DSW easily topped Street estimates for its third quarter, fueled by the most successful back-to-school season in its history.
The discount footwear retailer reported net income of $39.3 million, or 48 cents a share, for the quarter ended Nov.3, up from $4.01 million, or 5 cents a share, in the year-ago period. Adjusted per-share earnings came to 70 cents, ahead of analysts’ estimates of 52 cents.
Revenue rose 17.2% to $833.0 million, ahead of estimates of $795 million. Same-store sales rose 7.3%, also more than expected.
“Our investments in merchandising, marketing and talent drove continued top line momentum, with comp growth across all businesses,” stated CEO Roger Rawlins. Additionally, the nationwide roll-out of DSW kids drove the most successful back-to-school season in our history and our recently acquired Canadian business [Town Shoes] delivered the best results in the last five years.”
Rawlins also referenced DSW’s acquisition of Camuto Group, which was announced in October. Under the terms of the deal, which was done in partnership with Authentic Brands Group, DSW acquired all of Camuto’s global production, sourcing and design infrastructure.
“Our acquisition of Camuto Group brings powerful design and sourcing capabilities in-house and new streams of revenue from one of the leading lifestyle brands in fashion footwear,” he said. “We have transformed our company to one of North America’s largest footwear operators, with vertical product development expertise combined with a vast distribution network. This will accelerate market share growth by creating value for more customers and increasing our competitive differentiation.”
DSW raised its full year outlook for adjusted EPS guidance to a range of $1.70 to $1.85 from a prior range of $1.60 to $1.75. It is now expecting revenue to grow 12% to 14% in the full year, compared with prior guidance of up 6% to 9%.
At the end of the quarter, DSW operated nearly 1,000 locations under the DSW Designer Shoe Warehouse, Shoe Company, Shoe Warehouse and Town Shoes banners and operates leased locations in the U.S. through its Affiliated Business Group. DSW also designs and produces footwear and accessories through Camuto Group, a leading manufacturer selling in more than 5,400 doors worldwide.