Despite the harsh retail environment, DSW Inc. (NYSE:DSW) doesn’t see anything wrong in expanding its store footprint. The company has announced the opening of a new retail location in Chino. The store will officially open on Sept. 22, offering an assortment of shoes and accessories, the company said in a press release.
The new Chino store continues the string of new store opening at DSW. By the end of the last quarter, DSW had increased the number of its retail outlets by 7% from the same quarter last year.
About the Chino store
DSW said its new Chino store will feature a wide collection of designer and name-brand shoes and accessories that will be offered at what the company thinks is goo value. The store covering 18,000-square-foot will be stocked with 22,000 pairs of footwear for women, men and kids, which will be augmented with accessories such as bags, socks, scarves and jewelry among others.
DSW said customers can also buy from the store conveniently through its online portal.
Are the new stores doing anything to sales?
Financial results from the last quarter (2Q2016), somewhat vindicate DSW’s store opening strategy. The company said sales in the quarter rose 5.1% to $659 million, thus meeting the consensus estimate. The improvement in bottom-line was backed by DSW’s acquisition of e-commerce platform Ebuy.com last year.
However, new stores opened recently also seemed to have played a part in boosting the top line figure in the latest quarter considering that comparable store sales fell 1.2% in the quarter.
As for the bottom-line, DSW posted adjusted EPS of $0.35, outpacing the consensus estimate of $0.30, but below $0.42 in the same quarter last year.
DSW is looking for full-year 2016 EPS in the band of $1.32 to $1.42. A combination of stock repurchases and cost curtailment is enabling DSW to grow its bottom-line. An aggressive stock buyback scheme saw the company’s shares outstanding fell by 8% by the end of the last quarter.
As for cost reduction, the company recently completed an expenses review that has provided an opportunity to eliminate $25 million in costs annually.