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Designer Brands Inc. Reports on First Quarter of 2025

On June 10, 2025, Designer Brands Inc. (NYSE: DBI) released its financial results for the first quarter ending May 3, 2025. Facing a turbulent economic landscape, CEO Doug Howe acknowledged a sluggish start to the year, attributing the challenges to a combination of unpredictable market conditions and waning consumer confidence.

Financial Summary

The company observed a notable decrease in net sales, which fell by 8% to $686.9 million year-over-year. This downturn is reflected in comprehensive comparable sales, which also saw a significant drop of 7.8%. Gross profit declined to $295.1 million, resulting in a gross margin of 43.0%, a decrease compared to 44.2% the previous year. The fiscal report indicated a net loss of $17.4 million, equating to a diluted loss per share of $0.36.

In response to these financial strains, the company announced the withdrawal of its guidance for the remainder of 2025. Howe expressed a commitment to controlling costs and enhancing value across retail channels to adapt to the prevailing economic conditions, forecasting $20 million to $30 million in cost savings throughout 2025.

Liquidity and Inventory Management

As of the first quarter's end, the company held $46.0 million in cash and cash equivalents, up from $43.4 million in the same period last year. Designer Brands also reported $125.5 million available for borrowing under its secured credit facility. The debt at this time stood at $522.9 million, an increase from $476.1 million during the last year’s first quarter. The total inventories were reported at $623.6 million, compared to $620.5 million the year prior.

Retail Presence

The company operates numerous stores across North America, maintaining a diverse portfolio with a total of 669 locations as of the end of the first quarter. This includes 494 DSW stores in the U.S. and a mix of stores in Canada under The Shoe Co. and Rubino. Despite a decrease in overall store count, Designer Brands remains firmly positioned in the footwear and accessories market.

Shareholder Returns

Both Class A and Class B common shares will receive a dividend of $0.05 per share, scheduled for payment on June 18, 2025, to shareholders recorded as of June 5, 2025. This move aims to reaffirm the company’s commitment to returning value to its shareholders even in uncertain times.

Conclusion

The current landscape presents substantial hurdles for Designer Brands Inc., but by emphasizing operational discipline and a firm focus on cost management, the company seeks to navigate these challenges and foster a robust foundation for future growth. Stay tuned for further updates as Designer Brands works through these economic fluctuations, aiming to reinforce its market presence and optimize its brand value across all consumer touchpoints.

For the full presentation of these results and more details, please access Designer Brands' investor relations website and tune into their scheduled conference calls.