Shares of Designer Brands Inc. (DBI) fell in pre-market trading after the shoe retailer posted fourth quarter earnings results.
Although the company beat Wall Street’s fourth quarter revenue estimate, its adjusted diluted loss per share estimate was wider than Wall Street’s expectation.
For the three months ended Jan. 31, the company’s net loss narrowed to nearly $20 million, or 40 cents a diluted share, from a net loss of $38.2 million, or 80 cents, in the year-ago quarter. On an adjusted basis, the loss per diluted share was 31 cents.
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Net sales were essentially flat at $713.59 million from $713.57 million. Total comparable sales fell by 1.9 percent. The gross profit rose to $302.7 million versus $282.6 million in the year-ago quarter, and gross margin was 42.4 percent versus 39.6 percent a year ago.
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Wall Street was expecting an adjusted diluted loss per share of 13 cents on revenue of $705.5 million.
For the year, the net loss narrowed to $5.6 million, or 17 cents a diluted share, from a net loss of about $10 million, or 20 cents, in 2024. On an adjusted basis, net income was $8.3 million and the adjusted diluted earnings per share was 16 cents. Net sales fell 3.9 percent to $2.89 billion from $3.01 billion. Total comparable sales were down by 4.3 percent.
“Our fourth quarter and fiscal 2025 results reflect disciplined execution as we strengthened the business and delivered sequential improvement across key financial metrics throughout the year,” Doug Howe, DBI’s CEO, said in a statement. “We ended the year with fourth quarter net sales flat year-over-year and impressive gross margin expansion, driving full year adjusted operating income that significantly surpassed the high end of our guidance.”
He added that as the company began fiscal 2026, “[We] remain focused on our strategic priorities, executing the initiatives within our control, and building on the momentum we’ve established. We believe this focus will drive continued improvement in both sales and profitability over the long-term.”
The company ended the year with 665 stores, or 519 DSW locations, 118 The Shoe Co. doors, and 28 Rubino stores.
Looking ahead, the company guided net sales for 2026 to a range that was down 1 percent to up 1 percent, with diluted earnings per share at between 28 cents to 38 cents.
Last month, DBI tapped Sheamus Toal for the role of CFO following the exit of Jared Poff in October. Toal joined the firm shortly after DSW parent company conducted a round of layoffs at the end of January that was conducted across operations and brands.