NEW YORK — DSW Inc.’s third-quarter profits fell 41 percent and the company slashed its full-year earnings expectations amid the bankruptcy of Value City Department Stores Inc. and a tough economy.
On Tuesday, the Columbus, Ohio-based footwear retailer said its quarterly net income fell to $13.2 million, or 30 cents a diluted share, from $22.4 million, or 51 cents, a year earlier. However, the latest results beat analysts’ average expectations for earnings of 27 cents.
As a result, shares of DSW spiked 9.1 percent Tuesday to close at $9.28.
Third-quarter sales rose 7 percent to $391.4 million from $367.4 million a year earlier. Analysts projected revenues of $394 million, on average. Same-store sales fell 4.1 percent from a year earlier.
DSW cut its 2008 full-year earnings expectations to a range of 62 cents to 72 cents a share, down from a previous outlook of 75 cents to 85 cents, released in August. The outlook includes a fourth-quarter severance charge, uncollectible fees from the bankruptcy of Value City and an anticipated continued economic decline. DSW is Value City’s unsecured creditor and former sister division.