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 November 25, 2014 |
DSW Inc. | ||||
By: | /s/ William L. Jordan | |||
William L. Jordan | ||||
Executive Vice President and General Counsel | ||||
Date: | November 25, 2014 |
• | Third quarter Reported sales increase 5.8% to $670 million |
• | Third quarter Adjusted sales increase 7.2% to $670 million; comparable sales increase 2.6% |
• | Third quarter Reported EPS totals $0.55 per share |
• | Third quarter Adjusted EPS totals $0.56 per share, including $0.03 charge for asset impairment |
• | Company updates full fiscal year outlook for Adjusted EPS in the range of $1.55 to $1.65 per share, with annual comparable sales expected to be slightly positive |
• | Board of Directors authorizes an additional $50 million in share repurchase and approves a quarterly dividend of $0.1875 per share |
• | Reported sales increased 5.8% to $670 million compared to last year's sales of $633 million. |
• | Adjusted sales increased 7.2% to $670 million compared to last year's sales of $625 million, which excluded sales from the Company's luxury test. |
• | Comparable sales increased by 2.6% compared to last year's decrease of 0.7%. |
• | Gross margin declined 100 bps, of which 55 bps was due to asset impairment. |
• | Reported net income was $49.6 million, or $0.55 per diluted share, on 90 million shares, which includes a RVI tax provision adjustment. This compares to Reported net income in the third quarter of 2013 of $55.0 million, or $0.60 per diluted share, on 92 million shares, which included a net after-tax income of $1.4 million, or $0.01 per share, from the Company's luxury test. |
• | Adjusted net income was $50.4 million, or $0.56 per diluted share, on 90 million shares, which includes a one-time charge of $0.03 per share from asset impairment. This compares to Adjusted net income for the same period last year of $53.6 million, or $0.58 per diluted share, on 92 million shares. |
• | Reported sales increased 3.3% to $1.86 billion compared to last year's sales of $1.80 billion. |
• | Adjusted sales increased 4.3% to $1.86 billion compared to last year's sales of $1.78 billion, which excluded sales from the Company's luxury test. |
• | Comparable sales decreased by 0.1% compared to last year's increase of 0.2%. |
• | Reported net income was $122.5 million, or $1.35 per diluted share, on 91 million shares. This compares to Reported net income in the same period last year of $123.2 million, or $1.34 per diluted share, on 92 million shares, which included a net after-tax loss of $20.9 million, or $0.23 per share, from the Company's luxury test and the termination of RVI's pension plan. |
• | Adjusted net income was $122.7 million, or $1.35 per diluted share, on 91 million shares. This compares to net income of $144.1 million, or $1.57 per diluted share, on 92 million shares, which excluded items related to our luxury test and the termination of RVI's pension plan. |
• | Cash, short term and long term investments totaled $427 million compared to $517 million in the third quarter last year. |
• | Inventories were $486 million compared to $424 million during the third quarter last year. On a cost per square foot basis, DSW inventories increased by 7.4% at the end of the quarter. A significant portion of this increase relates to opportunistic pre-buys to deliver strong brands and exceptional values to our customers in 2015. Excluding the increase in pre-buys, inventories on a cost per square foot increased by 3.8%. |
• | The Company repurchased one million shares for approximately $30 million during the quarter, for a total of three million shares for approximately $87 million since the authorization of the program. This leaves approximately $13 million available on the Company's previous $100 million share repurchase authorization. On November 21, 2014, the Board of Directors authorized an additional $50 million under the Company's share repurchase program. |
Net sales by reportable segment | |||||||||||||||||||||
Thirteen weeks ended | Thirty-nine weeks ended | ||||||||||||||||||||
November 1, 2014 | November 2, 2013 | % change | November 1, 2014 | November 2, 2013 | % change | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||
DSW | $ | 632,774 | $ | 597,274 | 5.9 | % | $ | 1,745,454 | $ | 1,691,119 | 3.2 | % | |||||||||
Affiliated Business Group | 37,098 | 35,702 | 3.9 | % | 110,461 | 105,282 | 4.9 | % | |||||||||||||
Reported DSW Inc. sales | $ | 669,872 | $ | 632,976 | 5.8 | % | $ | 1,855,915 | $ | 1,796,401 | 3.3 | % | |||||||||
Less: Luxury sales | — | 8,341 | — | 17,418 | |||||||||||||||||
Adjusted DSW Inc. sales | $ | 669,872 | $ | 624,635 | 7.2 | % | $ | 1,855,915 | $ | 1,778,983 | 4.3 | % |
Comparable sales change by reportable segment (excludes luxury) | |||||||
Thirteen weeks ended | Thirty-nine weeks ended | ||||||
November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | ||||
DSW | 2.8% | (1.0)% | (0.1)% | 0.2% | |||
Affiliated Business Group | 0.3% | 3.6% | 1.2% | 1.8% | |||
Total DSW Inc. | 2.6% | (0.7)% | (0.1)% | 0.2% |
November 1, 2014 | February 1, 2014 | November 2, 2013 | |||||||||
Assets | |||||||||||
Cash and equivalents | $ | 96,394 | $ | 112,021 | $ | 86,909 | |||||
Short-term investments | 128,381 | 224,098 | 195,248 | ||||||||
Accounts receivable, net | 26,610 | 26,646 | 23,853 | ||||||||
Inventories | 486,260 | 397,768 | 424,066 | ||||||||
Prepaid expenses and other current assets | 26,566 | 34,101 | 41,086 | ||||||||
Deferred income taxes | 23,486 | 18,130 | 24,343 | ||||||||
Total current assets | 787,697 | 812,764 | 795,505 | ||||||||
Property and equipment, net | 338,227 | 318,620 | 316,542 | ||||||||
Long-term investments | 202,259 | 243,188 | 234,748 | ||||||||
Goodwill | 25,899 | 25,899 | 25,899 | ||||||||
Deferred income taxes | 14,643 | 11,587 | 10,562 | ||||||||
Investment in Town Shoes | 24,838 | — | — | ||||||||
Note receivable from Town Shoes | 47,819 | — | — | ||||||||
Other assets | 8,850 | 9,186 | 8,518 | ||||||||
Total assets | $ | 1,450,232 | $ | 1,421,244 | $ | 1,391,774 | |||||
Liabilities and shareholders' equity | |||||||||||
Accounts payable | $ | 185,931 | $ | 168,705 | $ | 147,100 | |||||
Accrued expenses | 125,885 | 115,697 | 130,612 | ||||||||
Total current liabilities | 311,816 | 284,402 | 277,712 | ||||||||
Non-current liabilities | 142,540 | 138,298 | 132,844 | ||||||||
Total shareholders' equity | 995,876 | 998,544 | 981,218 | ||||||||
Total liabilities and shareholders' equity | $ | 1,450,232 | $ | 1,421,244 | $ | 1,391,774 |
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
November 1, 2014 | November 2, 2013 | November 1, 2014 | November 2, 2013 | |||||||||||||
Net sales | $ | 669,872 | $ | 632,976 | $ | 1,855,915 | $ | 1,796,401 | ||||||||
Cost of sales | (451,315 | ) | (420,106 | ) | (1,277,449 | ) | (1,217,092 | ) | ||||||||
Gross profit | 218,557 | 212,870 | 578,466 | 579,309 | ||||||||||||
Operating expenses | (138,860 | ) | (124,614 | ) | (384,208 | ) | (382,786 | ) | ||||||||
Operating profit | 79,697 | 88,256 | 194,258 | 196,523 | ||||||||||||
Interest income, net | 600 | 1,036 | 2,193 | 1,857 | ||||||||||||
Income from continuing operations before income taxes and income from Town Shoes | 80,297 | 89,292 | 196,451 | 198,380 | ||||||||||||
Income tax provision | (31,792 | ) | (34,331 | ) | (76,186 | ) | (75,184 | ) | ||||||||
Income from Town Shoes | 1,049 | — | 1,898 | — | ||||||||||||
Income from continuing operations | 49,554 | 54,961 | 122,163 | 123,196 | ||||||||||||
Income from discontinued operations, net of tax | — | — | 358 | — | ||||||||||||
Net income | $ | 49,554 | $ | 54,961 | $ | 122,521 | $ | 123,196 | ||||||||
Diluted shares used in per share calculations: | 89,810 | 92,090 | 91,014 | 91,813 | ||||||||||||
Diluted earnings per share: | ||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.55 | $ | 0.60 | $ | 1.34 | $ | 1.34 | ||||||||
Diluted earnings per share from discontinued operations | — | — | $ | 0.00 | — | |||||||||||
Diluted earnings per share | $ | 0.55 | $ | 0.60 | $ | 1.35 | $ | 1.34 |
Thirteen weeks ended November 1, 2014 | Thirty-nine weeks ended November 1, 2014 | ||||||||||||||
Net Income | Diluted earnings per share | Net income | Diluted earnings per share | ||||||||||||
Reported Measure | $ | 49,554 | $ | 0.55 | $ | 122,521 | $ | 1.35 | |||||||
Less: RVI Operating expenses, net of tax | — | (1) | — | 377 | (1) | — | |||||||||
Less: Income from discontinued operations, net of tax | — | (1) | — | 358 | (1) | — | |||||||||
Add: Income taxes | (864 | ) | (2) | (0.01 | ) | (864 | ) | (2) | (0.01 | ) | |||||
Adjusted Measure | $ | 50,418 | $ | 0.56 | $ | 122,650 | $ | 1.35 | |||||||
Thirteen weeks ended November 2, 2013 | Thirty-nine weeks ended November 2, 2013 | ||||||||||||||
Net Income | Diluted earnings per share | Net income | Diluted earnings per share | ||||||||||||
Reported Measure | $ | 54,961 | $ | 0.60 | $ | 123,196 | $ | 1.34 | |||||||
Less: Gross profit (loss), including valuation reserves on luxury test | 1,366 | (3) | 0.01 | (11,521 | ) | (3) | (0.13 | ) | |||||||
Less: RVI related expenses and RVI pension plan termination expense | (48 | ) | (4) | — | (9,355 | ) | (5) | (0.10 | ) | ||||||
Adjusted Measure | $ | 53,643 | $ | 0.58 | $ | 144,072 | $ | 1.57 | |||||||