DSW parent to focus on owned brands to drive growth, raises full-year outlook
Designer Brands Inc. plans to double down on sales on its owned brands.
The parent company of DSW 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.
“We are seeing aggressive growth in the sales of our owned brands,” stated Roger Rawlins, CEO of Designer Brands. “In fact, one out of every four pairs of shoes that Designer Brands sold as an enterprise during 2021 was designed and sourced by our own team.”
Designer Brands said it plans to maintain relationships with top national brand partners “who utilize our leading omnichannel capabilities in their own DTC efforts in ways unique to DBI.”
“In addition to our updated and differentiated assortment, we are expanding upon our already dominant sourcing and supply chain capabilities, leading to quicker speed to market with new designs and faster delivery times,” Rawlins said.
During its annual Investor Day, Designer Brands outlined a five-year financial roadmap through which it expects to deliver significant bottom-line growth. The company is targeting revenue of $4 billion and earnings per share in the range of $2.75 to $2.85 in fiscal 2026, which ends Jan. 30, 2027. (For the year ended Jan. 29, 2022, net sales totaled $3.2 billion.)
“We expect that this growth will be driven by doubling our owned brand sales, from 19% of the company's total revenue to nearly one-third, with most of that business happening within our own DTC channels,” the retailer stated. “This growth is highly margin accretive and is expected to drive our operating margin higher over the longer term.”
Designer Brands also raised its fiscal 2022 earnings per share outlook from $1.75 to $1.85 to a range of $1.80 to $1.90. Analysts were looking for earnings per share of $1.75.
Separately, the company said it will pay a dividend of $0.05 cents a share on May 6 to shareholders of record on April 22. It will be the first dividend paid since the $0.10 dividend paid in March 2020.
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Designer Brands operates nearly 650 stores under the DSW Designer Shoe Warehouse and The Shoe Company banners. 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.