Parent company of DSW posts Q1 loss amid big sales drop 

Designer Brands Inc. swung to a loss in its first quarter amid temporary store closures from COVID-19.

The parent company of DSW and other footwear banners reported a net loss of $215.9 million, or $3.00 loss per diluted share, for the quarter ended May 2, compared to a profit of $33.6 million, or $0.43 per share, for the year-ago period. The adjusted net loss was $131.8 million, or $1.38 per share. 

Net sales fell 44.7% to $482.8 million, slightly ahead of expectations. Comparable sales decreased 42.3% as its stores remained dark. 

To date, the company has reopened about 90% of its store fleet. It expects that all North American stores will have reopened by the end of June. In a statement, CEO Roger Rawlins noted the company’s strong e-commerce business during the quarter.

 “Over the past several years, we have made significant investments in our digital infrastructure, and, as a result, we were able to generate strong digital demand during the first quarter, which resulted in digital demand representing 50% of total demand for the quarter, growing 25% over last year,” he said. “We also leveraged our best-in-class inventory controls to end the quarter with inventory units on hand flat versus last year. We have adjusted our near-term areas of focus to prioritize growing with the top fifty brands in footwear and further emphasizing our everyday value. We are also laser-focused on maintaining and preserving sufficient liquidity."

Designer Brands said that it reached “alignment” with nearly all major vendors and landlords on past-due amounts and has extended go-forward payment terms.  It ended the quarter with cash and investments totaling $250.9 million. 

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. The company also designs and produces footwear and accessories through Camuto Group, a leading manufacturer selling in more than 5,400 stores worldwide.