Undeterred by volatility in its sales results, leading footwear retailer DSW maintained its pace of expansion and opened 16 new stores to end the third quarter with 393 locations.
The operator of large format footwear stores that average about 22,000-sq.-ft., said its third quarter sales declined 0.7% while total sales increased 6.8% to $633 million due to the addition of the new stores. The third quarter comp decline is the latest development in what has been a tumultuous year from a sales standpoint.
The company began 2013 slowly and offered modest guidance around same store sales and earnings and then reported a first quarter comp decrease of 2.4%. Weather trends and business conditions improved in the second quarter and same store sales popped 4.4%. The company raised its full year profit forecast and declared a two-for-one stock split. After reporting third quarter results that saw profits increase 14% to 58 cents a share, or $1.17 on a pre-split basis, the company affirmed its full year profit forecast of $1.80 to $1.90 on a post split basis.
"A solid increase in total sales combined with disciplined execution and inventory management allowed us to increase our adjusted earnings per share by 14%. We achieved our highest level of profitability in the third quarter while navigating through a promotional environment,” said Mike MacDonald, president and CEO. “We were encouraged by the improvement in traffic and sales at the end of the quarter, as the fall selling season got off to a delayed start."
Two of the 16 stores the company opened during the quarter were in the company’s smaller format, according to MacDonald who noted that DSW advanced its omni-channel work and implemented a number of systems initiatives during the third quarter.