On September 11, 2024, Designer Brands Inc (DBI, Financial) released its 8-K filing reporting financial results for the second quarter ended August 3, 2024. Designer Brands Inc is a designer, producer, and retailer of footwear and accessories, operating through three segments: U.S. Retail, Canada Retail, and Brand Portfolio.
Performance Overview
Designer Brands Inc (DBI, Financial) reported net sales of $771.9 million for Q2 2024, a 2.6% decrease compared to the same period last year. This figure fell short of the analyst estimate of $816.14 million. The company's diluted earnings per share (EPS) came in at $0.24, missing the analyst estimate of $0.61. Adjusted net income was $17.1 million, or adjusted diluted EPS of $0.29.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $771.9 million | $792.2 million | -2.6% |
| Gross Profit | $252.9 million | $273.4 million | -7.5% |
| Gross Margin | 32.8% | 34.5% | -1.7 pp |
| Net Income | $13.8 million | Not provided | Not provided |
| Adjusted Net Income | $17.1 million | Not provided | Not provided |
| Adjusted Diluted EPS | $0.29 | Not provided | Not provided |
Segment Performance
The U.S. Retail segment saw a 2.6% decline in net sales to $641.7 million, while the Canada Retail segment experienced a 6.4% increase to $74.8 million. The Brand Portfolio segment reported a 14.0% increase in net sales to $96.0 million.
Challenges and Strategic Initiatives
Designer Brands Inc (DBI, Financial) faced sustained pressure in challenged categories such as dress and seasonal footwear. However, the company partially mitigated these challenges by expanding its selection of athletic and athleisure brands. The athleisure category saw an 8% sales growth in the U.S. Retail segment, outpacing the overall market by over 4 percentage points.
We saw sustained pressure on challenged categories such as dress and seasonal in the second quarter, which we were able to partially mitigate through providing a greater selection of athletic and athleisure brands in our assortment," stated Doug Howe, Chief Executive Officer.
Liquidity and Shareholder Returns
As of the end of Q2 2024, Designer Brands Inc (DBI, Financial) had $38.8 million in cash and cash equivalents, down from $46.2 million at the same time last year. The company repurchased 2.7 million Class A common shares at an aggregate cost of $18.0 million during the quarter. Debt levels increased to $465.7 million from $331.0 million in the previous year.
Store Openings and Closings
During the second quarter, Designer Brands Inc (DBI, Financial) closed one store in the U.S. and opened two stores in Canada, bringing the total to 499 stores in the U.S. and 177 stores in Canada.
Updated Financial Outlook
Designer Brands Inc (DBI, Financial) updated its guidance for the full year 2024, now expecting net sales growth to be flat to low-single digits, compared to the previous guidance of low-single digits. Adjusted diluted EPS is now expected to be between $0.50 and $0.60, down from the previous range of $0.70 to $0.80.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Designer Brands Inc for further details.
