Using its store network helps DSW improve efficiency in operations and inventory management.

Using stores to fulfill online orders paid off in the fourth quarter for footwear retail chain DSW Inc.

CEO Roger Rawlins told analysts on the retailer’s fiscal Q4 2016 earnings call that DSW achieved “record-level digital growth,” declining to specify a sales figure or a percentage. DSW, No. 133 in the Internet Retailer 2016 Top 500 Guide, does not break out online sales in its quarterly earnings reports.

The retailer reported net income of $30.5 million during the fiscal fourth quarter ended Jan. 28, up 158.5% from $11.8 million last year.

DSW has placed greater emphasis on using its 500 store locations to fulfill online orders, having launched buy online, pick up in store  two years ago, nearly a year after beginning to ship online orders from stores to consumers’ homes. Rawlins told analysts that 70% of the U.S. population lives within 20 minutes of one of its stores.

“As our brick-and-mortar locations fulfill as much as 40% of digital orders, we have started to shift inventory out of our fulfillment center to better serve the customer while improving inventory turns and increasing profitability,” chief financial officer Jared Poff said, according to a transcript from Seeking Alpha. “We continue to increase operational efficiencies with our proprietary order-routing algorithm optimizing fulfillment.”


Rawlins told analysts the retailer’s redesigned website is expected to go live soon, though he didn’t specify a date.

“Customers will find a modernized, digital experience that seamlessly integrates their rewards information and preferences into this new mobile-oriented and responsive site,” he said.

For the fiscal fourth quarter ended Jan. 28, DSW reported:

  • Net sales of $674.6 million, up 0.4% from $672.0 million during the same time last year.
  • Net income of $30.5 million, up 158.5% from $11.8 million.
  • Comparable-store sales, including e-commerce, declined 7.0% year over year, compared with a 0.7% gain.

For fiscal 2016, DSW reported:

  • Net sales of $2.711 billion, up 3.5% from $2.620 billion in fiscal 2015.
  • Net income of $124.5 million, down 8.5% from $136.0 million.
  • Comparable-store sales declined 3.0%, compared with a 0.8% gain.