DSW Inc. (NYSE:DSW) Q3 2017 Earnings Conference Call Transcript
Nov 21, 2017 • 08:30 am ET
Hello, and welcome to DSW's Third Quarter 2017 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.
I now will turn the conference over to Christina Cheng. Ms. Cheng, please go ahead.
Thank you. Good morning, and welcome to DSW's Third Quarter Conference Call. Earlier today, we issued a press release detailing the results of operations for the 13-week period ended October 28, 2017. (Forward-Looking Cautionary Statements). Joining us today are Roger Rowlins, CEO; and Jared Poff, CFO.
Let me turn the call over to Roger.
Thanks, Christina, and good morning. I'm encouraged by our progress on the initiatives we are pursuing to differentiate and grow the DSW brand. Our third quarter results give us confidence we are on the right track. Let me share a few highlights.
Our DSW merchandising team drove a low single-digit comparable sales increase in footwear despite challenging weather conditions across the entire country. Our Power stores are significantly outpacing the balance of our chain. Our DSW kids sales exceeded our expectations. Our Lab store in Columbus continues to post robust results that validate our new store design and we started testing new services as part of the relaunch of DSW's loyalty program. At Ebuys, we completed the consolidation of the new fulfillment center and continued to clear out a sizable amount of slow-moving inventory. This has pressured their performance during the quarter and based on our results to date, we've tempered our long-term expectations for Ebuys. As such, we've reduced the carrying value of goodwill and intangible assets as well as the remaining earnout liability.
Let me turn the floor over to Jared to discuss our third quarter performance and our outlook for the remainder of the year.
Thanks, Roger, and good morning. Third quarter revenues increased by 2% to $708 million, driven by flat comparable sales at the DSW segment. Our third quarter performance brings our year-to-date top line to $2.1 billion, a 2% increase with modest store expansion and acquisition revenue partially offsetting a 1% comp decline and lower ABG revenues from our planned exit at Gordmans. Third quarter reported earnings of $0.05 per share includes net non-cash charges totaling $0.40, primarily related to the impairment of goodwill and intangibles associated with Ebuys. Excluding these GAAP items, adjusted earnings were $0.45 per share compared to $0.51 per share last year. Year-to-date adjusted earnings were $1.14 per share compared to last year's $1.26 per share. The rest of our comments will refer to adjusted results.
Let's start with the Designer Shoe Warehouse segment, where sales increased by 2% on flattish comps. Comp exclude our two locations in Puerto Rico, which remained closed due to Hurricane Maria. We opened six new warehouses and closed two locations for a total of 514 warehouses at the end of the quarter. Footwear comps increased in the low single-digit range. Accessories declined in the low teens. Monthly comps were consistent with softness during the middle of the quarter as temperatures turned unseasonably warm during our important