DSW : NYSE : Services
$23.47 -2.60 | -9.80%
Today's Range: 23.23 - 24.86
Avg. Daily Volume: 1,759,100
08/30/16 - 12:18 PM ET

Financial Analysis


DSW INC's gross profit margin for the first 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 0.56 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 10.98% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)681.27655.49
EBITDA ($mil)69.9191.45
EBIT ($mil)50.1673.57
Net Income ($mil)30.0147.37


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)165.17342.17
Total Assets ($mil)1456.991521.96
Total Debt ($mil)0.00.0
Equity ($mil)933.571048.79


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin32.935.23
EBITDA Margin10.2613.95
Operating Margin7.3611.22
Sales Turnover1.821.68
Return on Assets8.1410.64
Return on Equity12.7115.42
Debt Q1 FY16 Q1 FY15
Current Ratio2.382.83
Debt/Capital0.00.0
Interest Expense0.050.04
Interest Coverage1023.691936.11


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)82.0288.68
Div / share0.20.2
EPS0.360.53
Book value / share11.3811.83
Institutional Own % n/a n/a
Avg Daily Volume1789371.02039078.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 22.82 for the Specialty Retail industry and a discount compared to the S&P 500 average of 25.13. To use another comparison, its price-to-book ratio of 2.28 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 13.11. 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 19.10 Peers 22.82   DSW 10.29 Peers 15.61

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 17.31 Peers 20.58   DSW NM Peers 2.03

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

DSW is trading at a valuation on par with 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 2.28 Peers 13.11   DSW -24.45 Peers -14.69

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 0.80 Peers 1.57   DSW 3.65 Peers 8.00

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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