DSW shares decline on same-store sales, 1st-quarter outlook

NEW YORK—Shares of DSW Inc. fell on Thursday, after the discount shoe retailer said same-store sales fell in the first quarter and offered guidance below expectations.

The Columbus, Ohio-based company said same-store sales, or sales in stores open at least one year, fell 5.4 percent during the quarter.

Sales rose 3 percent to $366.3 million, while analysts polled by Thomson Financial, on average, predicted sales of $380.3 million.

For the fiscal year, DSW expects a profit of 75 cents to 85 cents per share, while analysts expect $1 per share.

However, Buckingham Research Group analyst John Zolidis said the guidance does not take into account any possible improvement in the second half of the year.

"We see this conservative assumption as a move in the right direction with guidance," Zolidis wrote in a note to investors on Thursday.

He lowered his price target by $2 from $19.

"It looks bleak, but with conservative assumptions built into lower guidance, we could potentially be nearing an inflection point in revisions," he wrote. He kept an "Accumulate" rating on the stock.

Shares fell 88 cents, or 6 percent, to $13.69. The stock has traded between $11.46 and $39.85 during the past 52 weeks.