Designer Brands (DBI) investor relations material

Executive summary

• Net sales for Q2 2025 declined 4.2% year-over-year to $739.8 million, with total comparable sales down 5.0% and a 280 basis point sequential improvement from Q1 comps, driven by operational initiatives and a strong back-to-school season.

• Gross profit margin declined 30 basis points to 43.7% due to lower margin rates across all segments.

• Net income attributable to shareholders was $10.8 million ($0.22 per diluted share), while adjusted net income was $16.7 million (adjusted diluted EPS $0.34), both down from last year.

• Macroeconomic headwinds, including inflation, higher interest rates, and increased tariffs, negatively impacted consumer demand and operating results.

• Positive momentum continued into August, supported by targeted operational efforts and improved consumer sentiment.

Financial highlights

• Net sales for Q2 2025 were $739.8 million, down 4.2% year over year; comparable sales down 5%.

• Gross profit was $322.9 million (43.7% of net sales), down from $339.5 million (44.0%) last year.

• Adjusted operating income was $30.3 million, compared to $32.5 million last year.

• Cash and cash equivalents were $44.9 million as of August 2, 2025, with $104.3 million available under the credit facility.

• Debt increased to $516.3 million from $465.7 million year-over-year; total inventories ended Q2 down 5% year over year.

Outlook and guidance

• No full-year 2025 guidance provided due to ongoing macroeconomic volatility, global trade policy, and tariff uncertainties.

• Management expects continued challenges from inflation, tariffs, and macroeconomic uncertainty, with a focus on cost mitigation and operational efficiency.

• Liquidity is considered sufficient for ongoing operations, but future impacts from economic conditions remain uncertain.

• Focus remains on disciplined execution and factors within management's control.

• Cautiously optimistic for the remainder of the year, with positive trends in August and early fall.