Designer Brands stock dives 22% on weak guidance, disappointing Q2 results
NEW YORK – Designer Brands Inc. (NYSE:DBI) shares plunged over 22% on Monday after the footwear retailer reported second quarter earnings that missed estimates and slashed its full-year outlook.
The company, which operates DSW Designer Shoe Warehouse stores, posted adjusted earnings of $0.29 per share for the quarter ended August 3, falling well short of analysts’ expectations of $0.58 per share. Revenue declined 2.6% YoY to $771.9 million, also missing the consensus estimate of $813.64 million.
Comparable sales decreased 1.4% in the quarter. Gross margin contracted to 32.8% from 34.5% a year ago.
“This quarter, we further built on our track record of steady improvement as we continued to refine and refresh our strategic initiatives intended to accelerate our ongoing business transformation,” said CEO Doug Howe in a statement.
Designer Brands significantly lowered its fiscal 2024 earnings guidance to $0.50-$0.60 per share, down from its previous outlook of $0.70-$0.80 and well below analysts’ expectations of $0.75 per share. The company now expects full-year revenue to be flat to up low-single digits, compared to its prior forecast for low-single digit growth.
Howe noted the company saw “sustained pressure on challenged categories such as dress and seasonal” in Q2, which it partially offset through increased offerings of athletic and athleisure brands. Athleisure category sales grew 8% YoY in the U.S. Retail segment, outpacing overall athleisure market growth by over 4 percentage points.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
