Designer Brands achieves profitability improvement in second quarter

Footwear and accessories group Designer Brands announced financial results for the second quarter ended August 1, 2026, recording an increase in net income to 17.6 million dollars, or diluted earnings per share (EPS) of 0.31 dollars, compared to the same period last year.

Adjusted net income reached 19.2 million dollars, delivering an adjusted diluted EPS of 0.34 dollars. The profitability improvement was driven by gross margin expansion and top-line momentum in the brand portfolio division.

“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 of Designer Brands. “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.”

Sales metrics and gross margin expansion Net sales for the second quarter decreased 1.2 percent to 730.6 million dollars compared to the second quarter of 2025. Total comparable sales fell 2.4 percent during the period.

Reported gross profit reached 365.4 million dollars, up from 322.5 million dollars in the prior-year period. Reported gross margin expanded 640 basis points to 50 percent compared to 43.6 percent last year.

On an adjusted basis, gross profit was 350 million dollars, yielding an adjusted gross margin of 47.9 percent, representing an expansion of 430 basis points year-over-year (YoY).

The company announced a quarterly dividend of 0.05 dollars per share for both Class A and Class B common stock, payable on October 7, 2026 to shareholders of record at the close of business on September 24, 2026.

Full-year outlook raised

Following retail trends at the start of the third quarter, Designer Brands raised its outlook for full-year 2026.

The company expects full-year net sales performance to range from flat to up 1 percent, compared to previous guidance of down 1 percent to up 1 percent.

Full-year adjusted diluted EPS is now projected between 0.47 dollars and 0.52 dollars, up from the prior forecast of 0.28 dollars to 0.38 dollars.