BB&T Capital Remains Sidelined on DSW, Inc. (DSW) Following 1Q Miss

BB&T Capital reiterated a Hold rating on DSW Inc. (NYSE: DSW) following the company's 1Q earnings report. DSW reported EPS of $0.40, below consensus of $0.46. Sales were lower than expected, on a -1.6% comp, below consensus of +0.2%.

Analyst Corinna Freedman commented, "DSW missed Q1 EPS as comps and GM declined meaningfully and more than anticipated on higher markdowns and lower IMUs. Management lowered FY guidance for sales, EPS, and GM, partially offset by better SG&A, with Q1 trends continuing into Q2. Encouragingly, Athletic outperformed with comps accelerating to +16.5% from +15.0% in Q4'15; however, lower IMU for the category contributed to GM degradation. Though DSW is in the process of re-examining its cost structure, the near-term environment remains challenging and a heightened level of markdowns are expected to continue into Q2. We maintain our Hold rating and lower our FY'16 EPS to the low end of the range or $1.32, from $1.62 previously."

For an analyst ratings summary and ratings history on DSW Inc. click here. For more ratings news on DSW Inc. click here.

Shares of DSW Inc. closed at $19.20 yesterday.

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