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Designer Brands returns to profitability

May 31, 2021 United States
Designer Brands returns to profitability
The US-based company registered net sales increasing by 45.6% to 703.2 million US dollars in the first quarter of fiscal 2021 compared to the same period last year. The company highlighted its return to profitability
"Designer Brands is off to a strong start in fiscal 2021, highlighted by our return to profitability for the first time since the onset of COVID-19 and a positive comparable sales increase of 52% for the first quarter. Our success was driven by green shoots in areas of the business that had been previously affected by the pandemic, synergies from our vertical capabilities coming to life, which allowed us to capitalize on positive trends faster than ever before, and our assortment strategy focused on athleisure, kids and seasonal products. We remain focused on leveraging the flexibility of our business model, pivoting our assortment to athleisure to better match the purchasing habits of our customers, enhancing our digital capabilities, and strategically managing costs. Looking forward, we are optimistic that the positive trends will continue as the market recovers", commented Roger Rawlins, Chief Executive Officer.

First Quarter Results

Designer Brands registered net sales increasing by 45.6% to 703.2 million US dollars in the first quarter of fiscal 2021 compared to the same period last year. Comparable sales increased by 52.2% for the first quarter of fiscal 2021 versus the 42.3% decrease for the same period last year.

The company's gross profit in the period increased to 216.1 million US dollars, which compares to gross loss of 26.5 million US dollars last year. Gross margin as a percentage of net sales was 30.7% as compared to negative 5.5% last year and 29.7% for the first quarter of fiscal 2019.

Reported net income in the first quarter of fiscal 2021 was 17.0 million US dollars. Adjusted net income in the first quarter of fiscal 2021 was 9.5 million US dollars.

Store Openings and Closings

During the first quarter of fiscal 2021, the company opened two stores and closed five locations in the US, resulting in a total of 516 US stores. In Canada, two stores were opened and one closed, resulting in a total of 145 Canadian stores.   

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