Discount footwear and accessories retailer Designer Brands (NYSE:) reported better-than-expected fourth-quarter 2023 results, with revenue flat year-over-year at $754.3 million. GAAP loss of $0.52 per share compared to earnings of $0. .66 per share in the same quarter last year.
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Designer Brands (DBI) Q4 2023 Highlights:
- Income: $754.3 million vs. analyst estimates of $747.3 million (0.9% increase)
- earnings per share: -$0.52 vs. analysts’ expectations -$0.45 (miss 16.4%)
- EPS forecast for the whole of 2024 $0.75 at the midpoint fell short of expectations of $0.87.
- Gross Profit (GAAP): 27.5% compared to 29.2% in the same quarter last year.
- Same store sales down 7.3% year-on-year (miss)
- Store locations: 642 at the end of the quarter, an increase of 3 over the last 12 months.
- Market capitalization: $655 million
“We ended the year strong, finishing the fourth quarter strongly above the top end of our revised earnings per share guidance range, supported by strength across our brand portfolio segment from the acquisitions of Keds, Topo and the launch of Le Tigre,” it said. Doug Howe, CEO.
Founded in 1969 as a footwear importer and distributor, Designer Brands (NYSE:DBI) is an American discount retailer specializing in footwear and accessories.
Footwear Retailer Sales of footwear, like their apparel counterparts, are driven more by seasons, trends and innovation than by absolute necessity, and similarly face the broader secular trend of e-commerce penetration. Shoes play an important role in social identity, self-expression and occasion, and shoe retailers recognize this. Therefore, they strive to balance selection, competitive prices and the latest trends to attract consumers. Unlike their clothing peers, shoe retailers primarily sell popular third-party brands (rather than their own exclusive brands), which can mean less product exclusivity but more flexibility in choosing what’s popular.
Sales GrowthDesigner Brands is a mid-sized retail company that sometimes has disadvantages compared to larger competitors that benefit from greater economies of scale. On the other hand, it has an advantage over smaller competitors with fewer resources and can still generate high growth rates because its growth base is smaller than its larger peers.
As you can see below, the company’s revenue has been declining over the past four years, declining 3.1% annually as the number of stores and sales from existing stores declined.
This quarter, Designer Brands reported a rather uninspiring 0.8% year-over-year decline in revenue to $754.3 million, in line with Wall Street estimates. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months, down from this quarter.
Sales in one store. Demand for Designer Brands has been declining over the past eight quarters, with average same-store sales down 2.1% year over year. The company is reducing the number of its stores because fewer stores sometimes leads to higher same-store sales, but that’s not the case here.
In the most recent quarter, Designer Brands’ same-store sales fell 7.3% year over year. The decline was a further slowdown from the 5.5% year-on-year decline recorded 12 months ago. We hope that business can get back on track.
Key takeaways from Designer Brands’ fourth-quarter results. It was a tough quarter for the company despite declining revenue. Full-year earnings forecast fell short of analysts’ expectations, and earnings per share fell short of Wall Street estimates. Overall, it was a mixed quarter for designer brands. The company’s shares fell 9.6% and are currently trading at $10.42 per share.