Sales of designer brands slow in Q4, profits better than expectations

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Designer Brands Inc reported weaker-than-expected fourth-quarter sales amid a slump in consumer demand.

In Q4, the DSW-parent company’s net sales declined 7.5% to $760.5 million, falling short of analysts’ expectations of $791.81 million. Comparable sales decreased 5.5% and adjusted net income was $4.7 million, with adjusted diluted EPS of $0.07, which beat analyst expectations.

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For the full year, results were largely in line with the company’s previously low outlook DecemberThat took into account headwinds related to the highly promotional environment and excess inventory, particularly in sneakers. Net sales increased 3.7% to $3.3 billion and adjusted net income was $133.7 million with adjusted diluted EPS of $1.85. CComparable sales increased 4.4%.

Net sales from owned brands, a key focus for the footwear retailer, were up 32.1% in 2022 compared to the prior year, according to DBI. Target To double Camuto Group sales from owned brands and national owned and licensed brands to about one-third of total sales by 2026.

Outgoing CEO Roger Rollins said the company’s 2022 results are a testament to the chain’s “brand building strategy”. In early February, the DBI kids brand from Wolverine Worldwide, adding to their existing roster which includes Topo Athletic and Le Tigre, both of which were acquired within the last year. DBI is also expanding its licensing agreement for the Wolverine-owned Hush Puppies brand to become the exclusive licensee for the brand across all channels in the as well as Canada, and manage its DTC e-commerce and potential wholesale business. Could

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Doug Howe, DSW President and incoming DBI CEO, said, “While we are navigating through a volatile environment, we are well-positioned to offer our customers great value and a diverse assortment of product offerings in 2023.” Are.” “We will remain prudent in managing our expenses and inventory and pursue growth in our portfolio of increasingly diversified owned brands.”

For 2023, Designer Brands expects net sales in the low to mid-single digits with diluted EPS between $1.65 and $1.75. This does not include any contribution from the recently acquired Keds brand, which the company expects to deliver incremental net sales of between $75 million and $85 million in 2023.