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Free falling net income at DSW, despite sales increase

Mar 16, 2016 United States
Free falling net income at DSW, despite sales increase
Fourth quarter and full year sales increased by 5.0%. Despite the good performance in sales, net income declined by 11.3% in the quarter and more than 60% in the full year
The Ohio-based branded footwear and accessories retailer just announced its financial results for its fourth quarter and full year (ended on the 30th of January). During the fourth quarter, net sales reached 672.0 million US dollars, growing by 4%, compared to similar period last year. Net income for the period totaled 11.8 million US dollars, declining by 61.8%

Roger Rawlins, Chief Executive Officer stated: "During the fourth quarter, we acted quickly to drive sales and gain market share, in the face of a challenging retail environment. While these actions negatively impacted operating margin in the near term, we believe they were the right steps to expand our customer base and exit the year with a clean inventory position. We recognize there is much more we need to accomplish and we are committed to returning DSW to sustainable and profitable growth while delivering strong shareholder returns."

The company achieved several important milestones in 2015, namely the opening of 40 new DSW stores in the United States, the expansion of its presence in Canada and the opening of 11 new DSW locations by Town Shoes.

DSW presented digital growth of 22%, which was aided by the roll-out of Buy Online Pick-Up In Store and Buy Online Ship to Store. Also on the online side, the DSW.com platform was restructured, enhancing its search engine and creating new personalization options.

Taking into account the full year, sales increased by 5.0% totaling 2.6 billion US dollars. Net income for the period reached 136.0 million US dollars, declining by 11.3% compared to fiscal 2014.

For the new fiscal year ending on the 28th of January 2017 DSW expects revenue growth to be in the range of 8% to 10%, with comparable sales growth in the 1% to 2% range. The company is also expecting to open 34 stores and close 2 existing locations.

On the 4th of March DSW completed the previously announced acquisition of Ebuys, Inc., a leading e-commerce off price footwear and accessories retailer operating in digital marketplaces in North America, Europe, Australia and Asia. The initial purchase payment of 61 million US dollars was funded using cash. During fiscal 2016, Ebuys is expected to contribute with approximately 100 million US dollars in sales.

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