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DSW net income rises in Q4; sees potential for 550 stores

Columbus, Ohio – DSW Inc. reported a net income increase in the fourth quarter of fiscal 2013 compared to the same period a year earlier, even as net sales dipped. Fourth quarter net income rose 4% to $28.1 million from $27.1 million, while net sales declined 4% to $572 million from $594 million and same-store sales remained flat.

In addition, DSW now sees a full build-out potential for 500 to 550 stores, including 35 new stores it expects to build in fiscal 2014. For the full year, the company expects revenue growth of 6% to 7%, with same-store sales growth in the low-single digit range.

During the full fiscal year 2013, DSW reported net income growth of 13.5%, to $172.8 million from $152.2 million. Reported sales increased 4.9% to $2.4 billion from $2.3 billion. Same-store sales increased 0.2%.

"We marked our fifth consecutive year of double digit earnings growth in 2013, with adjusted earnings per share of $1.88 compared to the prior year's results of $1.67,” said Mike MacDonald, president and CEO of DSW Inc. “Effective inventory management and our new systems enabled us to expand full year merchandise margin to 45.1%, which is just 10 bps shy of our record margin in 2011. We were also able to improve on our SG&A rate by 80 bps to 20.4%, which led to our highest ever operating margin of 11.7%.”