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DSW Poised on Store Expansion, Opens Shoe Store in Las Vegas

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DSW Inc.’s (DSW - Free Report) largest business Designer Shoe Warehouse opened a new store on the Las Vegas strip. The store located in the Showcase Mall at 3785 S. Las Vegas Boulevard is half its usual size. This move is in sync with the company’s plans to innovate nail bars, repair services, custom performance inserts, and a new store design, based on its Polaris lab store near Columbus, OH.

The store comes with a video-covered passageway that gives light and sound experience. Also, the store features a shoe elevator on the display wall that enables customers to order from the wall via a DSW app or tablet from a nearby kiosk. This will alert a nearby store associate about the order.

To combat e-commerce boom and stiff competition, DSW remains focused on store expansions, product renovation and technology investments. In order to mark its presence in the Canadian market, the company acquired Town Shoes. In May this year, the company concluded the buyout of its remaining stake in Town Shoes. Prior to this, the company has opened three of its stores in Abu Dhabi, Oman and Saudi Arabia. DSW intends to open seven to nine stores in the United States in fiscal 2018.

Such efforts have led to a 3% increase in sales to $712 million in the first quarter of fiscal 2018 along with registering the second consecutive quarter of positive comps. DSW expects the positive sales momentum to continue with the launch of a new loyalty program and recent investments in inventory, marketing and payroll.

Further, the company’s largest business, Designer Shoe Warehouse saw sales growth of 7% including 2% growth in comparable sales. This rise is attributable to strong online demand owing to recent investments in digital marketing. Notably, footwear comps rose low-single digits for the fourth straight quarter on the back of women’s footwear. The company foresees a rise in demand for women’s footwear.  

DSW, which currently carries a Zacks Rank #3 (Hold), has gained 40.6% in the past six months outperforming the industry’s growth of 6%.

Stocks to Consider

Some other better ranked companies in the retail space includes Kering SA (PPRUY - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and Boot Barn Holdings, Inc. (BOOT - Free Report) .

Kering has a long-term earnings growth rate of 12% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters has a long-term earnings growth rate of 7.9% and sports a Zacks Rank #2 (Buy).

Boot Barn Holdings has a long-term earnings growth rate of 20.7 % and sports a Zacks Rank #2.

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