Designer Brands Reports Q3 Sales Decline as Warm Weather Stalls Demand for Fall Product
Designer Brands Inc. (DBI) slashed its 2024 outlook after a warmer fall season prompted a sales decline in the third quarter.
Doug Howe, the shoe retailer’s chief executive officer, said in a statement that the third quarter started out strong thanks to solid athletic shoe sales amid the back-to-school season. However, Howe cited an “unseasonably warmer” fall season as well as “ongoing macroeconomic uncertainty” in the latter half of the period, which contributed to slower demand and a 3.1 decline in comparable sales for Q3.
JD Sports, Caleres and Shoe Carnival also said warmer fall weather impacted sales of seasonal footwear, including boots, in the most recent quarter.
“Although external challenges have persisted, I am encouraged by how effectively our business has stayed aligned with our strategic priorities and executing on the things within our control,” Howe said in a statement.
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Net sales for the DSW parent company decreased 1.2 percent to $777.2 million in the third quarter. Comparable sales decreased 3.1 percent in the period, while adjusted net income was $14.5 million, with adjusted diluted EPS of 27 cents.
DBI downgraded its outlook for the 2024 fiscal year, and now expects sales growth to be between down in the low-single digits. EPS is expected to be in the range of 10 cents to 30 cents.
Shares of DBI were down almost 20 percent in pre-market trading on Tuesday.
Looking ahead, Howe said the retailer is confident in its position for the holiday season.
“As we make our way through the fourth quarter, we remain confident in our strategy and our ability to navigate headwinds as we implement a refreshed holiday marketing and merchandising approach,” Howe said. “We continue to believe this focus will help us improve performance over the long-term.”
In Q1, DBI rolled out a new strategic business initiative to put consumers first while “being product obsessed and transformation-focused.” The retailer tapped Sarah Crockett as chief marketing officer of DSW in tandem with this new plan.
