Monday, June 18, 2012

DSW Inc (NYSE: DSW) Skids 11% After Warning On Q2, Full-Year Profit

DSW Inc (NYSE: DSW) Skids 11% After Warning On Q2, Full-Year ProfitAtlanta, GA 6/18/12 (StreetBeat) – DSW Inc, (NYSE: DSW) shares slipped this morning after the footwear retailer reaffirmed a full-year profit outlook that’s short of expectations.

Net income should be $3.25 to $3.40 a share, less than the average $3.37 forecast by analysts and a drop from the $4.96 cents a share a year earlier. DSW expects comparable sales to increase between 3% to 5%.

DSW also expects second-quarter profit to be less than expected, between 60 and 64 cents a share. That’s 16% less than a year ago, and much lower than the 75 cents a share analysts projected.

Shares of DSW fell 11.6% to $58.80 in pre-market trading.

The company has turned its 300 Designer Shoe Warehouse locations into a steady and growing stream of revenue, from $1.5 billion in 2009 to more than $2 billion in 2012. Cash flow has climbed too, while the company remains lightly leveraged. But with few barriers to entry, the company faces competition from a number of shoe-only retailers, like Foot Locker and Finish Line, as well as the bigger department stores such as Macy’sand Kohl’s.

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