Short Squeeze And Earnings: Why Designer Brands Stock Spiked Tuesday

Designer Brands Inc. (NYSE:DBI) shares climbed Tuesday after the footwear retailer delivered stronger-than-expected quarterly profit.

The company reported third-quarter adjusted earnings per share of 38 cents, beating the analyst consensus estimate of 18 cents.

Metrics

Quarterly sales of $752.411 million (down 3.2% year over year) missed the Street view of $763.400 million. Total comparable sales decreased by 2.4%.

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Segment performance weakened year over year, with U.S. Retail slipping 0.8%, Canada Retail declining 7.5%, and the Brand Portfolio down 8.6%.

Gross profit rose to $339.6 million from $333.8 million a year ago. Gross margin improved to 45.1%, up from 43.0% last year.

“Our third quarter performance represents another meaningful step forward in our transformation, as we demonstrated continued sequential improvement across multiple financial and operating metrics,” stated Doug Howe, Chief Executive Officer.

Consolidated operating profit gained 87% year over year to $42.663 million.

Designer Brands exited the quarter with cash and equivalents worth $51.352 million. Long-term debt contracted to $463.089 million, compared with $529.551 million a year ago.

As of November 1, 2025, Designer Brands operates a total of 672 stores across North America. Key figures include 497 DSW Designer Shoe Warehouse locations in the United States and 175 stores in Canada (under DSW, The Shoe Company, and Rubino banners).

The company said a dividend of 5 cents per share for both Class A and Class B common shares will be paid on December 19 to shareholders of record at the close of business on December 5.

Outlook

Designer Brands expects fiscal year 2025 adjusted operating profit of $50 million-$55 million.

The company projects Designer Brands’ net sales to be down 3%-5%.

Elevated Short Interest

The company has 8.10 million shares sold short, accounting for 57.07% of its public float, signaling an elevated level of bearish positioning among investors.

DBI Price Action: Designer Brands shares were up 17.11% at $5.68 during premarket trading on Tuesday, according to Benzinga Pro data.

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