UPDATE: DSW Posts Downbeat Q1 Results, Lowers Forecast

DSW

reported weaker-than-expected fiscal first-quarter results and lowered its full-year earnings forecast. DSW's quarterly profit rose to $38.6 million, or $0.42 per share, versus a year-ago profit of $34.5 million, or $0.38 per share. Its net sales declined 0.4% to $598.9 million. However, analysts were expecting earnings of $0.48 per share on sales of $622 million. DSW now expects full-year earnings of $1.45 to $1.60 per share, versus analysts' estimates of $1.90 per share. DSW's same-store sales slipped 3.7%. DSW's gross margin rose to 31.4% from 30.4%, while input costs slipped 1.8%. DSW's board also approved a quarterly cash dividend payment of $0.1875 per share. Mike MacDonald, President and Chief Executive Officer said, "We had a challenging quarter due to unseasonal weather and an aggressively promotional retail environment. We sharpened our prices for key items while proactively managing our clearance levels during the quarter. Monthly sales trends were weak but improved sequentially during the quarter. Our team is working hard to deliver an effective assortment with a compelling value message and we expect these initiatives to gain traction in the back half of the year. DSW shares tumbled 14.45% to $27.82 in pre-market trading.