Companies

Mixed results at Designer Brands

Jun 5, 2024 United States

The North American company reported a slight increase in net sales of 0.6% in the first quarter, but a sharp decline in net income, as compared to the same period last year

“This quarter, we were pleased to deliver results in line with our expectations for this quarter, as we gain traction on our path to returning Designer Brands to growth. I am proud of the way our teams are embracing the strategic initiatives that we are implementing across the business as we work to transform into a more efficient and synergistic organization. According to Circana, we outperformed the overall market dollar sales in the performance, leisure, and kids categories, which we believe is a testament to the strength of our new strategy”, commented Doug Howe, Chief Executive Officer.

First Quarter Results

In the first quarter of the year (ended on the 4^th of May), Designer Brands recorded net sales of 746.6 million US dollars, an increase of 0.6% on a comparable basis to the same period of last year. However, total comparable sales decreased by 2.5% year-over-year.

In the first quarter of the fiscal year 2024, US segment net sales were 621.4 million US dollars, up by 8.5%, and Canadian retail segment net sales were 55.5 million US dollars, up by 1.6%, on a comparable basis to the same period of the previous year; comparable store sales decreased 2.3% and 4.9%, respectively.

The brand portfolio fared slightly better in the quarter. Net sales from this segment reached 104.1 million US dollars in the quarter, growing by 11.1% over the same period of the prior year, while comparable store sales declined by 2.5% over the prior year.

The company’s gross profit increased to 245.1 million US dollars in the first three months of the current year from 237.7 million US dollars in a similar period of fiscal 2023, with a corresponding improvement in gross margin to 32.8% from 32.0%.

Designer Brands’ first quarter net income fell to just 0.8 million US dollars, equivalent to earnings per share of 0.01 US dollars, as compared to 11.4 million US dollars in the same period of last year. However, the company highlighted that a significant part is due to one-off restructuring and integration costs of 0.07 US dollars per share.

The company also reported an adjusted net income decrease to 4.8 million US dollars (or adjusted diluted earnings per share of 0.08 US dollars) in the period from 14.3 million US dollars (or adjusted diluted earnings per share of 0.21 US dollars) in the same period a year ago.

Fiscal 2024 Outlook

For fiscal 2024, the company expects a net sales growth in the low-single digits over the last year and adjusted diluted earnings per share in the range of 0.70 US dollars to 0.80 US dollars.

Image Credits: sgbonline.com

United States Designer Brands Footwear Quarter Results Results