Designer Brands Stock Rises on Better-than-Expected Earnings Despite Revenue Decline
Shares of Designer Brands (DBI) rose by nearly 5% after the company reported second-quarter earnings that beat expectations despite a revenue decline. The parent company, which owns DSW and other brands like Keds and Lucky Brand, saw overall sales fall to $730.6 million from $744.7 million in estimates. However, it outperformed on profitability with an adjusted gross margin increase of 4.3 percentage points due to better product selection and inventory control. The company also received a $15.3 million tariff refund that wasn't included in the adjusted figures but contributed positively to its bottom line. Adjusted earnings per share rose from $0.33 to $0.34, surpassing estimates of $0.26. CEO Doug Howe highlighted significant improvements and strong performance in the Brand Portfolio segment, which saw a 7.1% comparable sales increase. Looking ahead, Designer Brands raised its full-year guidance for revenue growth from -1% to +1%, now expecting flat-to-1% growth, while also increasing adjusted earnings per share forecasts.
Topics: footwear industry profitability retail