Columbus, Ohio, DSW Inc. said Wednesday its second-quarter profit dropped 58% due to a rise in promotions that hurt gross margins.
For the quarter ended Aug. 4, net income fell to $6.5 million from $15.3 million in the prior year quarter. Revenue rose 16% to $348.7 million from $301.3 million in the second quarter of 2006. The company said same-store sales climbed 5.9% during the quarter.
DSW attributed the same-store sales increase to a big boost in promotional activity meant to clear out seasonal merchandise. Those promotions also hurt its gross margins and contributed to its profit drop.