Latest news with #DougHowe
Yahoo
2 days ago
- Business
- Yahoo
DBI Q1 Earnings Call: Management Focuses on Cost Controls Amid Soft Consumer Demand
Footwear and accessories discount retailer Designer Brands (NYSE:DBI) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 8% year on year to $686.9 million. Its non-GAAP loss of $0.26 per share was significantly below analysts' consensus estimates. Is now the time to buy DBI? Find out in our full research report (it's free). Revenue: $686.9 million vs analyst estimates of $732.9 million (8% year-on-year decline, 6.3% miss) Adjusted EPS: -$0.26 vs analyst estimates of -$0.06 (significant miss) Adjusted EBITDA: $14.36 million vs analyst estimates of $32.05 million (2.1% margin, 55.2% miss) Operating Margin: -1.1%, down from 1.3% in the same quarter last year Locations: 669 at quarter end, down from 675 in the same quarter last year Same-Store Sales fell 7.8% year on year (-2.5% in the same quarter last year) Market Capitalization: $148.9 million Designer Brands' first quarter results were shaped by a challenging retail environment and weaker consumer sentiment, which pressured both store and digital traffic. CEO Doug Howe cited 'increased uncertainty and reduced planning visibility, particularly around consumer behavior,' leading to an 8% drop in comparable sales. Management attributed the softness in the U.S. and Canada to macroeconomic factors and unfavorable weather, particularly in February, which further dampened seasonal demand. The shift in consumer preferences toward value and heightened caution among discretionary shoppers forced the company to increase markdowns and adjust its approach to inventory and promotions. Howe noted that the team implemented a 6% reduction in operating expenses, with a broader plan to save $20 million to $30 million this year. Looking forward, Designer Brands withdrew its forward-looking guidance due to ongoing volatility and unpredictability in consumer demand. Management emphasized a near-term focus on cost controls, tariff mitigation, and enhancing the value proposition for customers. Howe stated, 'This volatility makes any future forecast highly unpredictable,' explaining the decision to refrain from providing projections. The company is prioritizing expense reductions, optimizing inventory levels, and diversifying sourcing to manage tariff impacts. Investments will continue in growth brands like Topo and Keds, which management believes are well-positioned even as discretionary spending remains under pressure. CFO Jared Poff highlighted ongoing efforts to 'operate the business as optimally as possible during this time,' with capital spending and inventory investments being tightly managed. Designer Brands' leadership attributed the quarter's results to persistent consumer softness, cost-cutting measures, and a strategic shift toward value and sourcing diversification. Consumer demand volatility: Management emphasized that lower store and online traffic reflected ongoing weakness in consumer sentiment, which was exacerbated by unfavorable weather early in the quarter and continued economic uncertainty for discretionary shoppers. Cost structure adjustments: The company implemented a 6% reduction in operating expenses for the quarter and expects $20 million to $30 million in annual savings as part of a broader cost management initiative in response to revenue pressures. Product assortment strategy: Designer Brands is reducing its choice count while increasing depth on key styles, prioritizing higher-converting products, and leveraging partnerships with top brands. This approach has shown improvement in store conversion rates and better inventory productivity, according to management. Brand performance divergence: While the overall Brand Portfolio segment saw lower sales, specific brands like Topo achieved 84% year-over-year growth, driven by expanded distribution and new product launches. Keds also improved gross margins by shifting production in-house and cleaning up excess inventory, despite top-line headwinds. Sourcing and tariff response: Management accelerated efforts to diversify sourcing away from China due to higher-than-anticipated tariffs, aiming for less than half of sourced products from China by year-end. They noted that only about 20% of products are directly sourced, limiting their ability to adjust for all categories. Management's outlook centers on continued cost control, sourcing diversification, and focusing investment on key growth brands amid consumer demand uncertainty. Tariff mitigation and sourcing shifts: Designer Brands is prioritizing diversification of its supplier base to reduce reliance on China, especially in anticipation of ongoing tariff pressures. Management expects less than half of all sourcing to come from China by the end of the year, which should help limit cost increases, though some categories—like dress footwear—remain more dependent on established Chinese suppliers. Expense discipline and capital allocation: The company aims to deliver $20 million to $30 million in expense savings this year, with further reductions in planned capital expenditures. CFO Jared Poff noted that every dollar of spend is being "highly scrutinized," and inventory investments are being managed for flexibility to respond quickly to demand shifts. Brand investment and product focus: Despite near-term headwinds, management is investing in brands like Topo and Keds, which are seen as long-term growth drivers with pricing power. The company will also relaunch its VIP Rewards program next year, aiming to deepen customer engagement and drive more targeted promotions, even as overall consumer sentiment remains volatile. In the coming quarters, the StockStory team will watch (1) whether cost reduction efforts yield sustained margin improvement, (2) the effectiveness of sourcing diversification in mitigating tariff and supply chain risks, and (3) further growth in brands like Topo and Keds. The relaunch of the VIP Rewards program and any stabilization in consumer demand will also be important milestones for tracking the company's recovery. Designer Brands currently trades at a forward P/E ratio of 12.2×. At this valuation, is it a buy or sell post earnings? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fashion Network
2 days ago
- Business
- Fashion Network
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.
Fashion Network
2 days ago
- Business
- Fashion Network
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.
Yahoo
3 days ago
- Business
- Yahoo
DSW Parent Designer Brands Stock Plummets on Weak Results, Withdrawn Outlook
Shares of Designer Brands (DBI) lost more than a fifth of their value Tuesday after the DSW parent reported first-quarter results that missed analysts' estimates and withdrew its fiscal 2025 outlook. The Columbus, Ohio-based company posted an adjusted loss of 26 cents per share, far wider than the 6-cent-per-share adjusted loss expected by analysts surveyed by Visible Alpha. Net sales decreased 8% year-over-year to $686.9 million, lower than the estimate of $732.9 million. "We experienced a soft start to 2025 amid an unpredictable macro environment and deteriorating consumer sentiment," CEO Doug Howe said. "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." Designer Brands said it was pulling its full-year projections "due to macroeconomic uncertainty stemming primarily from global trade policies." Last quarter, it had guided for fiscal 2025 net sales growth in the "low-single digits" and earnings per share of 30 cents to 50 cents. Designer Brands shares were down 22% in recent trading and have lost 45% of their value this year so far. Read the original article on Investopedia Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Designer Brands Sounds Tariff Alarm After Weak Quarter, Stock Plummets
Designer Brands Inc. (NYSE:DBI) shares are trading lower on Tuesday after the company released its first-quarter results. The footwear and accessories company reported an adjusted loss of 26 cents per share, missing the Street view of 6 cents loss. Quarterly sales of $686.91 million (down 8% year over year) missed the analyst consensus estimate of $732.81 million. Total comparable sales decreased by 7.8%.'We experienced a soft start to 2025 amid an unpredictable macro environment and deteriorating consumer sentiment,' stated CEO Doug Howe. Gross profit decreased to $295.1 million compared to $330.0 million last year. The quarterly gross margin was 43.0% compared to 44.2% last year. Cash and cash equivalents totaled $46 million at the end of the first quarter, compared to $43.4 million at the end of the same period last year. Debt totaled $522.9 million at the end of the first quarter of 2025 compared to $476.1 million at the end of the same period last year. The company ended the first quarter with inventories of $623.6 million compared to $620.5 million at the end of the same period last year. The total number of stores decreased slightly to 669 (11,006 square footage) from 675 (11,210 square footage) in the previous year. '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,' the CEO added. 'We expect to deliver between $20 million to $30 million in cost savings over the course of 2025.' Designer Brands is retracting its full-year 2025 guidance. This decision stems from macroeconomic uncertainties, largely attributed to global trade policies. The company said it will pay a dividend of $0.05 per share on June 18 to shareholders of record at the close of business on June 5. Price Action: DBI shares are trading lower by 24.8% to $2.80 at last check Tuesday. Read Next:Photo by JHVEPhoto via Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? This article Designer Brands Sounds Tariff Alarm After Weak Quarter, Stock Plummets originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
