Footwear and accessories retailer DSW Inc. (DSW: Quote) reported Tuesday a sharp decline in second-quarter profit, but earnings per share and topline beat analysts' expectations. The company reiterated its 2012 earnings and comparable sales guidance and said it is well positioned for solid growth in fiscal 2012 and beyond. The shares rose about 6 percent in the morning trade.
Mike MacDonald, president and chief executive officer of the company said, "Our second quarter results surpassed our updated guidance and our performance for the first six months of the year is on track with our annual earnings target."
In the second quarter, the Columbus, Ohio-based company's net income fell to $29.32 million from $139.87 million in the year-ago quarter. On a per share basis, earnings were $0.65 per share on 45.3 million shares, compared to $3.96 per share on 35.4 million shares outstanding. Results for the year-ago quarter included a net benefit of $106.2 million related to the May 2011 merger with Retail Ventures Inc.
Earnings per share, adjusted for charges related to RVI, were $0.66. In the prior year, adjusted earnings were $0.74 per share. On average, 10 analysts polled by Thomson Reuters expected the company to earn $0.62 per share for the quarter. Analysts' estimates typically exclude special items.
The company had an income tax provision of $18.53 million, compared to an income tax benefit of $124.64 million a year earlier.
Quarterly sales rose 7.5 percent to $512.22 million, which also came above analysts' estimate of $510.94 million. DSW segment net sales increased 9.1 percent to $482.2 million. Comparable sales increased 4.2 percent, compared to an increase of 12.3 percent in the preceding year.
DSW continues to expect adjusted earnings per share to be in the range of $3.25 to $3.40 for the 53-week year ending February 2, 2013. The company still anticipates a mid-single digit comparable sales increase for the year. Analysts expect the company to earn $3.28 per share for the year.
On August 17, the board approved a quarterly cash dividend payment of $0.18 per share, to shareholders of record on September 18, payable on September 28, 2012.
During the second half of the year, the company plans to open another 27 new stores.
DSW is currently trading at $64.7, up $3.47 or 5.67 percent, on a volume of 571 thousand shares on the NYSE.
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by RTT Staff Writer
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