Shoe retailer DSW drops despite topping view

DSW shares were on sale on Wednesday even after the shoe retailer reported better-than-expected earnings for its fiscal first quarter.

The Ohio-based company, which sells branded footwear, plunged nearly 10 per cent to $23.54 per share after closing at a two year high of $26.07 in the previous session.

DSW said net income came in at $24.3m, or 30 cents per diluted share for the quarter ending May 5, up from the $22.8m, or 28 cents a share reported in the year ago period.

Total revenue went up 2.9 per cent to $712m with comparable sales improving 2.2 per cent. The market had expected revenues of $681.9m and like-for-like sales gain of 2 per cent, according to FactSet.

Despite the solid results, the company kept its full-year adjusted earnings outlook at $1.52-$1.67 per share. The average consensus is for $1.62 a share.

Chief executive Roger Rawlins said the company is on solid financial footing and new promotional efforts are working. “We are pleased with the customer response to DSW VIP, which delivers a simpler points system and new benefits like shoe donations, free shipping and points gifting,” he said.

Earlier this month, DSW acquired the remaining shares in Town Shoes of Canada. The move comes two months after the company closed down Ebuys, the e-commerce business it acquired for $62.5m in 2016.