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Designer Brands Inc. Reports Quarterly and Annual Financial Updates

Designer Brands Inc., recognized as one of the foremost designers, producers, and retailers of footwear and accessories, disclosed its financial results for both the fourth quarter and the entire fiscal year of 2024 on March 20, 2025. The announcement marks a critical moment for the company as it continues to navigate the complexities of the retail market.

CEO Doug Howe emphasized the company's achievement in the fourth quarter, noting a positive change in comparable sales for the first time in nine quarters, driven by strategic initiatives aimed at revitalizing the brand and enhancing customer experiences. The company's full-year earnings per share (EPS) reached the upper end of their expectations, showcasing resilience amid economic pressures such as inflation and shifting consumer spending.

Financial Performance Overview

In the fourth quarter, Designer Brands reported net sales of $713.6 million, reflecting a 5.4% decrease compared to the same period the previous year. However, total comparable sales had a modest uptick of 0.5%. Gross profit for this period dropped to $282.6 million, resulting in a gross margin improvement to 39.6%. Despite these changes, the company reported a net loss of $38.2 million, translating to a loss of $0.80 per diluted share.

For the entire fiscal year 2024, Designer Brands achieved net sales of $3.0 billion, marking a 2.1% decrease from 2023. Total comparable sales also declined by 1.7%. Nevertheless, the company recorded an adjusted net income of $15 million, or $0.27 per diluted share, offering a glimmer of optimism amid challenging market conditions.

Strategic Initiatives

Howe attributed the financial results to a series of strategic actions taken throughout the year. The company focused on refreshing its leadership, modernizing its product assortment, refining marketing strategies, and optimizing its brand portfolio. These initiatives were designed to enhance the omnichannel shopping experience for customers, ultimately positioning Designer Brands for continued growth.

Looking ahead to fiscal 2025, Designer Brands aims for a low single-digit growth in net sales and anticipates a diluted EPS between $0.30 and $0.50. The management is optimistic about stabilized performance, fueled by their commitment to a customer-first approach and data-driven insights to refine their product offerings.

Financial Outlook Amid Economic Pressures

Despite the positive outlook for 2025, the company recognizes the short-term challenges posed by inflation and reductions in consumer discretionary income. Howe assured stakeholders that the company's transformation efforts will lead to improved financial performance and a strong market position in the long run.

Shareholder Returns and Store Updates

To further benefit shareholders, the company repurchased 10.3 million Class A shares at a cost of $68.6 million during 2024. A dividend of $0.05 per share is scheduled for payment on April 11, 2025, indicating a continued commitment to returning value to shareholders despite recent losses.

Designer Brands Inc. reported a total of 669 stores across North America as of February 1, 2025, a slight increase due to the addition of several brand outlets, despite closing others throughout the year.

In conclusion, while Designer Brands faces challenges in a fluctuating market, its strategic focus on customer engagement and brand revitalization showcases a robust path forward for sustained growth in the future.