Designer Brands Inc.’s stock
DBI,
slid 34% premarket Tuesday, after the parent to footwear brands, including Keds, Lucky Brand and Vince Camuto, posted weaker-than-expected third-quarter earnings and cut its guidance. Columbus, Ohio-based Designer Brands said it was hurt by a footwear market that contracted for the first time since the pandemic amid unseasonably warm weather. “We saw improved performance in casual and clearance categories this quarter, but this was not enough to offset the broader lack of demand,” CEO Doug Howe said in a statement. “While macro pressures notably impacted our business, we clearly recognize the need to operate with even greater speed and increase the level of innovation, newness, and fashion into our assortments, returning to our roots as a merchant organization and a fashion footwear retailer.” The company had net income of $10.1 million, or 17 cents a share, down from $45.2 million, or 65 cents a share, in the year-earlier period. Adjusted per-share earnings came to 24 cents, well below the 46 cent FactSet consensus. Sales fell to $786.3 million from $865.0 million a year ago, also below the $824.0 million FactSet consensus. The company expects the pressure to continue and lowered its full-year guidance for EPS to a range of 40 cents to 70 cents from $1.20 to $1.50 previously. It expects sales to be down in the high single digits, compared with prior guidance of down mid-to-high single digits. The stock has gained 31% in the year to date, while the S&P 500
SPX,
has gained 19%.
