Family footwear retailer DSW struggled in the first quarter of 2017, reporting a net income of $23 million, or $0.28 per diluted share, a 23 percent drop year-over-year compared to $30 million or $0.36 per diluted share during the same period last year.
DSW’s net income for the first quarter of 2017 included pre-tax charges of $4.5 million or $0.04 per share, due to the acquisition of Ebuys, restructuring costs and foreign exchange loss in part due to the pre-funding of the Town Shoes acquisition happening soon.
In the first quarter, adjusted net income came in at $25.7 million, or $0.32 per diluted share, compared to last year’s $32.8 million, or $0.40 per diluted share, excluding acquisition related costs. However, DSW saw a sales increase of 1.4% to $691.1 million, including $22.3 million of revenues from Ebuys. Comparable sales fell 3 percent compared to the same period last year’s 1.6% decrease.
“First quarter sales were challenging, but trends improved during the quarter with comps turning positive in April. As expected, planned clearance activity and the addition of Ebuys drove lower gross margin and operating income. The investments we have made in our digital capabilities, such as our redesigned website and mobile app, drove robust growth in digital demand,” said DSW CEO Roger Rawlins. “We are intently focused on driving sequential top line improvements through key product and customer initiatives while balancing strategic investments with disciplined expense management.”
DSW maintains its full year outlook for adjusted earnings around $1.45-$1.55 per diluted share.