Ohio
|
|
31-0746639
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
810 DSW Drive, Columbus, Ohio
|
|
43219
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(614) 237-7100
|
||
Registrant’s telephone number, including area code
|
||
N/A
|
||
(Former name, former address and former fiscal year, if changed since last report)
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
|
|
|
|
|
þ
|
Yes
|
o
|
No
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
|
|
|
|
|
þ
|
Yes
|
o
|
No
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
|
Large Accelerated Filer
|
þ
|
||
|
Accelerated Filer
|
o
|
||
|
Non-accelerated Filer
|
o
|
||
|
(Do not check if smaller reporting company)
|
|||
|
Smaller reporting company
|
o
|
||
|
|
|
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
|
|
|
|
|
o
|
Yes
|
þ
|
No
|
Item No.
|
Page
|
Part I. Financial Information
|
|
Item 1. Financial Statements
|
|
Part II. Other Information
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
||||||||
Net sales
|
$
|
658,944
|
|
|
$
|
627,206
|
|
|
$
|
1,340,211
|
|
|
$
|
1,282,692
|
|
Cost of sales
|
(472,083
|
)
|
|
(435,904
|
)
|
|
(948,993
|
)
|
|
(878,332
|
)
|
||||
Operating expenses
|
(145,088
|
)
|
|
(131,721
|
)
|
|
(299,284
|
)
|
|
(271,207
|
)
|
||||
Change in fair value of contingent consideration
|
(2,166
|
)
|
|
—
|
|
|
(3,611
|
)
|
|
—
|
|
||||
Operating profit
|
39,607
|
|
|
59,581
|
|
|
88,323
|
|
|
133,153
|
|
||||
Interest expense
|
(50
|
)
|
|
(40
|
)
|
|
(99
|
)
|
|
(78
|
)
|
||||
Interest income
|
673
|
|
|
792
|
|
|
1,243
|
|
|
1,750
|
|
||||
Interest income, net
|
623
|
|
|
752
|
|
|
1,144
|
|
|
1,672
|
|
||||
Non-operating income (expense)
|
100
|
|
|
(7
|
)
|
|
264
|
|
|
3,305
|
|
||||
Income before income taxes and income (loss) from Town Shoes
|
40,330
|
|
|
60,326
|
|
|
89,731
|
|
|
138,130
|
|
||||
Income tax provision
|
(15,716
|
)
|
|
(22,486
|
)
|
|
(34,794
|
)
|
|
(51,582
|
)
|
||||
Income (loss) from Town Shoes
|
418
|
|
|
(230
|
)
|
|
109
|
|
|
(1,572
|
)
|
||||
Net income
|
$
|
25,032
|
|
|
$
|
37,610
|
|
|
$
|
55,046
|
|
|
$
|
84,976
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.31
|
|
|
$
|
0.42
|
|
|
$
|
0.67
|
|
|
$
|
0.96
|
|
Diluted earnings per share
|
$
|
0.30
|
|
|
$
|
0.42
|
|
|
$
|
0.67
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
82,053
|
|
|
88,713
|
|
|
82,003
|
|
|
88,619
|
|
||||
Diluted shares
|
82,655
|
|
|
89,693
|
|
|
82,691
|
|
|
89,660
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation (loss) gain
|
$
|
(4,903
|
)
|
|
$
|
(8,652
|
)
|
|
$
|
7,246
|
|
|
$
|
(6,838
|
)
|
Unrealized net gain (loss) on available-for-sale securities (net of taxes of $14, $6, $130 and $6, respectively)
|
150
|
|
|
50
|
|
|
276
|
|
|
(311
|
)
|
||||
Total comprehensive income
|
$
|
20,279
|
|
|
$
|
29,008
|
|
|
$
|
62,568
|
|
|
$
|
77,827
|
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Cash and equivalents
|
$
|
62,324
|
|
|
$
|
32,495
|
|
|
$
|
151,007
|
|
Short-term investments
|
103,467
|
|
|
226,027
|
|
|
140,821
|
|
|||
Accounts receivable, net
|
18,848
|
|
|
15,437
|
|
|
18,533
|
|
|||
Accounts receivable from related parties
|
81
|
|
|
27
|
|
|
63
|
|
|||
Inventories
|
556,183
|
|
|
484,236
|
|
|
505,170
|
|
|||
Prepaid expenses and other current assets
|
30,040
|
|
|
37,444
|
|
|
31,599
|
|
|||
Prepaid rent to related parties
|
12
|
|
|
2
|
|
|
—
|
|
|||
Total current assets
|
770,955
|
|
|
795,668
|
|
|
847,193
|
|
|||
|
|
|
|
|
|
||||||
Property and equipment, net
|
379,643
|
|
|
374,241
|
|
|
354,477
|
|
|||
Long-term investments
|
77,901
|
|
|
71,953
|
|
|
179,305
|
|
|||
Goodwill
|
81,043
|
|
|
25,899
|
|
|
25,899
|
|
|||
Deferred income taxes
|
20,690
|
|
|
21,815
|
|
|
32,111
|
|
|||
Long-term prepaid rent to related parties
|
821
|
|
|
875
|
|
|
866
|
|
|||
Investment in Town Shoes
|
17,261
|
|
|
21,188
|
|
|
21,986
|
|
|||
Note receivable from Town Shoes
|
50,200
|
|
|
44,170
|
|
|
44,627
|
|
|||
Intangible assets
|
39,316
|
|
|
46
|
|
|
46
|
|
|||
Other assets
|
21,145
|
|
|
13,254
|
|
|
7,554
|
|
|||
Total assets
|
$
|
1,458,975
|
|
|
$
|
1,369,109
|
|
|
$
|
1,514,064
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|||||||||
Accounts payable
|
$
|
198,584
|
|
|
$
|
214,893
|
|
|
$
|
190,382
|
|
Accounts payable to related parties
|
656
|
|
|
733
|
|
|
529
|
|
|||
Accrued expenses
|
115,192
|
|
|
107,800
|
|
|
113,466
|
|
|||
Total current liabilities
|
314,432
|
|
|
323,426
|
|
|
304,377
|
|
|||
|
|
|
|
|
|
||||||
Non-current liabilities
|
143,562
|
|
|
140,759
|
|
|
144,029
|
|
|||
Commitments and contingencies
|
59,611
|
|
|
—
|
|
|
—
|
|
|||
Total liabilities
|
$
|
517,605
|
|
|
$
|
464,185
|
|
|
$
|
448,406
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common shares paid in capital, no par value; 250,000 Class A Common Shares authorized; 84,570, 84,396 and 84,047 issued, respectively; 74,359, 74,185 and 81,011 outstanding, respectively; 100,000 Class B Common Shares authorized, 7,733 issued and outstanding
|
$
|
936,572
|
|
|
$
|
930,011
|
|
|
$
|
920,682
|
|
Preferred Shares, no par value; 100,000 authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Treasury shares, at cost, 10,211, 10,211 and 3,036 outstanding, respectively
|
(266,531
|
)
|
|
(266,531
|
)
|
|
(86,938
|
)
|
|||
Retained earnings
|
309,503
|
|
|
287,140
|
|
|
270,510
|
|
|||
Basis difference related to acquisition of commonly controlled entity
|
(24,993
|
)
|
|
(24,993
|
)
|
|
(24,993
|
)
|
|||
Accumulated other comprehensive loss
|
(13,181
|
)
|
|
(20,703
|
)
|
|
(13,603
|
)
|
|||
Total shareholders’ equity
|
$
|
941,370
|
|
|
$
|
904,924
|
|
|
$
|
1,065,658
|
|
Total liabilities and shareholders’ equity
|
$
|
1,458,975
|
|
|
$
|
1,369,109
|
|
|
$
|
1,514,064
|
|
|
|
Number of Shares
|
|
|
|
Retained earnings
|
Basis difference related to acquisition of commonly controlled entity
|
Accumulated other comprehensive loss
|
Total
|
|||||||||||||||||
|
|
Class A
Common
Shares
|
Class B Common
Shares
|
Treasury Shares
|
|
Common shares paid in capital
|
Treasury shares
|
|||||||||||||||||||
Balance, January 31, 2015
|
|
80,666
|
|
7,733
|
|
3,036
|
|
|
$
|
908,679
|
|
$
|
(86,938
|
)
|
$
|
220,826
|
|
$
|
(24,993
|
)
|
$
|
(6,454
|
)
|
$
|
1,011,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
84,976
|
|
—
|
|
—
|
|
84,976
|
|
||||||
Stock-based compensation expense, before related tax effects
|
|
—
|
|
—
|
|
—
|
|
|
6,729
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,729
|
|
||||||
Stock units granted
|
|
31
|
|
—
|
|
—
|
|
|
926
|
|
—
|
|
—
|
|
—
|
|
—
|
|
926
|
|
||||||
Exercise of stock options
|
|
263
|
|
—
|
|
—
|
|
|
3,431
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,431
|
|
||||||
Vesting of restricted stock units, net of settlement of taxes
|
|
51
|
|
—
|
|
—
|
|
|
(1,272
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,272
|
)
|
||||||
Excess tax benefits related to stock-based compensation
|
|
—
|
|
—
|
|
—
|
|
|
2,189
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,189
|
|
||||||
Foreign currency translation
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(6,838
|
)
|
(6,838
|
)
|
||||||
Unrealized net loss on available-for-sale securities (net of taxes of $6)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(311
|
)
|
(311
|
)
|
||||||
Dividends paid ($0.40 per share)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(35,292
|
)
|
—
|
|
—
|
|
(35,292
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, August 1, 2015
|
|
81,011
|
|
7,733
|
|
3,036
|
|
|
$
|
920,682
|
|
$
|
(86,938
|
)
|
$
|
270,510
|
|
$
|
(24,993
|
)
|
$
|
(13,603
|
)
|
$
|
1,065,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, January 30, 2016
|
|
74,185
|
|
7,733
|
|
10,211
|
|
|
$
|
930,011
|
|
$
|
(266,531
|
)
|
$
|
287,140
|
|
$
|
(24,993
|
)
|
$
|
(20,703
|
)
|
$
|
904,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
55,046
|
|
—
|
|
—
|
|
55,046
|
|
||||||
Stock-based compensation expense, before related tax effects
|
|
—
|
|
—
|
|
—
|
|
|
6,326
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,326
|
|
||||||
Stock units granted
|
|
52
|
|
—
|
|
—
|
|
|
990
|
|
—
|
|
—
|
|
—
|
|
—
|
|
990
|
|
||||||
Exercise of stock options
|
|
37
|
|
—
|
|
—
|
|
|
429
|
|
—
|
|
—
|
|
—
|
|
—
|
|
429
|
|
||||||
Vesting of restricted stock units, net of settlement of taxes
|
|
85
|
|
—
|
|
—
|
|
|
(1,104
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,104
|
)
|
||||||
Tax shortfall related to stock-based compensation
|
|
—
|
|
—
|
|
—
|
|
|
(80
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(80
|
)
|
||||||
Foreign currency translation
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,246
|
|
7,246
|
|
||||||
Unrealized net gain on available-for-sale securities (net of taxes of $130)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
276
|
|
276
|
|
||||||
Dividends paid
($0.40
per share)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(32,683
|
)
|
—
|
|
—
|
|
(32,683
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, July 30, 2016
|
|
74,359
|
|
7,733
|
|
10,211
|
|
|
$
|
936,572
|
|
$
|
(266,531
|
)
|
$
|
309,503
|
|
$
|
(24,993
|
)
|
$
|
(13,181
|
)
|
$
|
941,370
|
|
|
Six months ended
|
||||||
|
July 30, 2016
|
|
August 1, 2015
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for income taxes
|
$
|
25,685
|
|
|
$
|
43,705
|
|
Proceeds from construction and tenant allowances
|
$
|
9,179
|
|
|
$
|
14,004
|
|
|
|
|
|
||||
Non-cash operating, investing and financing activities:
|
|
|
|
||||
Balance of accounts payable and accrued expenses due to property and equipment purchases
|
$
|
4,944
|
|
|
$
|
8,277
|
|
Contingent consideration liability
|
$
|
59,611
|
|
|
$
|
—
|
|
|
Preliminary Purchase Price Allocation as of March 4, 2016
|
|
Adjustments
|
|
Updated Preliminary Purchase Price Allocation as of July 30, 2016
|
||||||
Accounts and other receivables
|
$
|
1,623
|
|
|
$
|
(361
|
)
|
|
$
|
1,262
|
|
Inventory
|
30,152
|
|
|
251
|
|
|
30,403
|
|
|||
Other current assets
|
191
|
|
|
—
|
|
|
191
|
|
|||
Property and equipment
|
1,221
|
|
|
22
|
|
|
1,243
|
|
|||
Goodwill
|
54,785
|
|
|
359
|
|
|
55,144
|
|
|||
Other intangible assets
|
41,301
|
|
|
(200
|
)
|
|
41,101
|
|
|||
Accounts payable and other long-term liabilities
|
(12,862
|
)
|
|
(71
|
)
|
|
(12,933
|
)
|
|||
Total preliminary purchase price
|
$
|
116,411
|
|
|
$
|
—
|
|
|
$
|
116,411
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
|
|||
|
|
|
|
|
|
|
|
||||
|
(in thousands)
|
||||||||||
Weighted average shares outstanding
|
82,053
|
|
|
88,713
|
|
|
82,003
|
|
|
88,619
|
|
Assumed exercise of dilutive stock options
|
392
|
|
|
756
|
|
|
442
|
|
|
807
|
|
Assumed exercise of dilutive RSUs and PSUs
|
210
|
|
|
224
|
|
|
246
|
|
|
234
|
|
Number of shares for computation of diluted earnings per share
|
82,655
|
|
|
89,693
|
|
|
82,691
|
|
|
89,660
|
|
|
Six months ended
|
||||||
|
July 30, 2016
|
|
August 1, 2015
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Stock options
|
$
|
3,224
|
|
|
$
|
3,626
|
|
Restricted stock units
|
1,870
|
|
|
1,401
|
|
||
Performance-based restricted stock units
|
1,232
|
|
|
1,702
|
|
||
Director stock units
|
990
|
|
|
926
|
|
||
Total
|
$
|
7,316
|
|
|
$
|
7,655
|
|
|
Six months ended
|
||||||||||
|
July 30, 2016
|
||||||||||
|
Stock Options
|
|
RSUs
|
|
PSUs
|
|
DSUs
|
||||
|
|
|
|
|
|
|
|
||||
|
(in thousands)
|
||||||||||
Outstanding, beginning of period
|
3,849
|
|
|
372
|
|
|
293
|
|
|
305
|
|
Granted
|
835
|
|
|
181
|
|
|
112
|
|
|
52
|
|
Exercised/units vested
|
(37
|
)
|
|
(83
|
)
|
|
(133
|
)
|
|
(58
|
)
|
Forfeited
|
(251
|
)
|
|
(51
|
)
|
|
(27
|
)
|
|
—
|
|
Outstanding, end of period
|
4,396
|
|
|
419
|
|
|
245
|
|
|
299
|
|
Exercisable, end of period
|
2,388
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Six months ended
|
||||||||||
|
July 30, 2016
|
||||||||||
|
Stock Options
|
|
RSUs
|
|
PSUs
|
||||||
Unrecognized compensation cost
|
$
|
14,781
|
|
|
$
|
8,201
|
|
|
$
|
4,952
|
|
Weighted average expense recognition period
|
2.2 years
|
|
|
2.0 years
|
|
|
2.1 years
|
|
|
Six months ended
|
||
Assumptions:
|
July 30, 2016
|
|
August 1, 2015
|
Risk-free interest rate
|
1.5%
|
|
1.4%
|
Expected volatility of DSW Inc. Common Shares
|
36.0%
|
|
37.9%
|
Expected option term
|
5.4 years
|
|
5.1 years
|
Dividend yield
|
3.0%
|
|
2.1%
|
Other Data:
|
|
|
|
Weighted average grant date fair value
|
$6.59
|
|
$10.22
|
|
Short-term investments
|
|
Long-term investments
|
||||||||||||||||||||
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carrying value
|
$
|
103,051
|
|
|
$
|
225,985
|
|
|
$
|
140,778
|
|
|
$
|
78,068
|
|
|
$
|
72,153
|
|
|
$
|
179,659
|
|
Unrealized gains included in accumulated other comprehensive loss
|
455
|
|
|
477
|
|
|
91
|
|
|
33
|
|
|
22
|
|
|
14
|
|
||||||
Unrealized losses included in accumulated other comprehensive loss
|
(39
|
)
|
|
(435
|
)
|
|
(48
|
)
|
|
(200
|
)
|
|
(222
|
)
|
|
(368
|
)
|
||||||
Total investments
|
$
|
103,467
|
|
|
$
|
226,027
|
|
|
$
|
140,821
|
|
|
$
|
77,901
|
|
|
$
|
71,953
|
|
|
$
|
179,305
|
|
•
|
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that are publicly accessible. Active markets have frequent transactions with enough volume to provide ongoing pricing information.
|
•
|
Level 2 inputs are other than level 1 inputs that are directly or indirectly observable. These can include unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical assets or liabilities in inactive markets or other observable inputs.
|
•
|
Level 3 inputs are unobservable inputs.
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
(1)
|
||||||||||||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Cash and equivalents
|
$
|
62,324
|
|
|
$
|
62,324
|
|
|
—
|
|
|
—
|
|
|
$
|
32,495
|
|
|
$
|
32,495
|
|
|
—
|
|
|
—
|
|
|
$
|
151,007
|
|
|
$
|
151,007
|
|
|
—
|
|
|||||
Short-term investments
(a)
|
103,467
|
|
|
120
|
|
|
$
|
103,347
|
|
|
—
|
|
|
226,027
|
|
|
2,127
|
|
|
$
|
223,900
|
|
|
—
|
|
|
140,821
|
|
|
—
|
|
|
$
|
140,821
|
|
||||||||
Long-term investments
(a)
|
77,901
|
|
|
314
|
|
|
77,587
|
|
|
—
|
|
|
71,953
|
|
|
181
|
|
|
71,772
|
|
|
—
|
|
|
179,305
|
|
|
—
|
|
|
179,305
|
|
|||||||||||
Cost method investments
(b)
|
7,250
|
|
|
—
|
|
|
—
|
|
|
$
|
7,250
|
|
|
6,000
|
|
|
—
|
|
|
—
|
|
|
$
|
6,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Note receivable from Town Shoes
(c)
|
43,640
|
|
|
—
|
|
|
43,640
|
|
|
—
|
|
|
33,311
|
|
|
—
|
|
|
33,311
|
|
|
—
|
|
|
44,627
|
|
|
—
|
|
|
44,627
|
|
|||||||||||
Total financial assets
|
$
|
294,582
|
|
|
$
|
62,758
|
|
|
$
|
224,574
|
|
|
$
|
7,250
|
|
|
$
|
369,786
|
|
|
$
|
34,803
|
|
|
$
|
328,983
|
|
|
$
|
6,000
|
|
|
$
|
515,760
|
|
|
$
|
151,007
|
|
|
$
|
364,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stock appreciation rights
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
561
|
|
|
—
|
|
|
$
|
561
|
|
|
—
|
|
|
$
|
3,380
|
|
|
—
|
|
|
$
|
3,380
|
|
|||||||
Contingent consideration
(e)
|
$
|
59,611
|
|
|
—
|
|
|
—
|
|
|
$
|
59,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total financial liabilities
|
$
|
59,611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,611
|
|
|
$
|
561
|
|
|
$
|
—
|
|
|
$
|
561
|
|
|
$
|
—
|
|
|
$
|
3,380
|
|
|
$
|
—
|
|
|
$
|
3,380
|
|
|
|
Fiscal period ended
|
||||||
|
|
July 30, 2016
|
|
January 30, 2016
|
||||
|
|
|
|
|
||||
|
|
(in thousands)
|
||||||
Carrying value, beginning of period
|
|
$
|
6,000
|
|
|
—
|
|
|
Additional cost method investment
|
|
1,250
|
|
|
$
|
6,000
|
|
|
Carrying value, end of period
|
|
$
|
7,250
|
|
|
$
|
6,000
|
|
|
Six months ended
|
||
|
July 30, 2016
|
||
|
(in thousands)
|
||
Balance, acquisition date of contingent consideration
|
$
|
56,000
|
|
Change in fair value of contingent consideration
|
3,611
|
|
|
Balance, end of period
|
$
|
59,611
|
|
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||
|
|
|
|
|
|
|
||||||
|
|
(in thousands)
|
||||||||||
Land
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
Furniture, fixtures and equipment
|
|
404,626
|
|
|
385,780
|
|
|
357,255
|
|
|||
Software
|
|
131,675
|
|
|
120,567
|
|
|
114,351
|
|
|||
Buildings, building and leasehold improvements
|
|
394,702
|
|
|
385,861
|
|
|
368,976
|
|
|||
Total property and equipment
|
|
932,113
|
|
|
893,318
|
|
|
841,692
|
|
|||
Accumulated depreciation and amortization
|
|
(552,470
|
)
|
|
(519,077
|
)
|
|
(487,215
|
)
|
|||
Property and equipment, net
|
|
$
|
379,643
|
|
|
$
|
374,241
|
|
|
$
|
354,477
|
|
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||
|
|
|
|
|
|
|
||||||
|
|
(in thousands)
|
||||||||||
Gift cards and merchandise credits
|
|
$
|
38,062
|
|
|
$
|
43,446
|
|
|
$
|
35,373
|
|
Compensation
|
|
15,184
|
|
|
8,042
|
|
|
15,862
|
|
|||
Taxes
|
|
18,887
|
|
|
17,004
|
|
|
17,389
|
|
|||
Customer loyalty program
|
|
11,401
|
|
|
10,084
|
|
|
15,113
|
|
|||
Other accrued expenses
(1)
|
|
31,658
|
|
|
29,224
|
|
|
29,729
|
|
|||
Total accrued expenses
|
|
$
|
115,192
|
|
|
$
|
107,800
|
|
|
$
|
113,466
|
|
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||
|
|
|
|
|
|
|
||||||
|
|
(in thousands)
|
||||||||||
Construction and tenant allowances
|
|
$
|
89,460
|
|
|
$
|
86,777
|
|
|
$
|
88,998
|
|
Deferred rent
|
|
37,814
|
|
|
37,650
|
|
|
37,852
|
|
|||
Other non-current liabilities
(1)
|
|
16,288
|
|
|
16,332
|
|
|
17,179
|
|
|||
Total non-current liabilities
|
|
$
|
143,562
|
|
|
$
|
140,759
|
|
|
$
|
144,029
|
|
|
DSW segment
|
|
ABG segment
|
|
Other
(1)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Three months ended July 30, 2016
|
|||||||||||||||
Net sales
|
$
|
603,927
|
|
|
$
|
35,446
|
|
|
$
|
19,571
|
|
|
$
|
658,944
|
|
Gross profit
|
177,885
|
|
|
7,217
|
|
|
1,759
|
|
|
186,861
|
|
||||
Capital expenditures
|
25,908
|
|
|
145
|
|
|
14
|
|
|
26,067
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Three months ended August 1, 2015
|
|||||||||||||||
Net sales
|
$
|
592,583
|
|
|
$
|
34,623
|
|
|
$
|
—
|
|
|
$
|
627,206
|
|
Gross profit
|
184,738
|
|
|
6,564
|
|
|
—
|
|
|
191,302
|
|
||||
Capital expenditures
|
26,338
|
|
|
111
|
|
|
—
|
|
|
26,449
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six months ended July 30, 2016
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,226,959
|
|
|
$
|
78,585
|
|
|
$
|
34,667
|
|
|
$
|
1,340,211
|
|
Gross profit
|
369,304
|
|
|
18,030
|
|
|
3,884
|
|
|
391,218
|
|
||||
Capital expenditures
|
43,258
|
|
|
469
|
|
|
14
|
|
|
43,741
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six months ended August 1, 2015
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,204,794
|
|
|
$
|
77,898
|
|
|
$
|
—
|
|
|
$
|
1,282,692
|
|
Gross profit
|
388,800
|
|
|
15,560
|
|
|
—
|
|
|
404,360
|
|
||||
Capital expenditures
|
53,573
|
|
|
218
|
|
|
—
|
|
|
53,791
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
|
|
|
|
|
|
|
||||||||
As of July 30, 2016
|
$
|
1,077,789
|
|
|
$
|
112,541
|
|
|
$
|
268,645
|
|
|
$
|
1,458,975
|
|
As of January 30, 2016
|
1,126,179
|
|
|
105,259
|
|
|
137,671
|
|
|
1,369,109
|
|
||||
As of August 1, 2015
|
1,254,349
|
|
|
116,453
|
|
|
143,262
|
|
|
1,514,064
|
|
•
|
our success in opening and operating new stores on a timely and profitable basis;
|
•
|
maintaining strong relationships with our vendors;
|
•
|
our ability to anticipate and respond to fashion trends;
|
•
|
our success in meeting customer expectations;
|
•
|
disruption of our distribution and/or fulfillment operations;
|
•
|
continuation of agreements and the financial condition of our affiliated business and international partners;
|
•
|
fluctuation of our comparable sales and quarterly financial performance;
|
•
|
risks related to our information systems and data;
|
•
|
failure to retain our key executives or attract qualified new personnel;
|
•
|
our competitiveness with respect to style, price, brand availability and customer service;
|
•
|
our reliance on our DSW Rewards program and marketing to drive traffic, sales and customer loyalty;
|
•
|
uncertain general economic conditions;
|
•
|
our reliance on foreign sources for merchandise and risks inherent to international trade;
|
•
|
risks related to our handling of sensitive and confidential data;
|
•
|
risks related to leases of our properties;
|
•
|
risks related to prior and current acquisitions;
|
•
|
foreign currency exchange risk; and
|
•
|
risks related to our cash and investments.
|
|
Three months ended
|
|
Six months ended
|
||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
Net sales
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
Cost of sales
|
(71.6)
|
|
(69.5)
|
|
(70.8)
|
|
(68.5)
|
Gross profit
|
28.4
|
|
30.5
|
|
29.2
|
|
31.5
|
Operating expenses
|
(22.0)
|
|
(21.0)
|
|
(22.3)
|
|
(21.1)
|
Change in fair value of contingent consideration
|
(0.4)
|
|
—
|
|
(0.3)
|
|
—
|
Operating profit
|
6.0
|
|
9.5
|
|
6.6
|
|
10.4
|
Interest income, net
|
0.1
|
|
0.1
|
|
0.1
|
|
0.1
|
Non-operating income (expense)
|
0.0
|
|
0.0
|
|
0.0
|
|
0.3
|
Income before income taxes and income (loss) from Town Shoes
|
6.1
|
|
9.6
|
|
6.7
|
|
10.8
|
Income tax provision
|
(2.4)
|
|
(3.6)
|
|
(2.6)
|
|
(4.1)
|
Income (loss) from Town Shoes
|
0.1
|
|
0.0
|
|
0.0
|
|
(0.1)
|
Net income
|
3.8%
|
|
6.0%
|
|
4.1%
|
|
6.6%
|
|
Three months ended
|
|
Six months ended
|
||||
|
July 30, 2016
|
|
July 30, 2016
|
||||
|
|
|
|
||||
|
(in millions)
|
||||||
Net sales for the same period last year
|
$
|
627.2
|
|
|
$
|
1,282.7
|
|
Decrease in comparable sales
|
(7.4
|
)
|
|
(17.6
|
)
|
||
Increase due to Ebuys sales
|
19.6
|
|
|
34.7
|
|
||
Net increase from non-comparable and closed store sales
|
19.5
|
|
|
40.4
|
|
||
Net sales for the current period
|
$
|
658.9
|
|
|
$
|
1,340.2
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
DSW segment
|
$
|
603,927
|
|
|
$
|
592,583
|
|
|
$
|
1,226,959
|
|
|
$
|
1,204,794
|
|
ABG segment
|
35,446
|
|
|
34,623
|
|
|
78,585
|
|
|
77,898
|
|
||||
Other
(1)
|
19,571
|
|
|
—
|
|
|
34,667
|
|
|
—
|
|
||||
Total DSW Inc.
|
$
|
658,944
|
|
|
$
|
627,206
|
|
|
$
|
1,340,211
|
|
|
$
|
1,282,692
|
|
|
Three months ended
|
|
Six months ended
|
||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
DSW segment
|
(1.2)%
|
|
1.9%
|
|
(1.3)%
|
|
3.5%
|
ABG segment
|
(1.0)%
|
|
0.7%
|
|
(2.3)%
|
|
3.1%
|
Total DSW Inc.
|
(1.2)%
|
|
1.8%
|
|
(1.4)%
|
|
3.5%
|
|
Three months ended
|
|
Six months ended
|
||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
DSW segment
|
29.5%
|
|
31.2%
|
|
30.1%
|
|
32.3%
|
ABG segment
|
20.4%
|
|
19.0%
|
|
22.9%
|
|
20.0%
|
Other
(1)
|
9.0%
|
|
—%
|
|
11.2%
|
|
—%
|
Total DSW Inc.
|
28.4%
|
|
30.5%
|
|
29.2%
|
|
31.5%
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
||||
DSW segment gross profit
|
29.5
|
%
|
|
31.2
|
%
|
|
30.1
|
%
|
|
32.3
|
%
|
Store occupancy expense
|
11.5
|
%
|
|
11.3
|
%
|
|
11.2
|
%
|
|
10.8
|
%
|
Distribution and fulfillment expenses
|
2.1
|
%
|
|
2.0
|
%
|
|
2.2
|
%
|
|
2.0
|
%
|
DSW segment merchandise margin
|
43.1
|
%
|
|
44.5
|
%
|
|
43.5
|
%
|
|
45.1
|
%
|
|
|
|
|
|
|
|
|
||||
ABG segment gross profit
|
20.4
|
%
|
|
19.0
|
%
|
|
22.9
|
%
|
|
20.0
|
%
|
Occupancy fees
|
20.2
|
%
|
|
19.9
|
%
|
|
20.3
|
%
|
|
22.3
|
%
|
Distribution and fulfillment expenses
|
1.1
|
%
|
|
1.1
|
%
|
|
1.1
|
%
|
|
1.1
|
%
|
ABG segment merchandise margin
|
41.7
|
%
|
|
40.0
|
%
|
|
44.3
|
%
|
|
43.4
|
%
|
|
|
|
|
|
|
|
|
||||
Other gross profit
(1)
|
9.0
|
%
|
|
—
|
%
|
|
11.2
|
%
|
|
—
|
%
|
Marketplace fees
|
12.0
|
%
|
|
—
|
%
|
|
11.5
|
%
|
|
—
|
%
|
Distribution and fulfillment expenses
|
13.0
|
%
|
|
—
|
%
|
|
11.5
|
%
|
|
—
|
%
|
Other merchandise margin
|
34.0
|
%
|
|
—
|
%
|
|
34.2
|
%
|
|
—
|
%
|
|
|
As of August 1, 2015
|
||||||
|
|
As previously reported
|
|
As adjusted
|
||||
|
|
|
|
|
||||
|
|
(in thousands)
|
||||||
Net working capital
|
|
$
|
566.0
|
|
|
$
|
542.8
|
|
Current ratio
|
|
2.9
|
|
|
2.8
|
|
|
|
Six months ended
|
||||||
|
|
July 30, 2016
|
|
August 1, 2015
|
||||
|
|
|
|
|
||||
|
|
(in thousands)
|
||||||
Cash flows from operating activities
|
|
$
|
61,144
|
|
|
$
|
114,570
|
|
Less: Capital expenditures
|
|
43,741
|
|
|
53,791
|
|
||
Free cash flow
|
|
$
|
17,403
|
|
|
$
|
60,779
|
|
Period
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced programs
|
|
Approximate dollar value of shares that may yet be purchased under the programs
|
||||||
May 1, 2016 to May 28, 2016
(a)
|
|
5,445
|
|
|
$
|
23.89
|
|
|
—
|
|
|
$
|
83,469
|
|
May 29, 2016 to July 2, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,469
|
|
||
July 3, 2016 to July 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,469
|
|
||
|
|
5,445
|
|
|
$
|
23.89
|
|
|
—
|
|
|
$
|
83,469
|
|
Date:
|
September 1, 2016
|
|
By:
|
/s/ Jared Poff
|
|
|
|
|
Jared Poff
|
|
|
|
|
SVP Finance and Interim Chief Financial Officer
|
|
|
|
|
(principal financial and accounting officer and duly authorized officer)
|
[b]
|
Executive may exercise any outstanding Awards that are vested on the effective date of Involuntary Termination Without Cause.
|
[c]
|
With respect to Awards that would vest solely upon the passage of time and such vesting date would occur within the 12 month period following the effective date of Involuntary Termination Without Cause, such Award shall vest and, if applicable, be awarded to Executive as of the date of termination Without Cause.
|
[d]
|
With respect to Awards that would vest upon the satisfaction of a specified requirement, or upon satisfaction of the passage of time and satisfaction of a specified requirement; in the event that all such requirements are satisfied prior to the expiration of the 12 month period following the date of
|
Date:
|
July 20, 2016
|
By:
|
/s/ Jared Poff
|
|
|
|
Jared Poff
|
|
|
|
Executive
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Thomas Jessep
|
|
|
|
Thomas Jessep
|
|
|
|
SVP, Human Resources
|
September 1, 2016
|
By:
|
/s/ Roger Rawlins
|
|
|
Roger Rawlins
|
|
|
Chief Executive Officer
|
September 1, 2016
|
By:
|
/s/ Jared Poff
|
|
|
Jared Poff
|
|
|
SVP Finance and Interim Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
September 1, 2016
|
By:
|
/s/ Roger Rawlins
|
|
|
Roger Rawlins
|
|
|
Chief Executive Officer
|
*
|
This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
September 1, 2016
|
By:
|
/s/ Jared Poff
|
|
|
Jared Poff
|
|
|
SVP Finance and Interim Chief Financial Officer
|
*
|
This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|