Designer Brands Inc. DBI shares are trading lower on Wednesday.

The company reported second-quarter adjusted earnings per share of 29 cents, missing the street view of 53 cents. Quarterly sales of $771.9 million missed the analyst consensus of $816.137 million.

Designer Brands reported a decrease in net sales of 2.6%. Total comparable sales also declined by 1.4%.

“We saw sustained pressure on challenged categories such as dress and seasonal in the second quarter, which we were able to partially mitigate through providing a greater selection of athletic and athleisure brands in our assortment,” stated Doug Howe, Chief Executive Officer. 

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The company’s gross profit fell to $252.9 million, down from $273.4 million the previous year, and the gross margin decreased to 32.8%, compared to 34.5% in the prior year.

Cash and cash equivalents totaled $38.8 million at the end of the second quarter.

The company ended the second quarter with inventories of $642.8 million compared to $606.8 million at the end of the same period last year.

In the second quarter of 2024, the company closed one store in the U.S. and opened two stores in Canada, resulting in 499 stores in the U.S. and 177 stores in Canada as of August 3, 2024.

Outlook: Designer Brands has lowered its fiscal year 2024 outlook, now expecting adjusted EPS to be between $0.50 and $0.60, compared to the previous view of $0.70 to $0.80. This new forecast is below the estimate of $0.75.

The company projects net sales growth of flat to low-single digits (prior view: low-single digits).

Price Action: DBI shares are trading lower by 28.2% to $4.17 premarket at last check Wednesday.

Photo via Shutterstock

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