Designer Brands lifts earnings guidance despite a modest sales decline

Designer Brands ($DBI) raised its full-year adjusted earnings forecast to $0.47–0.52 per share from $0.28–0.38. Annual sales are now expected to be flat to 1% higher, compared with the previous range of a 1% decline to 1% growth. The upgrade followed second-quarter adjusted earnings of $0.34 per share on revenue of $730.6 million.

Sales fell 1.2% and comparable sales declined 2.4%, so the improved outlook is not the result of a broad sales surge. Adjusted gross margin increased to 47.9% from 43.6%, while debt fell to $423.1 million from $516.3 million a year earlier. Reported gross margin was higher still because of tariff-refund benefits. Separating those refunds from adjusted performance gives a clearer view of the improvement in the footwear group’s profitability.

Sources:

• Designer Brands — quarterly results, PR Newswire