Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Black - Lehman Brothers.
Jeff Black - Lehman Brothers
Good morning, guys. Doug, how do we think about SG&A growth going forward? I know we saw growth slightly ahead of square footage growth in the quarter, but how do we look at that in terms of just year-over-year growth for the year? Any color on that would be helpful.
Doug Probst
By the way, Jeff, can I ask you to confirm that you heard the balance of Debbie's presentation after I give you my answers?
Actually, the SG&A deleverage that we will have is similar, if not a little bit higher, for the balance of the next three quarters for the reasons we described. It will be 200 basis points pretty much by quarter as we move forward through the balance of the year.
Jeff Black - Lehman Brothers
Thanks. And no, I didn't hear the balance of Debbie's comments. She cut off halfway.
Doug Probst
Okay.
Leslie Neville
Why don't we go ahead and start with Debbie’s portion? Is that okay if we just read it over again?
Debbie Ferree
All right. Let's start with where I started with ?in Q2 dress and casual sandals continue to be important?.
In Q2, dress and casual sandals will continue to be important. The trend in dress is moving toward more casual looks with stacked heels, platform straps and various shades of the brown family moving to the forefront. This supports the safari influences we are seeing in ready-to-wear.
In summary, for the balance of 2008 our priorities will remain:
to ensure our assortments reflect the right product in trend and style that match consumer demand;
to continue to aggressively control inventory, keeping in line with comp expectations;
to take advantage of opportunistic buys;
and to constantly test new items to determine the next big drivers.
Now I would like to reiterate the fundamentals of our business and why we believe DSW is poised for continued long-term growth.
First, DSW is a unique retail experience. DSW offers customers a powerful combination of assortment brands, convenience and value that we believe give us a competitive edge in the marketplace. Our year-over-year growth indicates we are gaining market share and we believe we are well-positioned to satisfy our current customer base and attract new customers
Second, DSW has a robust loyalty program. With over 9 million active members, the DSW Rewards Program continues to grow and improve, even in these economic times. So far in 2008, enrollments are in excess of 65,000 new members per week, the highest sign-up rates we have ever had in the program. We continue to have significant success in driving sales through timely and relevant communication with this population. Our interests lies in earning a long-term relationship with these valuable customers.
- To read the full transcript on Seeking Alpha, click here »
