8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 29, 2006

DSW Inc.

(Exact name of registrant as specified in its charter)

Ohio	001-32545	31-0746639
(State or other jurisdiction of incorporation)	(Commission File Number)	( IRS Employer Identification No.)

4150 E. Fifth Avenue, Columbus, Ohio	43219
(Address of principal executive offices)	(Zip Code)

(614) 237-7100

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     On November 29, 2006, the Company issued a press release regarding its consolidated financial results for the quarter ended October 28, 2006. A copy of the press release announcing these financial results for the quarter is attached as Exhibit 99.1 hereto and incorporated by reference herein.

     Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

     (d) Exhibits.

Exhibit Number	Description
99.1	Press Release dated November 29, 2006

Signature

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DSW Inc.
	By:	/s/Douglas J. Probst
		Douglas J. Probst Executive Vice President, Chief Financial Officer and Treasurer
Date: November 29, 2006

EX-99.1

Exhibit 99.1

For Release at 4:05 PM Eastern on November 29, 2006

DSW INC. REPORTS 2006 THIRD QUARTER FINANCIAL RESULTS

COLUMBUS, Ohio, November 29, 2006/PRNewswire/ — DSW Inc. (NYSE: DSW), a leading branded footwear specialty retailer, announced net income of $16.0 million on net sales of $332.2 million for the third quarter ended October 28, 2006, compared with net income of $10.9 million on net sales of $302.2 million for the comparable period last year.

Diluted earnings per share were $0.36 for the third quarter of 2006 compared with $0.25 for last year’s third quarter.

Comparable store sales for the third quarter of 2006 increased 2.6% compared with the same period last year.

Nine Month Results
For the nine months ended October 28, 2006, net income was $48.9 million on net sales of $950.0 million, compared with net income of $27.1 million on net sales of $860.3 million for the comparable period last year.

Diluted earnings per share for the nine months ended October 28, 2006 were $1.11 compared with $0.77 for the same period last year.

The fiscal 2005 nine-month results include $6.6 million of interest expense on a dividend note to the Company’s controlling shareholder, Retail Ventures, Inc., and $6.5 million for the accrual for losses associated with the data theft announced March 2005. After adjusting for the dividend interest, the data theft accrual and the significant increase in shares as a result of the Company’s initial public offering in June 2005, pro forma net income for the fiscal 2005 nine-month period was $35.0 million, or diluted earnings per share of $0.79. The exhibit at the end of this release reconciles the non-GAAP pro forma net income and diluted earnings per share to the reported net income and diluted earnings per share for the fiscal 2005 nine-month period.

Comparable store sales for the nine months ended October 28, 2006 increased 3.0% compared with the same period last year.

2006 Outlook
Based on the performance through the first three quarters reported today, the Company raised its current estimate for fiscal 2006 annual diluted earnings per share to a range of $1.35 to $1.38, up from its previous estimate of $1.24 to $1.27. Annual comparable store sales are projected to increase approximately 1-3% and the Company plans to open 29 DSW stores for the year.

Webcast and Conference Call
To hear the Company’s live third quarter earnings conference call, log on to www.DSWshoes.com at 5:00 p.m. ET today, Wednesday, November 29, 2006 or call 1-866-713-8563 and reference passcode 21481520. To hear a replay of the earnings call, which will be available approximately two hours after the conference call ends, dial 1-888-286-8010, followed by passcode 75600992. An audio replay of the conference call, as well as additional financial information, will also be available at www.DSWshoes.com.

About DSW Inc.
DSW Inc., headquartered in Columbus, Ohio, is a leading U.S. branded footwear specialty retailer that offers a wide selection of brand name and designer dress, casual and athletic footwear for women and men. As of November 29, 2006, DSW operated 220 stores in 35 states and supplied footwear to 258 leased locations (30 for related retailers and 228 for non-related retailers) in the United States. For store locations and additional information about DSW, visit www.DSWshoes.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Any statements in this release that are not historical or current facts are forward-looking statements. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements 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, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the Company’s latest annual or quarterly report, as filed with the SEC. These risk factors include, but are not limited to: the Company’s success in opening and operating new stores on a timely and profitable basis; maintaining good relationships with vendors; ability to anticipate and respond to fashion trends; fluctuation of comparable store sales and quarterly financial performance; disruption of distribution operations; dependence on Retail Ventures, Inc. for key services; failure to retain key executives or attract qualified new personnel; remaining competitive with respect to style, price, brand availability and customer service; declining general economic conditions; risks inherent to international trade; and security risks related to our electronic processing and transmission of confidential customer information. Management undertakes no obligation to revise these forward-looking statements included in this press release to reflect any future events or circumstances.

Contact: DSW Investor Relations, 614-872-1474

Source: DSW Inc.

2

DSW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)

	October 28,		January 28,
	2006		2006
ASSETS
Cash and equivalents	$	97,191	$	124,759
Short-term investments		75,350		—
Accounts receivable, net		9,564		4,088
Inventories		235,047		216,698
Prepaid expenses and other assets		15,487		13,981
Deferred income taxes		19,740		18,591
Total current assets		452,379		378,117
Property and equipment, net		102,793		95,921
Goodwill		25,899		25,899
Tradenames and other intangibles, net		5,568		6,216
Deferred income taxes and other assets		2,681		1,562
Total assets	$	589,320	$	507,715
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	95,204	$	85,520
Accrued expenses		64,834		54,069
Total current liabilities		160,038		139,589
Other noncurrent liabilities		72,244		63,410
Total shareholders’ equity		357,038		304,716
Total liabilities and shareholders’ equity	$	589,320	$	507,715

3

DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Nine Months Ended
	October 28,			October 29,			October 28,			October 29,
	2006			2005			2006			2005
Net sales	$	332,219		$	302,240		$	950,008		$	860,257
Cost of sales		(233,544	)		(219,221	)		(672,944	)		(618,077	)
Gross profit		98,675			83,019			277,064			242,180
Operating expenses		(73,451	)		(65,292	)		(200,854	)		(188,712	)
Operating profit		25,224			17,727			76,210			53,468
Interest income (expense), net		1,563			149			4,862			(8,384	)
Earnings before income taxes		26,787			17,876			81,072			45,084
Income tax provision		(10,786	)		(6,965	)		(32,211	)		(17,942	)
Net income	$	16,001		$	10,911		$	48,861		$	27,142
Basic and diluted earnings per share:
Basic		$0.36			$0.25			$1.11			$0.78
Diluted		$0.36			$0.25			$1.11			$0.77
Shares used in per share calculations:
Basic		43,922			43,891			43,909			34,994
Diluted		44,226			44,066			44,193			35,080

4

Exhibit
(in thousands, except per share amounts)

				Nine Months Ended
				October 29, 2005
	Proforma						As reported
	Non-GAAP			Adjustments (1)			GAAP
Net Sales	$	860,257					$	860,257
Cost of sales		(618,077	)					(618,077	)
Gross profit		242,180						242,180
Operating expenses		(182,212	)	$	(6,500	)		(188,712	)
Operating profit		59,968			(6,500	)		53,468
Interest income (expense), net		(1,792	)		(6,592	)		(8,384	)
Earnings before income taxes		58,176			(13,092	)		45,084
Income tax provision (2)		(23,179	)		5,237			(17,942	)
Net income	$	34,997		$	(7,855	)	$	27,142
Weighted average outstanding shares, diluted (3)		44,066			(8,986	)		35,080
Diluted earnings per share	$	0.79					$	0.77

(1)	The Company believes the use of pro forma results provide meaningful information for the nine months ended October 29, 2005 due to: i) the significant increase in share count as a result of the Company’s initial public offering on June 29, 2005, ii) the interest expense in the nine-month period of fiscal 2005 attributable to a $190 million dividend note which was repaid with the proceeds of the initial public offering, and iii) the $6.5 million accrual for the data theft which was recorded in the first quarter of fiscal 2005. The pro forma data is presented as if the initial public offering occurred on the first day of fiscal 2005 and the dividend note interest and data theft accrual are non-recurring or unusual charges. There were no adjustments to reported net income and diluted earnings per share for the fiscal three-month period ended October 29, 2005.
(2)	The tax effect on the pro forma adjustments is calculated using an approximate annual tax rate of 40%.
(3)	Amount is based on the weighted average outstanding shares, plus the assumed exercise of dilutive stock options and restricted stock units, for the quarter ended October 29, 2005, the Company’s first full fiscal quarter following its initial public offering on June 29, 2005.

5