DSW Inc. Reports Second Quarter 2015 Financial Results

COLUMBUS, Ohio, Aug. 25, 2015 /PRNewswire/ -- DSW Inc. DSW, a leading branded footwear and accessories retailer, announced financial results for the thirteen week period ended August 1, 2015, which compares to the thirteen week period ended August 2, 2014.

Mike MacDonald, President and Chief Executive Officer, commented, "We were encouraged with our accomplishments in the second quarter. Our double digit earnings growth over the prior period reflected a significant shift in favor of regular priced merchandise selling. This shift enabled us to achieve meaningful merchandise margin rate expansion and gross profit dollar growth. We also advanced our strategy of becoming a more customer-centric company by evolving our organization, systems, and processes to meet our customers' changing expectations. As a result of this financial and strategic process, we remain confident in our direction."

Second Quarter Operating Results

• Sales increased 6.8% to $627 million compared to last year's sales of $587 million.
• Comparable sales increased by 1.8% compared to last year's increase of 0.8%.
• Gross profit increased 120 bps driven primarily by lower markdown activity.
• Operating expense rate increased by 80 bps due to higher stock and incentive compensation.
• Net income from continuing operations increased by 10.7% to $37.6 million.
• Earnings per share from continuing operations increased by 13.5% to $0.42 per share compared to last year's $0.37 per share.

Six Months Ended August 1, 2015 Operating Results

• Sales increased 8.1% to $1.28 billion compared to last year's sales of $1.19 billion.
• Comparable sales increased by 3.5% compared to last year's decrease of 1.5%.
• Net income from continuing operations increased by 17.0% to $85.0 million.
• Earnings per share from continuing operations increased by 20.3% to $0.95 per share compared to last year's $0.79 per share.

Second Quarter Balance Sheet Highlights

• Cash, short-term and long-term investments totaled $471 million compared to $465 million in the second quarter last year.
• Inventories were $505 million compared to $415 million at the end of the second quarter last year. On a cost per square foot basis, DSW inventories increased by 14.2%. Excluding opportunistic buys, inventories on a cost per square foot increased by 6.3%.

Regular Dividend
DSW Inc.'s Board of Directors declares a quarterly cash dividend payment of $0.20 per share. The dividend will be paid on September 30, 2015 to shareholders of record at the close of business on September 18, 2015.

Fiscal 2015 Annual Outlook
For the fifty-two week fiscal year ending January 30, 2016, the Company reiterated its earnings outlook to range from $1.80 to $1.90 per share.

Webcast and Conference Call
To hear the Company's live earnings conference call, log on to http://www.dswinc.com/ today at 8:30 a.m. Eastern Time, or call 1-888-317-6003 in the U.S. or 1-412-317-6061 outside the U.S. using passcode 0043755 approximately ten minutes prior to the start of the call. A telephone replay of this call will be available until 5:00 p.m. Eastern Time on September 8, 2015 and can be accessed by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 outside the U.S. and using passcode 10070803. An audio replay of the conference call, as well as additional financial information, will also be available at http://www.dswinc.com.

About DSW Inc.
DSW Inc. is a leading branded footwear and accessories retailer that offers a wide selection of brand name and designer dress, casual and athletic footwear and accessories for women, men and kids. As of August 25, 2015, DSW operates 449 stores in 42 states, the District of Columbia and Puerto Rico, and operates an e-commerce site, http://www.dsw.com, and a mobile website, http://m.dsw.com. DSW Inc. also supplies footwear to 372 locations in the United States under the Affiliated Business Group. For store locations and additional information about DSW Inc., visit http://www.dswinc.com. Follow DSW on Twitter at http://twitter.com/DSWShoeLovers and Facebook at http://www.facebook.com/DSW.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Any statements in this release that are not historical facts, including the statements made in our "Fiscal 2015 Annual Outlook," are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's current expectations and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: our success in executing our omni-channel strategy; our success in opening and operating new stores on a timely and profitable basis; maintaining strong relationships with our vendors; our ability to anticipate and respond to fashion trends; disruption of our distribution and/or fulfillment operations; continuation of supply agreements and the financial condition of our affiliated business partners; fluctuation of our comparable sales and quarterly financial performance; risks related to our information systems and data; failure to retain our key executives or attract qualified new personnel; our competitiveness with respect to style, price, brand availability and customer service; our reliance on our DSW Rewards program and marketing to drive traffic, sales and customer loyalty; uncertain general economic conditions; our reliance on foreign sources for merchandise and risks inherent to international trade; risks related to our handling of sensitive and confidential data; risks related to leases of our properties; risks related to the realization of benefits related to our equity interest in Town Shoes, a leading branded shoe retailer in Canada; foreign currency exchange risk; and risks related to our cash and investments. Additional factors that could cause our actual results to differ materially from our expectations are described in the Company's latest annual or quarterly report, as filed with the SEC. All forward-looking statements speak only as of the time when made. The Company undertakes no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.

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SOURCE DSW Inc.