DSW Q1 sales increase on Ebuys acquisition as comparable sales fall
Designer Shoe Warehouse (DSW) on Tuesday reported its first quarter 2017 results that include an increase in net sales and a decrease in net income.
Net sales increased 1.4% to $691.1 million and were aided by $22.3 million in revenues from Ebuys. Comparable sales fell 3.0% compared to a 1.6% decrease in the prior year’s first quarter, and net income decreased to $23 million, or $0.28 per diluted share, from $30 million, or $0.36 per diluted share, in the previous year.
The footwear and accessories retailer incurred $4.1 million in pre-tax charges due to the Ebuys acquisition, as well as restructuring costs and foreign exchange loss from the pre-funding of the upcoming Town Shoes acquisition.
Reported gross profit decreased by 180 basis points driven by the Ebuys acquisition and planned clearance activity, and reported operating expenses improved by 40 basis points.
"First quarter sales were challenging, but trends improved during the quarter with comps turning positive in April,” said Roger Rawlins, Chief Executive Officer. “As expected, planned clearance activity and the addition of Ebuys drove lower gross margin and operating income. The investments we have made in our digital capabilities, such as our redesigned website and mobile app, drove robust growth in digital demand. We are intently focused on driving sequential top line improvements through key product and customer initiatives while balancing strategic investments with disciplined expense management."
As a result of the first quarter numbers, DSW reaffirmed its full year adjusted earnings outlook range of $1.45 to $1.55.
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