NEW YORK (TheStreet) -- DSW (DSW) - Get Report shares closed Monday's trading session up 1.1% to $23.05 on heavy trading volume even though the company is expected to post a year-over-year drop in earnings.
The company is scheduled to report its third quarter fiscal 2015 earnings results on Tuesday before the opening bell.
Analysts are projecting the footwear and accessories retailer to earn 43 cents a share on revenue of $668.51 million.
In the same period the year prior, the company earned 58 cents a share on revenue of $669.87 million.
Based in Columbus, OH, DSW offers assortment of shoes, handbags and accessories for women and men. It operates through two segments: the DSW segment and the Affiliated Business Group (ABG) segment.
Separately, TheStreet Ratings team rates DSW INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate DSW INC (DSW) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DSW's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- DSW has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- DSW INC has improved earnings per share by 13.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DSW INC increased its bottom line by earning $1.69 versus $1.64 in the prior year. For the next year, the market is expecting a contraction of 13.6% in earnings ($1.46 versus $1.69).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, DSW INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has decreased to $65.18 million or 21.99% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: DSW