The firm said sales visibility is improving.
Shares of DSW were unchanged in pre-market trading Monday.
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, reasonable valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DSW's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 1.8% when compared to the same quarter one year prior, going from $33.72 million to $34.33 million.
- DSW's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 29.92%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The gross profit margin for DSW INC is currently lower than what is desirable, coming in at 29.28%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.84% trails that of the industry average.
- You can view the full analysis from the report here: DSW Ratings Report
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