Buoyed by strong sales and growing profitability, leading footwear retailer DSW Inc., preannounced second quarter sales and plans for a 2-for-1 stock split in advance of the release of second quarter results on August 27.
DSW’s sales for the second quarter ended August 3, increased 9% to $558 million from $512 million and same store sales increased 4.3% on top of a prior year gain of 4.2%. Those results prompted the operator of 377 stores to increase its full year profit forecast to a range of $3.60 to $3.80 per share from the previous range of $3.40 to $3.60 per share.
Actual results will be released on August 27 and following that report the company will hold a special meeting of shareholders at a to-be-determined date to seek approval of a 2-for-1 stock split. Normally such matters do not require shareholder approval, but in this case the situation is more elaborate and if approved will result in a reduction of the voting control of some shareholders.
DSW has Class A and Class B shareholders and proposes issuing one Class A share for each Class A or Class B share outstanding to create a total of approximately 90.2 million shares, comprised of approximately 81.6 million Class A shares and 8.6 million Class B shares. Currently, the company has 45.1 million total shares outstanding, which is comprised of 36.5 million Class A shares and 8.6 million Class B shares. The Class A shares will continue to hold one vote per share while the Class B shares will hold eight votes per share. According to the company, the proposed stock split will not change the proportion of share ownership of existing shareholders but it will reduce the voting control of the Class B shareholders from 65% currently to approximately 46% post-split.