Designer Brands lowers profit outlook
US fashion retailer Designer Brands has cut its full-year profit outlook as it saw a slight uptick in sales in the third quarter of the year.
Net sales in the three months to October 29 rose 1.4 percent to 865 million dollars. On a comparable basis, sales were up 3 percent.
Net income in the third quarter fell to 45.2 million dollars from 80.2 million dollars a year earlier.
“We continued to make meaningful progress on our long-term brand building strategy while also delivering solid comparable sales across every segment of our business,” CEO Roger Rawlins told investors.
He pointed to the fact that sales of the company’s Owned Brands represented 26.5 percent of total net sales in the third quarter, up from 21.5 percent a year earlier.
“The strategic shifts we have made in our business over the past several years are driving a sustainably higher gross margin rate than 2019 as we have a more targeted focus on customer acquisition, optimizing our assortment, and growing the brands we own and control,” he said.
Based on its Q3 results, Designer Brands reiterated its full-year guidance of sales growth in the mid-single digits.
But it cut its diluted earnings per share guidance to between 1.75 dollars to 1.8 dollars, down from its previous guidance of between 2.05 dollars and 2.15 dollars.
Looking ahead, Rawlins said: “While we are seeing many of the same pressures across the consumer landscape that most retailers are seeing, our flexible business model continues to support our efforts to navigate a dynamic macro environment.
“We are focused on meeting our customers' footwear needs while we balance inventory and expenses in order to continue growing market share in this volatile environment.”