"Designer Brands' outstanding third quarter results demonstrate the efficacy of our strategic plans that were set in motion prior to the onset of the pandemic and accelerated over the last 18 months. We continue to see strength in our key assortment distortion areas including athletic and athleisure, kid's, and men's, all powered by the Top 50 Brands in footwear, as well as a return to growth in our vertical brands. This drove record-setting margin expansion in the third quarter and our expectation is that these areas will continue to drive our long-term margin profile with these shifts being a permanent part of our go-forward model”, commented Roger Rawlins, Chief Executive Officer.

Third Quarter Results

In the third quarter of fiscal 2021, Designer Brands’ net sales increased by 30.7%, totalling 853.5 million US dollars, as compared to the same period of last year. Comparable sales grew by 40.8% this quarter, on a comparable basis to similar period of 2020.

Gross profit rose to 313.6 million US dollars in the third quarter of the current year, as compared to gross profit of 165.7 million US dollars in the same quarter of the prior year. Gross margin as a percentage of net sales corresponded to 36.7%, on a comparable basis to gross margin of 25.4% and 29.3% in the third quarter of fiscal 2020 and fiscal 2019, respectively.

In the three months to 30^th of October 2021, reported net income totalled 80.2 million US dollars, or 1.04 US dollars diluted earnings per share. Adjusted net income during this period corresponded to 66.6 million US dollars, or 0.86 US dollars diluted earnings per share, as compared to an adjusted net loss of 18.6 million US dollars, or 0.26 US dollars loss per diluted share, in the third quarter of fiscal 2020.

Store Openings And Closings

During the third quarter of fiscal 2021, Designer Brands opened four new stores in the US and one new store in Canada, but closed another four stores in the US. Therefore, Designer Brands operates a total of 515 stores in the US and 144 stores in Canada, as of the 30^th of October.

For the fourth quarter of fiscal 2021, the company is expecting consolidated net sales to be flat to up low-single digits, as compared to the fourth quarter of fiscal 2019. Designer Brands is forecasting diluted earnings per share in the range of 0.10 US dollars to 0.15 US dollars for the last quarter of fiscal 2021.