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Designer Brands announces fourth quarter and full year results

Mar 28, 2024 United States
Designer Brands announces fourth quarter and full year results
The North American company ended the fiscal year 2023 with better-than-expected results due to its brand portfolio, but highlighted the challenging environment it faced
“We ended the year strong, with a solid finish to the fourth quarter above the top end of our revised EPS guidance range, led by strength in our brand portfolio segment as a result of acquiring Keds, Topo, and launching Le Tigre”, said Doug Howe, Chief Executive Officer. “Despite the results, 2023 was a difficult year as we were impacted by a softening footwear market, highly promotional retail environment, and the impact of unseasonably warm weather on our seasonal footwear business”, he added.
 

Fourth Quarter Results

In the three months to the 3rd of February, the company’s net sales totalled 754.3 million euros, a decrease of 0.8% as compared to a similar period of the prior year; in this period, total comparable sales were down by 7.3% year-over-year.

Fourth quarter net sales in the US retail segment amounted to 630.8 million US dollars, a decrease of 2.7% over the prior year, and in the Canadian retail segment were 64.4 million US dollars, a decrease of 2.9% over the prior year. On the other hand, net sales of the Brand portfolio increased by 37.7% year-over-year to 77.7 million US dollars.

On a comparable basis, Designer Brands reported a gross profit of 207.4 million US dollars in the fourth quarter of fiscal 2003 compared to a gross profit of 222.0 million US dollars in the same quarter of the prior year; accordingly, the gross margin decreased from 29.2% to 27.5% year-on-year.

In the fourth quarter of the last fiscal year, the company posted a net loss of 29.7 million US dollars, or loss per diluted share of 0.52 US dollars, as compared to a net income of 45.1 million US dollars, or 0.66 US dollars per diluted share, recorded in the same period of fiscal 2022.

Fiscal 2023 Results

The North American company’s net sales in 2023 amounted to 3.1 billion US dollars, reflecting a decline of 7.3%, on a comparable basis to the previous fiscal year; in these twelve months, total comparable sales were down by 9.0% year-over-year.

Last year’s Designer Brands gross profit totalled 1.0 billion US dollars, as compared to a gross profit of 1.1 billion US dollars, with the gross margin decreasing from 32.6% to 31.7%.

The company recorded a 2023 net income of 29.1 million US dollars, or earnings of 0.46 US dollars per diluted share, on a comparable basis to a net income of 162.7 million US dollars, or earnings of 2.26 US dollars, registered in the prior year.

At the end of fiscal 2023, the company operated 499 stores in the US and 143 stores in Canada.

Fiscal 2024 Outlook

“Looking ahead to 2024, we have an important transition year ahead as we plan to return to growth across our business. We are laser-focused on assembling a fresher and more trend-right assortment for our customers, providing an increasingly convenient shopping experience across our channels and executing on operational improvements in our brands business bolstered by our new hires”, added Howe.

For fiscal 2024, the company expects a net sales growth in the low-single digits over the last year and diluted earnings per share in the range of 0.70 US dollars to 0.80 US dollars.


Image Credits: finance.yahoo.com

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