Designer Brands Q2 sales, earnings miss; slashes outlook
Designer Brands, parent company of DSW Designer Shoe Warehouse, reported disappointing second-quarter earnings and sales as customers but back spending in two key categories.
The footwear giant also lowered its full-year outlook as shoppers are becoming “increasingly mindful” of their discretionary spending.
In a statement, CEO Doug Howe said the retailer was challenged during the quarter in categories such as dress and seasonal, which it was able to partially mitigate through providing a greater selection of athletic and athleisure brands.
“During the second quarter, we drove athleisure category sales growth of 8% in the U.S. retail segment over the same period last year, outpacing overall athleisure market growth by over 4 percentage points,” he said. “Our strategy successfully supported a solid start to the back-to-school season, particularly in our kids' category, which helped us to exit the second quarter in a stronger position than we started."
Designer Brands’ net income dropped to $13.8 million, or $0.24 a share, for the quarter ended Aug. 3, from $37.2 million, or $0.56 a share, in the year-ago period. Adjusted earnings of $0.29 a share missed Street estimates of $0.53 a share.
Net sales fell 2.6% to $771.9 million from $792.2 million. Analysts had expected sales of $816.1 million. Same-store sales decreased 1.4%.
During the quarter, DSW named a new marketing chief and acquired Canadian footwear retailer Rubino, which operates 28 stores throughout the province Quebec.
The retailer lowered its full-year guidance range for adjusted earnings per share to $0.50 to $0.60 from its previous range of $0.70 to $0.80. It now expects sales growth to be between flat and in the low-single digits.
As of Aug. 3, the company had a total of 499 stores in the U.S. and 177 stores in Canada.
Designer Brands is one of the world's largest designers, producers, and retailers of footwear brands and accessories. Its portfolio of brands, includes Crown Vintage, Hush Puppies, Jessica Simpson, Keds, Kelly & Katie, Lucky Brand, Mix No. 6, Topo Athletic, Vince Camuto and others.
