EX-99.1 2 l27877aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
For Release at 7:00 AM Eastern on September 5, 2007
DSW INC. REPORTS 2007 SECOND QUARTER FINANCIAL RESULTS
COLUMBUS, Ohio, September 5, 2007/PRNewswire/ — DSW Inc. (NYSE: DSW), a leading branded footwear specialty retailer, announced net income of $6.5 million on net sales of $348.7 million for the second quarter ended August 4, 2007, compared with net income of $15.3 million on net sales of $301.3 million for the second quarter ended July 29, 2006. Same store sales increased 5.9% for the comparable thirteen-week period versus an increase of 2.2% last year.
The Company said second quarter sales were driven by significant promotional activity aimed at clearing seasonal merchandise, which negatively impacted gross margin for the quarter.
Diluted earnings per share were $0.15 for the second quarter of 2007 compared with $0.35 for last year’s second quarter.
Six Month Results
Net income was $30.3 million on net sales of $705.7 million for the six months ended August 4, 2007, compared with net income of $32.9 million on net sales of $617.8 million for the six months ended July 29, 2006. Same store sales increased 0.9% for the comparable twenty-six week period versus an increase of 3.2% last year.
Diluted earnings per share were $0.68 for the six months ended August 4, 2007, compared with $0.74 for the same period last year.
2007 Outlook
Based on the performance through the second quarter reported today, the Company is maintaining its annual estimate for fiscal 2007 diluted earnings per share in the range of $1.63 to $1.68 and is maintaining its annual estimate for comparable store sales in the range of 0% to 3%. In addition, the Company plans to open at least 35 new DSW stores during the year, an increase from its original estimate of at least 30 new stores.
Webcast and Conference Call
To hear the Company’s live second quarter earnings conference call, log on to www.DSWshoes.com at 8:00 a.m. ET today, Wednesday, September 5, 2007, or call 1-800-659-2056 and reference passcode 50473518. 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 55100942. 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 September 5, 2007 DSW operated 237 stores in 36 states and supplied footwear to 366 leased locations (33 for related retailers and 333 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 facts, including the statements made in our “2007 Outlook,” are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company’s current expectations and 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. These factors include, but are not limited to: our success in opening and operating new stores on a timely and profitable basis; maintaining good relationships with our vendors; our ability to anticipate and respond to fashion trends; fluctuation of our comparable store sales and quarterly financial performance; disruption of our distribution operations; our dependence on Retail Ventures, Inc. for key services; failure to retain our key executives or attract qualified new personnel; our competitiveness with respect to style, price, brand availability and customer service; declining general economic conditions; risks inherent to international trade with countries that are major manufacturers of footwear; and security risks related to our electronic processing and transmission of confidential customer information. Additional factors that could cause our actual results to differ materially from our expectations are described in the Company’s latest annual or quarterly report, as filed with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to revise the 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.

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DSW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                 
    August 4,     February 3,  
    2007     2007  
 
                
ASSETS
                
Cash and equivalents
   $ 74,843     $ 73,205  
Short-term investments
     100,475       98,650  
Accounts receivable, net
     12,468       8,284  
Inventories
     258,119       237,737  
Prepaid expenses and other assets
     28,934       22,049  
Deferred income taxes
     19,044       18,046  
 
Total current assets
     493,883       457,971  
 
 
                
Property and equipment, net
     145,538       116,872  
Long-term investments
     2,500       —  
Goodwill
     25,899       25,899  
Tradenames and other intangibles, net
     4,949       5,355  
Deferred income taxes and other assets
     2,117       2,206  
 
Total assets
   $ 674,886     $ 608,303  
 
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Accounts payable
   $ 134,012     $ 94,967  
Accrued expenses
     54,734       64,300  
 
Total current liabilities
     188,746       159,267  
 
 
                
Deferred income taxes and other non-current liabilities
     79,001       74,457  
Total shareholders’ equity
     407,139       374,579  
 
Total liabilities and shareholders’ equity
   $ 674,886     $ 608,303  
 

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DSW INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    August 4,     July 29,     August 4,     July 29,  
    2007     2006     2007     2006  
 
                                
Net sales
   $ 348,718     $ 301,302     $ 705,715     $ 617,789  
Cost of sales
     (267,368 )     (216,200 )     (515,109 )     (439,400 )
 
Gross profit
     81,350       85,102       190,606       178,389  
Operating expenses
     (73,024 )     (62,005 )     (145,062 )     (127,403 )
 
Operating profit
     8,326       23,097       45,544       50,986  
Interest income, net
     1,948       1,975       3,667       3,299  
 
Earnings before income taxes
     10,274       25,072       49,211       54,285  
Income tax provision
     (3,753 )     (9,731 )     (18,946 )     (21,425 )
 
Net income
   $ 6,521     $ 15,341     $ 30,265     $ 32,860  
 
 
                                
Basic and diluted earnings per share:
                                
Basic
   $ 0.15     $ 0.35     $ 0.69     $ 0.75  
Diluted
   $ 0.15     $ 0.35     $ 0.68     $ 0.74  
 
                                
Shares used in per share calculations:
                                
Basic
     43,953       43,909       43,947       43,902  
Diluted
     44,338       44,210       44,349       44,177  

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