DSW Inc. Posts Flat Q4 Sales; Beats EPS Estimates; Raises Dividend 50% (DSW)

Before the opening bell on Tuesday morning, DSW Inc. (DSW) reported its fourth quarter earnings and announced a raise to its quarterly dividend.

DSW’s Earnings in Brief

DSW’s Q4 period from fiscal 2012 contained 14 weeks, so it does not necessarily compare to fiscal 2013′s Q4′s 13-week period; however, when adjusting for the extra week, DSW’s sales for the comparable 13-week period are flat year over year at $572 million. Net income for the quarter came in at $28.1 million, or 30 cents per share, but on an adjusted basis, the figure comes in at $28.8 million, or 31 cents per share. DSW managed to beat EPS estimates of 29 cents, but came in below revenue views of $590.23 million. For FY2014, DSW sees its EPS in the range of $1.80 to $1.95, which is in-line with analysts’ views of $1.86.

CEO Commentary

DSW’s president and CEO, Mike MacDonald, made the following comments: “We marked our fifth consecutive year of double digit earnings growth in 2013, with Adjusted earnings per share of $1.88 compared to the prior year’s results of $1.67.  Effective inventory management and our new systems enabled us to expand full year merchandise margin to 45.1%, which is just 10 bps shy of our record margin in 2011. We were also able to improve on our SG&A rate by 80 bps to 20.4%, which led to our highest ever operating margin of 11.7%. We have updated our store build out potential for full size units to a range of 500 to 550 stores …”

DSW Raises Dividend by 50%

DSW’s board of directors increased the company’s quarterly dividend payout to 12.75 cents to 18.75 cents, making for an annualized payout of 75 cents. The dividend will be paid on April 15 to all shareholders on record as of April 4.

Stock Performance

DSW stock was inactive in pre-market trading. YTD, the stock is down 7.22%.