Beat-and-raise-minded investors strike again.
Shares for DSW Inc. opened down nearly 10 percent today after the firm posted first-quarter earnings that topped forecasts across the board. A probable culprit for the sell-off is the company’s decision to maintain its full-year forecast. On the heels of the better-than-expected performance, investors were likely hoping to see DSW’s guidance adjusted upward.
The family-footwear retailer — which recently rebooted its loyalty program and transformed its stores to better aid online order fulfillment — said its Q1 sales increased 3 percent to $712 million, topping estimates of $682 million. Same-store sales also climbed 2.2 percent during the period, marking DSW’s second straight gain in that area, noted CEO Roger Rawlins. (Footwear, specifically, enjoyed its fourth consecutive quarter of comp gains, he said.)
DSW’s profits rose 6 percent year over year to $24.3 million, or 30 cents per diluted share. On an adjusted basis, profits were 39 cents per diluted share, topping analysts’ bets for 37 cents a share.
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“With our solid first-quarter results, we have delivered a 4 percent revenue increase and a 16 percent earnings increase over the last 12 months, marking an exciting return to growth for the DSW brand,” Rawlins said.
The company continues to expect full-year adjusted earnings in the range of $1.52 to $1.67 per diluted share.
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