Designer Brands Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results
Delivers full year 2024 EPS at high end of guidance range
Fiscal 2025 guidance reflects expectations for profitable growth
"Positive comparable sales in the fourth quarter reflect a return to growth for the first time in nine quarters, highlighting the success of our strategic initiatives throughout the year," stated
Howe continued, "Looking ahead to 2025, we are confident that our ongoing business transformation will drive continued stability and growth, with expectations to significantly increase EPS compared to our 2024 adjusted results. We anticipate our reinvigorated efforts to be customer-first and product obsessed will help us better understand our customers and strengthen our product offerings through a data-driven approach. Although we do see pressure on the consumer in the short term as a result of ongoing inflation, rising prices and less discretionary income, we believe these initiatives will drive improved financial performance through 2025 and continue to position us well for long-term, sustainable growth."
Fourth Quarter Operating Results (Unless otherwise stated, all comparisons are to the fourth quarter of 2023)
- Net sales decreased 5.4% to
$713.6 million . - Total comparable sales increased by 0.5%.
- Gross profit decreased to
$282.6 million versus$292.6 million last year, and gross margin was 39.6% compared to 38.8% last year. - Reported net loss attributable to Designer Brands Inc. was
$38.2 million , or loss per diluted share of$0.80 . - Adjusted net loss was
$21.3 million , or$0.44 loss per diluted share.
Full Year Operating Results (Unless otherwise stated, all comparisons are to full year 2023)
- Net sales decreased 2.1% to
$3.0 billion . - Total comparable sales decreased by 1.7%.
- Gross profit decreased to
$1.29 billion versus$1.32 billion last year, and gross margin was 42.7% compared to 43.1% last year. - Reported net loss attributable to Designer Brands Inc. was
$10.5 million , or loss per diluted share of$0.20 . - Adjusted net income was
$15.0 million , or adjusted diluted earnings per share ("EPS") of$0.27 .
Liquidity
- Cash and cash equivalents totaled
$44.8 million at the end of 2024, compared to$49.2 million at the end of 2023, with$127.3 million available for borrowings under our senior secured asset-based revolving credit facility. Debt totaled$491.0 million at the end of 2024 compared to$427.1 million at the end of 2023. - Net cash provided by operating activities was
$82.2 million for 2024 compared to$162.4 million last year. - Inventories totaled
$599.8 million at the end of 2024, compared to$571.3 million at the end of 2023.
Return to Shareholders
- During 2024, the Company repurchased an aggregate 10.3 million Class A common shares at an aggregate cost of
$68.6 million . As ofFebruary 1, 2025 ,$19.7 million of Class A common shares remained available for future repurchase under the share repurchase program. - A dividend of
$0.05 per share of Class A and Class B common shares will be paid onApril 11, 2025 to shareholders of record at the close of business onMarch 28, 2025 .
Store Count
(square footage in thousands) | |||||||
Number of | Square | Number of | Square | ||||
494 | 9,740 | 499 | 9,958 | ||||
Canada Retail segment: | |||||||
The Shoe Co. stores | 121 | 623 | 118 | 618 | |||
Rubino stores | 28 | 149 | — | — | |||
DSW stores | 26 | 512 | 25 | 496 | |||
175 | 1,284 | 143 | 1,114 | ||||
Total number of stores | 669 | 11,024 | 642 | 11,072 | |||
During the fourth quarter of 2024, the Company closed two stores in
2025 Financial Outlook
The Company has announced the following guidance for the full year 2025:
Metric | 2025 Guidance | |
Designer Brands Net Sales Growth | Low-single digits | |
Diluted EPS |
Webcast and Conference Call
The Company is hosting a conference call today at
https://app.webinar.net/AOd2N6dpl4r
For those unable to listen to the live webcast, an archived version will be available at the same location until
International: 1-412-317-0088
Passcode: 5154029
Important information may be disseminated initially or exclusively via the Company's investor website; investors should consult the site to access this information.
About Designer Brands
Designer Brands is one of the world's largest designers, producers, and retailers of the most recognizable footwear brands and accessories, transforming and defining the footwear industry through a mission of being shoe obsessed. With a diversified, world-class portfolio of coveted brands, including Topo Athletic, Keds,
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Certain statements in this press release may constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of forward-looking words such as "outlook," "could," "believes," "expects," "potential," "continues," "may," "will," "should," "would," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. These statements are based on the Company's current views and expectations and involve known and unknown risks, uncertainties, and other factors, many of which are outside of the Company's control, that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: uncertain general economic and financial conditions, including economic volatility and potential downturn or recession, supply chain disruptions, new or increased tariffs and other barriers to trade, fluctuating interest rates, unemployment rates, and inflationary pressures, and the related impacts to consumer discretionary spending, as well as our ability to plan for and respond to the impact of these conditions; our ability to anticipate and respond to rapidly changing consumer preferences, seasonality, customer expectations, and fashion trends; the impact on our consumer traffic and demand, our business operations, and the operations of our suppliers, as we experience unseasonable weather, climate change evolves, and the frequency and severity of weather events increases; our ability to execute on our business strategies, including growing our Brand Portfolio segment, enhancing in-store and digital shopping experiences, and meeting consumer demands; our ability to successfully and efficiently integrate our recent acquisitions in a manner that does not impede growth; our ability to maintain strong relationships with our suppliers, vendors, licensors, and retailer customers; risks related to losses or disruptions associated with our distribution systems, including our distribution centers and stores, whether as a result of reliance on third-party providers or otherwise; risks related to cyber security threats and privacy or data security breaches or the potential loss or disruption of our information technology ("IT") systems, or those of our vendors; risks related to the implementation of new or updated IT systems; our ability to protect our reputation and to maintain the brands we license; our reliance on our reward programs and marketing to drive traffic, sales, and customer loyalty; our ability to successfully integrate new hires or changes in leadership and retain our existing management team, and to continue to attract qualified new personnel; risks related to restrictions imposed by our senior secured asset-based revolving credit facility, as amended, and our senior secured term loan credit agreement, as amended, that could limit our ability to fund our operations; our competitiveness with respect to style, price, brand availability, shopping platforms, and customer service; risks related to our international operations and our reliance on foreign sources for merchandise; our ability to comply with laws and regulations, as well as other legal obligations; risks associated with climate change and other corporate responsibility issues; and uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation. Risks and other factors that could cause our actual results to differ materially from our forward-looking statements are described in the Company's latest Annual Report on Form 10-K or our other reports made or filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the time when made. Except as may be required by applicable law, the Company undertakes no obligation to update or revise the forward-looking statements included in this press release to reflect any future events or circumstances.
DESIGNER BRANDS INC. SEGMENT RESULTS (unaudited)
| |||||||||||
Three months ended | |||||||||||
(dollars in thousands) | Change | ||||||||||
Amount | % of | Amount | % of | Amount | % | ||||||
Segment net sales: | |||||||||||
$ 587,545 | 79.0 % | $ 630,811 | 81.6 % | $ (43,266) | (6.9) % | ||||||
Canada Retail | 69,210 | 9.3 % | 64,398 | 8.3 % | 4,812 | 7.5 % | |||||
Brand Portfolio | 87,266 | 11.7 % | 77,719 | 10.1 % | 9,547 | 12.3 % | |||||
Total segment net sales | 744,021 | 100.0 % | 772,928 | 100.0 % | (28,907) | (3.7) % | |||||
Elimination of intersegment net sales | (30,449) | (18,580) | (11,869) | 63.9 % | |||||||
Consolidated net sales | $ 713,572 | $ 754,348 | $ (40,776) | (5.4) % | |||||||
Twelve months ended | |||||||||||
(dollars in thousands) | Change | ||||||||||
Amount | % of | Amount | % of | Amount | % | ||||||
Segment net sales: | |||||||||||
$ 2,466,101 | 78.3 % | $ 2,533,849 | 80.5 % | $ (67,748) | (2.7) % | ||||||
Canada Retail | 283,023 | 9.0 % | 264,229 | 8.4 % | 18,794 | 7.1 % | |||||
Brand Portfolio | 398,881 | 12.7 % | 348,976 | 11.1 % | 49,905 | 14.3 % | |||||
Total segment net sales | 3,148,005 | 100.0 % | 3,147,054 | 100.0 % | 951 | — % | |||||
Elimination of intersegment net sales | (138,743) | (72,078) | (66,665) | 92.5 % | |||||||
Consolidated net sales | $ 3,009,262 | $ 3,074,976 | $ (65,714) | (2.1) % | |||||||
Comparable Sales | |||||||
Three months ended | Twelve months ended | ||||||
Change in comparable sales: | |||||||
0.7 % | (7.4) % | (1.4) % | (9.5) % | ||||
Canada Retail segment | 4.7 % | (9.2) % | (2.2) % | (5.9) % | |||
Brand Portfolio segment - direct-to-consumer channel | (17.1) % | 5.9 % | (9.5) % | 6.0 % | |||
Total | 0.5 % | (7.3) % | (1.7) % | (9.0) % | |||
Gross Profit | |||||||||||||
Three months ended | |||||||||||||
(dollars in thousands) | Change | ||||||||||||
Amount | % of | Amount | % of | Amount | % | Basis | |||||||
Segment gross profit: | |||||||||||||
$ 238,490 | 40.6 % | $ 248,014 | 39.3 % | $ (9,524) | (3.8) % | 130 | |||||||
Canada Retail | 27,388 | 39.6 % | 25,842 | 40.1 % | 1,546 | 6.0 % | (50) | ||||||
Brand Portfolio | 18,389 | 21.1 % | 17,508 | 22.5 % | 881 | 5.0 % | (140) | ||||||
Total segment gross profit | 284,267 | 38.2 % | 291,364 | 37.7 % | (7,097) | (2.4) % | 50 | ||||||
Net recognition (elimination) of intersegment gross profit | (1,684) | 1,227 | (2,911) | ||||||||||
Consolidated gross profit | $ 282,583 | 39.6 % | $ 292,591 | 38.8 % | $ (10,008) | (3.4) % | 80 | ||||||
Twelve months ended | |||||||||||||
(dollars in thousands) | Change | ||||||||||||
Amount | % of | Amount | % of | Amount | % | Basis | |||||||
Segment gross profit: | |||||||||||||
43.0 % | 43.8 % | $ (48,804) | (4.4) % | (80) | |||||||||
Canada Retail | 126,030 | 44.5 % | 119,167 | 45.1 % | 6,863 | 5.8 % | (60) | ||||||
Brand Portfolio | 109,814 | 27.5 % | 92,545 | 26.5 % | 17,269 | 18.7 % | 100 | ||||||
Total segment gross profit | 1,296,042 | 41.2 % | 1,320,714 | 42.0 % | (24,672) | (1.9) % | (80) | ||||||
Net recognition (elimination) of intersegment gross profit | (10,084) | 3,281 | (13,365) | ||||||||||
Consolidated gross profit | 42.7 % | 43.1 % | $ (38,037) | (2.9) % | (40) | ||||||||
Intersegment Recognition and Elimination Activity | |||
Three months ended | |||
(in thousands) | |||
Intersegment recognition and elimination activity: | |||
Elimination of net sales recognized by Brand Portfolio segment | $ (30,449) | $ (18,580) | |
Cost of sales: | |||
Elimination of cost of sales recognized by Brand Portfolio segment | 19,048 | 13,079 | |
Recognition of intersegment gross profit for inventory previously purchased that | 9,717 | 6,728 | |
$ (1,684) | $ 1,227 | ||
Twelve months ended | |||
(in thousands) | |||
Intersegment recognition and elimination activity: | |||
Elimination of net sales recognized by Brand Portfolio segment | $ (138,743) | $ (72,078) | |
Cost of sales: | |||
Elimination of cost of sales recognized by Brand Portfolio segment | 95,138 | 51,213 | |
Recognition of intersegment gross profit for inventory previously purchased that | 33,521 | 24,146 | |
$ (10,084) | $ 3,281 | ||
Operating Profit (Loss) | |||||||||||||
Three months ended | |||||||||||||
(dollars in thousands) | Change | ||||||||||||
Amount | % of | Amount | % of | Amount | % | Basis | |||||||
Segment operating profit (loss): | |||||||||||||
$ 23,230 | 4.0 % | $ 23,771 | 3.8 % | $ (541) | (2.3) % | 20 | |||||||
Canada Retail | 1,233 | 1.8 % | 2,071 | 3.2 % | (838) | (40.5) % | (140) | ||||||
Brand Portfolio | (4,425) | (5.1) % | (13,635) | (17.5) % | 9,210 | (67.5) % | 1,240 | ||||||
Total segment operating profit | 20,038 | 2.7 % | 12,207 | 1.6 % | 7,831 | 64.2 % | 110 | ||||||
Corporate/Eliminations | (45,892) | (48,224) | 2,332 | (4.8) % | |||||||||
Consolidated operating loss | $ (25,854) | (3.6) % | $ (36,017) | (4.8) % | $ 10,163 | (28.2) % | 120 | ||||||
Twelve months ended | |||||||||||||
(dollars in thousands) | Change | ||||||||||||
Amount | % of | Amount | % of | Amount | % | Basis | |||||||
Segment operating profit (loss): | |||||||||||||
$ 225,511 | 9.1 % | $ 261,675 | 10.3 % | $ (36,164) | (13.8) % | (120) | |||||||
Canada Retail | 23,931 | 8.5 % | 24,632 | 9.3 % | (701) | (2.8) % | (80) | ||||||
Brand Portfolio | 3,225 | 0.8 % | (26,723) | (7.7) % | 29,948 | NM | NM | ||||||
Total segment operating profit | 252,667 | 8.0 % | 259,584 | 8.2 % | (6,917) | (2.7) % | (20) | ||||||
Corporate/Eliminations | (217,734) | (187,183) | (30,551) | 16.3 % | |||||||||
Consolidated operating profit | $ 34,933 | 1.2 % | $ 72,401 | 2.4 % | $ (37,468) | (51.8) % | (120) | ||||||
Impact of Reclassification |
Beginning with the fourth quarter of 2024, we changed our financial statement presentation related to expenses associated with distribution and fulfillment and store occupancy for the |
Three months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount | % of net | ||
Consolidated: | |||||||||||
Net sales | $ 746,596 | 100.0 % | $ — | $ 746,596 | 100.0 % | $ 742,082 | 100.0 % | $ — | $ 742,082 | 100.0 % | |
Cost of sales | (501,527) | (67.2) | 84,942 | (416,585) | (55.8) | (504,343) | (68.0) | 86,169 | (418,174) | (56.4) | |
Gross profit | $ 245,069 | 32.8 % | $ 84,942 | $ 330,011 | 44.2 % | $ 237,739 | 32.0 % | $ 86,169 | $ 323,908 | 43.6 % | |
Operating expenses | $ (238,551) | (32.0) % | $ (84,942) | $ (323,493) | (43.3) % | $ (220,119) | (29.6) % | $ (86,169) | $ (306,288) | (41.3) % | |
Net sales | $ 621,367 | 100.0 % | $ — | $ 621,367 | 100.0 % | $ 612,886 | 100.0 % | $ — | $ 612,886 | 100.0 % | |
Cost of sales | (422,912) | (68.1) | 75,953 | (346,959) | (55.8) | (416,072) | (67.9) | 77,998 | (338,074) | (55.2) | |
Gross profit | $ 198,455 | 31.9 % | $ 75,953 | $ 274,408 | 44.2 % | $ 196,814 | 32.1 % | $ 77,998 | $ 274,812 | 44.8 % | |
Operating expenses | $ (183,938) | (29.6) % | $ (75,953) | $ (259,891) | (41.8) % | $ (173,834) | (28.4) % | $ (77,998) | $ (251,832) | (41.1) % | |
Canada Retail segment: | |||||||||||
Net sales | $ 55,512 | 100.0 % | $ — | $ 55,512 | 100.0 % | $ 53,955 | 100.0 % | $ — | $ 53,955 | 100.0 % | |
Cost of sales | (38,127) | (68.7) | 8,989 | (29,138) | (52.5) | (36,781) | (68.2) | 8,171 | (28,610) | (53.0) | |
Gross profit | $ 17,385 | 31.3 % | $ 8,989 | $ 26,374 | 47.5 % | $ 17,174 | 31.8 % | $ 8,171 | $ 25,345 | 47.0 % | |
Operating expenses | $ (16,226) | (29.2) % | $ (8,989) | $ (25,215) | (45.4) % | $ (15,118) | (28.0) % | $ (8,171) | $ (23,289) | (43.2) % | |
Three months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount | % of net | ||
Consolidated: | |||||||||||
Net sales | $ 771,900 | 100.0 % | $ — | $ 771,900 | 100.0 % | $ 792,217 | 100.0 % | $ — | $ 792,217 | 100.0 % | |
Cost of sales | (518,986) | (67.2) | 86,635 | (432,351) | (56.0) | (518,830) | (65.5) | 88,376 | (430,454) | (54.3) | |
Gross profit | $ 252,914 | 32.8 % | $ 86,635 | $ 339,549 | 44.0 % | $ 273,387 | 34.5 % | $ 88,376 | $ 361,763 | 45.7 % | |
Operating expenses | $ (226,896) | (29.4) % | $ (86,635) | $ (313,531) | (40.6) % | $ (214,530) | (27.1) % | $ (88,376) | $ (302,906) | (38.2) % | |
Net sales | $ 641,694 | 100.0 % | $ — | $ 641,694 | 100.0 % | $ 658,542 | 100.0 % | $ — | $ 658,542 | 100.0 % | |
Cost of sales | (435,633) | (67.9) | 76,855 | (358,778) | (55.9) | (432,774) | (65.7) | 79,541 | (353,233) | (53.6) | |
Gross profit | $ 206,061 | 32.1 % | $ 76,855 | $ 282,916 | 44.1 % | $ 225,768 | 34.3 % | $ 79,541 | $ 305,309 | 46.4 % | |
Operating expenses | $ (173,021) | (27.0) % | $ (76,855) | $ (249,876) | (38.9) % | $ (165,440) | (25.1) % | $ (79,541) | $ (244,981) | (37.2) % | |
Canada Retail segment: | |||||||||||
Net sales | $ 74,797 | 100.0 % | $ — | $ 74,797 | 100.0 % | $ 70,266 | 100.0 % | $ — | $ 70,266 | 100.0 % | |
Cost of sales | (49,490) | (66.2) | 9,780 | (39,710) | (53.1) | (46,455) | (66.1) | 8,835 | (37,620) | (53.5) | |
Gross profit | $ 25,307 | 33.8 % | $ 9,780 | $ 35,087 | 46.9 % | $ 23,811 | 33.9 % | $ 8,835 | $ 32,646 | 46.5 % | |
Operating expenses | $ (18,246) | (24.4) % | $ (9,780) | $ (28,026) | (37.5) % | $ (15,901) | (22.6) % | $ (8,835) | $ (24,736) | (35.2) % | |
Six months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount | % of net | ||
Consolidated: | |||||||||||
Net sales | $ 1,518,496 | 100.0 % | $ — | $ 1,518,496 | 100.0 % | $ 1,534,299 | 100.0 % | $ — | $ 1,534,299 | 100.0 % | |
Cost of sales | (1,020,513) | (67.2) | 171,577 | (848,936) | (55.9) | (1,023,173) | (66.7) | 174,545 | (848,628) | (55.3) | |
Gross profit | $ 497,983 | 32.8 % | $ 171,577 | $ 669,560 | 44.1 % | $ 511,126 | 33.3 % | $ 174,545 | $ 685,671 | 44.7 % | |
Operating expenses | $ (465,447) | (30.7) % | $ (171,577) | $ (637,024) | (42.0) % | $ (434,649) | (28.3) % | $ (174,545) | $ (609,194) | (39.7) % | |
Net sales | $ 1,263,061 | 100.0 % | $ — | $ 1,263,061 | 100.0 % | $ 1,271,428 | 100.0 % | $ — | $ 1,271,428 | 100.0 % | |
Cost of sales | (858,545) | (68.0) | 152,808 | (705,737) | (55.9) | (848,846) | (66.8) | 157,539 | (691,307) | (54.4) | |
Gross profit | $ 404,516 | 32.0 % | $ 152,808 | $ 557,324 | 44.1 % | $ 422,582 | 33.2 % | $ 157,539 | $ 580,121 | 45.6 % | |
Operating expenses | $ (356,959) | (28.3) % | $ (152,808) | $ (509,767) | (40.4) % | $ (339,274) | (26.7) % | $ (157,539) | $ (496,813) | (39.1) % | |
Canada Retail segment: | |||||||||||
Net sales | $ 130,309 | 100.0 % | $ — | $ 130,309 | 100.0 % | $ 124,221 | 100.0 % | $ — | $ 124,221 | 100.0 % | |
Cost of sales | (87,617) | (67.2) | 18,769 | (68,848) | (52.8) | (83,236) | (67.0) | 17,006 | (66,230) | (53.3) | |
Gross profit | $ 42,692 | 32.8 % | $ 18,769 | $ 61,461 | 47.2 % | $ 40,985 | 33.0 % | $ 17,006 | $ 57,991 | 46.7 % | |
Operating expenses | $ (34,472) | (26.5) % | $ (18,769) | $ (53,241) | (40.9) % | $ (31,019) | (25.0) % | $ (17,006) | $ (48,025) | (38.7) % | |
Three months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount | % of net | ||
Consolidated: | |||||||||||
Net sales | $ 777,194 | 100.0 % | $ — | $ 777,194 | 100.0 % | $ 786,329 | 100.0 % | $ — | $ 786,329 | 100.0 % | |
Cost of sales | (529,749) | (68.2) | 86,370 | (443,379) | (57.0) | (529,923) | (67.4) | 89,327 | (440,596) | (56.0) | |
Gross profit | $ 247,445 | 31.8 % | $ 86,370 | $ 333,815 | 43.0 % | $ 256,406 | 32.6 % | $ 89,327 | $ 345,733 | 44.0 % | |
Operating expenses | $ (210,457) | (27.1) % | $ (86,370) | $ (296,827) | (38.2) % | $ (230,788) | (29.4) % | $ (89,327) | $ (320,115) | (40.7) % | |
Net sales | $ 615,495 | 100.0 % | $ — | $ 615,495 | 100.0 % | $ 631,610 | 100.0 % | $ — | $ 631,610 | 100.0 % | |
Cost of sales | (427,705) | (69.5) | 76,594 | (351,111) | (57.0) | (431,342) | (68.3) | 80,599 | (350,743) | (55.5) | |
Gross profit | $ 187,790 | 30.5 % | $ 76,594 | $ 264,384 | 43.0 % | $ 200,268 | 31.7 % | $ 80,599 | $ 280,867 | 44.5 % | |
Operating expenses | $ (162,853) | (26.5) % | $ (76,594) | $ (239,447) | (38.9) % | $ (178,842) | (28.3) % | $ (80,599) | $ (259,441) | (41.1) % | |
Canada Retail segment: | |||||||||||
Net sales | $ 83,504 | 100.0 % | $ — | $ 83,504 | 100.0 % | $ 75,610 | 100.0 % | $ — | $ 75,610 | 100.0 % | |
Cost of sales | (56,099) | (67.2) | 9,776 | (46,323) | (55.5) | (49,004) | (64.8) | 8,728 | (40,276) | (53.3) | |
Gross profit | $ 27,405 | 32.8 % | $ 9,776 | $ 37,181 | 44.5 % | $ 26,606 | 35.2 % | $ 8,728 | $ 35,334 | 46.7 % | |
Operating expenses | $ (18,621) | (22.3) % | $ (9,776) | $ (28,397) | (34.0) % | $ (16,912) | (22.4) % | $ (8,728) | $ (25,640) | (33.9) % | |
Nine months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount after | % of net | ||
Consolidated: | |||||||||||
Net sales | $ 2,295,690 | 100.0 % | $ — | $ 2,295,690 | 100.0 % | $ 2,320,628 | 100.0 % | $ — | $ 2,320,628 | 100.0 % | |
Cost of sales | (1,550,262) | (67.5) | 257,947 | (1,292,315) | (56.3) | (1,553,096) | (66.9) | 263,872 | (1,289,224) | (55.6) | |
Gross profit | $ 745,428 | 32.5 % | $ 257,947 | $ 1,003,375 | 43.7 % | $ 767,532 | 33.1 % | $ 263,872 | $ 1,031,404 | 44.4 % | |
Operating expenses | $ (675,904) | (29.5) % | $ (257,947) | $ (933,851) | (40.7) % | $ (665,437) | (28.7) % | $ (263,872) | $ (929,309) | (40.0) % | |
Net sales | $ 1,878,556 | 100.0 % | $ — | $ 1,878,556 | 100.0 % | $ 1,903,038 | 100.0 % | $ — | $ 1,903,038 | 100.0 % | |
Cost of sales | (1,286,250) | (68.5) | 229,402 | (1,056,848) | (56.3) | (1,280,188) | (67.3) | 238,138 | (1,042,050) | (54.8) | |
Gross profit | $ 592,306 | 31.5 % | $ 229,402 | $ 821,708 | 43.7 % | $ 622,850 | 32.7 % | $ 238,138 | $ 860,988 | 45.2 % | |
Operating expenses | $ (519,812) | (27.7) % | $ (229,402) | $ (749,214) | (39.9) % | $ (518,116) | (27.2) % | $ (238,138) | $ (756,254) | (39.7) % | |
Canada Retail segment: | |||||||||||
Net sales | $ 213,813 | 100.0 % | $ — | $ 213,813 | 100.0 % | $ 199,831 | 100.0 % | $ — | $ 199,831 | 100.0 % | |
Cost of sales | (143,716) | (67.2) | 28,545 | (115,171) | (53.9) | (132,240) | (66.2) | 25,734 | (106,506) | (53.3) | |
Gross profit | $ 70,097 | 32.8 % | $ 28,545 | $ 98,642 | 46.1 % | $ 67,591 | 33.8 % | $ 25,734 | $ 93,325 | 46.7 % | |
Operating expenses | $ (53,093) | (24.8) % | $ (28,545) | $ (81,638) | (38.2) % | $ (47,931) | (24.0) % | $ (25,734) | $ (73,665) | (36.9) % | |
Three months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount | % of net sales | ||
Consolidated: | |||||||||||
Net sales | $ 713,572 | 100.0 % | $ — | $ 713,572 | 100.0 % | $ 754,348 | 100.0 % | $ — | $ 754,348 | 100.0 % | |
Cost of sales | (517,483) | (72.5) | 86,494 | (430,989) | (60.4) | (546,994) | (72.5) | 85,237 | (461,757) | (61.2) | |
Gross profit | $ 196,089 | 27.5 % | $ 86,494 | $ 282,583 | 39.6 % | $ 207,354 | 27.5 % | $ 85,237 | $ 292,591 | 38.8 % | |
Operating expenses | $ (225,489) | (31.6) % | $ (86,494) | $ (311,983) | (43.7) % | $ (241,604) | (32.0) % | $ (85,237) | $ (326,841) | (43.3) % | |
Net sales | $ 587,545 | 100.0 % | $ — | $ 587,545 | 100.0 % | $ 630,811 | 100.0 % | $ — | $ 630,811 | 100.0 % | |
Cost of sales | (426,014) | (72.5) | 76,959 | (349,055) | (59.4) | (459,395) | (72.8) | 76,598 | (382,797) | (60.7) | |
Gross profit | $ 161,531 | 27.5 % | $ 76,959 | $ 238,490 | 40.6 % | $ 171,416 | 27.2 % | $ 76,598 | $ 248,014 | 39.3 % | |
Operating expenses | $ (178,290) | (30.3) % | $ (76,959) | $ (255,249) | (43.4) % | $ (189,584) | (30.1) % | $ (76,598) | $ (266,182) | (42.2) % | |
Canada Retail segment: | |||||||||||
Net sales | $ 69,210 | 100.0 % | $ — | $ 69,210 | 100.0 % | $ 64,398 | 100.0 % | $ — | $ 64,398 | 100.0 % | |
Cost of sales | (51,357) | (74.2) | 9,535 | (41,822) | (60.4) | (47,195) | (73.3) | 8,639 | (38,556) | (59.9) | |
Gross profit | $ 17,853 | 25.8 % | $ 9,535 | $ 27,388 | 39.6 % | $ 17,203 | 26.7 % | $ 8,639 | $ 25,842 | 40.1 % | |
Operating expenses | $ (18,242) | (26.4) % | $ (9,535) | $ (27,777) | (40.1) % | $ (16,947) | (26.3) % | $ (8,639) | $ (25,586) | (39.7) % | |
Twelve months ended | |||||||||||
(dollars in thousands) | |||||||||||
Amount | % of net | Reclass | Amount | % of net | Amount | % of net | Reclass | Amount | % of net | ||
Consolidated: | |||||||||||
Net sales | $ 3,009,262 | 100.0 % | $ — | $ 3,009,262 | 100.0 % | $ 3,074,976 | 100.0 % | $ — | $ 3,074,976 | 100.0 % | |
Cost of sales | (2,067,745) | (68.7) | 344,441 | (1,723,304) | (57.3) | (2,100,090) | (68.3) | 349,109 | (1,750,981) | (56.9) | |
Gross profit | $ 941,517 | 31.3 % | $ 344,441 | $ 1,285,958 | 42.7 % | $ 974,886 | 31.7 % | $ 349,109 | $ 1,323,995 | 43.1 % | |
Operating expenses | $ (901,393) | (30.0) % | $ (344,441) | (41.4) % | $ (907,041) | (29.4) % | $ (349,109) | (40.8) % | |||
Net sales | $ 2,466,101 | 100.0 % | $ — | $ 2,466,101 | 100.0 % | $ 2,533,849 | 100.0 % | $ — | $ 2,533,849 | 100.0 % | |
Cost of sales | (1,712,264) | (69.4) | 306,361 | (1,405,903) | (57.0) | (1,739,583) | (68.7) | 314,736 | (1,424,847) | (56.2) | |
Gross profit | $ 753,837 | 30.6 % | $ 306,361 | $ 1,060,198 | 43.0 % | $ 794,266 | 31.3 % | $ 314,736 | $ 1,109,002 | 43.8 % | |
Operating expenses | $ (698,102) | (28.3) % | $ (306,361) | (40.7) % | $ (707,700) | (27.9) % | $ (314,736) | (40.4) % | |||
Canada Retail segment: | |||||||||||
Net sales | $ 283,023 | 100.0 % | $ — | $ 283,023 | 100.0 % | $ 264,229 | 100.0 % | $ — | $ 264,229 | 100.0 % | |
Cost of sales | (195,073) | (68.9) | 38,080 | (156,993) | (55.5) | (179,435) | (67.9) | 34,373 | (145,062) | (54.9) | |
Gross profit | $ 87,950 | 31.1 % | $ 38,080 | $ 126,030 | 44.5 % | $ 84,794 | 32.1 % | $ 34,373 | $ 119,167 | 45.1 % | |
Operating expenses | $ (71,335) | (25.2) % | $ (38,080) | $ (109,415) | (38.7) % | $ (64,878) | (24.6) % | $ (34,373) | $ (99,251) | (37.6) % | |
DESIGNER BRANDS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share amounts) | |||||||
Three months ended | Twelve months ended | ||||||
Net sales | $ 713,572 | $ 754,348 | $ 3,009,262 | $ 3,074,976 | |||
Cost of sales | (430,989) | (461,757) | (1,723,304) | (1,750,981) | |||
Gross profit | 282,583 | 292,591 | 1,285,958 | 1,323,995 | |||
Operating expenses | (311,983) | (326,841) | (1,245,834) | (1,256,150) | |||
Income from equity investments | 4,126 | 2,418 | 13,145 | 9,390 | |||
Impairment charges | (580) | (4,185) | (18,336) | (4,834) | |||
Operating profit (loss) | (25,854) | (36,017) | 34,933 | 72,401 | |||
Interest expense, net | (11,130) | (9,875) | (45,291) | (32,171) | |||
Non-operating income (expenses), net | 140 | (116) | (372) | (33) | |||
Income (loss) before income taxes | (36,844) | (46,008) | (10,730) | 40,197 | |||
Income tax benefit (provision) | (1,312) | 16,391 | 755 | (10,981) | |||
Net income (loss) | (38,156) | (29,617) | (9,975) | 29,216 | |||
Net income attributable to redeemable noncontrolling interest | (12) | (81) | (574) | (154) | |||
Net income (loss) attributable to Designer Brands Inc. | $ (38,168) | $ (29,698) | $ (10,549) | $ 29,062 | |||
Diluted earnings (loss) per share attributable to Designer Brands Inc. | $ (0.80) | $ (0.52) | $ (0.20) | $ 0.46 | |||
Weighted average diluted shares | 47,919 | 56,939 | 53,657 | 63,375 | |||
DESIGNER BRANDS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 44,752 | $ 49,173 | |
Receivables, net | 50,371 | 83,590 | |
Inventories | 599,751 | 571,331 | |
Prepaid expenses and other current assets | 39,950 | 73,338 | |
Total current assets | 734,824 | 777,432 | |
Property and equipment, net | 208,199 | 219,939 | |
Operating lease assets | 701,621 | 721,335 | |
Goodwill | 130,386 | 123,759 | |
Intangible assets, net | 84,639 | 82,827 | |
Deferred tax assets | 43,324 | 39,067 | |
Equity investments | 56,761 | 62,857 | |
Other assets | 49,470 | 49,016 | |
Total assets | $ 2,009,224 | $ 2,076,232 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND | |||
Current liabilities: | |||
Accounts payable | $ 271,524 | $ 289,368 | |
Accrued expenses | 152,153 | 159,622 | |
Current maturities of long-term debt | 6,750 | 6,750 | |
Current operating lease liabilities | 159,924 | 166,531 | |
Total current liabilities | 590,351 | 622,271 | |
Long-term debt | 484,285 | 420,344 | |
Non-current operating lease liabilities | 635,076 | 646,161 | |
Other non-current liabilities | 17,737 | 24,948 | |
Total liabilities | 1,727,449 | 1,713,724 | |
Redeemable noncontrolling interest | 3,284 | 3,288 | |
Total shareholders' equity | 278,491 | 359,220 | |
Total liabilities, redeemable noncontrolling interest, and shareholders' equity | $ 2,009,224 | $ 2,076,232 | |
DESIGNER BRANDS INC. NON-GAAP RECONCILIATION (unaudited and in thousands, except per share amounts) | |||||||
Three months ended | Twelve months ended | ||||||
Operating expenses | $ (311,983) | $ (326,841) | $ (1,245,834) | $ (1,256,150) | |||
Non-GAAP adjustments: | |||||||
CEO transition costs | — | 369 | — | 4,352 | |||
Restructuring and integration costs | 1,729 | 1,188 | 11,843 | 6,378 | |||
Acquisition-related costs | — | 36 | 2,154 | 1,633 | |||
Total non-GAAP adjustments | 1,729 | 1,593 | 13,997 | 12,363 | |||
Adjusted operating expenses | $ (310,254) | $ (325,248) | $ (1,231,837) | $ (1,243,787) | |||
Operating profit (loss) | $ (25,854) | $ (36,017) | $ 34,933 | $ 72,401 | |||
Non-GAAP adjustments: | |||||||
CEO transition costs | — | 369 | — | 4,352 | |||
Restructuring and integration costs | 1,729 | 1,188 | 11,843 | 6,378 | |||
Acquisition-related costs | — | 36 | 2,154 | 1,633 | |||
Impairment charges | 580 | 4,185 | 18,336 | 4,834 | |||
Total non-GAAP adjustments | 2,309 | 5,778 | 32,333 | 17,197 | |||
Adjusted operating profit (loss) | $ (23,545) | $ (30,239) | $ 67,266 | $ 89,598 | |||
Net income (loss) attributable to Designer Brands Inc. | $ (38,168) | $ (29,698) | $ (10,549) | $ 29,062 | |||
Non-GAAP adjustments: | |||||||
CEO transition costs | — | 369 | — | 4,352 | |||
Restructuring and integration costs | 1,729 | 1,188 | 11,843 | 6,378 | |||
Acquisition-related costs | — | 36 | 2,154 | 1,633 | |||
Impairment charges | 580 | 4,185 | 18,336 | 4,834 | |||
Foreign currency transaction losses (gains) | (141) | 115 | 371 | 32 | |||
Total non-GAAP adjustments before tax effect | 2,168 | 5,893 | 32,704 | 17,229 | |||
Tax effect on above non-GAAP adjustments | 13,567 | (1,577) | (8,458) | (4,462) | |||
Discrete and permanent tax on non-deductible CEO transition costs | — | (936) | — | 1,868 | |||
Valuation allowance change on deferred tax assets | 1,116 | 949 | 768 | (666) | |||
Total non-GAAP adjustments, after tax | 16,851 | 4,329 | 25,014 | 13,969 | |||
Net income attributable to redeemable noncontrolling interest | 12 | 81 | 574 | 154 | |||
Adjusted net income (loss) | $ (21,305) | $ (25,288) | $ 15,039 | $ 43,185 | |||
Diluted earnings (loss) per share | $ (0.80) | $ (0.52) | $ (0.20) | $ 0.46 | |||
Adjusted diluted earnings (loss) per share | $ (0.44) | $ (0.44) | $ 0.27 | $ 0.68 | |||
Non-GAAP Measures
To supplement amounts presented in our consolidated financial statements determined in accordance with accounting principles generally accepted in
Comparable Sales Performance Metric
We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the
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SOURCE Designer Brands Inc.