DSW Earnings: Beats Profit Estimate Despite a Mixed Bag

DSW Inc. (NYSE:DSW) reported its results for the second quarter. DSW is a branded footwear specialty retailer in the United States.

Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?

DSW Inc. Earnings Cheat Sheet

Results: Net income for DSW Inc. fell to $29.3 million (65 cents per share) vs. $139.9 million ($3.96 per share) a year earlier. This is a decline of 79% from the year-earlier quarter.

Revenue: Rose 7.5% to $512.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: DSW Inc. reported adjusted net income of 66 cents per share. By that measure, the company beat the mean estimate of 62 cents per share. It fell short of the average revenue estimate of $548.1 million.

Quoting Management: “Our second quarter results surpassed our updated guidance and our performance for the first six months of the year is on track with our annual earnings target,” stated Mike MacDonald, President and Chief Executive Officer, DSW Inc. “During the spring season, we reported solid comp sales increases across all categories of our business, reflecting our ongoing ability to identify and interpret trends that resonate with our customers. We ended the season with inventory in good shape in terms of level, content and currency. We remain excited about our business as we begin the second half of the year, during which we will open another 27 new stores. Consumers continue to favor our consistent value proposition, our strong selection of brands and our unique service model. We are well positioned for solid growth in fiscal 2012 and beyond.”

Key Stats:

Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the first quarter, net income rose 3.8% from the year earlier, while the figure increased 4.8% in the fourth quarter of the last fiscal year, 51.1% in the third quarter of the last fiscal year and more than fivefold in the second quarter of the last fiscal year.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 8 cents in the first quarter, by 2 cents in the fourth quarter of the last fiscal year, and by 8 cents in the third quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 10.9% to $558.6 million in the first quarter. The figure rose 9.7% in the fourth quarter of the last fiscal year from the year earlier and climbed 8.5% in the third quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 95 cents a share to 90 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $3.38 a share to $3.26 over the last thirty days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Are Central Banks Still Hoarding Gold?

Apple and Google Have Some LESSONS for Tech Companies>>

Is Home Depot’s Stock a Buy?