Shoe retailer DSW Inc doubled its quarterly profit that beat estimates, as its discounted boots appealed to bargain-hungry consumers looking to equip themselves for the cold weather, and it raised its full-year outlook for the second time in a little more than a month.

Shares of Columbus, Ohio-based DSW rose as much as 12 percent to a year-high of $23 before paring some gains to trade up about 5 percent at $21.52.

For 2009, the company, which had raised its earnings outlook in October, now sees earnings of 90 cents to $1 a share, up from its prior view of 70 cents to 80 cents a share.

The company, which sells branded footwear for men and women at discounted prices, also expects annual same-store sales to be up 1 percent, while it had earlier expected flat sales at stores open at least a year.

The retailer said it saw an early sell through of its boots during the third quarter due to the cold weather in October.

While inventories are a little lower than we anticipated due to the increase in sales, we are comfortable with our in-store inventory position, a company executive said on a conference call with analysts.

He added that the company will continue to plan (inventories) conservatively throughout the fourth quarter.

Boots sales, which grew to 20 percent of the retailer's total sales from 14.5 percent last year, are expected to represent about 30 percent of sales in the fourth quarter, the executive said.

The company said it expects further margin improvements in the fourth quarter but cautioned that it may not be able to repeat the 220-basis-point merchandise margin expansion to 46.3 percent in the third-quarter.

DSW, which swung to an 8.7 percent rise in same-store sales for the third quarter, also noted improvement in financial markets.

Despite government statistics to the contrary, I believe that market recovery has positively affected the consumers' outlook, the executive said.

Q3 TOPS

For the third quarter ended Oct. 31, net income rose to $26.6 million, or 60 cents a share, from $13.2 million, or 30 cents a share, a year earlier.

Analysts on average expected earnings of 46 cents a share, before items, according to Thomson Reuters I/B/E/S.

Revenue rose 14 percent to $444.6 million, surpassing analysts' consensus of $424.6 million. (Reporting by Viraj Nair in Bangalore; Editing by Anil D'Silva, Maju Samuel)