Designer Brands Inc. lifted its outlook for earnings and sales for the year after reporting results in the second quarter ended August 1 that topped expectations on a stellar performance by its Brand Portfolio segment, which includes Topo Athletic, Keds and Vince Camuto. Same-store sales at its Retail segment, which primarily includes DSW, were down 2.6 percent in the quarter, although the segment’s gross margins improved.

“Our second quarter results represent significant improvement in profitability year-over-year, highlighted by meaningful gross margin expansion as well as impressive sales growth in our Brand Portfolio segment,” said Doug Howe, chief executive officer. “We remain focused on generating long term value for our shareholders and are encouraged by the progress we are making against our strategic plan. These efforts have contributed to improved retail trends and a positive start to the third quarter, giving us confidence in raising our full-year guidance.”

Second Quarter Summary
Net sales decreased 1.2 percent to $730.6 million and Total comparable sales decreased by 2.4 percent.

  • Retail segment sales, which includes the DSW Designer Shoe Warehouse, The Shoe Co., and Rubino banners across North America, declined 2.2 percent in the second quarter to $ 671.1 million from $686.0 million a year ago.
    • Comparable sales were down 2.6 percent on top of a decline of 4.5 percent in the year-ago quarter.
    • Gross margins in the Retail segment improved 120 basis points to 44.9 percent.
    • Operating earnings slid 9.7 percent to $62.0 million from $68.7 million a year ago.
  • Brand Portfolio segment sales, which includes the Topo Athletic, Keds, Vince Camuto, Kelly & Katie, Jessica Simpson, Lucky Brand, Mix No. 6, and Crown Vintage brands, climbed 17.9 percent to $86.3 million from $73.2 million in Q2 last year.
    • Direct-to-consumer sales in the Brand Portfolio segment grew 7.1 percent compared with a 29.2 percent decline in the year-ago period.
    • Gross margins in the Brand Portfolio segment jumped 510 basis points to 29.8 percent.
    • Segment operating profits amounted to $979,000 against a loss of $4.05 million in the same period a year ago.

Profitability
Reported gross profit was $365.4 million in Q2, compared to $322.5 million last year, and gross margin was 50.0 percent compared to 43.6 percent last year. Adjusted gross profit was $350.0 million compared to $322.5 million last year, and adjusted gross margin was 47.9 percent compared to 43.6 percent last year.

Reported net income attributable to Designer Brands Inc. was $17.6 million, or diluted earnings per share of 31 cents. Adjusted net income was $19.2 million, or adjusted diluted EPS of 34 cents.

Liquidity

  • Cash and cash equivalents totaled $51.6 million at the end of the second quarter of 2026, compared to $44.9 million at the end of the same period last year, with $146.2 million available for borrowings under our senior secured asset-based revolving credit facility.
  • Debt totaled $423.1 million at the end of the second quarter of 2026 compared to $516.3 million at the end of the same period last year, a reduction of approximately $93.0 million.
  • The company ended the second quarter of 2026 with inventories of $594.7 million compared to $610.9 million at the end of the same period last year.

Return to Shareholders
A dividend of 5 cents per share for both Class A and Class B common shares will be paid on October 7, 2026 to shareholders of record at the close of business on September 24, 2026.

Stores

 

During the six months ended August 1, 2026, the company opened seven new stores, closed four stores, and remodeled three stores.

2026 Financial Outlook
Following a strong start to the third quarter, the company is raising its guidance for the full year 2026:

Image courtesy Topo Athletic, data and tables courtesy Designer Brands, Inc.

 

EXEC: DSW Parent Saw Shares Jump as Athletic Footwear Improved Sequentially into Q3

EXEC: Topo Stars Again for Designer Brands in Q2, Sales Approaching $100 Million Milestone

EXEC: Topo’s Founder Tony Post Sees Growth Just Getting Started