Designer Brands (DBI) Q1 2025 earnings summary

Executive summary

• Q1 2024 net sales rose 0.6% to $746.6 million, with performance and leisure footwear outpacing the market and comparable sales down 2.5% year-over-year.

• Gross profit margin improved by 80 basis points to 32.8%, driven by inventory management, DTC growth, and Brand Portfolio performance.

• Adjusted net income was $4.8 million ($0.08 per diluted share); reported net income was $0.8 million ($0.01 per share), impacted by $4.0 million in after-tax restructuring and integration charges.

• Strategic focus on athletic and casual categories, omni-channel enhancements, and cost optimization, with the Rubino acquisition expanding Canadian presence.

• Full-year 2024 guidance reaffirmed, citing progress on strategic initiatives and operational efficiencies.

Financial highlights

• Q1 net sales were $746.6 million, up 0.6% year-over-year; comparable sales down 2.5%.

• Gross profit was $245.1 million, up from $237.7 million year-over-year.

• Adjusted operating income was $14.7 million, down from $25.8 million last year.

• Net income attributable to the company was $0.8 million, down from $11.4 million last year, with adjusted net income at $4.8 million.

• Cash and cash equivalents were $43.4 million at quarter-end; total debt outstanding at $476.1 million.

Outlook and guidance

• Reaffirmed 2024 guidance: low single-digit net sales growth and comparable sales up low single digits.

• Adjusted diluted EPS expected in the $0.70–$0.80 range, up ~10% at midpoint vs. 2023, excluding potential charges.

• Brands portfolio expected to grow mid-single digits, with double-digit DTC and wholesale growth.

• Q3 projected as strongest sales period; Q4 expected to be weakest due to loss of 53rd week.

• Capital costs for the year expected between $65 million–$75 million.