COLUMBUS, Ohio — Shares of DSW skidded in midday trading Tuesday after the footwear and accessories retailer's second-quarter sales disappointed Wall Street.
DSW said its net income and revenue both improved compared to last year, but sales fell short of analyst estimates and an important sales measurement was weaker than expected. The company said it deliberately stocked its stores with less clearance merchandise, which bolstered its profit margins while affecting its sales. DSW also said fewer customers came to its stores.
Shares of DSW Inc. lost $2.81, or 9.1 percent, to $28.06 as the markets rebounded from a steep three-day slide. The stock has fallen about 24 percent in 2015 and is trading at its lowest prices in a year.
The Columbus, Ohio-based company said sales at stores open at least a year rose 1.8 percent. FactSet says analysts expected growth of 3.5 percent.
Sales at stores open at least a year are considered an important measurement of retailer health because they leave out results from stores that have opened or closed in the last year to show how a company's remaining locations are doing.
The company has 449 DSW stores in the U.S. and supplies footwear to 372 other stores under the name Affiliated Business Group. DSW said its net income rose 10 percent to $37.6 million, or 42 cents per share, over the three months that ended on Aug. 1. Revenue rose 7 percent to $627.2 million.
Analysts expected earnings of 42 cents per share on $635 million in revenue, according to Zacks Investment Research.
DSW said it still expects net income of $1.80 to $1.90 per share for the full fiscal year.
FactSet says analysts expect $1.90 per share on average.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DSW at http://www.zacks.com/ap/DSW
Keywords: DSW, Earnings Report