DSW is the latest retailer to experience an excellent Q2, beating analyst estimates and raising its full-year financial outlook. Q2 revenue increased 16.4% to $795.3 million, well ahead of the $691 million expected; comparable sales increased 9.7%, significantlysurpassing a Thomson Reuters forecast of 2.5% growth. Gross profit increased from 29.2% of sales to 32.1%.
Adjusted earnings came to $0.63 per share, ahead of $0.46 per share projections. The company updated its full-year adjusted earnings guidance in the range of $1.60 to $1.75 per diluted share, compared to its previous range of $1.52 to $1.67 per diluted share.
The results sent DSW's stock up as much as 24.3%, its best day since its 2005 IPO, when the stock shot up 26.8%.
While DSW acquired Canadian shoe retailer Town Shoes, Ltd. in May, including all three of its banners — Town Shoes, Shoe Company and Shoe Warehouse — the retailer said it would close all 38 Town Shoes stores by the end of the fiscal year to focus on the other Canadian banners.
DSW has sought to add new offerings to its stable in recent years, with varied success. The company reportedly bid on Nine West and Bandolino in a June 2018 bankruptcy auction, which Authentic Brands Group ended up winning. In 2016, DSW acquired online-only Ebuys and its ShoeMetro and ApparelSave sites for $62.5 million, but shut down operations of both banners only two years later. If anything, DSW was able to bolster its general e-Commerce offering with the expansion, particularly on mobile, where active monthly app users increased 5X in a year’s span.