Designer Brands Inc. Reports Second Quarter 2025 Financial Results

Sequential comparable sales improvement from first quarter of 2025 underscores strength and efficacy of strategies Delivered positive diluted earnings per share ("EPS") of $0.22 and positive adjusted diluted EPS of $0.34 with growth over the same period last year , /PRNewswire/ -- Designer Brands Inc. (NYSE: DBI) (the "Company," "we," "us," "our," and "Designer Brands"), one of the world's largest designers, producers, and retailers of footwear and accessories, today announced financial results for the second quarter ended August 2, 2025. "Our second quarter results were highlighted by a 280-basis point sequential improvement in comparable sales from the first quarter, underscoring the impact of our targeted operational initiatives," stated Doug Howe, Chief Executive Officer. "These initiatives supported a strong start to the back-to-school season within the U.S. Retail segment as well as gradual improvements in traffic and a notable uptick in conversion. We anticipate our ongoing efforts to strengthen our brand, drive awareness through investments in marketing, and optimize our omni-channel model will continue to support our transformation." Howe continued, "While consumer sentiment has ticked up slightly, given the ongoing macroeconomic volatility with recent extended tariff increases and caution in discretionary spending, there is still a notable amount of uncertainty. That said, we remain committed to disciplined execution in those areas within our control as we navigate the near-term environment while continuing to build a stronger, more sustainable business for the future." Second Quarter Operating Results (Unless otherwise stated, all comparisons are to the second quarter of 2024) Net sales decreased 4.2% to $739.8 million. Total comparable sales decreased by 5.0%. Gross profit decreased to $322.9 million versus $339.5 million last year, and gross margin was 43.7% compared to 44.0% last year. Reported net income attributable to Designer Brands Inc. was $10.8 million, or diluted EPS of $0.22. Adjusted net income was $16.7 million, or adjusted diluted EPS of $0.34. Liquidity Cash and cash equivalents totaled $44.9 million at the end of the second quarter of 2025, compared to $38.8 million at the end of the same period last year, with $104.3 million available for borrowings under our senior secured asset-based revolving credit facility. Debt totaled $516.3 million at the end of the second quarter of 2025 compared to $465.7 million at the end of the same period last year. The Company ended the second quarter with inventories of $610.9 million compared to $642.8 million at the end of the same period last year. Store Count (square footage in thousands) August 2, 2025 August 3, 2024 Number of Stores SquareFootage Number ofStores Square Footage U.S. Retail segment - DSW stores 493 9,686 499 9,879 Canada Retail segment: The Shoe Co. stores 121 618 123 631 Rubino stores 28 147 28 149 DSW stores 26 511 26 511 175 1,276 177 1,291 Total number of stores 668 10,962 676 11,170 2025 Financial Outlook Due to macroeconomic uncertainty stemming primarily from global trade policies, the Company has elected not to reinstate full year 2025 guidance. Webcast and Conference Call The Company is hosting a conference call today at 8:30 am Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-888-317-6003, or the international dial-in, 1-412-317-6061, and reference conference ID number 3316589 approximately ten minutes prior to the start of the conference call. The conference call will also be broadcast live over the internet and can be accessed through the following link, as well as through the Company's investor website at investors.designerbrands.com: https://app.webinar.net/dp6G0Qa0NM2 For those unable to listen to the live webcast, an archived version will be available on the Company's investor website until September 23, 2025. A replay of the teleconference will be available by dialing the following numbers: U.S.: 1-877-344-7529 Canada: 1-855-669-9658 International: 1-412-317-0088 Passcode: 4429044 Important information may be disseminated initially or exclusively via the Company's investor website; investors should consult the website to access this information. About Designer Brands Designer Brands is one of the world's largest designers, producers, and retailers of the most recognizable footwear brands and accessories, transforming and defining the footwear industry through a mission of being shoe obsessed. With a diversified, world-class portfolio of coveted brands, including Topo Athletic, Keds, Vince Camuto, Kelly & Katie, Jessica Simpson, Lucky Brand, Mix No. 6, Crown Vintage and others, Designer Brands designs and produces on-trend footwear and accessories for all of life's occasions delivered to the consumer through a robust direct-to-consumer omni-channel infrastructure and powerful national wholesale distribution. Powered by a billion-dollar digital commerce business across multiple domains and over 660 DSW Designer Shoe Warehouse, The Shoe Co., and Rubino stores in North America, Designer Brands delivers current, in-line footwear and accessories from the largest national brands in the industry and holds leading market share positions in key product categories across women's, men's, and kids'. Designer Brands also distributes its brands internationally through select wholesale and distributor relationships while also leveraging design and sourcing expertise to build private label products for national retailers. Designer Brands is committed to being a difference maker in the world and the footwear industry. By leading with our corporate values of We Belong and We Do What's Right, Designer Brands supports the global community and the health of the planet by donating more than twelve million pairs of shoes to the global non-profit Soles4Souls since 2018. To learn more, visit www.designerbrands.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Certain statements in this press release may constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of forward-looking words such as "outlook," "could," "believes," "expects," "potential," "continues," "may," "will," "should," "would," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. These statements are based on the Company's current views and expectations and involve known and unknown risks, uncertainties, and other factors, many of which are outside of the Company's control, that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: uncertain general economic and financial conditions, including economic volatility and potential downturn or recession, supply chain disruptions, new or increased tariffs and other barriers to trade, fluctuating interest rates, unemployment rates and inflationary pressures, and the related impacts to consumer discretionary spending, as well as our ability to plan for and respond to the impact of these conditions; our ability to anticipate and respond to rapidly changing consumer preferences, seasonality, customer expectations, and fashion trends; the impact on our consumer traffic and demand, our business operations, and the operations of our suppliers, as we experience unseasonable weather, climate change evolves, and the frequency and severity of weather events increases; our ability to execute on our business strategies, including growing our Brand Portfolio segment, enhancing in-store and digital shopping experiences, and meeting consumer demands; our ability to successfully and efficiently integrate acquisitions in a manner that does not impede growth; our ability to maintain strong relationships with our suppliers, vendors, licensors, and retailer customers; risks related to losses or disruptions associated with our distribution systems, including our distribution centers and stores, whether as a result of reliance on third-party providers or otherwise; risks related to cyber security threats and privacy or data security breaches or the potential loss or disruption of our information technology ("IT") systems, or those of our vendors; risks related to the implementation of new or updated IT systems; our ability to protect our reputation and to maintain the brands we license; our reliance on our reward programs and marketing to drive traffic, sales, and customer loyalty; our ability to successfully integrate new hires or changes in leadership and retain our existing management team, and to continue to attract qualified new personnel; risks related to restrictions imposed by our senior secured asset-based revolving credit facility, as amended, and our senior secured term loan credit agreement, as amended, that could limit our ability to fund our operations; our competitiveness with respect to style, price, brand availability, shopping platforms, and customer service; risks related to our international operations and our reliance on foreign sources for merchandise; our ability to comply with laws and regulations, as well as other legal obligations; risks associated with climate change and other corporate responsibility issues; and uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation. Risks and other factors that could cause our actual results to differ materially from our forward-looking statements are described in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025 or our other reports made or filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the time when made. Except as may be required by applicable law, the Company undertakes no obligation to update or revise the forward looking statements included in this press release to reflect any future events or circumstances. DESIGNER BRANDS INC. SEGMENT RESULTS (unaudited) Net Sales Three months ended (dollars in thousands) August 2, 2025 August 3, 2024 Change Amount % ofSegmentNet Sales Amount % of Segment Net Sales Amount % Segment net sales: U.S. Retail $ 610,926 80.5 % $ 641,694 79.0 % $ (30,768) (4.8) % Canada Retail 75,077 9.9 % 74,797 9.2 % 280 0.4 % Brand Portfolio 73,157 9.6 % 95,993 11.8 % (22,836) (23.8) % Total segment net sales 759,160 100.0 % 812,484 100.0 % (53,324) (6.6) % Elimination of intersegment net sales (19,398) (40,584) 21,186 (52.2) % Consolidated net sales $ 739,762 $ 771,900 $ (32,138) (4.2) % Six months ended (dollars in thousands) August 2, 2025 August 3, 2024 Change Amount % ofSegment Net Sales Amount % of SegmentNet Sales Amount % Segment net sales: U.S. Retail $ 1,184,166 79.9 % $ 1,263,061 79.3 % $ (78,895) (6.2) % Canada Retail 128,982 8.7 % 130,309 8.2 % (1,327) (1.0) % Brand Portfolio 169,055 11.4 % 200,123 12.5 % (31,068) (15.5) % Total segment net sales 1,482,203 100.0 % 1,593,493 100.0 % (111,290) (7.0) % Elimination of intersegment net sales (55,532) (74,997) 19,465 (26.0) % Consolidated net sales $ 1,426,671 $ 1,518,496 $ (91,825) (6.0) % Comparable Sales Three months ended Six months ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Change in comparable sales: U.S. Retail segment (4.9) % (1.1) % (6.1) % (1.7) % Canada Retail segment (0.6) % (3.1) % (4.4) % (3.9) % Brand Portfolio segment - direct-to-consumer channel (29.2) % (7.0) % (28.1) % (4.8) % Total (5.0) % (1.4) % (6.4) % (1.9) % Gross Profit Three months ended (dollars in thousands) August 2, 2025 August 3, 2024 Change Amount % ofSegmentNet Sales Amount % of Segment Net Sales Amount % BasisPoints Segment gross profit: U.S. Retail $ 264,522 43.3 % $ 282,916 44.1 % $ (18,394) (6.5) % (80) Canada Retail 34,950 46.6 % 35,087 46.9 % (137) (0.4) % (30) Brand Portfolio 18,508 25.3 % 26,635 27.7 % (8,127) (30.5) % (240) Total segment gross profit 317,980 41.9 % 344,638 42.4 % (26,658) (7.7) % (50) Net recognition (elimination) of intersegment gross profit 4,953 (5,089) 10,042 Consolidated gross profit $ 322,933 43.7 % $ 339,549 44.0 % $ (16,616) (4.9) % (30) Six months ended (dollars in thousands) August 2, 2025 August 3, 2024 Change Amount % ofSegment Net Sales Amount % of SegmentNet Sales Amount % BasisPoints Segment gross profit: U.S. Retail $ 507,318 42.8 % $ 557,324 44.1 % $ (50,006) (9.0) % (130) Canada Retail 60,354 46.8 % 61,461 47.2 % (1,107) (1.8) % (40) Brand Portfolio 45,179 26.7 % 60,112 30.0 % (14,933) (24.8) % (330) Total segment gross profit 612,851 41.3 % 678,897 42.6 % (66,046) (9.7) % (130) Net recognition (elimination) of intersegment gross profit 5,208 (9,337) 14,545 Consolidated gross profit $ 618,059 43.3 % $ 669,560 44.1 % $ (51,501) (7.7) % (80) Intersegment Eliminations Three months ended (in thousands) August 2, 2025 August 3, 2024 Intersegment recognition and elimination activity: Elimination of net sales recognized by Brand Portfolio segment $ (19,398) $ (40,584) Cost of sales: Elimination of cost of sales recognized by Brand Portfolio segment 13,785 28,174 Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period 10,566 7,321 $ 4,953 $ (5,089) Six months ended (in thousands) August 2, 2025 August 3, 2024 Intersegment recognition and elimination activity: Elimination of net sales recognized by Brand Portfolio segment $ (55,532) $ (74,997) Cost of sales: Elimination of cost of sales recognized by Brand Portfolio segment 39,599 52,267 Recognition of intersegment gross profit for inventory previously purchased thatwas subsequently sold to external customers during the current period 21,141 13,393 $ 5,208 $ (9,337) Operating Profit Three months ended (dollars in thousands) August 2, 2025 August 3, 2024 Change Amount % of Segment Net Sales Amount % of SegmentNet Sales Amount % BasisPoints Segment operating profit (loss): U.S. Retail $ 60,211 9.9 % $ 77,573 12.1 % $ (17,362) (22.4) % (220) Canada Retail 8,498 11.3 % 9,052 12.1 % (554) (6.1) % (80) Brand Portfolio (3,606) (4.9) % (2,053) (2.1) % (1,553) 75.6 % (280) Total segment operating profit 65,103 8.6 % 84,572 10.4 % (19,469) (23.0) % (180) Corporate/eliminations (38,520) (55,983) 17,463 (31.2) % Consolidated operating profit $ 26,583 3.6 % $ 28,589 3.7 % $ (2,006) (7.0) % (10) Six months ended (dollars in thousands) August 2, 2025 August 3, 2024 Change Amount % of Segment Net Sales Amount % of Segment Net Sales Amount % BasisPoints Segment operating profit (loss) U.S. Retail $ 99,819 8.4 % $ 141,774 11.2 % $ (41,955) (29.6) % (280) Canada Retail 8,863 6.9 % 12,220 9.4 % (3,357) (27.5) % (250) Brand Portfolio (1,015) (0.6) % (97) — % (918) 946.4 % (60) Total segment operating profit 107,667 7.3 % 153,897 9.7 % (46,230) (30.0) % (240) Corporate/eliminations (88,346) (115,926) 27,580 (23.8) % Consolidated operating profit $ 19,321 1.4 % $ 37,971 2.5 % $ (18,650) (49.1) % (110) DESIGNER BRANDS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share amounts) Three months ended Six months ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Net sales $ 739,762 $ 771,900 $ 1,426,671 $ 1,518,496 Cost of sales (416,829) (432,351) (808,612) (848,936) Gross profit 322,933 339,549 618,059 669,560 Operating expenses (297,462) (313,531) (599,324) (637,024) Income from equity investments 2,578 2,571 5,005 5,435 Impairment charges (1,466) — (4,419) — Operating profit 26,583 28,589 19,321 37,971 Interest expense, net (11,667) (11,035) (23,535) (22,596) Non-operating expenses, net (78) (109) (70) (252) Income (loss) before income taxes 14,838 17,445 (4,284) 15,123 Income tax provision (3,557) (3,363) (1,571) (156) Net income (loss) 11,281 14,082 (5,855) 14,967 Net income attributable to redeemable noncontrolling interest (454) (258) (742) (360) Net income (loss) attributable to Designer Brands Inc. $ 10,827 $ 13,824 $ (6,597) $ 14,607 Diluted earnings (loss) per share attributable to Designer Brands Inc. $ 0.22 $ 0.24 $ (0.14) $ 0.25 Weighted average diluted shares 49,734 58,576 48,678 58,978 DESIGNER BRANDS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) August 2, 2025 February 1, 2025 August 3, 2024 ASSETS Current assets: Cash and cash equivalents $ 44,937 $ 44,752 $ 38,834 Receivables, net 55,675 50,371 49,671 Inventories 610,876 599,751 642,783 Prepaid expenses and other current assets 40,437 39,950 66,760 Total current assets 751,925 734,824 798,048 Property and equipment, net 227,141 208,199 216,313 Operating lease assets 716,685 701,621 723,818 Goodwill 130,716 130,386 130,611 Intangible assets, net 81,881 84,639 86,334 Deferred tax assets 45,067 43,324 39,997 Equity investments 59,446 56,761 61,020 Other assets 48,870 49,470 50,993 Total assets $ 2,061,731 $ 2,009,224 $ 2,107,134 LIABILITIES, REDEEMABLE NONCONTROLLINGINTEREST, AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 239,200 $ 271,524 $ 294,739 Accrued expenses 170,333 152,153 161,155 Current maturities of long-term debt 6,750 6,750 6,750 Current operating lease liabilities 157,212 159,924 156,394 Total current liabilities 573,495 590,351 619,038 Long-term debt 509,593 484,285 458,974 Non-current operating lease liabilities 646,431 635,076 653,416 Other non-current liabilities 48,201 17,737 16,642 Total liabilities 1,777,720 1,727,449 1,748,070 Redeemable noncontrolling interest 3,214 3,284 3,519 Total shareholders' equity 280,797 278,491 355,545 Total liabilities, redeemable noncontrolling interest, and shareholders' equity $ 2,061,731 $ 2,009,224 $ 2,107,134 DESIGNER BRANDS INC. NON-GAAP RECONCILIATION (unaudited and in thousands, except per share amounts) Three months ended Six months ended August 2, 2025 August 3, 2024 August 2, 2025 August 3, 2024 Operating expenses $ (297,462) $ (313,531) $ (599,324) $ (637,024) Non-GAAP adjustments: Restructuring and integration costs 2,212 2,349 6,087 7,178 Acquisition-related costs — 1,586 — 2,072 Total non-GAAP adjustments 2,212 3,935 6,087 9,250 Adjusted operating expenses $ (295,250) $ (309,596) $ (593,237) $ (627,774) Operating profit $ 26,583 $ 28,589 $ 19,321 $ 37,971 Non-GAAP adjustments: Restructuring and integration costs 2,212 2,349 6,087 7,178 Acquisition-related costs — 1,586 — 2,072 Impairment charges 1,466 — 4,419 — Total non-GAAP adjustments 3,678 3,935 10,506 9,250 Adjusted operating profit $ 30,261 $ 32,524 $ 29,827 $ 47,221 Net income (loss) attributable to Designer Brands Inc. $ 10,827 $ 13,824 $ (6,597) $ 14,607 Non-GAAP adjustments: Restructuring and integration costs 2,212 2,349 6,087 7,178 Acquisition-related costs — 1,586 — 2,072 Impairment charges 1,466 — 4,419 — Foreign currency transaction losses 78 109 70 252 Total non-GAAP adjustments before tax effect 3,756 4,044 10,576 9,502 Tax effect on above non-GAAP adjustments 1,921 (1,149) 257 (2,547) Valuation allowance change on deferred tax assets (242) 94 (770) (42) Total non-GAAP adjustments, after tax 5,435 2,989 10,063 6,913 Net income attributable to redeemable noncontrolling interest 454 258 742 360 Adjusted net income $ 16,716 $ 17,071 $ 4,208 $ 21,880 Diluted earnings (loss) per share $ 0.22 $ 0.24 $ (0.14) $ 0.25 Adjusted diluted earnings per share $ 0.34 $ 0.29 $ 0.09 $ 0.37 Non-GAAP Measures To supplement amounts presented in our consolidated financial statements determined in accordance with accounting principles generally accepted in the U.S. ("GAAP"), the Company uses certain non-GAAP financial measures, including adjusted operating expenses, adjusted operating profit, adjusted net income, and adjusted diluted earnings per share as shown in the table above. These measures adjust for the effects of: (1) restructuring and integration costs, including severance charges; (2) acquisition-related costs; (3) impairment charges; (4) foreign currency transaction losses; (5) the net tax impact of such items; (6) the change in the valuation allowance on deferred tax assets; and (7) net income attributable to redeemable noncontrolling interest. The unaudited adjusted results should not be construed as an alternative to the reported results determined in accordance with GAAP. These financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures presented by other companies. The Company believes that these non-GAAP financial measures provide useful information to both management and investors to increase comparability to prior periods by adjusting for certain items that may not be indicative of core operating measures and to better identify trends in our business. The adjusted financial results are used by management to, and allow investors to, evaluate the operating performance of the Company compared to prior periods, when reviewed in conjunction with the Company's GAAP statements. These amounts are not determined in accordance with GAAP and therefore should not be used exclusively in evaluating the Company's business and operations. Comparable Sales Performance Metric We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the U.S. Retail and Canada Retail segments. Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period of the prior year. Comparable sales include the e-commerce net sales of the Brand Portfolio segment from the direct-to-consumer e-commerce sites. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation. SOURCE Designer Brands Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Designer Brands Inc. Reports Second Quarter 2025 Financial Results

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