DSW bounces back and raises outlook

After four consecutive quarters of year-over-year earnings decline, DSW Inc. got back on track in its third quarter.



The footwear and accessories retailer had adjusted net income of $42 million, or 51 cents per diluted share, a 16% year-over-year improvement and 3 cents above estimates.



"After four consecutive declines, we reported a 16% increase in adjusted earnings per share this quarter. Tighter inventory management drove improvements in gross margin which, combined with effective expense management, resulted in an increase in net income," stated CEO Roger Rawlins.



The footwear and accessories retailer posted revenue of $696.6 million, less than the Street expected, compared to $666 million in the year-ago period.



Same-store sales fell 2%.



On the company’s quarterly conference call, Rawlins discussed DSW’s buy online and pick up in store program.



“A significant amount of digital demand is being fulfilled by stores," Rawlins said. "This evolving model will offer significantly more opportunities for survivors (in the footwear industry). We will be one of the few left standing."



DSW increased its full-year earnings estimate to between $1.35 and $1.45 per share, up from previous guidance of between $1.32 and $1.42 per share.