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03/16/2021

Designer Brands Q4 sales fall; cites ‘room to grow’

Marianne Wilson
Editor-in-Chief
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The parent company of DSW ended the year on a tough note as the pandemic continued to impact its store traffic and sales of dress shoes.

Designer Brands reported net losses of $134.0 million, or $1.85 per share, in the quarter ended Jan.30, compared to a loss of $7.6 million, or $11 per share in the year-ago period. Adjusted losses were $0.53 per share. Analysts had expected a wider loss of $0.68 per share. 

Sales fell 26.5% to $609.4 million, below the FactSet consensus for $627.0 million. Comparable sales fell 20.1%. 

CEO Roger Rawlins put an upbeat spin on the quarter, noting that it “continues our story of sequential improvement in unprecedented market conditions.”  

“I am proud of our team’s exceptional execution of our near-term strategy as we continued to pivot our assortment to athleisure and kids, focused on the top 50 brands in footwear and leaned even further into our digital-first capabilities,” he stated.

On the company’s earnings call, Rawlins said that fashion is going to come back in “a bigger way than ever before once our customers are able to more safely move forward with their social activities.”

For the full year, net sales fell 36.0% to $2.2 billion. Comparable sales were down 34.2%. It had an adjusted net loss of $281.7 million, or loss of $3.90 per share.

Rawlins said that, in 2021, Designer Brands will improve its digital and omnichannel capabilities and leverage its design and sourcing.

“When demand shifts back to dress and seasonal, our Camuto team will be well-prepared to capitalize on our historical success in these categories while protecting our newly captured market share in the athletic segment,” Rawlins stated. We have a significant amount of inventory open to buy and the capability to flex our business as customer preferences evolve, making us a dominant player with room to grow as the market recovers.”

The company, which operates stores under the DSW, The Shoe Company and Shoe Warehouse banners, ended its fiscal year with 519 U.S. stores and 144 Canadian stores.