Companies

Designer Brands announces first quarter results

Jun 9, 2023 United States

After seeing its sales and earnings decline in the first quarter of 2023, the North American company has decided to approach the rest of the year with “heightened” caution, lowering its full year guidance in result

“I am pleased with the quarter we delivered on top of outsized market-leading growth in the first quarter of last year, albeit slightly below our initial expectations. We have made significant operational progress on our goal of doubling sales of our Owned Brands by 2026 over 2021 with our recent acquisitions of Keds, Le Tigre, and Topo Athletic helping to further expand and diversify our brand portfolio”, commented Doug Howe, Chief Executive Officer of Designer Brands. However, “as the consumer remains cautious” – he added – “we are approaching the remainder of the year and the trajectory of the recovery in our business with heightened consideration”.

First Quarter Results

In the first quarter of fiscal 2023, Designer Brands' net sales totalled 742.1 million US dollars, reflecting a decline of 10.7%, on a comparable basis to the same period of last year; in this quarter, its comparable sales were down by 10.4% year-over-year.

In the three months to the 29^th of April, the company's US retail segment recorded a 12.8% decrease in net sales to 612.9 million US dollars, while the Canada retail segment posted a 4.2% decline to 54.0 million US dollars, as compared to the same months of 2022. Meanwhile, net sales in the company's owned brands segment amounted to 93.0 million US dollars, down by 4.6% from the same quarter of the prior year.

Designer Brands' first quarter gross profit totalled 237.7 million US dollars and its gross margin was 32.0%, on a comparable basis to the gross profit of 275.7 million US dollars and gross margin of 33.2% recorded in the first quarter of 2022.

As of the 29^th of April, the company's net income was 11.4 million US dollars, or diluted earnings per share of 0.17 US dollars, as compared to a net income of 26.2 million US dollars, or diluted earnings per share of 0.34 US dollars, registered in a similar period of the previous year.

Store Base Update

In the first quarter of the current fiscal year, Designer Brands closed two stores in the US and opened a new one in the US, resulting in a total of 499 US stores and 139 Canadian stores.

Fiscal 2023 Outlook

For the full year, the North American company expects its net sales, excluding Keds, to decline mid-to-high single digits, as compared to the previous guidance of a decline of mid-single digits. Keds is still expected to add between 75 million US dollars to 85 million US dollars to the total revenue.

In addition, Designer Brands is anticipating diluted earnings per share in the range of 1.20 US dollars to 1.50 US dollars, on a comparable basis to the prior guidance of 1.65 US dollars to 1.75 US dollars.

Image Credits: designerbrands.com

United States Companies Designer Brands Footwear Quarter Results Results