DSW parent company Q2 tops expectations; maintains outlook
Designer Brands reported better-than-expected second-quarter results amid “sequential improvement” in both sales and profitability
The parent company of DSW said it net income fell to $37.2 million, or $0.56 a share for the quarter ended July 29, from $46.2 million, or $0.62 a share, in the year-ago period. Adjusted earnings per share came to $0.59, topping analysts’ expectations of $0.44 per share.
Net sales fell 7.8% to $792.2 million but still topped estimates of $787.9 million. Same-store sales fell 8.9%.
In February, Designer Brands acquired the Keds brand from Wolverine Worldwide, adding to its owned brands portfolio and supplementing its recent additions of Le Tigre and Topo Athletic. In June, the company said it had reentered a partnership with Nike to once again sell Nike footwear.
"I am proud of the sequential improvement in both sales and profitability in the second quarter as well as the progress that has been made on our strategic initiatives, with several exciting milestones in the quarter — including new collaborations and celebrity partnerships,” said Doug Howe, who took the reins as CEO in April. “Our portfolio of owned brands and national brand partners remains strong and we are excited to be rolling out our new athletic and athleisure offerings from Le Tigre and Keds while continuing to elevate our relationship with Nike during a time that athletic and athleisure demand continues to grow.
In April 2022, Designer Brands said its owned brands will be the key driver of growth during the next five years, and that it plans to double sales of the brands by fiscal 2026.
"The unique synergies between our legacy retail business and our brand portfolio are putting us on a path to being more resilient than ever and we will continue to build out our leadership and structure our teams accordingly,” said Howe.
Although the company said it expects “near-term headwinds” to persist, it maintained its earnings guidance for fiscal 2020 for earnings per share in the range of $1.20 to $1.50.
During the second quarter of 2023, Designer Brands closed one store in the U.S. and one store in Canada, giving it a total of 498 U.S. stores and 138 Canadian stores as of July 29, 2023.
The company also designs and produces footwear and accessories through Camuto Group, a leading manufacturer selling in more than 5,400 stores worldwide.
Camuto Group owns licensing rights for the Jessica Simpson footwear business and footwear and handbag licenses for Lucky Brand. In partnership with a joint venture with Authentic Brands Group, the company also owns a stake in Vince Camuto, Louise et Cie and others.