Designer Brands Inc (DBI) Q3 2024 Earnings Call Highlights: Navigating Challenges with ...

GuruFocus.com2024-12-11

Net Sales: $777 million, down 1.2% year-over-year. US Retail Segment Comps: Down 2.8% in the third quarter. Canada Retail Segment Comps: Down 4.6% in the third quarter. Brand Portfolio Segment Sales: ...

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total liquidity of $154.5 million.Share Repurchase: $50.6 million worth of shares repurchased at an average price of $6.59.GuruFocus has detected 7 Warning Signs with DBI.Designer Brands Inc  experienced positive comps in August, driven by strong back-to-school sales, particularly in athletic and athleisure categories.DBI's top eight brands, primarily in the athleisure category, saw a 27% increase in sales compared to the third quarter of the previous year.DBI's brand portfolio se","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"DBI":"Designer Brands Inc"},"translate_title":"Designer Brands Inc(DBI)2024年第三季度收益看涨期权亮点：应对挑战……","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DBI":1},"content_text":"Net Sales: $777 million, down 1.2% year-over-year.\nUS Retail Segment Comps: Down 2.8% in the third quarter.\nCanada Retail Segment Comps: Down 4.6% in the third quarter.\nBrand Portfolio Segment Sales: Up 18.5% in the third quarter.\nConsolidated Gross Margin: 31.8%, decreased 80 basis points year-over-year.\nAdjusted SG&A: 26.7% of sales, a 220 basis points improvement from last year.\nAdjusted Operating Income: $43.6 million, improved from $31.4 million last year.\nAdjusted Net Income: $14.5 million, or $0.27 per diluted share.\nInventory: Up 6% versus the prior year.\nCash and Liquidity: $36.2 million in cash; total liquidity of $154.5 million.\nTotal Debt: $536.3 million at the end of the third quarter.\nShare Repurchase: $50.6 million worth of shares repurchased at an average price of $6.59.\nFiscal 2024 Guidance: Net sales growth expected to be down low single digits; annual diluted EPS outlook revised to $0.10 to $0.30.\n\n\nWarning! GuruFocus has detected 7 Warning Signs with DBI.\n\nRelease Date: December 10, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nDesigner Brands Inc (NYSE:DBI) experienced positive comps in August, driven by strong back-to-school sales, particularly in athletic and athleisure categories.\nThe company's adjusted operating income improved by approximately 40% compared to the previous year, reaching $43.6 million.\nDBI's top eight brands, primarily in the athleisure category, saw a 27% increase in sales compared to the third quarter of the previous year.\nThe company reported a significant increase in media impressions, with $67 billion earned media impressions, up from $15 billion the previous year.\nDBI's brand portfolio segment saw an 18.5% increase in sales, with notable strength in direct-to-consumer sites like topo.com, which delivered a triple-digit comp.\n\n Negative Points \n\nOverall sales for Designer Brands Inc (NYSE:DBI) were down 1.2% compared to the previous year, with a 2.8% decline in comp sales in the US retail segment.\nThe boot category underperformed, with sales down 27%, significantly impacting overall results.\nUnseasonably warm weather and ongoing consumer discretionary spending pullback negatively affected fall seasonal business.\nThe Canadian retail segment experienced a 4.6% decline in comps due to warm weather impacting boot sales, a critical category for the region.\nGross margin decreased by 80 basis points to 31.8% due to lower initial markup (IMU) from a shift towards national brands and athletic footwear.\n\n Q & A Highlights \nQ: Can you provide insights into November trends and how they have influenced your guidance? A: Jared Poff, Executive Vice President and CFO, explained that the midpoint of their guidance reflects November trends. Overall demand was slightly below last year, with stores performing positively but digital sales lagging due to targeted promotions. Gross margin dollars and rates were above last year, and these trends are incorporated into their guidance.\nQ: Are you losing market share in the boot category, and how are you addressing this? A: Douglas Howe, CEO, stated that they had planned the boot category down by 15%, but it decreased by almost double that. They are strategically working to reduce weather dependency in their business. While they have seen some rebound with weather changes, they remain conservative in seasonal categories.\nQ: How did your top eight national brands perform, and what are your current trends? A: Douglas Howe noted that the top eight brands were up 27% in Q3, making up about 40% of total sales. They are cautious not to overly rely on any single brand. Current trends are in line with guidance, with some softness in Black Friday and Cyber Monday but improved margins due to less promotional activity.\nQ: How are you managing debt levels given the current business challenges? A: Jared Poff emphasized a focus on liquidity management, noting they are comfortable with current debt and liquidity levels. They remain cautious about the consumer environment but believe their capital structure is appropriately positioned.\nQ: Can you provide an update on your partnership with Nike? A: Douglas Howe expressed satisfaction with Nike's performance and partnership, noting it remains a net positive for the company. They have now lapped the period when Nike returned to their stores and continue to see strong results.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2490881906"}