DSW announced its second quarter earnings for 2017, reaching an important goal, of same-store sales reaching positive numbers, for the first time in two years.
Comparable sales increased 0.6% compared to last year’s 1.2% decrease.
Net income was $28.6 million, or $0.35 per diluted share, beating analyst projections of $0.29 per diluted share. Including pre-tax charges of $3.2 million, or $0.03 per diluted share, in relation to the acquisition of Ebuys, restructuring costs along with foreign exchange losses. Adjusted net income was $30.6 million, or $0.38 per diluted share.
The company saw a sales increase of 3.3% to $680.4 million.
“We were pleased to report our first positive comp quarter since 2015. This resulted in a healthy increase in regular priced sales and improvements across all selling metrics,” said DSW CEO Roger Rawlins. “With our mission to inspire self-expression, these results demonstrate how our strategic direction is resonating with the DSW customer.”
DSW has done a number of things to get with the changing times, including on-boarding Trend Bar in select locations, allowing customers to customize their shoes.
Reported gross profit grew 50 basis points, driven by lower markdowns and favorable sourcing, minorly offset by inventory reserves and distribution costs related to the ongoing integration of Ebuys.
“We are deepening our customer connection with unique product and meaningful experiences that will define Designer Shoe Warehouse as the trusted authority for all things footwear. The current retail consolidation provides significant opportunity to acquire market share, and in the next 12 months, we will unveil several exciting new initiatives that will inspire emotional loyalty with the DSW brand,” said Rawlins. “At the same time, we are building the infrastructure to mobilize inventory across all of our brands and enable us to better serve our customers.”
Rawlins relayed the company’s confidence in the initiatives, stating that he believes they will grow sales, cash flow and help long-term profitability. The company maintains its full year outlook of adjusted earnings around $1.45 to $1.55 per diluted share.