DSW sales push drives market share and numbers, effects operating margin
The company reported a 5% sales increase to $672 million in the fourth quarter, as well as a comparable sales increase of 0.7%, and a net income of $11.8 million, or $0.14 per diluted share. The full year increases were very close to the fourth quarter increases with sales increasing 5% to $2.6 billion and comparable sales increasing 0.8%. Net income for the full year was $136 million, or $1.54 per diluted share.
DSW achieved several milestones during fiscal 2015, which includes opening 40 new DSW stores in the US; expanding the company’s presence in Canada with the opening of 11 new DSW locations by Town Shoes; growing digital demand by 22% in the full year; re-platforming DSW.com with enhanced search engine optimization and personalization capabilities; and returning close to $250 million to shareholders, including $69.7 million in dividends and $179.6 million in share repurchases.
Roger Rawlins, Chief Executive Officer stated, “During the fourth quarter, we acted quickly to drive sales and gain market share, in the face of a challenging retail environment. While these actions negatively impacted operating margin in the near term, we believe they were the right steps to expand our customer base and exit the year with a clean inventory position. In 2016, we will move decisively to improve our execution, intensify our focus on delivering value to our customers and drive additional growth by entering new categories, markets and digital channels. We recognize there is much more we need to accomplish and we are committed to returning DSW to sustainable and profitable growth while delivering strong shareholder returns.”
The company expects its fiscal 2016 revenue to grow 8-10% and comparable sales to grow 1-2%. DSW announced in February its acquisition of Ebuys, Inc. and it completed the purchase on March 4, 2016. The initial purchase payment of $61 million was funded using cash on hand. Ebuys, Inc. is expected to contribute $100 million in sales.
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