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What Analysts Expect for DSW’s Fiscal 4Q17 Sales

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Mar. 9 2018, Published 8:58 a.m. ET

Sales to increase 7.9%

DSW (DSW) is slated to report its fiscal 4Q17 results on March 13, 2018. Analysts have projected sales to be up 7.9% to $728.2 million driven by its growth initiatives. DSW is a popular name in the retail footwear space. The retailer also stocks handbags and accessories across its 500 plus store base. However, like most of the retailers, DSW has been marred by stiffening competition and the subsequent intense promotional backdrop.

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On a YTD (year-to-date) basis as of March 8, 2018, DSW’s stock price has fallen 11.6% to $18.92. In comparison, on a YTD basis, Finish Line (FINL) has fallen 30.4% to $10.11 as of March 8, 2018, while Foot Locker (FL) is down 12.9% to $40.85. However, Genesco’s (GCO) stock price is up 19.4% to $38.80 as of March 8, 2018.

DSW has taken several measures to grow in this environment. The company is revamping merchandise, giving its stores a makeover, investing in technology (especially its mobile platform), and is overhauling its rewards program. The company also has made acquisitions to boost its prospects. The company purchased Ebuys, an online footwear retailer, in 2016 to expand in the e-commerce space. However, the buyout didn’t pan out as expected, and the company wrote down huge losses.

Fiscal 3Q17 sales performance

In fiscal 3Q17, the company’s sales of $708.3 million missed analysts’ estimate of $709.6 million. The company cited a severe hurricane season as well as goodwill impairment charges pertaining to the Ebuys acquisition as the headwinds.

On a YoY (year-over-year) basis, sales were up 1.7%. The company stated that comps (comparable-store sales) were down 0.4%, as hurricanes negatively impacted the metric by 50 to 60 basis points. The footwear category was in the low single digits, but accessories declined in the low-teens range. Boots sales were negatively impacted by unusually higher temperatures in September and October. The company has projected revenue to grow in the range of 3% to 4% for fiscal 2017 while comps are expected to be flat.

In this series on DSW’s 4Q17 results, we’ll discuss the company’s revenue, EPS, and margins in detail. Then we’ll take stock of analysts’ ratings for the company.

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