Oct 15 (Reuters) - Footwear retailer DSW Inc (DSW.N) raised its full-year earnings outlook, citing higher-than-expected sales, margin expansion and better cost management so far in the third quarter.

Sandals at DSW Inc

The company sees full-year earnings of 70 cents to 80 cents a share, up from its earlier forecast of 37 cents to 45 cents a share.

Analysts on average were expecting the company to earn 44 cents a share, before items, according to Thomson Reuters I/B/E/S.

The company, which sells branded footwear for men and women at discounted prices, said it expects sales at stores open at least a year to rise 6 percent to 8 percent for the third quarter ending Oct. 31 due to increased traffic and conversion.

DSW, however, said it remained cautious for the fourth quarter as it expects the economic environment to remain challenging.

Shares of the Columbus, Ohio-based company closed at $17.66 Wednesday 14 October on the New York Stock Exchange. (Reporting by Abhishek Takle in Bangalore; Editing by Anne Pallivathuckal)