Designer Brands narrows 2023 outlook

For the third quarter, Designer Brands net sales decreased 9.1 percent to 786.3 million dollars, while comparable sales decreased by 9.3 percent.

Gross profit decreased to 256.4 million dollars and gross margin to 32.6 percent, reported net income was 10.1 million dollars or diluted earnings per share of 17 cents.

The company’s adjusted net income was 14.8 million dollars or adjusted diluted EPS of 24 cents.

"This quarter, we were impacted by a footwear market that contracted for the first time since Covid coupled with unseasonably warm weather, which significantly reduced customer demand for shoes and pressured our heavily seasonal assortment," stated Doug Howe, the company’s chief executive officer.

Narrowing its outlook for the year ahead, the company said, it anticipates sales to decline high single digits and EPS excluding Keds to be in the range of 40 cents to 60 cents.

"As we look ahead, we do not anticipate pressures alleviating in the near-term, and we will continue to adjust accordingly. We have also made some difficult decisions regarding leadership across our organisation and believe that we are making progress in positioning our business well for the long-term while continuing to generate strong cash flow and ample liquidity," added Howe.

The company’s board declared a dividend of 5 cents per share of Class A and Class B common shares to be paid on December 14, 2023 to shareholders of record at the close of business on November 30, 2023.

During the third quarter, Designer Brands opened one store in the U.S. and six stores in Canada, resulting in a total of 499 U.S. stores and 144 Canadian stores as of October 28, 2023.