COLUMBUS, Ohio - Designer Brands Inc. (NYSE:DBI), a leading footwear and accessories retailer, reported a first-quarter earnings miss that sent shares down 9% in market response.
The company posted adjusted earnings per share (EPS) of $0.08, falling short of the analyst consensus of $0.12. However, revenue slightly exceeded expectations at $746.6 million against a forecasted $735.57 million.
The company's net sales saw a modest increase of 0.6% compared to the same quarter last year, showcasing resilience in a challenging retail environment. Gross profit also improved to $245.1 million, up from $237.7 million in the previous year, with a gross margin increase of 80 basis points to 32.8%. Despite these gains, the overall market reaction was negative due to the earnings shortfall.
CEO Doug Howe expressed confidence in the company's strategic initiatives and their role in delivering in-line results for the quarter. He highlighted the company's outperformance in key footwear categories according to Circana data and reaffirmed the full-year 2024 guidance. Designer Brands anticipates adjusted EPS for FY2025 to be in the range of $0.70-$0.80, aligning with analyst expectations at the midpoint of $0.76.
The first quarter also saw a decrease in total comparable sales by 2.5%. In terms of liquidity, cash and cash equivalents stood at $43.4 million at the quarter's end, a slight decrease from $50.6 million last year. The company's debt increased to $476.1 million from $390.3 million at the end of the same period last year.
Designer Brands' reaffirmed outlook, along with a dividend declaration of $0.05 per share, suggests a steady path forward.
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