DSW Q2 profit jumps on acquisition and rising sales
Columbus, Ohio — DSW said Tuesday that its second-quarter profit soared, boosted by a hefty one-time gain related to its acquisition of Retail Ventures.
The results beat Wall Street expectations and the company boosted its full-year outlook.
For the quarter ended July DSW posted net income of $139.9 million, compared with $26.9 million for the same quarter last year.
Excluding the one-time gain related to the purchase of Retail Ventures, the company said it posted an adjusted profit of $33.7 million, compared with an adjusted $23.5 million in the year-ago period.
Sales rose 15% to $476.3 million from $415.1 million. Same-store sales were up 12.3%. The results beat Wall Street predictions.
“During the quarter we increased our men’s and accessories penetration while continuing to grow women’s fashion footwear," said Mike MacDonald, president and CEO. "We also launched our mobile website and kids’ shoes online to further our market share gains in the high-growth e-commerce business. Despite economic uncertainty and equity market volatility, we expect fiscal 2011 to represent another strong year of growth and increased value for all DSW stakeholders."
In May, DSW bought Retail Ventures, a company whose only operating business was its 62% stake in DSW. Retail Ventures’ chairman was also the chairman and former CEO of DSW.
DSW had been a subsidiary of Retail Ventures, until DSW went public in 2005.
DSW steps up 2Q comps
COLUMBUS, Ohio — DSW’s model of bringing designer goods to a budget-conscious consumer continues to pay off, as the company posted sales and earnings growth for its second quarter. DSW Inc. reported that net sales for the second quarter increased4.7% to $476.3 million from $415.1 million in the second quarter of 2010.Comparable sales for the second quarter increased 12.3%.
Reported net income was $139.9 million, or $3.96 per diluted share. This compares with reported net income of $26.9 million, or $1.00 per diluted share.
"We continued our strong performance in the second quarter, delivering double-digit increases in sales and comparable sales, expansion in gross margin and solid earnings growth driven by the success of our format and our strategies," stated Mike MacDonald, president and CEO of DSW Inc. "We believe our sustained momentum is a clear indication of DSW’s authority in the footwear category. The second quarter marked our eighth consecutive quarter of strong comparable sales approaching or equaling a double-digit growth rate."
"During the quarter we increased our men’s and accessories penetration while continuing to grow women’s fashion footwear," MacDonald continued. "We also launched our mobile website and kids’ shoes online to further our market share gains in the high-growth e-commerce business. Despite economic uncertainty and equity market volatility, we expect fiscal 2011 to represent another strong year of growth and increased value for all DSW stakeholders."
For the first half of the year, DSW reported that net sales increased 13.3% to $979.9 million from $866.7 million for the first six months of 2010. Comparable sales for the period were up 11.5%. Net income for the first six months was $101.7 million or $3.54 per diluted share, compared with net income of $21 million or 98 cents per diluted share. Net income benefited by $28.4 million from the company’s recent merger with Retail Ventures.
DSW said it is raising its annual guidance.The company continues to estimate annual comparable sales to increase in the mid-single-digit range and now expects annual diluted earnings per share in the range of $2.70 to $2.85 for fiscal 2011, excluding any impact from the merger with RVI.
As of July 30, 2011, DSW operated 319 stores in 39 states
New promotions announced at Books-A-Million
BIRMINGHAM, Ala. — Books-A-Million announced that it has promoted Terrance Finley, formerly EVP/chief merchandising officer to president and COO of the company, effective immediately. Finley has served in his previous role since August 2009 and in various other capacities in the merchandising department since joining the company in 1992. Finley was appointed to the board of directors of Hibbett Sports Inc. in March 2008.
The company has also appointed James Turner, formerly the company’s VP real estate, to the position of EVP real estate and business development. Turner has served as the company’s VP real estate since June 2003. Prior to this, Turner held several positions in the company’s finance department, including controller. Prior to joining the company, Turner served as a division controller for Belk Inc.
Commenting on the promotions, Clyde Anderson, chairman and CEO, said, “I am extremely pleased to congratulate Terry on his well-deserved promotion. Terry has been an innovator and leader at BAM for over 20 years, and I am confident that he will lead our team to new heights as we take advantage of the many opportunities ahead.”