Designer Brands sees yearly sales drop, plans return to growth

Footwear and accessories group Designer Brands issued its financial results for both the fourth quarter and year ended February 3, 2024, in which sales for the two periods saw a slight drop ahead of an upcoming “transition year”.

For Q4, the company’s net sales fell 0.8 percent to 754.3 million dollars, while total comparable sales dropped 7.3 percent. Over the period, gross profit also took a hit, decreasing from 222 million dollars to 207.4 million dollars, with a gross profit margin of 27.5 percent.

Its reported net loss came to 29.7 million dollars, reflecting a loss per diluted share of 52 cents. The group’s adjusted net loss was reported to be 25.3 million dollars, or 44 cents loss per diluted share.

Full year sales drop 7.3 percent

Over the full year, net sales dropped to 3.1 billion dollars, a 7.3 percent decrease, while total comparable sales fell 9 percent. The company’s gross profit for the year decreased to 1 billion dollars, down from 1.1 billion dollars in the year prior, with a gross margin of 31.7 percent.

Net income attributable to Designer Brands was 29.1 million dollars, or diluted earnings per share (EPS) of 46 cents, while adjusted net income came to 43.2 million dollars, resulting in an adjusted diluted EPS of 68 cents.

In a release, CEO Doug Howe said that it had been a difficult year for the company, which had been “impacted by a softening footwear market, highly promotional retail environment, and the impact of unseasonably warm weather”.

As such, Howe said that 2024 was to be an “important transition year” for the business, as it plans to return to growth through a “more trend-right assortment” and an “increasingly convenient shopping experience” across all channels.

He added: “We expect these initiatives will underpin improved financial performance throughout the year, and combined with disciplined cost savings, will lead to continued strong cash flow generation."

For the 2024 financial year, the company anticipates a net sales growth in the low-single digits, with a diluted EPS between 70 and 80 cents.