Q2 2024 Designer Brands Inc Earnings Call Transcript
Key Points
- Designer Brands Inc (DBI) experienced three consecutive quarters of sequential comp improvement, with comps turning positive as they moved into the back half of the year.
- The company's top eight brands in the athletic and athleisure categories generated over 30% growth, showcasing the benefits of deeper relationships with key brand partners.
- DBI's back-to-school business showed strong momentum, supported by expanded athletic and athleisure offerings.
- The company reported a 16% increase in total athletic sales for the quarter, driven by strategic assortment changes.
- DBI's digital platform sustained mid-single-digit growth for the third consecutive quarter, indicating successful omnichannel strategies.
- Sales for the second quarter were down approximately 3% compared to the previous year, with a 1% decline in comparable sales.
- Gross margin contracted by 170 basis points to 32.8%, influenced by lower initial markup on athletic and athleisure products and promotional pressures.
- The company's US retail segment saw a 1.1% decline in comps, with negative comps in dress and seasonal categories offsetting gains in athletic and kids categories.
- DBI's adjusted SG&A was 28.9% of sales, up from 26.9% last year, due to increased investment in talent and IT, and a declining top line.
- The company revised its full-year earnings guidance to $0.50 to $0.60, down from the previous guidance of $0.70 to $0.80, due to muted improvements and macroeconomic pressures.
Good morning and welcome to the Designer Brands second quarter 2024 results conference call. All participants will be in listen-only mode. (Operator instructions) I would now like to turn the conference over to Dustin Hauenstein, Senior Vice President of Finance. Please go ahead.
Good morning. Earlier today, the company issued a press release comparing results of operations for the 13-week period ended August 3, 2024 to the 13-week period ended July 29, 2023. Please note that the financial results that we will be referencing during the remainder of today's call exclude certain adjustments recorded under GAAP unless specified otherwise. For a complete reconciliation of GAAP to adjusted earnings, please reference our press release.
Additionally, please note that remarks made about the future expectations, plans and prospects of the company constitute forward-looking statements. Results may differ materially due to various factors listed in today's press release and the company's
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