Designer Brands Plummets After Q3 Miss, FY22 EPS Outlook Cut

  • Designer Brands Inc DBI reported third-quarter FY22 sales growth of 1.4% year-on-year to $865.02 million, missing the consensus of $866.65 million.
  • Comparable sales rose 3.0% on top of comparable sales of 40.8% for 3Q21.
  • Adjusted EPS of $0.67 missed the analyst consensus of $0.72.
  • Gross profit margin contracted 370 basis points Y/Y to 33%, and the gross profit dropped 8.9% to $285.8 million.
  • The operating margin was 7.5%, and operating income for the quarter declined 38.1% to $64.5 million.
  • The company held $62.5 million in cash and equivalents as of October 29, 2022. The company ended the quarter with inventories of $681.8 million compared to $602.1 million for the same period last year.
  • The company had a total of 504 U.S. stores and 138 Canadian stores as of October 29, 2022.
  • The company's dividend of $0.05 per share will be paid on December 28, 2022, to shareholders of record on December 13, 2022.
  • "While we are seeing many of the same pressures across the consumer landscape that most retailers are seeing, our flexible business model continues to support our efforts to navigate a dynamic macro environment. We are focused on meeting our customers' footwear needs while we balance inventory and expenses in order to continue growing market share in this volatile environment," said CEO Roger Rawlins.
  • Outlook: Designer Brands cut FY22 EPS guidance to $1.75 - $1.80 from $2.05 - $2.15, versus the consensus of $2.06.
  • The company continues to expect an FY22 comparable sales growth outlook of mid-single digits.
  • Price Action: DBI shares are trading lower by 23.2% at $11.75 on the last check Thursday.
  • Photo Via Company
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