Designer Brands Inc. (DBI), the parent of the DSW Shoe Warehouse, The Shoe Co., and Rubino retail banners, and a brand portfolio business that includes Topo Athletic, Keds, Vince Camuto, and a range of other designer footwear brands, relied on its Brand Portfolio business segment to keep the overall company in positive territory in the fiscal first quarter ended May 2.

A double-digit increase in the Brand Portfolio segment drove total consolidated net sales up 1.4 percent year-over-year (y/y) to $696.4 million, which, in partnership with improving gross margins, pushed the bottom line into positive territory against a net loss in the year-ago Q1 period.

“Performance was led by our Brand Portfolio segment that delivered strong growth of 19 percent versus the prior year, and Retail segment sales were stable, approximately flat to last year,” offered company CEO Doug Howe on a conference call with analysts on Tuesday, June 9. “In addition to improved sales trends, we drove meaningful gross profit expansion, with gross margin increasing 240 basis points versus last year and gross profit increasing by $21 million.” Howe said they also leveraged adjusted operating expenses by 50 basis points year-over-year as DBI continues to drive efficiency throughout the business.

Howe said sales in seasonal categories were impacted by unfavorable weather in the quarter, which was more prevalent in Canada. In the U.S., revenue was said to be “up slightly, and according to Circana data, in Q1, DSW held in footwear market share versus last year.”

Retail Segment
The company’s Retail segment, which reflects the aggregation of the U.S. retail and Canada retail operating segments, posted essentially flat (-0.1 percent y/y) total sales for the first quarter, with comparable sales down slightly (-1.2 percent y/y).

Traffic trends reportedly improved for the quarter.

“We also continued to see strong regular price sales, supported by our enhanced assortment and effective inventory management,” Howe noted.

“From a product perspective, we shared on our last call that in 2026, we are focused on winning with the merchandise that matters most to our consumers, and we saw encouraging response across several categories in the first quarter,” Howe shared. “Our Dress [shoe] business was strong in Q1, up approximately 4 percent [y/y]. Affordable luxury continues its significant growth trajectory with the category enhancing relevance and driving differentiation within the assortment. On our last earnings call, we also spoke about an opportunity to increase market share in categories adjacent to Footwear. We were pleased to drive double-digit sales growth in these categories during the first quarter, led by strong performance across the Accessories assortment.”

The CEO shared that weather-related headwinds impacted the Seasonal Sandals business, which was down in low single digits in the quarter. He said they also saw softness in the Casual and Athletic categories as consumers shifted back towards Fashion and occasion-based products following several years of elevated demand in Casual and Athletic.

“These trends are not unique to our business. We are confident that our assortment breadth positions us well to capitalize on these cyclical shifts in consumer preferences,”Howe emphasized.

He continuing, noting that, “Performance of our Top 10 brands was generally in line with our retail trend during the quarter, with growth across several strategic partners offset by the category headwinds I mentioned earlier. These strategic brand partners continue to play an important role in driving customer engagement and in reinforcing the strength and relevance of our assortment.”

The CEO gave a nod to the marketing team for amplifying assortment strength by building on DSW’s Let Us Surprise You platform in the first quarter.

“We were encouraged to see positive momentum in our 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,” Howe added.

Brand Portfolio
Howe reminded the call participants about the company’s focus on building and scaling the DBI brand portfolio in 2026.

“We were pleased with the strong start to the year, with Q1 sales increasing 19 percent and operating income improving by $13 million versus last year,” Howe began. “Within our exclusive brands business, we continued to build on our strong partnership with the DSW team. Newness across the assortment resonated well with consumers during the quarter. We remain confident in our ability to build on momentum in categories where we are seeing meaningful growth opportunities at DSW throughout the year.”

Howe said Topo continued its strong momentum and grew 32 percent during the quarter, in line with expectations. Brand growth was said to be driven by strong demand across core franchises, successful new product introductions, momentum in specialty running, and expanded distribution partnerships that further strengthened the brand’s positioning within the category.

He said Jessica Simpson also delivered another strong quarter, growing 35 percent year-over-year, benefiting from continued strength in dress trends and positive response to the evolution of the assortment, including lower heel heights across key styles.

Keds generated encouraging growth of 35 percent, benefiting from expanded distribution and momentum from newness across the assortment in both digital and wholesale channels as the brand entered the year with a sharper assortment and cleaner inventory levels.

“Across the portfolio, we remain focused on supporting profitable, sustainable growth while leveraging the strategic advantages of vertical integration and sourcing capabilities, as well as our strong retail partnerships,” Howe said.

“We continue scaling the Brand Portfolio segment,” Howe stated. “We believe this diversified operating model enhances both profitability and flexibility across our organization. ”

Segment Net Sales

Segment Comp Sales
Total comparable sales decreased by 1.1 percent year-over-year, cycling against a 7.8 percent comp sales decline in Q11 last year.

Profitability

Segment Gross Profit 
Gross profit increased to $315.3 million versus $294.5 million last year, and gross margin was 45.3 percent compared to 42.9 percent last year.

“Importantly, the margin improvement we delivered in the first quarter reflects more than just favorable mix,” Howe added. “It is being driven by the structural changes we’ve made across inventory management, pricing, discipline sourcing, and channel profitability over the last several quarters. We believe these actions are helping create a more durable earnings model for the business going forward.”

Segment Operating Profit

Consolidated Income Statement
Reported net income attributable to Designer Brands Inc. was $1.2 million, or diluted EPS of 2 cents per share, compared to a loss per share of 37 cents in the year-ago Q1 period.  Adjusted net income was $3.8 million, or adjusted diluted EPS of 7 cents per share, for the first quarter.

Liquidity
Cash and cash equivalents totaled $50.1 million at the end of the first quarter, compared to $46.0 million at the end of the Q1 period last year, with $138.5 million available for borrowings under the company’s senior secured asset-based revolving credit facility.

Debt totaled $475.3 million at the end of the first quarter of 2026 compared to $522.9 million at the end of the Q1 period last year.

The company ended the first quarter of 2026 with inventories of $586.6 million compared to $623.6 million at the end of the Q1 period last year.

Store Count at Quarter’s End

2026 Financial Outlook
Designer Brands Inc. reaffirmed the following guidance for the full year 2026.

CEO Howe added, “Following our encouraging start to the year, we believe in our ability to achieve the high end of our fiscal 2026 EPS guidance range, even amidst ongoing uncertainty in the macroeconomic environment. We believe our strategic actions will continue to strengthen our foundation of the business and position us well for long-term profitable growth.”

Image courtesy DSW Shoe Warehouse/Designer Brands, Inc. 

See below for additional coverage of the of the reasons for the sharp stock price downturn and the provided weak guidance that was said to be the cause of the decline:

EXEC: DSW’s Parent Beat Analysts’ Q1 EPS Estimates — Why Did DBI Shares Crash?