US' Designer Brands Q1 sales drop 8%, withdraws FY25 outlook

Designer Brands, parent of DSW, has reported an 8 per cent decline in net sales to $686.9 million for the first quarter (Q1) ended May 3, 2025. Comparable sales fell 7.8 per cent year-on-year (YoY).

Gross profit declined to $295.1 million from $330 million a year earlier, with the gross margin narrowing to 43 per cent from 44.2 per cent. The company posted a net loss of $17.4 million, or $0.36 per diluted share, while adjusted net loss stood at $12.5 million, or $0.26 per share.

"We experienced a soft start to 2025 amid an unpredictable macro environment and deteriorating consumer sentiment," stated Doug Howe, chief executive officer.

As of May 3, 2025, the company operated 669 stores down from 675 last year. Liquidity remained steady with $46 million in cash and $125.5 million in available borrowings, though debt rose to $522.9 million from $476.1 million a year ago. Inventories stood at $623.6 million, slightly up from $620.5 million.

A quarterly dividend of $0.05 per share will be paid on June 18, 2025, to shareholders of record as of June 5, the company said in a financial release.

"We have shifted our near-term focus to amplifying value in our retail channels, preserving margins, controlling costs, and mitigating the impact of tariffs as part of our response to this volatility. Thanks to our team's focus and discipline, we expect to deliver between $20 million to $30 million in cost savings over the course of 2025," Howe continued.

Designer Brands has withdrawn its full-year 2025 (FY25) financial guidance, originally issued on March 20, 2025. The company stated it would not provide a revised outlook at this time.

"Given the persistent instability and pressure on consumer discretionary spend, we've made the decision to withdraw our 2025 guidance for the time being. Moving forward, our efforts remain focused on disciplined execution of the initiatives within our control to build a business rooted in the strength of our brand, centred on the customer, and positioned for long-term value creation," said Howe.

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ALCHEMPro News Desk (HU)