DSW saw its sales grow by 5.3 percent to $385.8 million in the first quarter ended May 2 despite a 4.7 percent drop in comparable store sales, attributed to customers’ buying fewer units per transaction. The sales figure was helped by the addition of 34 new stores over last year, as well as the June 2008 launch of e-commerce. Increased television advertising has boosted traffic.

The gross margin rose by 0.7 percentage points to 27.2 percent, and the net income was $7.1 million against $10.3 million in the same period last year.

This was the seventh quarter in a row that DSW has reported negative comparable store sales, and the company plans to focus on sales growth as its main priority. As such, it plans to stock sizes based on the local clientele, expand men’s and accessories departments, more productively use it customer rewards database, and allow customers to search online to find which stores have their size in stock, as well as generally improve its online store.

DSW’s outlook for the current fiscal year calls for a mid-single digit drop in comparable store sales and earnings of $13.2-15.4 million. Only 10 new doors will be opened for 2009 versus 41 last year, and capital expenditures will fall by 57 percent to approximately $35 million.