**Earnings Call Summary: Designer Brands Inc. (DBI)**
**Earnings Call Transcript Title:** Designer Brands (DBI) Q4 2024 Earnings Call Transcript
Designer Brands Inc. (DBI) recently held its Q4 2024 earnings call, providing insights into the company's performance and outlook. Below is a summary of the key points discussed during the call, categorized into bullish and bearish aspects.
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### **Bullish Points**
1. **Positive Comparable Sales:** The company achieved positive comparable sales in Q4 2024 for the first time in nine quarters.
2. **Strong Brand Performance:** The top eight brands drove positive performance, with sales up 25% on a full-year basis.
3. **Canadian Market Growth:** Fourth-quarter comps in Canada increased by 5%, led by strong performance in categories such as Athletic and kids.
4. **Sales Growth:** Fourth-quarter sales rose approximately 12%, while full-year sales increased by roughly 14%.
5. **Operating Profitability:** The company reached operating profitability in a specific segment for the first time in 2024.
6. **Brand Success:** Topo Athletic and Jessica Simpson brands significantly outperformed expectations, with Topo sales up nearly 80% and Jessica Simpson sales up over 20% in wholesale.
7. **Future Growth Expectations:** The company anticipates significantly increasing adjusted EPS in 2025 compared to 2024 results.
8. **Store Expansion:** Designer Brands plans to add new DSW stores to its fleet for the first time since 2019.
9. **Sustained Brand Growth:** Topo Athletic grew over 70% in 2024, with further growth expected in 2025.
10. **Shareholder Returns:** The company returned $79 million to shareholders through dividends and share repurchases.
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### **Bearish Points**
1. **Sales Decline:** Total sales in Q4 2024 declined 5% year-over-year due to the inclusion of a 53rd week in the prior year. Full-year sales were down roughly 2%.
2. **U.S. Retail Weakness:** U.S. retail comparable sales declined slightly over 1% in Q4, driven by seasonal weaknesses. Full-year comps were down 2%.
3. **Consumer Caution:** Inflation, rising prices, and reduced discretionary income led to more cautious consumer behavior starting in January.
4. **Soft Start to 2025:** The company anticipates Q1 2025 performance to be below last year.
5. **Operating Expense Deleverage:** Adjusted operating expense was 43.5% of sales in Q4, a 40-basis-point deleverage compared to the prior year.
6. **Gross Margin Decline:** Full-year consolidated gross margin of 42.7% in 2024 deleveraged 40 basis points versus the prior year.
7. **Operating Loss:** Adjusted operating loss in Q4 was $23.5 million, though this was an improvement from a $30.2 million loss last year.
8. **Net Income Decline:** Full-year adjusted net income was $15 million ($0.27 per diluted share), down from $43.2 million ($0.68 per share) in fiscal 2023.
9. **Interest Expense Increase:** Net interest expense rose to $11.1 million in Q4, compared to $9.9 million last year.
10. **Profitability Decline:** Full-year adjusted operating profit fell to $67.3 million from $89.6 million in the prior year.
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For more information about Designer Brands Inc.'s earnings call, you can read the relevant news:
Designer Brands (DBI) Q4 2024 Earnings Call Transcript
This summary highlights both the positive and negative aspects of Designer Brands Inc.'s recent performance, providing a balanced view of the company's current position and future prospects.
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