DSW's new strategy pays off in second quarter

DSW says its investments in becoming a more “customer-centric” company are paying off, as the retailer reported sales and earnings growth in the second quarter.

The footwear and accessories retailer said that for the second quarter ended Aug. 1, sales increased 6.8% to $627 million compared to last year's sales of $587 million. Same store sales increased by 1.8% compared to last year's increase of 0.8%. Net income from continuing operations increased by 10.7% to $37.6 million. And earnings per share from continuing operations increased by 13.5% to $0.42 per share compared to last year's $0.37 per share.

Mike MacDonald, president and CEO, said: "We were encouraged with our accomplishments in the second quarter. Our double digit earnings growth over the prior period reflected a significant shift in favor of regular priced merchandise selling. This shift enabled us to achieve meaningful merchandise margin rate expansion and gross profit dollar growth. We also advanced our strategy of becoming a more customer-centric company by evolving our organization, systems, and processes to meet our customers' changing expectations. As a result of this financial and strategic process, we remain confident in our direction."

The company also reported growth in the six-month period, including:

• Sales increased 8.1% to $1.28 billion compared to last year's sales of $1.19 billion.

• Same store sales increased by 3.5% compared to last year's decrease of 1.5%.

• Net income from continuing operations increased by 17.0% to $85.0 million.

• Earnings per share from continuing operations increased by 20.3% to $0.95 per share compared to last year's $0.79 per share.

For the 52-week fiscal year ending Jan. 30, the company reiterated its earnings outlook to range from $1.80 to $1.90 per share.

DSW operates 449 stores in 42 states, the District of Columbia and Puerto Rico.