Designer Brands Shares Fall 22% on Weak Guidance, Disappointing Q2 Results By Investing.com

NEW YORK – Shares of Designer Brands Inc. (NYSE: ) fell more than 22% on Monday after the shoe retailer reported second-quarter earnings that missed estimates and cut its full-year guidance.

The company, which operates DSW Designer Shoe Warehouse stores, reported adjusted earnings of $0.29 per share for the quarter ended Aug. 3, well below analysts’ expectations of $0.58 per share. Revenue fell 2.6 percent from a year ago to $771.9 million, also missing the consensus estimate of $813.64 million.

Comparable sales fell 1.4% in the quarter. Gross margin fell to 32.8% from 34.5% a year ago.

“This quarter, we continued to build on our track record of steady improvement as we continued to refine and refresh our strategic initiatives designed to accelerate the continued transformation of our business,” CEO Doug Howe said in a statement .

Designer Brands significantly cut its fiscal 2024 earnings guidance to $0.50-$0.60 per share, down from its previous forecast of $0.70-$0.80 and well below analysts’ expectations of 0 $.75 per share. The company now expects full-year revenue to be in the low-single digits, compared with previous forecasts for low-single-digit growth.

Howe noted that the company saw “sustained pressure on challenged categories such as apparel and seasonal” in Q2, which it partially offset with increased athletic and sports brand offerings. Athleisure sales grew 8% year-over-year in the US retail segment, outpacing global athletic market growth by more than 4 percentage points.

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