Designer Brands Inc. (NYSE: DBI) reported Q1 EPS of ($1.83), $1.23 worse than the analyst estimate of ($0.60). Revenue for the quarter came in at $482.8 million versus the consensus estimate of $481.16 million.

First Quarter Operating Results

• Net sales decreased 44.7% to $482.8 million.
• Comparable sales decreased 42.3% for first quarter of fiscal 2020 compared to a 3.0% increase in the first quarter of fiscal 2019.
• Reported consolidated gross profit decreased $285.8 million to a loss of $26.5 million in the first quarter as compared to a profit of $259.3 million in the same period last year. This was primarily driven by increased inventory markdown activity and the resulting increase in inventory reserves of $84.0 million over the same period last year, higher shipping costs associated with an increase in digital penetration, and the deleveraging of distribution and fulfillment and store occupancy expenses on lower sales volume.
• Recorded impairment charges of $112.5 million as a result of the material reduction in net sales and cash flows due to the temporary closure of all stores.
• Reported net loss was $215.9 million, or $3.00 loss per diluted share, including pre-tax charges totaling $112.3 million, or $1.17 per diluted share, primarily related to impairment charges, integration and restructuring expenses and COVID-19 incremental costs, partially offset by governmental credits the Company is able to claim.
• Adjusted net loss was $131.8 million, or $1.83 loss per diluted share.

Roger Rawlins, Chief Executive Officer, stated, "As we said last quarter, the effect of COVID-19 on our industry has been unprecedented and has created many significant near-term challenges. The pandemic necessitated store closures and heavily impacted consumers, resulting in total comparable sales being down 42% during the first quarter."

Mr. Rawlins continued, "I am proud of how our team has responded to the challenges and what we were able to accomplish in the first quarter. Over the past several years, we have made significant investments in our digital infrastructure, and, as a result, we were able to generate strong digital demand during the first quarter, which resulted in digital demand representing 50% of total demand for the quarter, growing 25% over last year. We also leveraged our best-in-class inventory controls to end the quarter with inventory units on hand flat versus last year. We have adjusted our near-term areas of focus to prioritize growing with the top fifty brands in footwear and further emphasizing our everyday value. We are also laser-focused on maintaining and preserving sufficient liquidity."

2020 GuidanceAs previously announced on March 17, 2020, the Company is not issuing guidance for fiscal 2020 given the rapidly evolving COVID-19 environment. The Company is not providing an update at this time.

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