Shares of DSW Inc. (NYSE:DBI) rose on Tuesday after the footwear retailer reported second-quarter results that blew away analyst expectations. Nearly double-digit growth in comparable-store sales pushed revenue well above estimates, and the company boosted its full-year guidance. The stock was up about 20.8% at 11:35 a.m. EDT on Tuesday.
DSW reported second-quarter revenue of $795 million, up 16.4% year over year, and about $106 million higher than the average analyst estimate. Comps jumped 9.7% during the quarter, excluding results from the Canadian retail segment.
Non-GAAP earnings per share came in at $0.63, up from $0.38 in the prior-year period and $0.17 better than analysts were expecting. The company lost $0.48 per share on a GAAP basis due to charges of $1.11 per share related to its Canadian acquisition.
CEO Roger Rawlins said: "We are thrilled to report record sales and earnings results this quarter as our merchandise strategy and marketing investment fueled strong customer engagement, traffic, and transaction activity, resulting in a 10% comp. The strong results we've had this spring demonstrate we're successfully activating customers and increasing lifetime value."
DSW raised its full-year outlook for revenue and earnings. Revenue is now expected to grow by 6% to 9%, driven in part by approximately $215 million from the Canadian acquisition. That's up from previous guidance calling for a revenue decline between 1% and 3%. Comps are now expected to grow by a low- to mid-single-digit percentage, up from previous guidance of a low-single-digit increase.
Non-GAAP EPS is expected between $1.60 and $1.75, up from a previous range of $1.52 to $1.67. Earnings guidance excludes charges related to acquisitions and the closing of the Town Shoes brand.
While strong consumer spending is likely responsible for some of DSW's growth in the second quarter, the company's strategy is clearly paying off.