DSW 4Q16 Earnings Call Notes

Debbie Ferrie

Weather impact

“The warm weather at the beginning of the quarter stimulate sales of fashion boots, athletic and casual footwear. With the onset of cold weather in December our merchandizing and marketing strategy created a stronger than expected demand in boots which allow our team to deploy some pre-buys we’d allocated for next year. With the strong results from our cold weather business coupled with our decision to chase a number of fashion styles early in the third quarter we beat our bid forecast for the season. This Spring we’ve positioned inventories appropriately, with transitional merchandize and a sandal assortments that we will carry in our warm doors all year round.”

Partnership with Under Armour

” I am particularly excited to announce our brand partnership with Under Armor this year. The influence of athletic also carried to our men’s business, but overall results have been below planned. We are aggressively managing our assortment of core items while increasing the freshness within men’s dress and casual with relevant sport influenced fashion…We’re very pleased to announce our new partnership with Under Armor and we are developing, it’s a collaboration where we are developing unique product and it will be unique product for DSW with their design team.”

Roger Rawlins

Approaching real estate with a digital lens first

“Yes, I can take the real estate question. So Jeff one of the things that we continually talk about is, we are looking at our business as a digital business and with the digital business you have to place warehouses close to your consumer and with our 500 warehouses we have today, we’re within 20 minutes of 70% of the U.S. population. So when we’re looking to build out a new warehouse we’re trying to figure out, how can we get closer to that customer, so that someday we can meet that demand of the customer of delivery within whatever short period of time we want to deliver upon. So I will tell you that’s the lens we are using in making these decisions. We also are testing a lot of new fixturing that we think dramatically changes the interior of our warehouses and the customer experience we can create, but also how many units we could place in a warehouse that is closer to the consumers. So I think there is some really cool things and the opportunities we have in our warehouse network that’s I wouldn’t give our the full number right now because frankly it might be more with our smaller boxes and those are things we’re working through, but we are approaching it with a digital lens first, that’s how I will describe it.”