** charts before earnings **
** charts after earnings **
DSW beats by $0.16, beats on revs; raises FY19 guidance
- Reports Q2 (Jul) earnings of $0.63 per share, $0.16 better than the S&P Capital IQ Consensus of $0.47; revenues rose 16.4% year/year to $793.7 mln vs the $689.41 mln S&P Capital IQ Consensus.
- Comparable sales increased 9.7% for the same 13-week periods ended August 4, 2018 and August 5, 2017. Comparable sales exclude results from its Canada Retail segment.
- Integration of New Canada Retail Segment -- As part of the two step acquisition, the Company completed the remeasurement of previously held assets, including the equity investment and note receivable from its initial investment in 2014, resulting in a non-cash charge of $34.0 million.
- As a result of the current enterprise value exceeding the fair value of the acquired net assets, the Company recorded a goodwill impairment of $36.2 million.
- Upon the completion of its comprehensive review, the Company will focus on its largest retail banners, Shoe Company, Shoe Warehouse and DSW Designer Shoe Warehouse. The Company will exit its full price, mall-based Town Shoes banner, which operates 38 locations, mostly by the end of the fiscal year.
- The acquisition is expected to generate approximately $215 million in revenues and will be slightly accretive to Adjusted Earnings in 2018.
- Outlook
- Co issues guidance for FY19, sees EPS of $1.60-1.75 vs. $1.61 S&P Capital IQ Consensus, compared to its previous range of $1.52-1.67; sees FY19 revs of +6-9% YoY to $2.97-3.05 bln vs. $2.79 bln S&P Capital IQ Consensus. --Revenues from Canadian acquisition ~$215 million
- Co reaffirmed Comparable sales growth of Low- to mid-single digit range
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