Footwear retailer DSW (NYSE: DSW) reported a 27% jump in first-quarter profit, riding high on a surge in sales. The company boosted its annual outlook, sending its shares up as much as 17% following the announcement, although shares have given back some since.
Let's delve a little into the numbers and see what lies ahead for the Ohio-based retailer.
A look at the numbers
Footwear and apparel retailers have had a promising start to 2011. DSW peer Foot Locker (NYSE: FL), for instance, recorded a 74% increase in net income in its first quarter, helped by a 13.3% rise in sales. Lids parent Genesco's (NYSE: GCO) profit soared by 72% in the first quarter. Not to be outshined by the competition, DSW stayed true to the upward trend seen in the general industry.
Revenue rose to $503.6 million, up 12% from the year-ago period. The quarter was boosted by a 10.8% rise in comparable-store sales. Earnings clocked in at $38.4 million, up 27%.
The company said successful implementation of key growth initiatives taken last year helped boost its quarterly numbers. It has been looking to expand its business at an enhanced rate and also drive sales through improved merchandising, capitalizing on current trends. It opened seven stores last quarter, giving it 318 locations; the company plans to open another 18 stores this fiscal year.
Perhaps the most significant development was DSW's acquisition of Retail Ventures, formerly the company's largest shareholder.
The Foolish bottom line
With such a strong start to the year in the bag, DSW not surprisingly raised its yearly outlook. It expects earnings in the range of $2.65 to $2.80 per share. It also predicted that same-store sales will increase in the mid-single digits. With further expansion plans in place, the company looks good to carry the strong performance forward. Investors should keep track of DSW's movements by adding it their watchlist. Just click here.
