þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
|
|
to
|
|
DSW INC.
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(Exact name of registrant as specified in its charter)
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Ohio
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31-0746639
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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810 DSW Drive, Columbus, Ohio
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43219
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class A Common Shares, without par value
|
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New York Stock Exchange
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Page
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PART I
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PART II
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PART III
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PART IV
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Page
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•
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our success in growing our store base and digital demand;
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•
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risks related to the planned acquisition of Town Shoes;
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•
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our ability to protect our reputation;
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•
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maintaining strong relationships with our vendors;
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•
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our ability to anticipate and respond to fashion trends, consumer preferences and changing customer expectations;
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•
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risks related to the loss or disruption of our distribution and/or fulfillment operations;
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•
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continuation of agreements with and our reliance on the financial condition of Stein Mart;
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•
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our ability to execute our strategies;
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•
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risks related to international franchisees not operating the franchised stores according to our standards;
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•
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fluctuation of our comparable sales and quarterly financial performance;
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•
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risks related to the loss or disruption of our information systems and data;
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•
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our ability to prevent or mitigate breaches of our information security and the compromise of sensitive and confidential data;
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•
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failure to retain our key executives or attract qualified new personnel;
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•
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our reliance on our DSW Rewards program and marketing to drive traffic, sales and customer loyalty;
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•
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risks related to leases of our properties;
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•
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our competitiveness with respect to style, price, brand availability and customer service;
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•
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our reliance on foreign sources for merchandise and risks inherent to international trade;
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•
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uncertainty related to future legislation, regulatory reform or policy changes, including the impact of the Tax Cuts and Jobs Act;
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•
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uncertain general economic conditions;
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•
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risks related to holdings of cash and investments and access to liquidity; and
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•
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fluctuations in foreign currency exchange rates.
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ITEM 1.
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BUSINESS
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Category
|
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Percent of DSW Segment Net Sales
|
|
Women's footwear
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69
|
%
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Men's footwear
|
|
22
|
%
|
Accessories and other
|
|
9
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%
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ITEM 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
|
ITEM 2.
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PROPERTIES
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Location
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Number of Stores
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|
Location
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Number of Stores
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Location
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|
Number of Stores
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||
Alabama
|
|
6
|
|
|
Louisiana
|
|
4
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|
North Dakota
|
|
1
|
|
Arizona
|
|
10
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|
|
Maine
|
|
1
|
|
Ohio
|
|
21
|
|
Arkansas
|
|
1
|
|
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Maryland
|
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20
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Oklahoma
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|
4
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California
|
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49
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|
|
Massachusetts
|
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18
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|
Oregon
|
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6
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|
Colorado
|
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11
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|
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Michigan
|
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20
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|
Pennsylvania
|
|
25
|
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Connecticut
|
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11
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|
|
Minnesota
|
|
12
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|
Puerto Rico
|
|
2
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Delaware
|
|
1
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|
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Mississippi
|
|
1
|
|
Rhode Island
|
|
2
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|
Florida
|
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31
|
|
|
Missouri
|
|
5
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|
South Carolina
|
|
3
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|
Georgia
|
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17
|
|
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Nebraska
|
|
3
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|
Tennessee
|
|
8
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|
Idaho
|
|
1
|
|
|
Nevada
|
|
3
|
|
Texas
|
|
46
|
|
Illinois
|
|
29
|
|
|
New Hampshire
|
|
2
|
|
Utah
|
|
3
|
|
Indiana
|
|
11
|
|
|
New Jersey
|
|
20
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|
Virginia
|
|
22
|
|
Iowa
|
|
2
|
|
|
New Mexico
|
|
1
|
|
Washington
|
|
12
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|
Kansas
|
|
3
|
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|
New York
|
|
37
|
|
District of Columbia
|
|
3
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|
Kentucky
|
|
4
|
|
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North Carolina
|
|
10
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|
Wisconsin
|
|
10
|
|
|
|
|
|
|
|
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Total
|
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512
|
|
ITEM 3.
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LEGAL PROCEEDINGS
|
ITEM 4.
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MINE SAFETY DISCLOSURES
|
ITEM 5.
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||||||||||
|
Market Price
|
||||||||||||||
|
High
|
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Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
22.26
|
|
|
$
|
18.55
|
|
|
$
|
29.53
|
|
|
$
|
21.99
|
|
Second Quarter
|
$
|
21.72
|
|
|
$
|
15.98
|
|
|
$
|
24.98
|
|
|
$
|
18.51
|
|
Third Quarter
|
$
|
21.84
|
|
|
$
|
15.14
|
|
|
$
|
26.22
|
|
|
$
|
20.07
|
|
Fourth Quarter
|
$
|
22.72
|
|
|
$
|
17.75
|
|
|
$
|
25.96
|
|
|
$
|
20.08
|
|
|
(a)
Total Number of Shares Purchased
|
|
(b)
Average Price Paid per Share
|
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Programs
|
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(d)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs
|
||||||
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(in thousands, except per share amounts)
|
||||||||||||
October 29, 2017 to November 25, 2017
(1)
|
7
|
|
|
$
|
21.05
|
|
|
—
|
|
|
$
|
524,094
|
|
November 26, 2017 to December 30, 2017
(1)
|
5
|
|
|
$
|
20.36
|
|
|
—
|
|
|
$
|
524,094
|
|
December 31, 2017 to February 3, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
524,094
|
|
|
12
|
|
|
$
|
20.79
|
|
|
—
|
|
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|
(1)
|
The total number of shares repurchased includes shares withheld in connection with tax payments due upon vesting of employee restricted stock awards.
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Fiscal Years Ended
|
||||||||||||||||||||
Company / Index
|
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February 2, 2013
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February 1, 2014
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January 31, 2015
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January 30, 2016
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January 28, 2017
|
|
February 3, 2018
|
||||||||||||
DSW Inc.
|
|
$
|
100.00
|
|
|
$
|
139.92
|
|
|
$
|
158.89
|
|
|
$
|
153.55
|
|
|
$
|
106.43
|
|
|
$
|
93.25
|
|
S&P MidCap 400 Index
|
|
$
|
100.00
|
|
|
$
|
116.75
|
|
|
$
|
140.21
|
|
|
$
|
153.24
|
|
|
$
|
140.71
|
|
|
$
|
181.17
|
|
S&P 500 Retailing Index
|
|
$
|
100.00
|
|
|
$
|
106.31
|
|
|
$
|
132.13
|
|
|
$
|
156.90
|
|
|
$
|
181.31
|
|
|
$
|
212.66
|
|
S&P MidCap 400 Retail Index
|
|
$
|
100.00
|
|
|
$
|
122.68
|
|
|
$
|
138.30
|
|
|
$
|
166.55
|
|
|
$
|
144.17
|
|
|
$
|
145.93
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Fiscal
(1)
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except per share data, store count and per square foot data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,799,794
|
|
|
$
|
2,711,444
|
|
|
$
|
2,620,248
|
|
|
$
|
2,496,092
|
|
|
$
|
2,368,668
|
|
Gross profit
(2)
|
$
|
789,376
|
|
|
$
|
771,833
|
|
|
$
|
768,369
|
|
|
$
|
755,021
|
|
|
$
|
739,287
|
|
Operating profit
(3)
|
$
|
124,960
|
|
|
$
|
200,168
|
|
|
$
|
213,551
|
|
|
$
|
242,485
|
|
|
$
|
241,424
|
|
Net income
(4)
|
$
|
67,304
|
|
|
$
|
124,535
|
|
|
$
|
136,034
|
|
|
$
|
153,299
|
|
|
$
|
151,302
|
|
Diluted earnings per share
|
$
|
0.83
|
|
|
$
|
1.52
|
|
|
$
|
1.54
|
|
|
$
|
1.69
|
|
|
$
|
1.65
|
|
Weighted average number of diluted shares outstanding
|
80,687
|
|
|
82,135
|
|
|
88,501
|
|
|
90,612
|
|
|
91,901
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and investments
|
$
|
300,537
|
|
|
$
|
287,091
|
|
|
$
|
330,475
|
|
|
$
|
447,128
|
|
|
$
|
579,307
|
|
Inventory
|
$
|
501,903
|
|
|
$
|
499,995
|
|
|
$
|
484,236
|
|
|
$
|
450,836
|
|
|
$
|
397,768
|
|
Total assets
|
$
|
1,413,613
|
|
|
$
|
1,428,476
|
|
|
$
|
1,369,109
|
|
|
$
|
1,438,243
|
|
|
$
|
1,421,244
|
|
Total shareholders' equity
|
$
|
950,355
|
|
|
$
|
937,488
|
|
|
$
|
904,924
|
|
|
$
|
1,011,120
|
|
|
$
|
998,544
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Comparable sales change
(5)
|
(0.4
|
)%
|
|
(3.0
|
)%
|
|
0.8
|
%
|
|
1.8
|
%
|
|
0.2
|
%
|
|||||
DSW stores (excluding licensed stores):
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of period
|
501
|
|
|
468
|
|
|
431
|
|
|
394
|
|
|
364
|
|
|||||
New stores
|
15
|
|
|
34
|
|
|
40
|
|
|
37
|
|
|
30
|
|
|||||
Closed stores
|
(4
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||||
End of period
|
512
|
|
|
501
|
|
|
468
|
|
|
431
|
|
|
394
|
|
|||||
DSW segment square footage
(6)
|
10,485
|
|
|
10,336
|
|
|
9,805
|
|
|
9,277
|
|
|
8,687
|
|
|||||
DSW segment net sales per average square foot
|
$
|
246
|
|
|
$
|
246
|
|
|
$
|
258
|
|
|
$
|
261
|
|
|
$
|
265
|
|
ABG stores, end of period
|
293
|
|
|
395
|
|
|
379
|
|
|
371
|
|
|
356
|
|
|||||
Cash dividends per share
|
$
|
0.800
|
|
|
$
|
0.800
|
|
|
$
|
0.800
|
|
|
$
|
0.750
|
|
|
$
|
0.375
|
|
(1)
|
All fiscal years are based on a
52
-week year, except for fiscal 2017, which is based on a
53
-week year. Fiscal 2016 and 2017 include the results of operations of Ebuys, which we acquired on
March 4, 2016
.
|
(2)
|
Gross profit is defined as net sales less cost of sales. Cost of sales includes the cost of merchandise, which includes markdowns, shrinkage, and other inventory write-downs, and expenses associated with distribution and fulfillment (including depreciation) and store occupancy (excluding depreciation). The calculation of gross profit varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.
|
(3)
|
During fiscal 2017, as a result of recurring operating losses incurred by Ebuys, which led to our decision to exit the business, we recorded goodwill, intangible and fixed asset impairment charges of
$89.4 million
, inventory write-downs of
$9.3 million
, and a gain due to the change in fair value of Ebuys contingent consideration liability of
$32.7 million
. During fiscal 2016, we recorded a gain due to the change in fair value of Ebuys contingent consideration liability of
$20.2 million
. Fiscal 2013 included net losses from a luxury business test of
$19.7 million
and charges from the termination of a pension plan assumed in a previous acquisition of
$14.7 million
.
|
(4)
|
During fiscal 2017, we recognized
$10.1 million
of additional net tax expense as a result of implementing the U.S. Tax Reform.
|
(5)
|
A DSW or ABG store is considered comparable when in operation for at least 14 months at the beginning of the fiscal year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter they are closed. Comparable sales includes sales from dsw.com and excludes sales from Gordmans and Ebuys. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.
|
(6)
|
DSW segment square footage represents the total amount of square footage as of the end of the fiscal year for DSW stores only and does not include square footage of the distribution and fulfillment centers.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Fiscal
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Net sales
|
$
|
2,799,794
|
|
|
100.0
|
%
|
|
$
|
2,711,444
|
|
|
100.0
|
%
|
|
$
|
2,620,248
|
|
|
100.0
|
%
|
Cost of sales
|
(2,010,418
|
)
|
|
(71.8
|
)
|
|
(1,939,611
|
)
|
|
(71.5
|
)
|
|
(1,851,879
|
)
|
|
(70.7
|
)
|
|||
Gross profit
|
789,376
|
|
|
28.2
|
|
|
771,833
|
|
|
28.5
|
|
|
768,369
|
|
|
29.3
|
|
|||
Operating expenses
|
(607,723
|
)
|
|
(21.7
|
)
|
|
(591,816
|
)
|
|
(21.8
|
)
|
|
(554,818
|
)
|
|
(21.2
|
)
|
|||
Impairment charges
|
(89,440
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent consideration
|
32,747
|
|
|
1.2
|
|
|
20,151
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|||
Operating profit
|
124,960
|
|
|
4.5
|
|
|
200,168
|
|
|
7.4
|
|
|
213,551
|
|
|
8.1
|
|
|||
Interest income, net
|
2,789
|
|
|
0.1
|
|
|
2,141
|
|
|
0.1
|
|
|
3,462
|
|
|
0.1
|
|
|||
Non-operating income (expense)
|
(1,885
|
)
|
|
(0.1
|
)
|
|
338
|
|
|
0.0
|
|
|
3,178
|
|
|
0.1
|
|
|||
Income before income taxes and income (loss) from Town Shoes
|
125,864
|
|
|
4.5
|
|
|
202,647
|
|
|
7.5
|
|
|
220,191
|
|
|
8.3
|
|
|||
Income tax provision
|
(59,617
|
)
|
|
(2.1
|
)
|
|
(78,853
|
)
|
|
(2.9
|
)
|
|
(83,806
|
)
|
|
(3.2
|
)
|
|||
Income (loss) from Town Shoes
|
1,057
|
|
|
0.0
|
|
|
741
|
|
|
0.0
|
|
|
(351
|
)
|
|
0.1
|
|
|||
Net income
|
$
|
67,304
|
|
|
2.4
|
%
|
|
$
|
124,535
|
|
|
4.6
|
%
|
|
$
|
136,034
|
|
|
5.2
|
%
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Net sales for the previous fiscal year
|
$
|
2,711,444
|
|
|
$
|
2,620,248
|
|
|
$
|
2,496,092
|
|
Increase (decrease) in comparable sales
|
(10,229
|
)
|
|
(75,267
|
)
|
|
19,505
|
|
|||
Increase due to sales during the 53
rd
week
|
35,626
|
|
|
—
|
|
|
—
|
|
|||
Net increase from non-comparable store sales, Ebuys and other changes
|
62,953
|
|
|
166,463
|
|
|
104,651
|
|
|||
Total net sales
|
$
|
2,799,794
|
|
|
$
|
2,711,444
|
|
|
$
|
2,620,248
|
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
DSW segment
|
$
|
2,571,950
|
|
|
$
|
2,477,991
|
|
|
$
|
2,470,107
|
|
Other
(1)
|
227,844
|
|
|
233,453
|
|
|
150,141
|
|
|||
Total net sales
|
$
|
2,799,794
|
|
|
$
|
2,711,444
|
|
|
$
|
2,620,248
|
|
(1)
|
Other primarily represents net sales for ABG and Ebuys.
|
|
Fiscal
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
DSW segment:
|
|
|
|
|
|
|||
Merchandise margin
|
43.3
|
%
|
|
43.1
|
%
|
|
42.8
|
%
|
Store occupancy expenses
|
(10.9
|
)
|
|
(11.1
|
)
|
|
(10.7
|
)
|
Distribution and fulfillment expenses
|
(2.3
|
)
|
|
(2.2
|
)
|
|
(2.1
|
)
|
Gross profit
|
30.1
|
%
|
|
29.8
|
%
|
|
30.0
|
%
|
Other - Gross profit
|
6.9
|
%
|
|
14.7
|
%
|
|
18.6
|
%
|
Total Company gross profit
|
28.2
|
%
|
|
28.5
|
%
|
|
29.3
|
%
|
|
Payments due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1 - 3
Years
|
|
3 -5
Years
|
|
More Than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations
(1)
|
$
|
1,140,330
|
|
|
$
|
202,596
|
|
|
$
|
378,902
|
|
|
$
|
295,394
|
|
|
$
|
263,438
|
|
Construction commitments
(2)
|
2,106
|
|
|
2,106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations
(3)
|
20,334
|
|
|
16,118
|
|
|
4,216
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,162,770
|
|
|
$
|
220,820
|
|
|
$
|
383,118
|
|
|
$
|
295,394
|
|
|
$
|
263,438
|
|
(1)
|
Many of our operating leases require us to pay contingent rent based on sales, maintenance, insurance, and real estate taxes, which can vary year by year and are based almost entirely on actual amounts incurred. As such, they are not included in the lease obligations presented above.
|
(2)
|
As of
February 3, 2018
, we have entered into various construction commitments, including items to be purchased for projects that were under construction or for which a lease has been signed.
|
(3)
|
We are able to cancel many of our purchase obligations without payment or penalty, and therefore we have excluded such obligations.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
|
Plan Category
|
(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights
(1)(2)(3)
|
|
(b) Weighted-average exercise price of outstanding options, warrants and rights
(2)
|
|
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(3)
|
||||
Equity compensation plans approved by security holders
|
5,580,974
|
|
|
$
|
23.84
|
|
|
4,874,680
|
|
Equity compensation plans not approved by security holders
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
5,580,974
|
|
|
$
|
23.84
|
|
|
4,874,680
|
|
(1)
|
DSW Inc. 2005 Equity Incentive Plan.
|
(2)
|
Includes
4,333,351
shares issuable pursuant to the exercise of outstanding stock options,
435,948
shares issuable pursuant to restricted stock units,
457,395
shares issuable pursuant to performance-based restricted stock units and
354,280
shares issuable pursuant to director stock units. Since the restricted stock units, performance-based restricted stock units and director stock units have no exercise price, they are not included in the weighted average exercise price calculation in column (b).
|
(3)
|
DSW Inc. 2014 Equity Incentive Plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Operations for the years ended February 3, 2018, January 28, 2017 and January 30, 2016
|
|
Consolidated Statements of Comprehensive Income for the years ended February 3, 2018, January 28, 2017 and January 30, 2016
|
|
Consolidated Balance Sheets as of February 3, 2018 and January 28, 2017
|
|
Consolidated Statements of Shareholders' Equity for the years ended February 3, 2018, January 28, 2017 and January 30, 2016
|
|
Consolidated Statements of Cash Flows for the years ended February 3, 2018, January 28, 2017 and January 30, 2016
|
|
Notes to Consolidated Financial Statements
|
Exhibit No.
|
|
Description
|
2.1
|
|
|
2.2
|
|
|
2.3##
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
10.1
|
|
|
10.1.1
|
|
|
10.2#
|
|
|
10.2.1#
|
|
|
10.2.2#
|
|
|
10.3#
|
|
|
10.3.1#
|
|
|
10.3.2#
|
|
|
10.3.3#
|
|
|
10.3.4#
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6#
|
|
|
10.7
|
|
|
10.8
|
|
Exhibit No.
|
|
Description
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.11.1*
|
|
|
10.11.2*
|
|
|
10.11.3*
|
|
|
10.11.4*
|
|
|
10.11.5*
|
|
|
10.11.6*
|
|
|
10.12#
|
|
|
10.13
|
|
|
10.13.1
|
|
|
10.13.2
|
|
|
10.13.3
|
|
|
10.14
|
|
|
10.15#
|
|
|
10.15.1#
|
|
|
10.16#
|
|
|
10.16.1#
|
|
|
10.17#
|
|
|
10.18#
|
|
|
10.19#
|
|
|
21.1*
|
|
|
23.1*
|
|
|
24.1*
|
|
Exhibit No.
|
|
Description
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
101*
|
|
XBRL Instance documents.
|
*
|
Filed herewith.
|
#
|
Management contract or compensatory plan or arrangement.
|
##
|
Certain schedules to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and DSW Inc. agrees to furnish supplementary to the Securities and Exchange Commission a copy of any omitted schedule.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
DSW INC.
|
|
|
|
|
March 23, 2018
|
By:
|
/s/ Jared Poff
|
|
|
Jared Poff,
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Roger Rawlins
|
|
Chief Executive Officer and Director
|
|
March 23, 2018
|
Roger Rawlins
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jared Poff
|
|
Senior Vice President and Chief Financial Officer
|
|
March 23, 2018
|
Jared Poff
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
*
|
|
Executive Chairman of the Board and Director
|
|
March 23, 2018
|
Jay L. Schottenstein
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Peter Cobb
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Joanne Zaiac
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Elaine J. Eisenman
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Carolee Lee
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Joanna T. Lau
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Joseph A. Schottenstein
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Harvey L. Sonnenberg
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March 23, 2018
|
Allan J. Tanenbaum
|
|
|
|
|
*By:
|
/s/ Jared Poff
|
|
Jared Poff (Attorney-in-fact)
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
$
|
2,799,794
|
|
|
$
|
2,711,444
|
|
|
$
|
2,620,248
|
|
Cost of sales
|
(2,010,418
|
)
|
|
(1,939,611
|
)
|
|
(1,851,879
|
)
|
|||
Operating expenses
|
(607,723
|
)
|
|
(591,816
|
)
|
|
(554,818
|
)
|
|||
Impairment charges
|
(89,440
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent consideration
|
32,747
|
|
|
20,151
|
|
|
—
|
|
|||
Operating profit
|
124,960
|
|
|
200,168
|
|
|
213,551
|
|
|||
Interest expense
|
(488
|
)
|
|
(238
|
)
|
|
(168
|
)
|
|||
Interest income
|
3,277
|
|
|
2,379
|
|
|
3,630
|
|
|||
Interest income, net
|
2,789
|
|
|
2,141
|
|
|
3,462
|
|
|||
Non-operating income (expense)
|
(1,885
|
)
|
|
338
|
|
|
3,178
|
|
|||
Income before income taxes and income (loss) from Town Shoes
|
125,864
|
|
|
202,647
|
|
|
220,191
|
|
|||
Income tax provision
|
(59,617
|
)
|
|
(78,853
|
)
|
|
(83,806
|
)
|
|||
Income (loss) from Town Shoes
|
1,057
|
|
|
741
|
|
|
(351
|
)
|
|||
Net income
|
$
|
67,304
|
|
|
$
|
124,535
|
|
|
$
|
136,034
|
|
Basic and diluted earnings per share:
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
0.84
|
|
|
$
|
1.53
|
|
|
$
|
1.55
|
|
Diluted earnings per share
|
$
|
0.83
|
|
|
$
|
1.52
|
|
|
$
|
1.54
|
|
Weighted average shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic shares
|
80,160
|
|
|
81,536
|
|
|
87,561
|
|
|||
Diluted shares
|
80,687
|
|
|
82,135
|
|
|
88,501
|
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
67,304
|
|
|
$
|
124,535
|
|
|
$
|
136,034
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
3,681
|
|
|
6,831
|
|
|
(14,076
|
)
|
|||
Unrealized net gain (loss) on available-for-sale securities
|
(1,095
|
)
|
|
127
|
|
|
(173
|
)
|
|||
Reclassification adjustment for net losses (gains) realized in net income
|
1,281
|
|
|
(196
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss), net of income taxes
|
3,867
|
|
|
6,762
|
|
|
(14,249
|
)
|
|||
Total comprehensive income
|
$
|
71,171
|
|
|
$
|
131,297
|
|
|
$
|
121,785
|
|
|
February 3, 2018
|
|
January 28, 2017
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
175,932
|
|
|
$
|
110,657
|
|
Short-term investments
|
124,605
|
|
|
98,530
|
|
||
Accounts receivable
|
17,532
|
|
|
18,456
|
|
||
Accounts receivable from related parties
|
1,704
|
|
|
550
|
|
||
Inventories
|
501,903
|
|
|
499,995
|
|
||
Prepaid expenses and other current assets
|
41,333
|
|
|
31,078
|
|
||
Total current assets
|
863,009
|
|
|
759,266
|
|
||
Property and equipment, net
|
355,199
|
|
|
375,251
|
|
||
Long-term investments
|
—
|
|
|
77,904
|
|
||
Goodwill
|
25,899
|
|
|
79,689
|
|
||
Intangible assets
|
135
|
|
|
35,108
|
|
||
Deferred income taxes
|
27,671
|
|
|
14,934
|
|
||
Equity investment in Town Shoes
|
6,096
|
|
|
15,830
|
|
||
Notes receivable from Town Shoes
|
115,895
|
|
|
53,121
|
|
||
Other assets
|
19,709
|
|
|
17,373
|
|
||
Total assets
|
$
|
1,413,613
|
|
|
$
|
1,428,476
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Accounts payable
|
$
|
178,449
|
|
|
$
|
185,497
|
|
Accounts payable to related parties
|
859
|
|
|
774
|
|
||
Accrued expenses
|
145,218
|
|
|
130,334
|
|
||
Total current liabilities
|
324,526
|
|
|
316,605
|
|
||
Non-current liabilities
|
138,732
|
|
|
141,179
|
|
||
Contingent consideration liability
|
—
|
|
|
33,204
|
|
||
Total liabilities
|
463,258
|
|
|
490,988
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common shares paid in capital, no par value; 250,000 Class A common shares authorized, 85,385 and 85,038 issued, respectively; 72,294 and 72,447 outstanding, respectively; 100,000 Class B common shares authorized, 7,733 and 7,733 issued and outstanding, respectively
|
961,245
|
|
|
946,351
|
|
||
Preferred shares, no par value; 100,000 authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Treasury shares, at cost, 13,091 and 12,591, respectively
|
(325,906
|
)
|
|
(316,531
|
)
|
||
Retained earnings
|
350,083
|
|
|
346,602
|
|
||
Basis difference related to acquisition of commonly controlled entity
|
(24,993
|
)
|
|
(24,993
|
)
|
||
Accumulated other comprehensive loss
|
(10,074
|
)
|
|
(13,941
|
)
|
||
Total shareholders' equity
|
950,355
|
|
|
937,488
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,413,613
|
|
|
$
|
1,428,476
|
|
|
Number of Shares
|
|
Common shares paid in capital
|
Treasury 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
|
|
|||||||||||||||||||||
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
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
136,034
|
|
—
|
|
—
|
|
136,034
|
|
||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
|
13,501
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,501
|
|
||||||
Stock-based compensation issuances and exercises
|
694
|
|
—
|
|
—
|
|
|
5,108
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,108
|
|
||||||
Repurchase of Class A common shares
|
(7,175
|
)
|
|
7,175
|
|
|
|
(179,593
|
)
|
|
|
|
(179,593
|
)
|
|||||||||||
Excess tax benefits related to stock-based compensation
|
—
|
|
—
|
|
—
|
|
|
2,723
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,723
|
|
||||||
Dividends paid ($0.80 per share)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(69,720
|
)
|
—
|
|
—
|
|
(69,720
|
)
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(14,249
|
)
|
(14,249
|
)
|
||||||
Balance, January 30, 2016
|
74,185
|
|
7,733
|
|
10,211
|
|
|
930,011
|
|
(266,531
|
)
|
287,140
|
|
(24,993
|
)
|
(20,703
|
)
|
904,924
|
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
124,535
|
|
—
|
|
—
|
|
124,535
|
|
||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
|
12,687
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,687
|
|
||||||
Stock-based compensation issuances and exercises
|
642
|
|
—
|
|
—
|
|
|
3,693
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,693
|
|
||||||
Repurchase of Class A common shares
|
(2,380
|
)
|
—
|
|
2,380
|
|
|
—
|
|
(50,000
|
)
|
—
|
|
—
|
|
—
|
|
(50,000
|
)
|
||||||
Excess tax detriments related to stock-based compensation
|
—
|
|
—
|
|
—
|
|
|
(40
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(40
|
)
|
||||||
Dividends paid ($0.80 per share)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(65,073
|
)
|
—
|
|
—
|
|
(65,073
|
)
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,762
|
|
6,762
|
|
||||||
Balance, January 28, 2017
|
72,447
|
|
7,733
|
|
12,591
|
|
|
946,351
|
|
(316,531
|
)
|
346,602
|
|
(24,993
|
)
|
(13,941
|
)
|
937,488
|
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
67,304
|
|
—
|
|
—
|
|
67,304
|
|
||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
|
14,704
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,704
|
|
||||||
Stock-based compensation issuances and exercises
|
347
|
|
—
|
|
—
|
|
|
190
|
|
—
|
|
—
|
|
—
|
|
—
|
|
190
|
|
||||||
Repurchase of Class A common shares
|
(500
|
)
|
—
|
|
500
|
|
|
—
|
|
(9,375
|
)
|
—
|
|
—
|
|
—
|
|
(9,375
|
)
|
||||||
Dividends paid ($0.80 per share)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(63,823
|
)
|
—
|
|
—
|
|
(63,823
|
)
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,867
|
|
3,867
|
|
||||||
Balance, February 3, 2018
|
72,294
|
|
7,733
|
|
13,091
|
|
|
$
|
961,245
|
|
$
|
(325,906
|
)
|
$
|
350,083
|
|
$
|
(24,993
|
)
|
$
|
(10,074
|
)
|
$
|
950,355
|
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
67,304
|
|
|
$
|
124,535
|
|
|
$
|
136,034
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
80,216
|
|
|
81,639
|
|
|
73,577
|
|
|||
Stock-based compensation expense
|
14,704
|
|
|
12,687
|
|
|
13,501
|
|
|||
Deferred income taxes
|
(12,787
|
)
|
|
6,881
|
|
|
9,265
|
|
|||
Loss (income) from Town Shoes
|
(1,057
|
)
|
|
(741
|
)
|
|
351
|
|
|||
Impairment charges
|
89,440
|
|
|
247
|
|
|
962
|
|
|||
Change in fair value of contingent consideration
|
(32,747
|
)
|
|
(20,151
|
)
|
|
—
|
|
|||
Loss on disposal of property and equipment
|
919
|
|
|
723
|
|
|
844
|
|
|||
Amortization of investment discounts and premiums
|
645
|
|
|
1,185
|
|
|
5,456
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(230
|
)
|
|
(2,206
|
)
|
|
8,943
|
|
|||
Inventories
|
(1,908
|
)
|
|
14,411
|
|
|
(33,400
|
)
|
|||
Prepaid expenses and other current assets
|
(16,418
|
)
|
|
3,884
|
|
|
1,782
|
|
|||
Accounts payable
|
(8,855
|
)
|
|
(30,572
|
)
|
|
38,031
|
|
|||
Accrued expenses
|
11,146
|
|
|
18,785
|
|
|
(3,644
|
)
|
|||
Other
|
644
|
|
|
1,599
|
|
|
(6,328
|
)
|
|||
Net cash provided by operating activities
|
191,016
|
|
|
212,906
|
|
|
245,374
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Cash paid for property and equipment
|
(56,282
|
)
|
|
(87,580
|
)
|
|
(103,939
|
)
|
|||
Purchases of available-for-sale investments
|
(133,153
|
)
|
|
(95,905
|
)
|
|
(279,735
|
)
|
|||
Sales of available-for-sale investments
|
187,866
|
|
|
220,744
|
|
|
353,344
|
|
|||
Additional borrowings by Town Shoes
|
(57,396
|
)
|
|
(4,795
|
)
|
|
(4,580
|
)
|
|||
Acquisition of Ebuys
|
—
|
|
|
(59,776
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(58,965
|
)
|
|
(27,312
|
)
|
|
(34,910
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
1,299
|
|
|
6,279
|
|
|
7,504
|
|
|||
Net change in vendor payment program
|
2,597
|
|
|
925
|
|
|
—
|
|
|||
Payment of credit facility costs
|
(1,018
|
)
|
|
—
|
|
|
—
|
|
|||
Cash paid for income taxes for stock-based compensation shares withheld
|
(1,109
|
)
|
|
(2,586
|
)
|
|
(2,396
|
)
|
|||
Cash paid for treasury shares
|
(9,375
|
)
|
|
(50,000
|
)
|
|
(179,593
|
)
|
|||
Dividends paid
|
(63,823
|
)
|
|
(65,073
|
)
|
|
(69,720
|
)
|
|||
Net cash used in financing activities
|
(71,429
|
)
|
|
(110,455
|
)
|
|
(244,205
|
)
|
|||
Effect of exchange rate changes on cash balances
|
—
|
|
|
—
|
|
|
3,267
|
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
60,622
|
|
|
75,139
|
|
|
(30,474
|
)
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
115,310
|
|
|
40,171
|
|
|
70,645
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
175,932
|
|
|
$
|
115,310
|
|
|
$
|
40,171
|
|
Supplemental disclosures of cash flow information -
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
77,208
|
|
|
$
|
56,529
|
|
|
$
|
72,851
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Property and equipment purchases not yet paid
|
$
|
9,778
|
|
|
$
|
8,882
|
|
|
$
|
13,150
|
|
Ebuys contingent purchase price
|
$
|
—
|
|
|
$
|
53,355
|
|
|
$
|
—
|
|
|
February 3, 2018
|
|
January 28, 2017
|
|
January 30, 2016
|
||||||
|
(in thousands)
|
||||||||||
Cash and cash equivalents
|
$
|
175,932
|
|
|
$
|
110,657
|
|
|
$
|
32,495
|
|
Restricted cash, included in prepaid expenses and other current assets
|
—
|
|
|
4,653
|
|
|
7,676
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows
|
$
|
175,932
|
|
|
$
|
115,310
|
|
|
$
|
40,171
|
|
•
|
Level 1 - Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Quoted prices for similar assets or liabilities in active markets or inputs that are observable.
|
•
|
Level 3 - Unobservable inputs in which little or no market activity exists.
|
Buildings
|
39 years
|
Building and leasehold improvements
|
3 to 20 years or the lease term if shorter
|
Furniture, fixtures and equipment
|
3 to 10 years
|
Software
|
5 to 10 years
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||||||||||||||||||
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
|
Foreign Currency Translation
|
|
Available-for-Sale Securities
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Net loss in AOCI - beginning of period
|
$
|
(13,699
|
)
|
|
$
|
(242
|
)
|
|
$
|
(13,941
|
)
|
|
$
|
(20,530
|
)
|
|
$
|
(173
|
)
|
|
$
|
(20,703
|
)
|
Other comprehensive income (loss) before reclassifications
|
3,681
|
|
|
(1,095
|
)
|
|
2,586
|
|
|
6,831
|
|
|
127
|
|
|
6,958
|
|
||||||
Amounts reclassified from AOCI to non-operating income
|
740
|
|
|
541
|
|
|
1,281
|
|
|
—
|
|
|
(196
|
)
|
|
(196
|
)
|
||||||
Other comprehensive income (loss)
|
4,421
|
|
|
(554
|
)
|
|
3,867
|
|
|
6,831
|
|
|
(69
|
)
|
|
6,762
|
|
||||||
Net loss in AOCI - End of period
|
$
|
(9,278
|
)
|
|
$
|
(796
|
)
|
|
$
|
(10,074
|
)
|
|
$
|
(13,699
|
)
|
|
$
|
(242
|
)
|
|
$
|
(13,941
|
)
|
|
Fiscal Year Ended
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities, as previously reported
|
$
|
212,906
|
|
|
$
|
242,651
|
|
Eliminated the excess tax benefits related to stock-based compensation
|
—
|
|
|
2,723
|
|
||
Net cash provided by operating activities, as adjusted
|
$
|
212,906
|
|
|
$
|
245,374
|
|
Net cash used in investing activities, as previously reported
|
$
|
(24,289
|
)
|
|
$
|
(31,112
|
)
|
Eliminated the decrease in restricted cash
|
(3,023
|
)
|
|
(3,798
|
)
|
||
Net cash provided by investing activities, as adjusted
|
$
|
(27,312
|
)
|
|
$
|
(34,910
|
)
|
Net cash used in financing activities, as previously reported
|
$
|
(110,455
|
)
|
|
$
|
(241,482
|
)
|
Eliminated the excess tax benefits related to stock-based compensation
|
—
|
|
|
(2,723
|
)
|
||
Net cash used in financing activities, as adjusted
|
$
|
(110,455
|
)
|
|
$
|
(244,205
|
)
|
Net increase (decrease) in cash and cash equivalents, as previously reported
|
$
|
78,162
|
|
|
$
|
(26,676
|
)
|
Eliminated the impact of the decrease in restricted cash
|
(3,023
|
)
|
|
(3,798
|
)
|
||
Net increase in cash, cash equivalents, and restricted cash, as adjusted
|
$
|
75,139
|
|
|
$
|
(30,474
|
)
|
Cash and cash equivalents, beginning of period, as previously reported
|
$
|
32,495
|
|
|
$
|
59,171
|
|
Included restricted cash
|
7,676
|
|
|
11,474
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period, as adjusted
|
$
|
40,171
|
|
|
$
|
70,645
|
|
Cash and cash equivalents, end of period, as previously reported
|
$
|
110,657
|
|
|
$
|
32,495
|
|
Included restricted cash
|
4,653
|
|
|
7,676
|
|
||
Cash, cash equivalents, and restricted cash, end of period, as adjusted
|
$
|
115,310
|
|
|
$
|
40,171
|
|
|
Final Purchase Price and Allocation
|
||
|
(in thousands)
|
||
Purchase price:
|
|
||
Cash consideration
|
$
|
59,776
|
|
Contingent consideration
|
53,355
|
|
|
|
$
|
113,131
|
|
Fair value of assets and liabilities acquired:
|
|
||
Accounts and other receivables
|
$
|
1,336
|
|
Inventory
|
30,170
|
|
|
Other current assets
|
526
|
|
|
Property and equipment
|
1,243
|
|
|
Goodwill
|
53,790
|
|
|
Intangible assets
|
38,701
|
|
|
Accounts payable and other liabilities
|
(12,635
|
)
|
|
|
$
|
113,131
|
|
|
Fiscal 2015
|
||
|
(in thousands)
|
||
Net sales
|
$
|
2,699,770
|
|
Net income
|
$
|
135,600
|
|
|
Fiscal
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Equity investment in Town Shoes - beginning of period
|
$
|
15,830
|
|
|
$
|
21,188
|
|
Portion of Town Shoes income (loss)
|
(5,095
|
)
|
|
(4,592
|
)
|
||
Foreign currency translation adjustments, included in other comprehensive income (loss)
|
(4,271
|
)
|
|
(486
|
)
|
||
Amortization of purchase price adjustments
|
(368
|
)
|
|
(280
|
)
|
||
Equity investment in Town Shoes - end of period
|
$
|
6,096
|
|
|
$
|
15,830
|
|
|
Fiscal
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Notes receivable from Town Shoes - beginning of period
|
$
|
53,121
|
|
|
$
|
44,170
|
|
Payment-in-kind interest earned
|
6,520
|
|
|
5,613
|
|
||
Foreign currency translation adjustments, included in other comprehensive income (loss)
|
3,384
|
|
|
2,770
|
|
||
Management service fee
|
1,162
|
|
|
568
|
|
||
Additional Town Shoes loan
|
51,708
|
|
|
—
|
|
||
Notes receivable from Town Shoes - end of period
|
$
|
115,895
|
|
|
$
|
53,121
|
|
|
Fiscal
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(in thousands)
|
|||||||
Weighted average shares outstanding - Basic shares
|
80,160
|
|
|
81,536
|
|
|
87,561
|
|
Dilutive effect of stock-based compensation awards
|
527
|
|
|
599
|
|
|
940
|
|
Weighted average shares outstanding - Diluted shares
|
80,687
|
|
|
82,135
|
|
|
88,501
|
|
5
.
|
STOCK-BASED COMPENSATION
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Stock options
|
$
|
6,420
|
|
|
$
|
5,788
|
|
|
$
|
5,532
|
|
Restricted and director stock units
|
8,284
|
|
|
6,899
|
|
|
7,969
|
|
|||
|
$
|
14,704
|
|
|
$
|
12,687
|
|
|
$
|
13,501
|
|
|
Fiscal
|
||||
|
2017
|
|
2016
|
|
2015
|
Assumptions:
|
|
|
|
|
|
Risk-free interest rate
|
1.9%
|
|
1.5%
|
|
1.4%
|
Expected volatility
|
34.4%
|
|
36.0%
|
|
37.9%
|
Expected option term
|
5.5 years
|
|
5.4 years
|
|
5.1 years
|
Dividend yield
|
3.9%
|
|
3.0%
|
|
2.1%
|
Other Data -
|
|
|
|
|
|
Weighted average grant date fair value
|
$4.17
|
|
$6.58
|
|
$8.87
|
|
Shares Subject to Options
|
|
Weighted Average Exercise Price per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
|
(in thousands)
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Outstanding - beginning of period
|
3,799
|
|
|
$
|
26.42
|
|
|
|
|
|
||
Granted
|
1,756
|
|
|
$
|
19.52
|
|
|
|
|
|
||
Exercised
|
(162
|
)
|
|
$
|
8.03
|
|
|
|
|
|
||
Forfeited
|
(1,060
|
)
|
|
$
|
28.35
|
|
|
|
|
|
||
Outstanding - end of period
|
4,333
|
|
|
$
|
23.84
|
|
|
7.1 years
|
|
$
|
4,584
|
|
Vested and expected to vest - end of period
|
4,025
|
|
|
$
|
23.78
|
|
|
7.0 years
|
|
$
|
4,509
|
|
Exercisable - end of period
|
1,665
|
|
|
$
|
23.76
|
|
|
5.0 years
|
|
$
|
3,854
|
|
|
Time-Based RSUs
|
|
Performance-Based RSUs
|
||||||||||
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
||||||
|
(shares in thousands)
|
||||||||||||
Outstanding - beginning of period
|
351
|
|
|
$
|
29.60
|
|
|
250
|
|
|
$
|
29.46
|
|
Granted
|
296
|
|
|
$
|
19.28
|
|
|
267
|
|
|
$
|
20.10
|
|
Vested
|
(98
|
)
|
|
$
|
31.31
|
|
|
(60
|
)
|
|
$
|
32.34
|
|
Forfeited
|
(113
|
)
|
|
$
|
25.02
|
|
|
—
|
|
|
$
|
—
|
|
Outstanding - end of period
|
436
|
|
|
$
|
23.43
|
|
|
457
|
|
|
$
|
23.69
|
|
|
Short-term Investments
|
|
Long-term Investments
|
||||||||||||
|
February 3, 2018
|
|
January 28, 2017
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Carrying value
|
$
|
125,349
|
|
|
$
|
98,793
|
|
|
$
|
—
|
|
|
$
|
77,882
|
|
Unrealized gains included in accumulated other comprehensive income
|
23
|
|
|
101
|
|
|
—
|
|
|
133
|
|
||||
Unrealized losses included in accumulated other comprehensive loss
|
(767
|
)
|
|
(364
|
)
|
|
—
|
|
|
(111
|
)
|
||||
|
$
|
124,605
|
|
|
$
|
98,530
|
|
|
$
|
—
|
|
|
$
|
77,904
|
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
175,932
|
|
|
$
|
175,932
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110,657
|
|
|
$
|
110,657
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
124,605
|
|
|
—
|
|
|
124,605
|
|
|
—
|
|
|
98,530
|
|
|
2,446
|
|
|
96,084
|
|
|
—
|
|
||||||||
Long-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77,904
|
|
|
431
|
|
|
77,473
|
|
|
—
|
|
||||||||
|
$
|
300,537
|
|
|
$
|
175,932
|
|
|
$
|
124,605
|
|
|
$
|
—
|
|
|
$
|
287,091
|
|
|
$
|
113,534
|
|
|
$
|
173,557
|
|
|
$
|
—
|
|
Financial Liabilities -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,204
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,204
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,204
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,204
|
|
8
.
|
PROPERTY AND EQUIPMENT
|
|
February 3, 2018
|
|
January 28, 2017
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
1,110
|
|
|
$
|
1,110
|
|
Buildings
|
12,485
|
|
|
12,485
|
|
||
Building and leasehold improvements
|
404,852
|
|
|
393,505
|
|
||
Furniture, fixtures and equipment
|
423,597
|
|
|
408,653
|
|
||
Software
|
137,917
|
|
|
123,460
|
|
||
Construction in progress
(1)
|
39,201
|
|
|
27,456
|
|
||
Total property and equipment
|
1,019,162
|
|
|
966,669
|
|
||
Accumulated depreciation and amortization
|
(663,963
|
)
|
|
(591,418
|
)
|
||
Property and equipment, net
|
$
|
355,199
|
|
|
$
|
375,251
|
|
(1)
|
Construction in progress is comprised primarily of the construction of leasehold improvements and furniture and fixtures related to unopened stores and internal-use software under development.
|
9
.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||||||||||||||||
|
Goodwill
|
|
Accumulated Impairments
|
|
Net
|
|
Goodwill
|
|
Accumulated Impairments
|
|
Net
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Segment - beginning of period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
DSW Segment
|
$
|
25,899
|
|
|
$
|
—
|
|
|
$
|
25,899
|
|
|
$
|
25,899
|
|
|
$
|
—
|
|
|
$
|
25,899
|
|
Other - Ebuys
|
53,790
|
|
|
—
|
|
|
53,790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
79,689
|
|
|
—
|
|
|
79,689
|
|
|
25,899
|
|
|
—
|
|
|
25,899
|
|
||||||
Acquired Ebuys goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
53,790
|
|
|
—
|
|
|
53,790
|
|
||||||
Impairment charges
|
—
|
|
|
(53,790
|
)
|
|
(53,790
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Segment - End of period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
DSW Segment
|
25,899
|
|
|
—
|
|
|
25,899
|
|
|
25,899
|
|
|
—
|
|
|
25,899
|
|
||||||
Other - Ebuys
|
53,790
|
|
|
(53,790
|
)
|
|
—
|
|
|
53,790
|
|
|
—
|
|
|
53,790
|
|
||||||
|
$
|
79,689
|
|
|
$
|
(53,790
|
)
|
|
$
|
25,899
|
|
|
$
|
79,689
|
|
|
$
|
—
|
|
|
$
|
79,689
|
|
|
February 3, 2018
|
|
January 28, 2017
|
||||||||||||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Definite-lived:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Online retailer and customer relationships
|
$
|
3,767
|
|
|
$
|
(3,767
|
)
|
|
$
|
—
|
|
|
$
|
22,300
|
|
|
$
|
(2,072
|
)
|
|
$
|
20,228
|
|
Tradenames
|
1,260
|
|
|
(1,260
|
)
|
|
—
|
|
|
11,096
|
|
|
(672
|
)
|
|
10,424
|
|
||||||
Non-compete agreements
|
1,800
|
|
|
(1,800
|
)
|
|
—
|
|
|
5,400
|
|
|
(990
|
)
|
|
4,410
|
|
||||||
Indefinite-lived trademarks and tradenames
|
135
|
|
|
—
|
|
|
135
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||||
|
$
|
6,962
|
|
|
$
|
(6,827
|
)
|
|
$
|
135
|
|
|
$
|
38,842
|
|
|
$
|
(3,734
|
)
|
|
$
|
35,108
|
|
10
.
|
ACCRUED EXPENSES
|
|
February 3, 2018
|
|
January 28, 2017
|
||||
|
(in thousands)
|
||||||
Gift cards and merchandise credits
|
$
|
48,374
|
|
|
$
|
45,743
|
|
Compensation
|
25,082
|
|
|
17,132
|
|
||
Taxes
|
17,812
|
|
|
21,764
|
|
||
Customer loyalty program
|
12,196
|
|
|
11,502
|
|
||
Other
(1)
|
41,754
|
|
|
34,193
|
|
||
|
$
|
145,218
|
|
|
$
|
130,334
|
|
(1)
|
Other is comprised of deferred revenue, sales return allowance, and various other accrued expenses, including amounts owed under our vendor payment program described below.
|
|
February 3, 2018
|
|
January 28, 2017
|
||||
|
(in thousands)
|
||||||
Construction and tenant allowances
|
$
|
80,725
|
|
|
$
|
87,886
|
|
Deferred rent
|
37,116
|
|
|
37,779
|
|
||
Accrual for lease obligations
|
6,511
|
|
|
7,283
|
|
||
Other
(1)
|
14,380
|
|
|
8,231
|
|
||
|
$
|
138,732
|
|
|
$
|
141,179
|
|
(1)
|
Other is comprised of various other accrued expenses that we expect will settle beyond one year from the end of the applicable period.
|
12
.
|
DEBT
|
13
.
|
LEASES
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Minimum rentals:
|
|
|
|
|
|
||||||
Unrelated parties
|
$
|
178,353
|
|
|
$
|
172,483
|
|
|
$
|
162,072
|
|
Related parties
|
9,150
|
|
|
8,091
|
|
|
8,064
|
|
|||
Contingent rentals to unrelated parties
|
27,804
|
|
|
30,172
|
|
|
30,021
|
|
|||
|
$
|
215,307
|
|
|
$
|
210,746
|
|
|
$
|
200,157
|
|
|
Total
|
|
Unrelated
Parties
|
|
Related
Parties
|
||||||
|
(in thousands)
|
||||||||||
Fiscal 2018
|
$
|
202,596
|
|
|
$
|
192,849
|
|
|
$
|
9,747
|
|
Fiscal 2019
|
194,041
|
|
|
184,681
|
|
|
9,360
|
|
|||
Fiscal 2020
|
184,861
|
|
|
176,194
|
|
|
8,667
|
|
|||
Fiscal 2021
|
163,787
|
|
|
156,163
|
|
|
7,624
|
|
|||
Fiscal 2022
|
131,607
|
|
|
126,162
|
|
|
5,445
|
|
|||
Future fiscal years thereafter
|
263,438
|
|
|
260,785
|
|
|
2,653
|
|
|||
|
$
|
1,140,330
|
|
|
$
|
1,096,834
|
|
|
$
|
43,496
|
|
14
.
|
COMMITMENTS AND CONTINGENCIES
|
|
Fiscal
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Contingent consideration liability - beginning of period
|
$
|
33,204
|
|
|
$
|
—
|
|
Final purchase price
|
—
|
|
|
53,355
|
|
||
Accretion in value
|
3,589
|
|
|
6,674
|
|
||
Fair value adjustments
(1)
|
(36,336
|
)
|
|
(26,825
|
)
|
||
Other adjustments
|
(457
|
)
|
|
—
|
|
||
Contingent consideration liability - end of period
|
$
|
—
|
|
|
$
|
33,204
|
|
(1)
|
Fair value was determined using an income valuation approach, primarily based on discounted cash flows related to the projected earnings performance measure with a discount rate of approximately
13.0%
. The categorization of the fair value framework used to price the liability is considered Level 3 due to the subjective nature of the unobservable inputs used to determine fair value.
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
60,083
|
|
|
$
|
61,506
|
|
|
$
|
64,416
|
|
Foreign
|
901
|
|
|
954
|
|
|
941
|
|
|||
State and local
|
11,370
|
|
|
9,149
|
|
|
9,186
|
|
|||
Total current tax expense
|
72,354
|
|
|
71,609
|
|
|
74,543
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(10,436
|
)
|
|
4,972
|
|
|
8,035
|
|
|||
Foreign
|
927
|
|
|
674
|
|
|
817
|
|
|||
State and local
|
(3,228
|
)
|
|
1,598
|
|
|
411
|
|
|||
Total deferred tax expense
|
(12,737
|
)
|
|
7,244
|
|
|
9,263
|
|
|||
Income tax provision
|
$
|
59,617
|
|
|
$
|
78,853
|
|
|
$
|
83,806
|
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Income tax provision at federal statutory rate
|
$
|
44,422
|
|
|
$
|
71,186
|
|
|
$
|
76,944
|
|
State and local taxes, net of federal benefit
|
3,893
|
|
|
7,212
|
|
|
7,847
|
|
|||
Foreign
|
922
|
|
|
802
|
|
|
1,031
|
|
|||
Net impact of implementing the U.S. Tax Reform
|
10,079
|
|
|
—
|
|
|
—
|
|
|||
Other
|
301
|
|
|
(347
|
)
|
|
(2,016
|
)
|
|||
Income tax provision
|
$
|
59,617
|
|
|
$
|
78,853
|
|
|
$
|
83,806
|
|
|
February 3, 2018
|
|
January 28, 2017
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
State bonus depreciation
|
$
|
3,171
|
|
|
$
|
2,989
|
|
Inventory
|
6,557
|
|
|
9,298
|
|
||
Construction and tenant allowances
|
1,311
|
|
|
2,386
|
|
||
Stock-based compensation
|
9,402
|
|
|
11,216
|
|
||
Equity earnings
|
2,379
|
|
|
1,560
|
|
||
Gift cards
|
2,719
|
|
|
3,928
|
|
||
Accrued expenses
|
2,184
|
|
|
2,747
|
|
||
Accrued rewards
|
3,242
|
|
|
4,568
|
|
||
Accrued rent
|
11,284
|
|
|
18,007
|
|
||
Other
|
2,507
|
|
|
3,124
|
|
||
|
44,756
|
|
|
59,823
|
|
||
Less: valuation allowance
|
(2,736
|
)
|
|
(1,972
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
42,020
|
|
|
57,851
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
(21,800
|
)
|
|
(31,923
|
)
|
||
Change in fair value of contingent consideration
|
9,108
|
|
|
(8,075
|
)
|
||
Prepaid expenses and other
|
(1,657
|
)
|
|
(2,919
|
)
|
||
Total deferred tax liabilities
|
(14,349
|
)
|
|
(42,917
|
)
|
||
Net deferred tax asset
|
$
|
27,671
|
|
|
$
|
14,934
|
|
|
Fiscal
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Unrecognized tax benefits - beginning of period
|
$
|
6,773
|
|
|
$
|
5,767
|
|
|
$
|
5,073
|
|
Additions for tax positions taken in the current year
|
1,835
|
|
|
2,513
|
|
|
2,109
|
|
|||
Reductions for tax positions taken in prior years:
|
|
|
|
|
|
||||||
Lapses of applicable statutes of limitations
|
(233
|
)
|
|
(475
|
)
|
|
(854
|
)
|
|||
Settlements
|
(450
|
)
|
|
(1,032
|
)
|
|
(561
|
)
|
|||
Unrecognized tax benefits - end of period
|
$
|
7,925
|
|
|
$
|
6,773
|
|
|
$
|
5,767
|
|
16
.
|
SEGMENT REPORTING
|
|
DSW Segment
|
|
Other
|
|
Total
|
|||||
|
(in thousands)
|
|||||||||
Fiscal 2017
|
|
|
|
|
|
|||||
Net sales
|
$
|
2,571,950
|
|
|
227,844
|
|
|
$
|
2,799,794
|
|
Gross profit
|
$
|
773,643
|
|
|
15,733
|
|
|
$
|
789,376
|
|
Cash paid for property and equipment
|
$
|
52,541
|
|
|
3,741
|
|
|
$
|
56,282
|
|
Depreciation and amortization
|
$
|
75,692
|
|
|
4,524
|
|
|
$
|
80,216
|
|
Fiscal 2016
|
|
|
|
|
|
|||||
Net sales
|
$
|
2,477,991
|
|
|
233,453
|
|
|
$
|
2,711,444
|
|
Gross profit
|
$
|
737,423
|
|
|
34,410
|
|
|
$
|
771,833
|
|
Cash paid for property and equipment
|
$
|
86,430
|
|
|
1,150
|
|
|
$
|
87,580
|
|
Depreciation and amortization
|
$
|
76,776
|
|
|
4,863
|
|
|
$
|
81,639
|
|
Fiscal 2015
|
|
|
|
|
|
|||||
Net sales
|
$
|
2,470,107
|
|
|
150,141
|
|
|
$
|
2,620,248
|
|
Gross profit
|
$
|
740,402
|
|
|
27,967
|
|
|
$
|
768,369
|
|
Cash paid for property and equipment
|
$
|
103,087
|
|
|
852
|
|
|
$
|
103,939
|
|
Depreciation and amortization
|
$
|
72,734
|
|
|
843
|
|
|
$
|
73,577
|
|
|
|
Fiscal
|
||||
Category
|
|
2017
|
|
2016
|
|
2015
|
Women's footwear
|
|
69%
|
|
69%
|
|
69%
|
Men's footwear
|
|
22%
|
|
22%
|
|
22%
|
Accessories and other
|
|
9%
|
|
9%
|
|
9%
|
17
.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
Fiscal 2017 Quarters Ended
(1)
|
||||||||||||||
|
April 29, 2017
|
|
July 29, 2017
|
|
October 28, 2017
|
|
February 3, 2018
(2)
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net sales
|
$
|
691,102
|
|
|
$
|
680,409
|
|
|
$
|
708,308
|
|
|
$
|
719,975
|
|
Gross profit
|
$
|
195,229
|
|
|
$
|
196,972
|
|
|
$
|
206,717
|
|
|
$
|
190,458
|
|
Operating profit
|
$
|
40,881
|
|
|
$
|
46,747
|
|
|
$
|
3,422
|
|
|
$
|
33,910
|
|
Net income
(3)
|
$
|
22,967
|
|
|
$
|
28,599
|
|
|
$
|
4,037
|
|
|
$
|
11,701
|
|
Diluted earnings per share
(5)
|
$
|
0.28
|
|
|
$
|
0.35
|
|
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
Fiscal 2016 Quarters Ended
(4)
|
||||||||||||||
|
April 30, 2016
|
|
July 30, 2016
|
|
October 29, 2016
|
|
January 28, 2017
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net sales
|
$
|
681,267
|
|
|
$
|
658,944
|
|
|
$
|
696,616
|
|
|
$
|
674,617
|
|
Gross profit
|
$
|
204,357
|
|
|
$
|
186,861
|
|
|
$
|
211,780
|
|
|
$
|
168,835
|
|
Operating profit
|
$
|
48,716
|
|
|
$
|
39,607
|
|
|
$
|
62,899
|
|
|
$
|
48,946
|
|
Net income
|
$
|
30,014
|
|
|
$
|
25,032
|
|
|
$
|
38,963
|
|
|
$
|
30,526
|
|
Diluted earnings per share
(5)
|
$
|
0.36
|
|
|
$
|
0.30
|
|
|
$
|
0.47
|
|
|
$
|
0.38
|
|
(1)
|
During
fiscal 2017
, operating results were impacted by the following pre-tax items related to Ebuys for the quarters presented:
|
|
Fiscal 2017 Quarters Ended
|
||||||||||||||
|
April 29, 2017
|
|
July 29, 2017
|
|
October 28, 2017
|
|
February 3, 2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Impairment charges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,701
|
|
|
$
|
6,739
|
|
Inventory write-downs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,257
|
|
Loss (gain) due to change in fair value of contingent consideration liability
|
$
|
1,084
|
|
|
$
|
1,168
|
|
|
$
|
(31,178
|
)
|
|
$
|
(3,821
|
)
|
(2)
|
The fourth quarter of fiscal 2017 includes an additional week of activity when compared to the previous quarters during fiscal 2017 and fiscal 2016 quarters due to fiscal 2017 consisting of
53
weeks. The additional week added
$35.6 million
of sales,
$15.9 million
of gross margin,
$7.9 million
of operating profit, and
$4.9 million
of net income, or
$0.06
diluted earnings per share.
|
(3)
|
During the fourth quarter of fiscal 2017, we recognized
$10.1 million
of additional net tax expense as a result of implementing the U.S. Tax Reform.
|
(4)
|
During
fiscal 2016
, operating results were impacted by the following pre-tax items related to Ebuys for the quarters presented:
|
|
Fiscal 2016 Quarters Ended
|
||||||||||||||
|
April 30, 2016
|
|
July 30, 2016
|
|
October 29, 2016
|
|
January 28, 2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Loss (gain) due to change in fair value of contingent consideration liability
|
$
|
1,445
|
|
|
$
|
2,167
|
|
|
$
|
1,469
|
|
|
$
|
(25,232
|
)
|
(5)
|
The sum of the quarterly diluted earnings per share amounts may not equal the fiscal year amount due to rounding and the use of weighted average shares outstanding for each period.
|
Ref.
No.
|
|
Name
|
|
Jurisdiction of
Incorporation
|
|
Parent
Company No.
|
1
|
|
DSW Inc.
|
|
Ohio
|
|
N/A
|
2
|
|
DSW Shoe Warehouse, Inc.
|
|
Missouri
|
|
1
|
3
|
|
Brand Card Services LLC
|
|
Ohio
|
|
1
|
4
|
|
DSW Information Technology LLC
|
|
Ohio
|
|
1
|
5
|
|
eTailDirect LLC
|
|
Delaware
|
|
2
|
6
|
|
Ebuys, Inc.
|
|
California
|
|
2
|
7
|
|
DSW MS LLC
|
|
Ohio
|
|
1
|
8
|
|
DSW Leased Business Division LLC aka Affiliated Business Group
|
|
Ohio
|
|
2
|
9
|
|
810 AC LLC
|
|
Ohio
|
|
1
|
10
|
|
DSW PR LLC
|
|
Puerto Rico
|
|
2
|
11
|
|
Retail Ventures Services, Inc.
|
|
Ohio
|
|
7
|
12
|
|
DSW Shoe Warehouse Lux S.a.r.l.
|
|
Luxembourg
|
|
2
|
13
|
|
DSW Canada TS, Inc.
|
|
Canada
|
|
12
|
Date:
|
March 23, 2018
|
By:
|
/s/ Roger Rawlins
|
|
|
|
Roger Rawlins
|
|
|
|
Chief Executive Officer
|
Date:
|
March 23, 2018
|
By:
|
/s/ Jared Poff
|
|
|
|
Jared Poff, Senior Vice President and
|
|
|
|
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.
|
Dated:
|
March 23, 2018
|
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.
|
Dated:
|
March 23, 2018
|
By:
|
/s/ Jared Poff
|
|
|
|
Jared Poff,
|
|
|
|
Senior Vice President and 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.
|