The total comparable sales of the company declined 5 per cent in Q2. The gross profit fell to $322.9 million, with gross margin slipping slightly to 43.7 per cent. The net income attributable to Designer Brands was $10.8 million, or diluted earnings per share (EPS) of $0.22, while adjusted net income stood at $16.7 million, or adjusted diluted EPS of $0.34.
Designer Brands Inc has reported net sales of $739.8 million in Q2 FY25, down 4.2 per cent YoY, with comparable sales declining 5 per cent.
Net income was $10.8 million, while adjusted EPS stood at $0.34.
US sales fell 4.8 per cent, Canada rose 0.4 per cent, and brand portfolio plunged 23.8 per cent.
Operating 668 stores, the company withheld its FY25 guidance.
The cash and cash equivalents rose to $44.9 million. The company also reported $104.3 million available under its senior secured revolving credit facility. Debt increased to $516.3 million. Inventories decreased to $610.9 million, Designer Brands Inc said in a press release.
Region-wise, US retail net sales fell 4.8 per cent to $610.9 million, with comparable sales declining 4.9 per cent. In contrast, the Canada retail segment posted a modest 0.4 per cent increase in net sales to $75.1 million, though comparable sales edged down 0.6 per cent.
The brand portfolio segment faced significant pressure in Q2 FY25, with sales plunging 23.8 per cent to $73.2 million. Comparable direct-to-consumer (DTC) sales were hit particularly hard, dropping 29.2 per cent.
“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,” said Doug Howe, chief executive officer (CEO) at Designer Brands Inc. “These initiatives supported a strong start to the back-to-school season within the US 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 optimise our omni-channel model will continue to support our transformation,” added Howe.
For the first six months of FY25, consolidated net sales were $1.43 billion, down 6 per cent YoY, and the gross profit for the half-year declined 7.7 per cent to $618.1 million.
Designer Brands operated 668 stores with a total square footage of 10.96 million, compared to 676 stores and 11.17 million square feet a year earlier. The US retail segment included 493 DSW stores, while Canada housed 175 stores under The Shoe Co, Rubino, and DSW banners, added the release.
Due to macroeconomic uncertainty stemming primarily from global trade policies, the company has elected not to reinstate full year 2025 guidance.
“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,” said Howe.
Fibre2Fashion News Desk (SG)
