Host Mac Greer and senior analysts Andy Cross and Jason Moser may not know a ton about shoes, but they do know retail, so when they tiptoe into the space to review the performance of DSW (NYSE:DSW) in this segment from MarketFoolery, they do it more as analysts than as customers. And from at least one angle, they agree: It's a darn good time to be a value retailer, and the latest quarterly report shows it. Moreover, they note, the footwear giant has a surprising secret weapon -- a popular and powerful loyalty/rewards program. So you might think they'd be bullish on the stock. But listen in, and you'll hear why they won't be fitting it into their portfolios anytime soon.

A full transcript follows the video.

This video was recorded on Aug. 28, 2018.

Mac Greer: Let's close it out with another retailer that I know next to nothing about, I'm going to confess here -- DSW. I know that it involves shoes. It's a shoe retailer. The stock is up big today. Andy, when I was doing research here, the first phrase I saw was "blowout earnings." Jason, what do you think of those earnings?

Jason Moser: It's a nice time to be a value-focused retailer. If you focus on shoes in particular, DSW obviously did something right over the quarter. They also raised guidance. I feel like this is that Talladega Nights, you know that Ricky Bobby line? If you're not first, you're last. If you ain't first, you're last. I feel like, if you're not raising guidance, you're lowering guidance. This is the environment for value retailers. Certainly, DSW recognized a strong spring season. They are witnessing strength in back to school. A big focus on kid's shoes with the business.

But really, what's interesting about this business is, they have a rewards program, a loyalty program. We talked about loyalty with Costco and Amazon. DSW apparently has a pretty loyal base, as well, with 25 million rewards members today. They're responsible for about 90% of overall sales.

Ultimately, what they've done, they made some acquisitions back in 2014 to build up the Canadian side of the business. They're streamlining that operation, cutting bait on some underperformers, and trying to leverage the supply chain so that their Canadian business and U.S. business are all on the same page. That, I think, is resulting in the market's reaction today because they're able to up earnings guidance a little bit.

Now, with all of that said, this is just your run of the mill shoe store, at the end of the day. I don't know that I'm getting very excited about it. Full-year guidance right now has the stock pegged at about 20X earnings. To me, again, you might want to consider buying a retailer like this in times of macro-economic concerns. Right now, I think the rising tide is lifting all boats. DSW is no exception there. It does not have a history of really outperforming the market. Great quarter, good news for them, I don't know if that changes my opinion on the stock.

Andy Cross: I mean, the stock is back basically to break even where it was three years ago. That's all really pretty much due to the 30% jump it's seen so far this year. Historically not a great performer. Very competitive marketplace to play into. Obviously, some things are going well. Any time you're upping guidance, investors are going to react positively to that. We're seeing that today.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Andy Cross has no position in any of the stocks mentioned. Jason Moser has no position in any of the stocks mentioned. Mac Greer owns shares of AMZN and COST. The Motley Fool owns shares of and recommends AMZN. The Motley Fool recommends COST and DSW. The Motley Fool has a disclosure policy.