Designer Brands reports first positive sales growth in nine quarters

Designer Brands Inc. held its fourth-quarter earnings call for fiscal 2024, ending on December 31, 2024. The call highlighted the company's performance and future strategies. CEO Doug Howe reported a slight decline in total sales for the quarter, down 5% year-over-year due to a comparison with the previous year's 53-week period. However, when excluding that 53rd week, same-store sales increased by 1%. Overall, annual sales dropped about 2%. The company achieved an adjusted earnings per share (EPS) of $0.27, which was at the higher end of its expectations. The company has implemented various strategies to improve performance, including updating its leadership team and enhancing product offerings. Howe noted a significant shift towards athleisure products, leading to increased market share. Retail sales in the U.S. showed positive trends in categories like women's dresses and athletic shoes. Chief Financial Officer Jared Poff provided further financial details, noting that overall net sales reached $714 million in the fourth quarter. The Canadian retail segment showed growth, with a 5% increase in same-store sales. The brand portfolio segment also performed well, with sales up 12%. Looking forward, both Howe and Poff emphasized the importance of understanding consumer behavior due to ongoing inflation and changing spending habits. They anticipate modest revenue growth for 2025, along with gradual improvement throughout the year, particularly in the U.S. retail sector. The company aims to maintain focus on improving inventory management, customer experience, and enhancing its promotional strategy. A new distribution center in Arizona is expected to help improve service efficiency. Overall, Designer Brands expressed optimism about its transformation strategies, projecting higher adjusted EPS for the coming year. The call concluded with a commitment to sharing updates on the company's progress moving forward.