Shares of DSW (DSW) climbed Tuesday after the shoe retailer reported fourth-quarter earnings that exceeded analyst expectations—despite a quarter that sawed off sales in the retail sector at large.
DSW, formerly known as Designer Shoe Warehouse, reported earnings of 14 cents per shares on revenue of $672 million, beating Wall Street estimates of 8 cents per share on revenue of $640.7 million, according to Zacks Investment Research.
That was during a time when retailers lost millions in revenue through the holiday season due to unusually warm weather that slashed demand for winter wear.
To continue raising profits in the tougher environment, DSW marketed more aggressively in the fourth quarter to offset lower consumer demand, increasing operating expenses to $148 million.
“During the fourth quarter, we acted quickly to drive sales and gain market share, in the face of a challenging retail environment. While these actions negatively impacted operating margin in the near term, we believe they were the right steps to expand our customer base and exit the year with a clean inventory position,” Roger Rawlins, DSW’s CEO said in a statement. “We recognize there is much more we need to accomplish and we are committed to returning DSW to sustainable and profitable growth while delivering strong shareholder returns.”
The company was also able to grow 22% in terms of digital demand in the full year as a result of programs that let shoppers buy online and pick the items up in stores.
DSW also posted a better-than-expected 2016 outlook, projecting revenue to grow between 8% and 10% in the year ending Jan. 28, 2017, with comparable sales growth in the 1% to 2% range. EPS is expected at $1.54 to $1.64 per share.