The Shoe Doesn't Fit at DSW: Fool by Numbers

On June 6, shoe retailer DSW (NYSE: DSW  ) released first-quarter earnings for the period ended May 5.

  • Same-store sales varied widely by region. Overall, same-store sales decreased 3.6%, missing management's estimates.
  • The gross margin improved, mainly from a greater percentage of increased mark-up sales and a lower percentage of sales derived from discount items.
  • Due to a lack of customer demand for sandals and accessories, inventory levels rose 14.6%. An aggressive end-of-season sale is expected to help management with the excess inventory.
  • Bring your thoughts on DSW and other footwear retailers like Stride Rite (NYSE: SRR  ) and Payless Shoesource (NYSE: PSS  ) to the Motley Fool CAPS community.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$357.0

$316.5

12.8%

Net Profit

$23.7

$17.5

35.5%

EPS

$0.54

$0.40

35%

Diluted Shares

44.4

44.1

0.5%

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

30.6%

29.5%

1.1

Operating Margin

10.4%

8.8%

1.6

Net Margin

6.7%

5.5%

1.1

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$175.3

$159.3

10%

Accounts Rec.

$12.9

$4.2

210%

Inventory

$258.0

$225.2

14.6%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$109.1

$100.8

8.2%

The balance sheet reflects the company's health.

Cash Flow Highlights
Management was too busy getting a bargain at DSW's sandal sale to post the cash flow statement.

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.


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