Ohio | 001-32545 | 31-0746639 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
810 DSW Drive, Columbus, Ohio | 43219 | |
(Address of Principal Executive Offices) | (Zip Code) |
(Former name or former address if changed since last report.) |
Exhibit Number | Description | ||
99.1 | Press Release dated August 26, 2014 |
DSW Inc. | ||||
By: | /s/ William L. Jordan | |||
William L. Jordan | ||||
Executive Vice President and General Counsel | ||||
Date: | August 26, 2014 |
• | Second quarter Reported sales increase 4.5% to $587 million |
• | Second quarter Adjusted sales increase 5.2% to $587 million; comparable sales increase 0.8% |
• | First six months Reported sales increase 1.9% to $1.19 billion; comparable sales decrease 1.5% |
• | Second quarter Reported EPS totals $0.38 per share and Adjusted EPS totals $0.37 per share |
• | Full year Adjusted EPS guidance of $1.50 to $1.65 per share, based on flattish comps for the year |
• | Board of Directors approves a quarterly dividend of $0.1875 per share |
• | Reported sales increased 4.5% to $587 million compared to last year's second quarter sales of $562 million. |
• | Adjusted sales increased 5.2% to $587 million compared to last year's second quarter sales of $558 million, which excluded sales from the Company's luxury test. For the thirteen week period ended August 2, 2014, comparable sales increased by 0.8%. This follows an increase of 4.4% during the thirteen week period ended August 3, 2013. |
• | Reported net income was $34.3 million, or $0.38 per diluted share on 91 million weighted average shares outstanding, which includes an after-tax gain related to income for RVI. This compares to Reported net income in the second quarter of 2013 of $33.7 million, or $0.37 per diluted share, which included a net after-tax loss of $1.5 million, or $0.02 per share, from our luxury test, and a net charge of $9.3 million, or $0.10 per share, from the termination of the pension plan assumed in conjunction with the RVI merger. |
• | Adjusted net income was $33.6 million, or $0.37 per diluted share on 91 million weighted average shares outstanding. This compares to net income, adjusted for the results of our luxury test and legacy charges |
• | Reported sales increased 1.9% to $1.19 billion compared to last year's sales of $1.16 billion. |
• | Adjusted sales increased 2.7% to $1.19 billion compared to last year's sales of $1.15 billion, which excluded sales from the Company's luxury test. |
• | For the twenty-six week period ended August 2, 2014, comparable sales decreased by 1.5%. This follows an increase of 0.8% during the twenty-six week period ended August 3, 2013. |
• | Reported net income was $73.0 million, or $0.80 per diluted share, on 92 million weighted average shares outstanding. This compares to Reported net income in the same period last year of $68.2 million, or $0.74 per diluted share, which included a net after-tax loss of $12.9 million, or $0.14 per share, from our luxury test, and a net after-tax charge of $9.3 million, or $0.10 per share, from the termination of the pension plan assumed in conjunction with the RVI merger. |
• | Adjusted net income was $72.2 million, or $0.79 per diluted share, on 92 million weighted average shares outstanding. This also compares to net income, adjusted for the net loss from our luxury test and legacy charges from RVI, for the same period last year of $90.4 million, or $0.99 per diluted share, on 92 million weighted shares outstanding. |
• | Cash, short term and long term investments totaled $465 million at quarter end compared to $500 million at the end of the second quarter last year. |
• | Inventories were at $415 million compared to $405 million during the second quarter last year. On a cost per square foot basis, DSW segment inventories decreased by 3.3% at the end of quarter, excluding inventory for our luxury test last year. |
• | The Company repurchased approximately 2 million shares for $55 million under its $100 million authorized share buyback plan, with $43 million of its current authorization remaining. |
Net sales by reportable segment | |||||||||||||||||||||
Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||||||||
August 2, 2014 | August 3, 2013 | % change | August 2, 2014 | August 3, 2013 | % change | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||
DSW | $ | 553,814 | $ | 530,921 | 4.3 | % | $ | 1,112,680 | $ | 1,093,845 | 1.7 | % | |||||||||
Affiliated Business Group | 33,282 | 31,142 | 6.9 | % | 73,363 | 69,580 | 5.4 | % | |||||||||||||
Total DSW Inc. | $ | 587,096 | $ | 562,063 | 4.5 | % | $ | 1,186,043 | $ | 1,163,425 | 1.9 | % | |||||||||
Less: Luxury test sales | — | 3,822 | — | 9,077 | |||||||||||||||||
Total Adjusted DSW Inc. sales | $ | 587,096 | $ | 558,241 | 5.2 | % | $ | 1,186,043 | $ | 1,154,348 | 2.7 | % |
Comparable sales change by reportable segment (excludes luxury) | |||||||
Thirteen weeks ended | Twenty-six weeks ended | ||||||
August 2, 2014 | August 3, 2013 | August 2, 2014 | August 3, 2013 | ||||
DSW | 0.8% | 4.4% | (1.7)% | 0.8% | |||
Affiliated Business Group | 2.5% | 4.3% | 1.6% | 0.9% | |||
Total DSW Inc. | 0.8% | 4.4% | (1.5)% | 0.8% |
August 2, 2014 | February 1, 2014 | August 3, 2013 | |||||||||
Assets | |||||||||||
Cash and equivalents | $ | 87,406 | $ | 112,021 | $ | 68,929 | |||||
Short-term investments | 151,647 | 224,098 | 200,238 | ||||||||
Accounts receivable, net | 27,868 | 26,646 | 21,742 | ||||||||
Inventories | 414,988 | 397,768 | 404,512 | ||||||||
Prepaid expenses and other current assets | 52,515 | 34,101 | 39,116 | ||||||||
Deferred income taxes | 22,331 | 18,130 | 42,368 | ||||||||
Total current assets | 756,755 | 812,764 | 776,905 | ||||||||
Property and equipment, net | 331,269 | 318,620 | 310,374 | ||||||||
Long-term investments | 225,972 | 243,188 | 230,599 | ||||||||
Goodwill | 25,899 | 25,899 | 25,899 | ||||||||
Deferred income taxes | 12,466 | 11,587 | 14,366 | ||||||||
Investment in Town Shoes | 24,788 | — | — | ||||||||
Note receivable from Town Shoes | 47,755 | — | — | ||||||||
Other assets | 8,863 | 9,186 | 8,030 | ||||||||
Total assets | $ | 1,433,767 | $ | 1,421,244 | $ | 1,366,173 | |||||
Liabilities and shareholders' equity | |||||||||||
Accounts payable | $ | 192,999 | $ | 168,705 | $ | 176,625 | |||||
Accrued expenses | 107,123 | 115,697 | 127,151 | ||||||||
Total current liabilities | 300,122 | 284,402 | 303,776 | ||||||||
Non-current liabilities | 142,479 | 138,298 | 131,657 | ||||||||
Total shareholders' equity | 991,166 | 998,544 | 930,740 | ||||||||
Total liabilities and shareholders' equity | $ | 1,433,767 | $ | 1,421,244 | $ | 1,366,173 |
Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||||
August 2, 2014 | August 3, 2013 | August 2, 2014 | August 3, 2013 | |||||||||||||
Net sales | $ | 587,096 | $ | 562,063 | $ | 1,186,043 | $ | 1,163,425 | ||||||||
Cost of sales | (415,192 | ) | (378,621 | ) | (826,134 | ) | (796,986 | ) | ||||||||
Gross profit | 171,904 | 183,442 | 359,909 | 366,439 | ||||||||||||
Operating expenses | (118,594 | ) | (129,461 | ) | (245,348 | ) | (258,172 | ) | ||||||||
Operating profit | 53,310 | 53,981 | 114,561 | 108,267 | ||||||||||||
Interest income, net | 635 | 481 | 1,593 | 821 | ||||||||||||
Income before income taxes and income from Town Shoes | 53,945 | 54,462 | 116,154 | 109,088 | ||||||||||||
Income tax provision | (20,824 | ) | (20,742 | ) | (44,394 | ) | (40,853 | ) | ||||||||
Income from Town Shoes | 849 | — | 849 | — | ||||||||||||
Income from continuing operations | 33,970 | 33,720 | 72,609 | 68,235 | ||||||||||||
Total income from discontinued operations, net of tax | 358 | — | 358 | — | ||||||||||||
Net income | $ | 34,328 | $ | 33,720 | $ | 72,967 | $ | 68,235 | ||||||||
Diluted shares used in per share calculations: | 91,126 | 91,796 | 91,618 | 91,678 | ||||||||||||
Diluted earnings per share: | ||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.37 | $ | 0.37 | $ | 0.79 | $ | 0.74 | ||||||||
Diluted earnings per share from discontinued operations | 0.00 | — | 0.00 | — | ||||||||||||
Diluted earnings per share | $ | 0.38 | $ | 0.37 | $ | 0.80 | $ | 0.74 |
Thirteen weeks ended August 2, 2014 | Twenty-six weeks ended August 2, 2014 | ||||||||||||||||
Net income | Diluted earnings per share | Net income | Diluted earnings per share | ||||||||||||||
Reported Measure | $ | 34,328 | $ | 0.38 | $ | 72,967 | $ | 0.80 | |||||||||
Less: RVI operating expenses | |||||||||||||||||
RVI operating expenses, net of tax | 377 | (1 | ) | 0.00 | 377 | (1 | ) | 0.00 | |||||||||
Total income from discontinued operations, net of tax | 358 | (1 | ) | 0.00 | 358 | (1 | ) | 0.00 | |||||||||
Adjusted Measure | $ | 33,593 | $ | 0.37 | $ | 72,232 | $ | 0.79 |
Thirteen weeks ended August 3, 2013 | |||||||||||||||||||||||
Net sales | Cost of Sales | Gross profit | Operating expenses | Net income | Diluted earnings per share | ||||||||||||||||||
Reported Measure | $ | 562,063 | $ | (378,621 | ) | $ | 183,442 | $ | (129,461 | ) | $ | 33,720 | $ | 0.37 | |||||||||
Less: luxury test | |||||||||||||||||||||||
Net sales | 3,822 | ||||||||||||||||||||||
Cost of sales | (5,733 | ) | |||||||||||||||||||||
Gross profit (loss), including valuation reserves on remaining inventory & operating expenses | (1,911 | ) | (554 | ) | (1,532 | ) | (0.02 | ) | |||||||||||||||
Less: RVI pension and other RVI related expenses | (14,741 | ) | (9,309 | ) | (0.10 | ) | |||||||||||||||||
Adjusted Measure | $ | 558,241 | $ | (372,888 | ) | $ | 185,353 | $ | (114,166 | ) | $ | 44,561 | $ | 0.49 | |||||||||
Twenty-six weeks ended August 3, 2013 | |||||||||||||||||||||||
Net sales | Cost of Sales | Gross profit | Operating expenses | Net income | Diluted earnings per share | ||||||||||||||||||
Reported Measure | $ | 1,163,425 | $ | (796,986 | ) | $ | 366,439 | $ | (258,172 | ) | $ | 68,235 | $ | 0.74 | |||||||||
Less: luxury test | |||||||||||||||||||||||
Net sales | 9,077 | ||||||||||||||||||||||
Cost of sales | (27,495 | ) | |||||||||||||||||||||
Gross profit (loss), including valuation reserves on remaining inventory & operating expenses | (18,418 | ) | (2,442 | ) | (12,887 | ) | (0.14 | ) | |||||||||||||||
Less: RVI pension and other RVI related expenses | (14,741 | ) | (9,309 | ) | (0.10 | ) | |||||||||||||||||
Adjusted Measure | $ | 1,154,348 | $ | (769,491 | ) | $ | 384,857 | $ | (240,989 | ) | $ | 90,431 | $ | 0.99 | |||||||||