DSW parent Q3 earnings miss; slashes outlook

Designer Brands Inc. the owner of DSW and other footwear banners, reported third-quarter profit that missed expectations and cut its guidance. 

The footwear and accessories retailer reported net income of $43.5 million, or 60 cents per share, in the quarter ended Nov. 2, up from $39.3 million, or 48 cents per share, in the year-ago period. Adjusted earnings per share came to 67 cents, missing analysts’ estimates of 74 cents. 

Revenue rose 12.4% to $936.3 million from $833.0 million, topping estimates of $930.0 million. Same-store sales grew 0.3%.

In a statement, CEO Roger Rawlins noted that the company faced several meaningful headwinds during the third quarter that impacted its results, including warm weather and tariffs, and will likely continue for the upcoming quarters. 

“The near-record warm weather during our largest and most profitable quarter affected every segment of our business,” he said. “And, while we are extremely proud of the results we've achieved, substantially mitigating the very material footwear tariffs that were recently enacted, the mitigation effort itself has had repercussions which have weighed heavy on our results."

The company lowered its full-year outlook for adjusted EPS in the range of $1.50 to $1.55 per diluted share, compared to its previous range of $1.87 to $1.97 per diluted share. It continues to expect low double-digit revenue growth but flat comps compared with its previous outlook of low single-digit gains.

Designer Brands operates nearly 1,000 locations under the DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse banners and services footwear departments in the U.S. through its Affiliated Business Group. It also designs and produces footwear and accessories through Camuto Group, a leading manufacturer selling in more than 5,400 doors worldwide.