Designer Brands Reports Sharp Drop in Earnings and Sales

Designer Brands, Inc. reported a significant decline in net income and sales for the second quarter compared to the previous year. The company's future earnings outlook has also been revised downward, indicating potential challenges ahead.

Date: 11-09-2024

AI Rating: 4

Designer Brands, Inc. (DBI) has faced a notable decline in its financial performance for the second quarter. The report indicates that net income attributable to the company plunged to $13.82 million, translating to earnings per share (EPS) of $0.24, down from $37.20 million or $0.56 per share in the prior-year quarter. This significant drop highlights a worsening profitability scenario for the company.

Excluding special items, the adjusted earnings also reflect a downward trend, reported at $0.29 per share compared to $0.59 per share from the same quarter last year.

Net sales for Designer Brands declined by 2.6 percent to $771.90 million from $792.22 million in the same quarter last year, with comparable sales decreasing by 1.4 percent. Analysts had anticipated better performance, forecasting earnings of $0.53 per share and net sales of $816.14 million.

Looking forward, the company adjusted its projections for earnings in fiscal 2024 to a range of $0.50 to $0.60 per share, with net sales growth expected to remain flat or in the low-single digits. This is a downward revision from its previous expectations of $0.70 to $0.80 per share. Such projections contrast with analysts' consensus estimates of $0.75 per share on net sales of $3.14 billion for the fiscal year, indicating a mismatch between the street's expectations and the company's actual projected performance.

Given this performance and outlook, investors may start to reassess their positions in DBI. The significant drop in both earnings and sales, along with a lowered earnings forecast, could lead to a negative sentiment surrounding the stock.

Stocks: DBI