DSW Stock Continues Tumble as Earnings Miss Estimates, Guidance Lowered

NEW YORK (TheStreet) -- Shares of DSW  (DSW) - Get Report are declining by 11.14% to $19.31 on heavy trading volume on Tuesday afternoon, after the company announced its 2016 first quarter financial results earlier today, which fell short of analysts' projections. The discounted shoe retailer also slashed its full year guidance.

The company posted adjusted net income of 40 cents per diluted share, below the 45 cents per share analysts surveyed by Thomson Reuters had forecast.

Revenue grew year over year by 3.9% to $681.3 million, but fell short of the $698.8 million analysts had predicted.

Looking ahead to the 2016 full year, DSW is anticipating earnings of $1.32 to $1.42 per share, lower than the range of $1.54 to $1.64 per share the company had previously forecast.

The company's recent quarterly results and lower guidance for the year is a reflection of the current trend in the retail segment, which is facing challenges including a decline in store traffic as more consumers shop online.

"This is the prudent action to take so that inventory, expenses and capital investments are aligned to maximize profitability and positioned to expand earnings as our trend improves," company CEO Roger Rawlins stated in reference to the slash in outlook.

So far today, 13.06 million shares of DSW stock have exchanged hands, as compared to its average daily volume of 1.62 million shares. 

Separately, TheStreet Ratings has set a "hold" rating and a score of C+ on DSW stock. The primary factors that have impacted the 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: DSW