DSW, Inc. (DSW) Tops Q4 EPS by 11c, Miss on Revenues; Offers FY18 EPS Outlook Above Consensus

NOTE: EPS may not be comparable

DSW, Inc. (NYSE: DSW) reported Q4 EPS of $0.38, $0.11 better than the analyst estimate of $0.27. Revenue for the quarter came in at $720 million versus the consensus estimate of $729.42 million.

Fourth Quarter Operating Results

• Sales increased 6.7% to $720.0 million, including $35.6 million from the extra week.
• For the thirteen-week period, comparable sales increased 1.3% compared to last year\'s 7.0% decrease.
• Reported gross profit increased by 150 bps, driven by favorable sourcing, lower markdowns and occupancy leverage.
• Reported operating expenses improved by 20 bps, driven by tighter expense management, partly offset by higher incentive compensation.
• Reported net income was $11.7 million, or $0.15 per diluted share, which included net after-tax charges of $18.8 million, or $0.23 per diluted share, excluding costs related to Ebuys, restructuring, acquisition expenses related to Town Shoes and the impact of U.S. Tax Reform.
• Adjusted net income was $30.5 million, or $0.38 per diluted share, an increase of 90%, excluding costs related to Ebuys, restructuring, acquisition expenses related to Town Shoes and the impact of U.S. Tax Reform. Excluding the impact of the 53rd week of $0.06 per diluted share, adjusted earnings per share increased by 60%.

Fiscal 2018 Annual Outlook

For the fifty-two week period ending February 2, 2019, the Company expects full year revenue growth to decrease by 1% to 3%, with the exit of non-core businesses and the impact of the 53rd week. Excluding the exit of non-core businesses and the 53rd week, total revenues are expected to increase in the 2% to 4% range. This assumes comparable sales increase in the low single digit range and the opening of 3 to 6 net new locations for the DSW Segment.

Full year adjusted earnings per share is expected to range between $1.52 to $1.67 per diluted share, representing earnings growth of 4% to 14% excluding the income from the 53rd week. The Company\'s outlook assumes a tax rate of 29% and 81.0 million shares outstanding. Guidance excludes charges related to the exit of Ebuys and does not assume the consolidation of Town Shoes.

GUIDANCE:

DSW, Inc. sees FY2018 EPS of $1.52-$1.67, versus the consensus of $1.41.

For earnings history and earnings-related data on DSW, Inc. (DSW) click here.

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