DSW Inc.’s shares are in the red today — down nearly 7 percent, to $16.48 as of 10:25 a.m. ET — after the firm reported a mixed finish to the first quarter, ended April 29, 2017.
The off-price footwear retailer said its Q1 profits tumbled 23 percent year-over-year, to $23 million, or 28 cents per diluted share. Adjusted profits slipped to $25.7 million, or 32 cents per diluted share, missing analysts’ forecasts for diluted earnings per share of 35 cents.
Sales during the period increased 1.4 percent, to $691.1 million, topping forecasts for sales of $684.9 million. Comparable sales declined 3 percent.
DSW CEO Roger Rawlins said the company’s sales were “challenging” during most of the period but noted improved trends in April, when comps turned positive.
“As expected, planned clearance activity and the addition of Ebuys drove lower gross margin and operating income,” Rawlins said. “The investments we have made in our digital capabilities, such as our redesigned website and mobile app, drove robust growth in digital demand. We are intently focused on driving sequential top-line improvements through key product and customer initiatives while balancing strategic investments with disciplined expense management.” (DSW announced in February 2016 its acquisition of Ebuys Inc., an e-commerce off-price footwear and accessories retailer with a presence in North America, Europe, Australia and Asia.)
DSW CFO and SVP Jared Poff said Q1 digital-demand percentage growth was in the high teens, and store fulfillment of digital orders increased by 52 percent — and was just shy of 45 percent of all digital orders during the period.
During a call with investors today, Rawlins also praised DSW’s recent executive appointments, including its new hire of Nordstrom veteran Michelle Love.
“Michelle had a strong and distinguished career at Nordstrom, most recently spearheading the expansion of Nordstrom Rack,” Rawlins said. “Michelle will oversee all engagement with our DSW customer, including our digital experience.”
The firm reiterated its fiscal 2017 EPS guidance for $1.45 to $1.55 per share.