Exhibit 99.1
DSW INC. REPORTS 2009 SECOND QUARTER FINANCIAL RESULTS;
UPDATES ANNUAL OUTLOOK
COLUMBUS, Ohio, August 26, 2009/PRNewswire/ — DSW Inc. (NYSE: DSW), a leading branded footwear specialty retailer, announced net income of $7.6 million on net sales of $369.5 million for the quarter ended August 1, 2009, compared with net income of $11.0 million on net sales of $357.2 million for the quarter ended August 2, 2008. Same store sales decreased 2.9% versus a decrease of 6.9% last year.
Diluted earnings per share were $0.17 for the second quarter of fiscal 2009 compared with diluted earnings per share of $0.25 last year.
Six Month Results
Net income was $14.7 million on net sales of $755.3 million for the six months ended August 1, 2009, compared with net income of $21.2 million on net sales of $723.4 million for the six months ended August 2, 2008. Same store sales decreased 3.8% for the comparable six month period versus a decrease of 6.2% last year.
Diluted earnings per share were $0.33 for the six months ended August 1, 2009, compared with $0.48 for the same period last year.
Fiscal 2009 Outlook
For the fiscal year ending January 30, 2010, the Company reiterated its estimate of a mid-single digit decrease in comparable store sales. Based on the performance through the second quarter reported today, annual 2009 diluted earnings per share are now estimated to be in the range of $0.37 to $0.45, updated from the Company’s previously announced estimate of $0.30 to $0.35.
The Company will discuss its 2009 outlook more fully on its webcasted conference call to be held today.
Webcast and Conference Call
To hear the Company’s live earnings conference call, log on towww.dswinc.com today at 8:00 AM Eastern, or call 1-866-362-4666 and reference passcode 57772818. 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 43398914. An audio replay of the conference call, as well as additional financial information, will also be available atwww.dswinc.com.
About DSW Inc.
DSW Inc. is a leading 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 August 26, 2009, DSW operated 307 stores in 39 states and operated an e-commerce site, www.dsw.com. DSW also supplied footwear to 358 leased locations in the United States. For store locations and additional information about DSW, visitwww.dswinc.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 “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, performance 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; continuation of supply agreements and the financial condition of our leased business partners; 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; the realization of our bankruptcy claims related to liquidating Filene’s Basement and Value City Department Stores; impact of the disposition of Filene’s Basement by Retail Ventures on the allocation of expenses pursuant to the shared services agreement with RVI; 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; the success of dsw.com; liquidity and investment risks related to our investments; RVI’s lease of an office facility; our ability to secure additional credit upon the termination of our existing credit facility; and liquidity risks at Retail Ventures and its impact on DSW. 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. All forward-looking statements speak only as of the time when made. The Company undertakes no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.
Source: DSW Inc.
CONTACT: Investor Relations for DSW Inc., 1-614-872-1474
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DSW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| | | | | | | | | |
| | | August 1, | | January 31, |
| | | 2009 | | 2009 |
ASSETS | | | | | | | | |
| Cash and equivalents | | $ | 39,279 | | | $ | 54,782 | |
| Short-term investments, net | | | 139,687 | | | | 101,404 | |
| Accounts receivable, net | | | 5,893 | | | | 7,187 | |
| Inventories | | | 264,295 | | | | 244,008 | |
| Prepaid expenses and other current assets | | | 21,404 | | | | 24,790 | |
| Deferred income taxes | | | 26,095 | | | | 21,876 | |
| |
| Total current assets | | | 496,653 | | | | 454,047 | |
| |
| | | | | | | | | |
| Property and equipment, net | | | 220,573 | | | | 233,366 | |
| Goodwill | | | 25,899 | | | | 25,899 | |
| Deferred income taxes and other assets | | | 5,391 | | | | 7,885 | |
| |
| Total assets | | $ | 748,516 | | | $ | 721,197 | |
| |
| | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Accounts payable | | $ | 102,153 | | | $ | 95,211 | |
| Accrued expenses | | | 65,732 | | | | 63,115 | |
| |
| Total current liabilities | | | 167,885 | | | | 158,326 | |
| |
| | | | | | | | | |
| Deferred income taxes and non-current liabilities | | | 97,099 | | | | 97,287 | |
| Total shareholders’ equity | | | 483,532 | | | | 465,584 | |
| |
| Total liabilities and shareholders’ equity | | $ | 748,516 | | | $ | 721,197 | |
| |
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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 1, | | August 2, | | August 1, | | August 2, |
| | | 2009 | | 2008 | | 2009 | | 2008 |
| |
| Net sales | | $ | 369,490 | | | $ | 357,175 | | | $ | 755,336 | | | $ | 723,439 | |
| Cost of sales | | | (271,702 | ) | | | (256,081 | ) | | | (552,567 | ) | | | (525,298 | ) |
| |
| Gross profit | | | 97,788 | | | | 101,094 | | | | 202,769 | | | | 198,141 | |
| Operating expenses | | | (86,427 | ) | | | (83,415 | ) | | | (179,305 | ) | | | (164,456 | ) |
| |
| Operating profit | | | 11,361 | | | | 17,679 | | | | 23,464 | | | | 33,685 | |
| |
| Interest expense | | | (188 | ) | | | (304 | ) | | | (371 | ) | | | (578 | ) |
| Interest income | | | 766 | | | | 724 | | | | 1,203 | | | | 1,721 | |
| |
| Interest income, net | | | 578 | | | | 420 | | | | 832 | | | | 1,143 | |
| Non-operating income, net | | | 528 | | | | | | | | 133 | | | | | |
| |
| Earnings before income taxes | | | 12,467 | | | | 18,099 | | | | 24,429 | | | | 34,828 | |
| Income tax provision | | | (4,900 | ) | | | (7,142 | ) | | | (9,717 | ) | | | (13,583 | ) |
| |
| Net income | | $ | 7,567 | | | $ | 10,957 | | | $ | 14,712 | | | $ | 21,245 | |
| |
| | | | | | | | | | | | | | | | | |
| Basic and diluted earnings per share | | $ | 0.17 | | | $ | 0.25 | | | $ | 0.33 | | | $ | 0.48 | |
| | | | | | | | | | | | | | | | | |
| Shares used in per share calculations: | | | | | | | | | | | | | | | | |
| Basic | | | 44,074 | | | | 43,999 | | | | 44,046 | | | | 43,983 | |
| Diluted | | | 44,420 | | | | 44,242 | | | | 44,355 | | | | 44,195 | |
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