DSW Foresees 30 New Stores, Possibly More

In Wednesday's quarterly DSW conference call with financial analysts, Horvath noted that DSW, which ended the quarter with 230 stores, opening eight new locations in the first quarter, is on track to open the 30 new stores planned. "We are prepared to open more stores if appropriate opportunities are available," Horvath said, adding, "We would expect that any additional stores would open late in the second half of the year, and, because of preopening expenses, would not be accretive to this year's earnings."

DSW's new store openings this year "are hitting the mark," with more than $300 per sf in sales, and the company is "more encouraged than ever about our developer relationships as we continue to grow our store base and enhance our store design" after the recent ICSC conference, Horvath said. In addition to expanding its store base, DSW is testing new store designs, including one in Columbus, and is planning to remodel other stores over time.

During the conference call, DSW reported that net income climbed to $23.7 million and 54 cents a share for the first quarter that ended April 29, compared with $17.5 million and 40 cents a share for the first quarter of last year. Sales rose to $357 million for the first quarter, versus $316 million in the same year-ago quarter, while same store sales decreased 3.6% for the comparable 13-week period a year ago when DSW posted an increase of 4.2% in comp sales.

Horvath called the comp sales slide disappointing and said that the company "takes no comfort" in the idea that the slide was at least partly due to overall economic conditions. He said DSW is on track to deliver earnings throughout the year and has made adjustments in light of the first-quarter performance to trim inventory and place itself in a good position to do better for the rest of the year.