Things are going so well at DSW that the American chain has decided to extend its offer on the internet, launched in the U.S. last June, to some 200 other countries around the world gradually, starting at the end of the fourth quarter of its financial year. In the third quarter, ended on Oct. 29, the sales of its regular stores grew by 5.2 percent on a comparable store basis, building on the 10.1 percent increase that they experienced in the third quarter of 2010. While women's shoes dominated the chain's turnover, sales of men's shoes and accessories were the fastest-growing categories.
In absolute terms, DSW's sales rose by 8.5 percent in the quarter to $530.7 million. Net profit reached $53.7 million, compared with a net loss of $3.3 million in the same period a year ago, but this was partly due to extraordinary gains. On an adjusted basis, it increased to $39.8 million from $35.5 million as merchandise margins rose by 1.3 percentage points to 46.4 percent, thanks in part to price increases and a higher proportion of private-label products. Their contribution to the turnover is expected to be raised from 10 percent currently to 15 percent in the next three to five years.
Sales per square foot have grown by 22 percent to $240 in the past 12 months. Interestingly, members of DSW's loyalty program, which now involves 18 million consumers, accounted for 88 percent of DSW's revenues in the latest quarter.
Good results were also reported at another U.S. retail chain, Shoe Carnival, for the quarter ended on Oct. 29. Its revenues increased by 5.4 percent to $215.5 million, with an increase in comparable store sales of 2.8 percent that came after a 7.2 percent increase in the same quarter a year ago.
Same-store sales would have been 2.6 percentage points higher if there had not been a decline of 50 percent in Shoe Carnival's sales of toning shoes. A positive start of the back-to-school season was followed by lower store traffic in late September and in October due to unseasonably warm weather in the U.S., affecting women's boots in particular.
The gross margin remained largely stable for the 327-door chain at 30.2 percent of sales. The chain booked net earnings of $10.5 million for the period against $9.1 million in the same quarter a year ago. The chain opened seven new stores and closed one during the three months. It expected to open a total of 17 new stores for the fiscal year, while closing four of them.