Designer Brands, Inc. (DBI), the parent of the DSW, The Shoe Co., and Rubino retail brands, and Topo Athletic, Keds, Le Tigre, Hush Puppies, and other footwear brands, became the latest footwear retailer and brand consolidator to come up short in the fiscal third quarter as a year-over-year sales decline missed estimates and non-GAAP earnings came in 23.5 percent below analysts’ consensus estimates.

DBI reported fiscal third quarter net sales decreased 1.2 percent year-over-year to $777.2 million in the 13-week period ended November 7, short of the $802.14 million expected on Wall Street.

Third Quarter Sales Summary

Comparable Store Sales Summary

Total comparable sales decreased by 3.1 percent year-over-year, on top of a 9.8 percent comp sales decline in the year-ago quarter.

Gross profit decreased to $247.4 million in the quarter versus $256.4 million in Q3 last year, and gross profit as a percentage of net sales was 31.8 percent compared to 32.6 percent in Q3 last year, a decline of 80 basis points year-over-year.

Reported net income attributable to Designer Brands Inc. was $13.0 million, or diluted earnings per share (EPS) of 24 cents per share. Adjusted net income was $14.5 million, or adjusted diluted EPS of 27 cents per share.

Liquidity
Cash and cash equivalents totaled $36.2 million at the end of the third quarter of 2024, compared to $54.6 million at the end of the Q3 period last year. DBI had $118.3 million available for borrowings under its senior secured asset-based revolving credit facility at quarter-end.

Debt totaled $536.3 million at the end of the third quarter compared to $375.5 million at the end of the Q3 period last year.

The company ended the third quarter with inventories of $637.0 million compared to $601.5 million at the end of the Q3 period last year.

Return to Shareholders
During the third quarter of 2024, the company repurchased 7.7 million Class A common shares at an aggregate cost of $50.6 million. As of November 2, 2024, $19.7 million of Class A common shares remained available for repurchase under the Board-approved share repurchase program.

A dividend of 5 cents per share for both Class A and Class B common shares will be paid on December 20, 2024 to shareholders of record at the close of business on December 6, 2024.

Store Openings and Closings
During the third quarter of 2024, the company closed three stores in the U.S. and opened two stores in Canada, resulting in a total of 496 stores in the U.S. and 179 stores in Canada as of November 2, 2024.

Updated 2024 Financial Outlook
The company has updated the following guidance for the full year 2024:

Image courtesy DSW/Designer Brands, Inc.