March 15 - Footwear retailer DSW Inc reported a higher quarterly profit on strong demand during the holiday season, but forecast an annual profit that at best would meet Wall Street's expectations.

kelly & katie Jaylyn Snake wedge sandals, sold at DSW

The company said on Tuesday that it expects 2011 earnings of $2.60-$2.70 a share, excluding any impact from its purchase of Retail Ventures Inc. Analysts expect $2.70 a share, according to Thomson Reuters I/B/E/S.

For the fourth quarter, the company earned $18.5 million, or 41 cents a share, compared with $13.4 million, or 30 cents a share a year earlier.

Sales rose 16 percent to $468.5 million.

Shares of the company closed at $41.21 on Monday on the New York Stock Exchange.

(Reporting by Nivedita Bhattacharjee and Abhishek Takle in Bangalore. Editing by Robert MacMillan.)