American footwear retailer DSW posts wider-than-expected Q4 loss
25 Mar 2009
American footwear retailer DSW Inc posted a wider-than-expected quarterly loss, hurt in part by higher costs, and said it would not provide an annual earnings outlook given the uncertainty in the US economy. Shoppers cutting back in spending to concentrate on staples, or look for deep discounts when they buy non-essentials, have hurt shoe and apparel companies.
The Columbus-based retailer told investors it lost $7.52 million, or 17 cents a share, in the quarter ended 31 January. That compares with profit of $1.08 million, or 2 cents a share, a year ago. Fourth-quarter results include an investment-related impairment charge totaling $1.13 million. Analysts were expecting a loss of 12 cents a share, before special items, on revenue of $349.3 million.
DSW's total fourth-quarter revenue grew 5 per cent to $348.2 million from $332.5 million, but sales at stores open at least a year fell 7.2 per cent from a year ago. Operating expenses also constituted a bigger part of the top line, jumping 16 per cent to $83.7 million.
The company's full-year profit fell 50 per cent to $26.9 million, or 61 cents a share, from $53.8 million, or $1.21 a share, in fiscal 2007. Revenue grew 3.5 per cent to $1.46 billion from $1.41 billion. Gross margin fell to 20.6 per cent from 21 per cent.
DSW sees the weakness continuing, projecting fiscal-year same-store sales to fall by the mid-single digits on a percentage basis. The company, which is nearly two-thirds owned by Retail Ventures Inc., declined to make other projections amid the economic uncertainty. At the same time, DSW plans to slash its capital spending 57 per cent to $31 million, opening just 10 new stores in the current year, compared with 41 last year.
DSW runs 300 stores in 37 states and operates an e-commerce site at dsw.com. DSW shares were down 5.6 per cent at $9.41 Wednesday on the New York Stock Exchange.
