Latest news with #DBI
Yahoo
11-06-2025
- Business
- Yahoo
DBI Q1 Earnings Call: Management Focuses on Cost Controls Amid Soft Consumer Demand
Footwear and accessories discount retailer Designer Brands (NYSE:DBI) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 8% year on year to $686.9 million. Its non-GAAP loss of $0.26 per share was significantly below analysts' consensus estimates. Is now the time to buy DBI? Find out in our full research report (it's free). Revenue: $686.9 million vs analyst estimates of $732.9 million (8% year-on-year decline, 6.3% miss) Adjusted EPS: -$0.26 vs analyst estimates of -$0.06 (significant miss) Adjusted EBITDA: $14.36 million vs analyst estimates of $32.05 million (2.1% margin, 55.2% miss) Operating Margin: -1.1%, down from 1.3% in the same quarter last year Locations: 669 at quarter end, down from 675 in the same quarter last year Same-Store Sales fell 7.8% year on year (-2.5% in the same quarter last year) Market Capitalization: $148.9 million Designer Brands' first quarter results were shaped by a challenging retail environment and weaker consumer sentiment, which pressured both store and digital traffic. CEO Doug Howe cited 'increased uncertainty and reduced planning visibility, particularly around consumer behavior,' leading to an 8% drop in comparable sales. Management attributed the softness in the U.S. and Canada to macroeconomic factors and unfavorable weather, particularly in February, which further dampened seasonal demand. The shift in consumer preferences toward value and heightened caution among discretionary shoppers forced the company to increase markdowns and adjust its approach to inventory and promotions. Howe noted that the team implemented a 6% reduction in operating expenses, with a broader plan to save $20 million to $30 million this year. Looking forward, Designer Brands withdrew its forward-looking guidance due to ongoing volatility and unpredictability in consumer demand. Management emphasized a near-term focus on cost controls, tariff mitigation, and enhancing the value proposition for customers. Howe stated, 'This volatility makes any future forecast highly unpredictable,' explaining the decision to refrain from providing projections. The company is prioritizing expense reductions, optimizing inventory levels, and diversifying sourcing to manage tariff impacts. Investments will continue in growth brands like Topo and Keds, which management believes are well-positioned even as discretionary spending remains under pressure. CFO Jared Poff highlighted ongoing efforts to 'operate the business as optimally as possible during this time,' with capital spending and inventory investments being tightly managed. Designer Brands' leadership attributed the quarter's results to persistent consumer softness, cost-cutting measures, and a strategic shift toward value and sourcing diversification. Consumer demand volatility: Management emphasized that lower store and online traffic reflected ongoing weakness in consumer sentiment, which was exacerbated by unfavorable weather early in the quarter and continued economic uncertainty for discretionary shoppers. Cost structure adjustments: The company implemented a 6% reduction in operating expenses for the quarter and expects $20 million to $30 million in annual savings as part of a broader cost management initiative in response to revenue pressures. Product assortment strategy: Designer Brands is reducing its choice count while increasing depth on key styles, prioritizing higher-converting products, and leveraging partnerships with top brands. This approach has shown improvement in store conversion rates and better inventory productivity, according to management. Brand performance divergence: While the overall Brand Portfolio segment saw lower sales, specific brands like Topo achieved 84% year-over-year growth, driven by expanded distribution and new product launches. Keds also improved gross margins by shifting production in-house and cleaning up excess inventory, despite top-line headwinds. Sourcing and tariff response: Management accelerated efforts to diversify sourcing away from China due to higher-than-anticipated tariffs, aiming for less than half of sourced products from China by year-end. They noted that only about 20% of products are directly sourced, limiting their ability to adjust for all categories. Management's outlook centers on continued cost control, sourcing diversification, and focusing investment on key growth brands amid consumer demand uncertainty. Tariff mitigation and sourcing shifts: Designer Brands is prioritizing diversification of its supplier base to reduce reliance on China, especially in anticipation of ongoing tariff pressures. Management expects less than half of all sourcing to come from China by the end of the year, which should help limit cost increases, though some categories—like dress footwear—remain more dependent on established Chinese suppliers. Expense discipline and capital allocation: The company aims to deliver $20 million to $30 million in expense savings this year, with further reductions in planned capital expenditures. CFO Jared Poff noted that every dollar of spend is being "highly scrutinized," and inventory investments are being managed for flexibility to respond quickly to demand shifts. Brand investment and product focus: Despite near-term headwinds, management is investing in brands like Topo and Keds, which are seen as long-term growth drivers with pricing power. The company will also relaunch its VIP Rewards program next year, aiming to deepen customer engagement and drive more targeted promotions, even as overall consumer sentiment remains volatile. In the coming quarters, the StockStory team will watch (1) whether cost reduction efforts yield sustained margin improvement, (2) the effectiveness of sourcing diversification in mitigating tariff and supply chain risks, and (3) further growth in brands like Topo and Keds. The relaunch of the VIP Rewards program and any stabilization in consumer demand will also be important milestones for tracking the company's recovery. Designer Brands currently trades at a forward P/E ratio of 12.2×. At this valuation, is it a buy or sell post earnings? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-06-2025
- Business
- Yahoo
Designer Brands Inc (DBI) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
Net Sales: $687 million, down 8% year-over-year. Comparable Sales: Declined 7.8% overall; US Retail comps down 7.3%, Canada Retail comps down 9.2%. Operating Expenses: Reduced by 6% for the quarter, with expected annual savings of $20 million to $30 million. Gross Margin: 43%, decreased by 120 basis points from the previous year. Adjusted Operating Income: Essentially breakeven compared to $14.7 million last year. Adjusted Net Loss: $12.5 million, or a loss of $0.26 per diluted share, compared to a gain of $4.8 million last year. Inventory: Up 0.5% year-over-year. Total Debt: $522.9 million at the end of the quarter. Cash and Liquidity: $46 million in cash, with total liquidity of $171.5 million. Topo Brand Sales: Increased by 84% year-over-year. Operating Expense Reduction: Brand Portfolio segment saw a 23% reduction in operating expenses. Warning! GuruFocus has detected 8 Warning Signs with DBI. Release Date: June 10, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Designer Brands Inc (NYSE:DBI) achieved two consecutive quarters of year-over-year adjusted operating income growth. The company implemented expense cuts resulting in a 6% reduction in operating expenses for the quarter. Topo brand showed impressive growth, with sales increasing by 84% year-over-year. The company is focusing on strategic partnerships and data-driven insights to optimize its product assortment. DBI is actively diversifying its sourcing to mitigate tariff impacts, expecting less than half of its sourcing to come from China by the end of the year. First quarter comparable sales declined by 8%, reflecting weakening consumer sentiment. US retail reported a 7.3% decline in comps and a 7.7% decline in total sales. Canadian sales declined by 2.9% with comps down 9.2%, affected by similar consumer sentiment issues as in the US. Consolidated gross margin decreased by nearly 120 basis points due to increased markdowns. The company withdrew its forward-looking guidance due to the highly volatile macro-environment. Q: Can you explain the relationship between the $20 million to $30 million in savings and the anticipated increase in SG&A expenses this year? A: Initially, we anticipated a $30 million headwind due to no bonus accrual for FY24. We started this year without a bonus accrual, providing about $10 million in favorability for Q1. However, we will face a headwind in Q3 due to last year's bonus reversal. Despite not providing guidance, we expect $20 million to $30 million in cuts below last year's SG&A for 2025. Q: Could you elaborate on the performance of the Canadian and brand portfolio segments, particularly regarding comps? A: In Canada, consumer sentiment mirrors the US, with volatility affecting comps. Rubino's addition caused some noise, but the sentiment remains similar. The brand portfolio saw mixed results; Topo grew 84%, while Keds faced top-line headwinds due to last year's liquidation but improved gross margins. Q: What trends are you seeing in Q2, and how are tariffs impacting your business? A: Q2 trends are similar to Q1's exit. Tariffs mainly affect consumer sentiment and volatility. Our brand portfolio team mitigated a potential $100 million gross profit pressure through negotiations and selective pricing. We're working with national brand partners to manage price increases while maintaining our IMU. Q: Can you provide insights into Topo's growth and expectations for 2025? A: Topo grew 84% in the quarter, driven by door expansion and new product launches. It's in 1,200 distribution points, and we expect this trend to continue. We're optimistic about its growth potential as we're just getting started with the brand. Q: How did the athletic wear segment perform in the US, and what are your expectations? A: Athletic and athleisure outperformed other categories, with DSW gaining market share in Q1. The top eight brands, mostly athletic, were flat in Q1, indicating strong relative performance. This aligns with our strategy over the past 18 months. Q: How are you planning for back-to-school and holiday seasons, and how are you navigating tariff mitigation? A: We're cautiously optimistic about back-to-school, with strong performance last year and buoyant kids' business. Inventory is well-managed, and the category is less affected by tariffs. For the holiday season, we're prepared to execute our playbook, focusing on gifting and marketing. Tariff mitigation involves diversifying sourcing and maintaining flexibility. Q: What are your strategies for mitigating tariff impacts, and how does it affect your sourcing? A: We accelerated diversification outside China, with options to reduce sourcing from China to 5%. However, China remains a stable and cost-effective supply chain for non-athletic footwear. Less than 20% of our products are directly controlled, so we work closely with partners on sourcing decisions. Q: How are you managing inventory and pricing in response to the current environment? A: We're closely monitoring inventory investments to align with demand and maintain flexibility. Pricing strategies involve maintaining IMU while working with brand partners to manage price increases. Our focus is on delivering value through inventory, pricing, and messaging. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
10-06-2025
- Business
- Yahoo
Why Designer Brands (DBI) Stock Is Trading Lower Today
Shares of footwear and accessories discount retailer Designer Brands (NYSE:DBI) fell 21.4% in the afternoon session after the company reported underwhelming first-quarter 2025 results, with sales and earnings falling short of Wall Street's estimates. The company recorded a "soft start to the year", citing "an unpredictable macro environment and deteriorating consumer sentiment." Due to the consumer spending pressure, the company withdrew its full 2025 guidance, creating more uncertainty. Overall, this was a weaker quarter. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Designer Brands? Access our full analysis report here, it's free. Designer Brands's shares are extremely volatile and have had 54 moves greater than 5% over the last year. But moves this big are rare even for Designer Brands and indicate this news significantly impacted the market's perception of the business. The previous big move we wrote about was 4 days ago when the stock gained 5.2% after the major indices rebounded, as the Bureau of Labor Statistics report revealed a resilient labor market with non-farm payrolls rising by 139,000 in May 2025, significantly above the consensus forecast of 125,000. Notably, a stable labor market often supports consumer spending, which is a key driver of economic growth, which means the report could help ease some of the recession fears that gripped markets. The data also supports the soft landing narrative, where the Fed can manage inflation toward its 2% target without significant damage to the economy. Designer Brands is down 44.9% since the beginning of the year, and at $2.92 per share, it is trading 64.2% below its 52-week high of $8.16 from July 2024. Investors who bought $1,000 worth of Designer Brands's shares 5 years ago would now be looking at an investment worth $369.15. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Yahoo
10-06-2025
- Business
- Yahoo
DSW Parent Designer Brands Stock Plummets on Weak Results, Withdrawn Outlook
Shares of Designer Brands (DBI) lost more than a fifth of their value Tuesday after the DSW parent reported first-quarter results that missed analysts' estimates and withdrew its fiscal 2025 outlook. The Columbus, Ohio-based company posted an adjusted loss of 26 cents per share, far wider than the 6-cent-per-share adjusted loss expected by analysts surveyed by Visible Alpha. Net sales decreased 8% year-over-year to $686.9 million, lower than the estimate of $732.9 million. "We experienced a soft start to 2025 amid an unpredictable macro environment and deteriorating consumer sentiment," CEO Doug Howe said. "We have shifted our near-term focus to amplifying value in our retail channels, preserving margins, controlling costs, and mitigating the impact of tariffs as part of our response to this volatility." Designer Brands said it was pulling its full-year projections "due to macroeconomic uncertainty stemming primarily from global trade policies." Last quarter, it had guided for fiscal 2025 net sales growth in the "low-single digits" and earnings per share of 30 cents to 50 cents. Designer Brands shares were down 22% in recent trading and have lost 45% of their value this year so far. Read the original article on Investopedia Sign in to access your portfolio
Yahoo
10-06-2025
- Business
- Yahoo
Designer Brands (DBI) Reports Q1 Loss, Misses Revenue Estimates
Designer Brands (DBI) came out with a quarterly loss of $0.26 per share versus the Zacks Consensus Estimate of $0.01. This compares to earnings of $0.08 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -2,700%. A quarter ago, it was expected that this footwear and accessories retailer would post a loss of $0.47 per share when it actually produced a loss of $0.44, delivering a surprise of 6.38%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Designer Brands , which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $686.91 million for the quarter ended April 2025, missing the Zacks Consensus Estimate by 6.67%. This compares to year-ago revenues of $746.6 million. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Designer Brands shares have lost about 30.2% since the beginning of the year versus the S&P 500's gain of 2.1%. While Designer Brands has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Designer Brands: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.36 on $796.9 million in revenues for the coming quarter and $0.40 on $3.07 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Apparel and Shoes is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Vera Bradley (VRA), has yet to report results for the quarter ended April 2025. The results are expected to be released on June 11. This handbag and accessories company is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of +38.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Vera Bradley's revenues are expected to be $53.92 million, down 33.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Designer Brands Inc. (DBI) : Free Stock Analysis Report Vera Bradley, Inc. (VRA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
