarter with inventories below last year. Our business model remains healthy, generating strong cash flow which allows us to invest in both organic and non-organic growth. We activated new customers, accelerated digital demand and continued to deliver concrete progress in many of our strategic priorities, such as our Power Stores, our new Lab Store and the expansion of DSW kids. Additionally, we are starting to test several new services with our new Rewards VIP program that will further differentiate the DSW brand."

DSW increased sales by 1.7% in the third quarter (reaching 708.3 million US dollars). Comparable sales decreased by 0.4% with a negative impact of 50 to 60 bps from hurricane disruption. Reported net income was 4.0 million US dollars, or 0.05 US dollars per diluted share, including net non-cash impairment charges related to goodwill and intangible assets, offset by a reduction in contingent consideration related to the Company's acquisition of Ebuys. Adjusted net income was 35.9 million US dollars, or 0.45 US dollars per diluted share, including weather related impact of  approximately 0.05 US dollars per diluted share.

In the first nine months of 2017, sales increased by 2.1% totaling 2.1 billion US dollars. Comparable sales decreased by 1.0% compared to last year's 1.6% decrease. Reported net income was 55.6 million US dollars, or 0.69 US dollars per diluted share, including pre-tax charges totaling 59.9 million US dollars, or 0.45 US dollars per diluted share, related to acquisition and impairment costs, restructuring expenses and foreign exchange loss. Adjusted net income was 92.2 million US dollars, or 1.14 US dollars per diluted share. 

DSW updated its full year outlook for adjusted earnings in the range of 1.40 US dollars to 1.45 US dollars per diluted share to reflect lower expectations for Ebuys and the impact of weather related disruptions this quarter. Guidance does not include net charges related to the impairment of goodwill and intangible assets.

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