DSW Q4 Profit Beats View, Lifts Dividend By 50%; Sees FY14 EPS Below Estimates

(RTTNews) - Branded footwear and accessories retailer DSW Inc. (DSW) Tuesday reported a higher fourth-quarter profit, reflecting mainly a decline in expenses and tax provision. Net sales decreased about 4 percent, with flat comparable sales.

Earnings per share beat analysts expectations, while revenues came short of view. The board has approved a 50 percent increase in quarterly dividend. The firm also forecast fiscal 2014 adjusted earnings per share below analysts' estimates.

For the fourth quarter, the company's net income increased to $28.11 million from $27.15 million in the previous year. On a per share basis, earnings remained flat with last year at $0.30.

Adjusted earnings were $0.31 per share, while the firm posted $0.34 per share a year ago. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales decreased 3.7 percent to $572.27 million for the thirteen week period ended February 1, 2014, from $594.25 million for the fourteen week period ended February 2, 2013. Adjusted sales increased 3.8 percent excluding the impact of the extra week last year. Analysts estimated revenues of $588.53 million for the quarter.

For the thirteen week period ended February 1, comparable sales were flat, following an increase of 3.6 percent last year.

Operating expenses dropped to $115.11 million from $126.02 million in the prior year. For the quarter, income tax provision totaled $17.52 million, lower than $18.82 million a year earlier.

Looking ahead for fiscal 2014, the company expects adjusted earnings per share to be in the range of $1.80 to $1.95 per share. Analysts expect earnings of $2.09 per share for the year.

Revenue growth is expected to be 6 to 7 percent, with comparable sales growth in the low-single digit range.

Further, the company said its Board of Directors increased the quarterly dividend by 50 percent to $0.1875 per share. The dividend will be paid on April 15, 2014 to shareholders of record on April 4, 2014.

The firm plans opening of about 35 new stores. The company also updated its store build out potential for full size units to a range of 500 to 550 stores.

DSW is currently trading at $39.48, down 1.28 percent.