DSW touts omnichannel success amid Q3 struggle

Leading footwear retailer DSW Inc. made significant omnichannel upgrades during the third quarter but warm weather kept shoppers from buying shoes in stores or online.

Sales declined 0.6% to $666 million and same store sales declined 3.9% compared to a 2.6% comp increase during the same period the prior year. Profits declined 20.7% to $39.3 million and earnings per share declined 20% to 44 cents, in line with the company’s guidance range of 41 cents to 44 cents.

“Unseasonably warm temperatures, cautious consumer spending and slower tourism contributed to weak sales trends and a difficult retail environment,” said DSW President and CEO Mike MacDonald. “In response to these challenges, we took actions to manage inventories and canceled orders both within the quarter and for future periods, ending the quarter with total inventories nearly flat to the prior year on a cost per square foot basis.”

MacDonald added that the company is cautious about the retail environment in the fourth quarter and, as is the case with virtually everyone in retail, is anticipating a highly promotional holiday season.

“As a result, we are intensifying our merchandising and marketing efforts to capture market share and drive traffic, while rigorously managing our expenses,” MacDonald said.

Despite the challenging environment, the company significantly advanced is omnichannel initiatives during the quarter, successfully implementing buy online pick-up in store and buy online ship to store capabilities.

“We are encouraged that DSW customers have embraced these new capabilities with minimal marketing efforts to date,” MacDonald said.

As MacDonald prepares to step down as CEO, the company maintained its full year profit forecast calling for earnings per share in the range of of $1.40 to $1.50 and expects same store sales to be flat at it 469 stores. The company previously announced that Chief Innovation Officer Roger Rawlins would succeed MacDonald as CEO effective Jan. 1, 2016.

“I am confident that we have the right plan in place and that under Roger's leadership, we will continue to execute the strategic initiatives crucial to driving DSW's future success," MacDonald said.