Designer Brands Inc. (DBI) Announces Fourth Quarter And Fiscal Year 2024 Financial Earnings Results

Designer Brands Inc. (DBI) today announced its financial results for the latest quarter. The company reported a quarterly diluted earnings per share of -$0.44, beating the estimated -$0.49, while revenue came in at $713.6 million, slightly below the expected $719.3 million. Despite the revenue miss, the earnings per share beat indicates a positive shift in the company’s financial performance.

Key Highlights:

• Designer Brands Inc. reported a return to growth in the fourth quarter of 2024, with positive comparable sales for the first time in nine quarters.
• The company achieved full-year 2024 EPS at the high end of its guidance range and expects profitable growth in fiscal 2025.
• Strategic initiatives included refreshing leadership, modernizing product assortments, refining marketing strategies, and enhancing the omnichannel customer experience.
• Despite a decrease in net sales and gross profit for both the fourth quarter and full year, the company anticipates significant EPS growth in 2025.
• CEO Doug Howe emphasized a customer-first, product-obsessed approach to drive stability and growth, despite short-term consumer pressure from inflation and reduced discretionary income.
• The company repurchased 10.3 million Class A common shares in 2024 and announced a dividend of $0.05 per share for April 2025.
• Designer Brands plans to grow net sales in the low-single digits and achieve diluted EPS between $0.30 and $0.50 in 2025.

Summary:

Designer Brands Inc. reported a positive shift in its financial performance for the fourth quarter of 2024, marking a return to growth with a 0.5% increase in comparable sales, the first such increase in nine quarters. This improvement is attributed to the company’s strategic initiatives, which included refreshing leadership, modernizing product assortments, refining marketing strategies, and enhancing the omnichannel customer experience. Despite a 5.4% decrease in net sales to $713.6 million and a reduction in gross profit to $282.6 million, the company achieved a gross margin of 39.6%, up from 38.8% the previous year. CEO Doug Howe expressed confidence in the company’s ongoing transformation, stating, “Looking ahead to 2025, we are confident that our ongoing business transformation will drive continued stability and growth, with expectations to significantly increase EPS compared to our 2024 adjusted results.”

For the full year 2024, Designer Brands reported a 2.1% decrease in net sales to $3.0 billion and a gross profit of $1.29 billion, with a gross margin of 42.7%. The company faced a net loss of $10.5 million, or $0.20 per diluted share, but adjusted net income was $15.0 million, or $0.27 per adjusted diluted EPS. Despite these challenges, the company remains optimistic about 2025, projecting low-single-digit net sales growth and diluted EPS between $0.30 and $0.50. Howe highlighted the company’s focus on a customer-first, product-obsessed approach, leveraging data-driven insights to better understand customer needs and strengthen product offerings. While acknowledging short-term consumer pressures from inflation and reduced discretionary income, Howe believes these initiatives will drive improved financial performance through 2025 and position the company for long-term, sustainable growth.

Designer Brands Inc. (DBI) has experienced a tumultuous period in the stock market, with its share price plummeting by 64.97% over the past year. The company’s financial metrics paint a challenging picture, with a negative price-to-earnings ratio of -139.67, indicating significant losses. The earnings per share (EPS) two-year compound annual growth rate (CAGR) is a concerning -67.73%, reflecting a sharp decline in profitability. Revenue has also contracted, with a two-year CAGR of -4.97%, suggesting struggles in maintaining sales momentum. The return on invested capital stands at a modest 3.05%, which is not enough to offset the negative net profit margin of -0.09%. Despite a brief one-week rally of 16.92%, the stock’s performance over longer periods, such as the past three and six months, shows declines of 32.62% and 40.41%, respectively. These figures highlight the challenges DBI faces in turning around its financial performance and regaining investor confidence.

Designer Brands Inc., together with its subsidiaries, designs, manufactures, and retails footwear and accessories for women, men, and kids primarily in North America. The company operates through three segments: U.S. Retail, Canada Retail, and Brand Portfolio. It provides dress, casual, and athletic footwear; and handbags. The company offers its products under the Vince Camuto, Louise et Cie, Jessica Simpson, Lucky, JLO Jenifer Lopez, and other brands. It also operates vincecamuto.com e-commerce site, as well as www.dsw.com, www.dsw.ca, and www.theshoecompany.ca websites; and a portfolio of banners, including DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse. As of January 29, 2022, it operated 648 stores. Designer Brands Inc. was founded in 1991 and is based in Columbus, Ohio.