DSW Inc. (NYSE: DSW), a leading branded footwear and accessories retailer, announced financial results this week for the thirteen week period ended August 3, 2013, which compare to the thirteen week period ended July 28, 2012.

"Second quarter sales rebounded nicely after a difficult start to the year. This sales bounce, coupled with excellent inventory management and prudent expense discipline, resulted in solid quarterly profit results. Moreover, in a volatile sales environment, DSW was able to post a solid 20% earnings growth for the first half of the fiscal year," stated Mike MacDonald, President and Chief Executive Officer, DSW Inc.

Mr. MacDonald added, "These results underscore the compelling nature of the DSW formula that is based on the brand cornerstones of assortment, value and convenience. DSW's continued progress on its strategic initiatives supports our long term growth trajectory. With that in mind, we raised our full year guidance earlier this month to $3.60 to $3.80 per share."

Second Quarter Operating Results

         Reported sales increased 9.7% to $562 million compared to last year's second quarter sales of $512 million.

         For the thirteen week period ended August 3, 2013, comparable sales increased by 4.4%. This follows an increase of 4.2% during the thirteen week period ended July 28, 2012.

         Reported net income was $33.7 million, or $0.73 per diluted share on 45.9 million weighted average shares outstanding, which included a net after-tax loss of $1.5 million, or $0.03 per share, from our luxury test, and a net after-tax charge of $9.3 million, or $0.20 per share, from the termination of the pension plan assumed in conjunction with the RVI merger. This compares to Reported net income in the second quarter of 2012 of $29.3 million, or $0.65 per diluted share, which included a non-cash charge of $0.7 million or $0.01 per share, related to legacy charges from RVI.

         Net income, adjusted for the results of our luxury test and legacy charges from RVI, was $44.6 million, or $0.97 per diluted share on 45.9 million weighted average shares outstanding. This compares to Adjusted net income for the same period last year of $30.1 million, or $0.66 per diluted share, on 45.4 million weighted average shares outstanding.

Six Months Ended August 3, 2013 Operating Results

         Reported sales increased 8.7% to $1.16 billion compared to last year's sales of $1.07 billion.

         For the twenty-six week period ended August 3, 2013, comparable sales increased by 0.8%. This follows an increase of 6.0% during the twenty-six week period ended July 28, 2012.

         Reported net income was $68.2 million, or $1.49 per diluted share, on 45.8 million weighted average shares outstanding, which included a net after-tax loss of $12.9 million, or $0.28 per share, from our luxury test, and a net after-tax charge of $9.3 million, or $0.20 per share, from the termination of the pension plan assumed assumed in conjunction with the RVI merger. This compares to Reported net income in the same period last year of $69.2 million, which included a non-cash charge of $5.0 million related to legacy charges from RVI. Reported EPS for the second quarter last year was $1.54 per share.

         Net income, adjusted for the net loss from our luxury test and legacy charges from RVI, was $90.4 million, or $1.97 per diluted share, on 45.8 million weighted average shares outstanding. This compares to Adjusted net income for the same period last year of $74.2 million, or $1.64 per diluted share, on 45.3 million weighted average shares outstanding.

Second Quarter Balance Sheet Highlights

         Cash, short term and long term investments totaled $500 million compared to $485 million in the second quarter last year.

         Inventories were $405 million compared to $367 million during the second quarter last year, an increase of 10%, in line with expectations. On a cost per square foot basis, inventories supporting DSW stores increased by 2.7% at the end of quarter.

Regular Dividend

On August 22, 2013, DSW's Board of Directors declared a quarterly cash dividend payment of $0.25 per share. The dividend will be paid on September 30, 2013 to shareholders of record at the close of business on September 20, 2013.

Special Meeting Date for Stock Split

The Company has called a special shareholder's meeting to approve the proposed 2-for-1 stock split on October 14, 2013. Shareholders of record as of the close of the Friday, August 16, 2013 will be entitled to vote.

Fiscal 2013 Annual Outlook

As previously announced, for the fifty-two week period ending February 1, 2014, the Company expects earnings to range from $3.60 to $3.80 per share compared to the previous range of $3.40 to $3.60 per share. The midpoint of the revised range represents a 10% increase in earnings per share. This assumes comparable sales growth in the low single digit range and revenue growth of 5% to 7% for the fifty-two week period compared to the fifty-three week period ending February 2, 2013. Excluding the sales of $32 million from fifty-third week in fiscal 2012, full year revenue growth for fiscal 2013 is expected in the range of 6% to 8%.

Webcast and Conference Call

To hear the Company's live earnings conference call, log on to http://www.dswinc.com/ today at 8:30 AM Eastern, or call 1-866-524-3160 in the U.S. or 1-412-317-6760 outside the U.S. approximately ten minutes prior to the start of the call. A telephone replay of this call will be available until 9:00 a.m. Eastern Time on Sept. 4, 2013 and can be accessed by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 outside the U.S. and using conference number 10031358. An audio replay of the conference call, as well as additional financial information, will also be available at http://www.dswinc.com/.