Wednesday, October 20, 2010

Profits Not The Whole Story At Shoe Stores

While DSW accomplished forward in the fourth quarter, industry aspirant Collective Brands competence be a improved buy for the prolonged term.DSW ( DSW - news - people ) swung to a fourth-quarter distinction of $13.4 million, or thirty cents per share, up from a year-earlier loss of $7.5 million, or seventeen cents per share. The bonus shoe sell room sequence available a poignant alleviation in sales during the quarter, with same-store sales up 12.9% to $402.6 million.emailprintreprintnewslettercommentssharedel.icio.usDigg It!yahooFacebookTwitterRedditrssforbes:http://www.forbes.com/2010/03/16/dsw-collective-brands-markets-equities-shoe-sales.html?partner=yahoobuzzDespite the sales gain, a medium opinion had investors behest down shares. DSW expects same-store sales expansion in the low singular digits in 2010, along with gain per share in between $1.35 and $1.45. Morningstar researcher R.J. Hottovy records that bad open product line sales attributed to the continue competence have weighed down the companys forecast. Shares of DSW lost 10% to $26.50 Tuesday.Meanwhile, opposition Collective Brands ( PSS - news - people ) reported Mar 9 that it lost $10.9 million, or seventeen cents per share, in the fourth quarter, far narrower than the before years loss of $144 million, or $2.28 per share.While Collective Brands is still stranded in the red, investors competence get some-more crash for their sire with the sequence instead of the some-more richly-valued rival. Collective Brands trades at a price/earnings comparative measure of only 17, less than half the 35 of DSW.While the dual shoe retailers contest in the broader shoes industry, they suggest somewhat opposite product lineups, with DSW offered branded shoes in the $30 to $40 range and Collective Brands retailing the own brands in the low-teen range in the Payless stores.,,2010/03/16/dsw-collective-brands-markets-equities-shoe-sales.htmlDespite the muted fourth-quarter results, Hottovy views Collective Brands as the improved bet, as the association caters to the tastes of bargain-conscious buyers.Collective brands, being the incomparable company, has some-more scale advantages and improved distribution," says Hottovy. The association additionally avoids discounting or cost slicing to expostulate sales by collaborating with conform designers and celebrities to yield disdainful merchandise.Shares of Collective Brands lost 2.6% to $21.80.
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