DSW parent Q1 sales rise amid jump in profitability
Designer Brands Inc got off to a solid start in 2026, reporting a big improvement in profitability, driven by surging sales in its brand portfolio segment.
The footwear giant and parent company of DSW retailer also reaffirmed its guidance for the year, which falls below analysts’ expectations.
Designer Brands' first-quarter net income totaled $1.2 million, or $0.02 earnings per share, for the quarter ended May 2, compared to a loss of $17.81 million, or a loss of $0.37 per share, in the year-ago period. Adjusted earnings per share were $0.07, topping analysts estimates of $0.04 per share, compared to a loss of $0.27 per share in the year-ago period.
Consolidated net sales increased 1.4% to $696.35 million, slightly short of estimates. Total comparable sales decreased by 1.1%.
By segment, net sales in the company’s brand portfolio soared 19.4% to $114.5 million. Net sales in the retail segment inched down 0.1% to $626.7 million, with comparable sales falling 1.2%.
"Our strong start to the year was underscored by double-digit sales growth in our brand portfolio segment and encouraging stabilization in our betail segment," said Doug Howe, CEO. "In addition to top-line strength, we delivered meaningful profitability gains, with gross margin expanding 240 basis points, reflecting the structural improvements we have made across inventory management, pricing discipline, sourcing, and channel profitability."
On the earnings call, Howe said the company was encouraged to see positive momentum in its stores, with improving traffic and sales trends and demand that outpaced the broader footwear market in the quarter.
"We believe these trends reflect the progress we are making in refining our assortment and enhancing the customer experience across our store base," he told analysts.
Looking ahead, the company maintained its guidance for fiscal 2026 with net sales expected to be in the range of down 1% to up 1% and with earnings per share at between $0.28 to $0.38, which is below analysts expectations.
Designer Brands ended the quarter with 663 stores, including 518 DSW stores, 118 The Shoe Company stores and 27 Rubino stores. Designer Brands also distributes its brands internationally through select wholesale and distributor relationships. Its brand portfolio includes Topo Athletic, Keds, Vince Camuto, Kelly & Katie, Jessica Simpson, Lucky Brand, Mix No. 6, Crown Vintage and others.
