DSW : NYSE : Services
$21.32 | %
Today's Range: 21.31 - 21.67
Avg. Daily Volume: 1,970,700
09/23/16 - 4:00 PM ET

Financial Analysis


DSW INC's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. DSW INC has weak liquidity. Currently, the Quick Ratio is 0.61 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 11.66% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)658.94627.21
EBITDA ($mil)62.5478.41
EBIT ($mil)41.959.58
Net Income ($mil)25.0337.61


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)173.89300.93
Total Assets ($mil)1458.981514.06
Total Debt ($mil)0.00.0
Equity ($mil)941.371065.66


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin31.4933.5
EBITDA Margin9.4912.5
Operating Margin6.369.5
Sales Turnover1.841.71
Return on Assets7.2710.91
Return on Equity11.2715.52
Debt Q2 FY16 Q2 FY15
Current Ratio2.452.86
Debt/Capital0.00.0
Interest Expense0.050.04
Interest Coverage838.01489.53


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)82.0988.74
Div / share0.20.2
EPS0.30.42
Book value / share11.4712.01
Institutional Own % n/a n/a
Avg Daily Volume2067458.02065027.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 21.96 for the Specialty Retail industry and a discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 1.87 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, DSW INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
DSW 17.25 Peers 21.96   DSW 8.85 Peers 14.09

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

DSW is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

DSW is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
DSW 13.80 Peers 19.56   DSW NM Peers 1.91

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

DSW is trading at a discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

DSW's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
DSW 1.87 Peers 12.35   DSW -32.98 Peers 0.78

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

DSW is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, DSW is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DSW 0.66 Peers 1.48   DSW 3.27 Peers 7.28

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

DSW is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

DSW significantly trails its peers on the basis of sales growth

 

 

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