Designer Brands Cuts Annual Profit Outlook — Retail Bum

Designer Brands, the parent company of shoe retailer DSW, has cut its annual profit outlook following slower demand in the third quarter.

The company saw its Q3 sales rise by just 1.4% to $865 million. Meanwhile, net income fell to $45.2 million from $80.2 million a year before.

“We continued to make meaningful progress on our long-term brand-building strategy while also delivering solid comparable sales across every segment of our business,” said CEO Roger Rawlins adding that the company’s private label brands accounted more slightly more than a quarter of net sales in Q3.

“The strategic shifts we have made in our business over the past several years are driving a sustainably higher gross margin rate than 2019 as we have a more targeted focus on customer acquisition, optimizing our assortment, and growing the brands we own and control,” he said.

Looking ahead, the company is still expecting its annual sales growth to be in the mid-single digits, but it now expects lower earnings per share. In its report, the company cut its diluted earnings per share to $1.75 to $1.8, down from its previous projection of $2.05 to $2.15.

“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,” Rawlins said.

“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.”

Originally published at https://retailbum.com on December 5, 2022.