Designer Brands reports Q1 loss, withdraws 2025 outlook
Designer Brands Inc., the Columbus, Ohio-based owner of the DSW Designer Shoe Warehouse, The Shoe Company and Shoe Warehouse retail chains, announced on Tuesday that net sales decreased 8% in the first quarter, ended May 3.
The company achieved net sales of $686.9 million. Comparable sales fell 7.8% overall, with the U.S. retail segment down 7.3%, Canada retail down 9.2%, and the Brand Portfolio segment's direct-to-consumer channel plunging 27%.
Designer Brands posted a net loss of $17.4 million, or $0.36 per diluted share, versus net income of $783,000 or $0.01 per diluted share a year earlier. On an adjusted basis, the company reported a loss of $12.5 million, or $0.26 per share.
Gross profit dropped 10.6% year-over-year to $295.1 million, with gross margin slipping to 43% from 44.2%. Operating loss came in at $7.3 million, compared to operating profit of $9.4 million in the first quarter of 2024.
"We experienced a soft start to 2025 amid an unpredictable macro environment and deteriorating consumer sentiment," said Doug Howe, chief executive officer.
"We have shifted our near-term focus to amplifying value in our retail channels, preserving margins, controlling costs, and mitigating the impact of tariffs as part of our response to this volatility. Thanks to our team's focus and discipline, we expect to deliver between $20 million to $30 million in cost savings over the course of 2025.'
Looking ahead, the company withdrew its full year 2025 guidance that was provided on March 20, and did not provide a new full year outlook.
"Given the persistent instability and pressure on consumer discretionary spend, we've made the decision to withdraw our 2025 guidance for the time being. Moving forward, our efforts remain focused on disciplined execution of the initiatives within our control to build a business rooted in the strength of our brand, centered on the customer, and positioned for long-term value creation,' Howe added.
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