Omnichannel drags down DSW's comp store sales

DSW (NYSE:DSW) reported a 4.5 percent sales increase reaching $587 million in the second quarter. The retailer's adjusted sales showed that comparable sales only increased 0.8 percent, a disparity that can be partially attributed to investments in omnichannel initiatives.

Looking at the first six months of the year, DSW reported a sales increase of 1.9 percent to $1.19 billion and a comparable sales decrease of 1.5 percent.

"In the quarter we accomplished our goal of achieving improvement in the underlying sales trends and eliminating any inventory imbalances," said Mike McDonald, president and CEO of DSW. "All major categories recorded improved sales performance in the second quarter compared to the first quarter." 

At the beginning of the quarter, DSW announced a partnership with eBay (NASDAQ:EBAY) intended to expand its omnichannel fulfillment capabilities by allowing customers to order online and pick up in-store.

DSW's net income in Q2 was $34.3 million and adjusted income was $33.6 million.

Looking ahead, the company expects to end fiscal 2015 with flat comparable sales and a total revenue growth in the middle of the single-digit range. These numbers reflect omnichannel expenses of around $10 million.

"We continued to make progress in our omnichannel initiative," McDonald said. "The changes we are making are fundamental to the way we serve our customers. They will enable DSW to respond to the rapidly changing customer shopping patterns and maintain our position of strength in the footwear industry."

DSW announced in spring that it would open 550 smaller-format stores as it continues to expand, including 35 in fiscal 2014.

For more:
-See this DSW press release

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