Citi Comments On DSW 1Q11

According to Citi, DSW DSW reported 1Q adjusted EPS of $0.87 (ex merger related expenses) versus the $0.75 estimate and consensus of $0.75. Citi said that that excludes $1.4 million in expenses related to the RVI merger, which lowered 1Q EPS by $0.02. “Gross margins were up 140bps likely driven by buying and occupancy leverage on the double digit comp. SG&A levered by 50bps ex the merger related costs. Compares ease as we move into 2Q and we continue to believe the company is well positioned to drive HSD/LDD comps over the next couple of quarters.” DSW closed yesterday at $43.19.