DSW parent narrow loss, sales flat; partners to ID emerging brands
Designer Brands Inc. reported mixed fourth-quarter results, with an adjusted loss that was wider than analysts expected but revenue that topped estimates.
The parent company of DSW and other footwear brands reported a net loss of nearly $20 million, or $0.40 per share, for the quarter ended Jan. 31, down from from a net loss of $38.2 million, or $0.80 a share, in the year-ago period. The adjusted net loss was $15.6 million, or $0.31 loss per share. Analysts had expected a net loss of $0.13 per share.
Net sales were $713.589 million, essentially flat to last year ($713.572 million) and ahead of analysts' estimates of $705.5 million. Total comparable sales decreased by 1.9%.
For the full year, net sales decreased 3.9% to $2.9 billion. Total comparable sales decreased by 4.3%. Adjusted net income was $8.3 million, or adjusted diluted earnings per share of $0.16.
The gross profit rose to $302.7 million versus $282.6 million in the year-ago quarter, and gross margin was 42.4% versus 39.6 percent a year ago.
"Our fourth quarter and fiscal 2025 results reflect disciplined execution as we strengthened the business and delivered sequential improvement across key financial metrics throughout the year," said Doug Howe, CEO. "We ended the year with fourth quarter net sales flat year-over-year and impressive gross margin expansion, driving full year adjusted operating income that significantly surpassed the high end of our guidance.”
With regard to fiscal 2025, Howe said the company remains focused on its strategic priorities, executing the initiatives within its control, and building on the momentum it’s established.
“We believe this focus will drive continued improvement in both sales and profitability over the long-term,” he stated.
On the earnings call, Howe said to further support efforts to add newness to the company's product offerings, it is working closely with a consumer-focused investment bank focused on emerging consumer brands called Consensus. The runs the Great Brands Program, the preeminent platform for emerging consumer brands in North America, Howe said.
"This partnership enables us to thoughtfully identify and introduce new relevant brands within our leading categories while also expanding into adjacent non-footwear categories that encourage customer discovery and exploration," he told analysts."Through this relationship, we gain early access to emerging brands that align closely with our customer and our brand vision."
The company operated 665 stores at the end of the quarter, including 519 DSW stores; 118 The Shoe Co. stores; and 28 Rubino locations.
