DSW Inc. Q2 2009 (Qtr End 08/01/09) Earnings Call Transcript

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2009-08-26 16:39:14.0

Tags: Seeking Alpha, DSW Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Jeff Black – Barclays Capital

Jeff Black – Barclays Capital

On the marketing is there any indication that the marketing spend is really driving better traffic and could you give us some insight into how the comp fared on the UPT side? On the cost side, looking at the back half you mentioned you’re planning some in store reductions, could you just tell us a little bit more about where you’re finding the reductions and how to balance that with the marketing and IT spend? Is there a chance we see SG&A come down, maybe not in the back half but as we look out into 2010?

Mike MacDonald

We put most of that incremental marketing spend into television advertising both in the spring and in the fall. We actually haven’t been on air since about the middle of May. I think on the last call we indicated that we believed there was significant incremental sales being generated by virtue of the TV advertising and we thought that the P&L impact of that was slightly positive. It was helping us generate market share increases.

In terms of the second quarter our UPT performance was pretty much consistent with Q1 but again I can’t relate that back to marketing because there really wasn’t an incremental marketing spend of any significance in Q1. We’ll be back doing additional TV advertising starting in September and it’ll be a new campaign and we’re excited about the chances for it to drive additional awareness, additional traffic, and maybe even create some buzz in the process.

In terms of the cost side of your question let me turn that back to Doug.

Doug Probst

If you’re referring to our comments to our store expenses we leveraged to last year that was very good work by our field team. They’re working on a lot of different ideas and certainly our goal is to continue to leverage that part of our business operation. Certainly though as we said that we’ll still de-leverage SG&A for the year because of our increased spend in marketing and IT. If that doesn’t answer your question I can take a follow up.

Operator

Your next question comes from Chris Svezia - Susquehanna Financial

Chris Svezia - Susquehanna Financial

Can you update us on what you’re doing on a systems in terms of sizing in store, I think you’re doing a test towards the tail end of the year and what you’re doing on the stocks locator within stores and kind of going back between the stores and can you update what’s going on, on the systems side where you stand right now?

 

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