Core Insights - The article discusses the earnings call insights generated from transcripts and content available on the Seeking Alpha website, emphasizing the limitations of AI tools in ensuring accuracy and completeness [1][1]. Group 1 - The earnings call insights are compilations of earnings call transcripts and other content [1]. - The insights are generated by an AI tool and have not been curated or reviewed by editors [1]. - There are inherent limitations in using AI-based tools, affecting the accuracy, completeness, or timeliness of the insights [1].

Core Insights - Designer Brands Inc. (DBI) is a significant player in the global footwear and accessories market, focusing on diverse consumer needs and competing with major retailers [1] Financial Performance - On September 9, 2025, DBI reported earnings per share (EPS) of $0.34, surpassing the estimated $0.22, indicating effective strategies and operational improvements [2][6] - DBI's revenue for the second quarter was approximately $739.8 million, slightly exceeding the estimated $737.8 million, showcasing resilience amid macroeconomic uncertainties [3][6] Market Reaction - DBI's shares increased by 11.1%, closing at $4.41, reflecting investor confidence in the company's future prospects [4][6] Financial Ratios - The enterprise value to sales ratio of 0.506 and the price-to-sales ratio of 0.069 suggest that DBI's stock is valued at a fraction of its sales, indicating potential investment opportunities [5]

Core Insights - Designer Brands Inc. shares increased approximately 12% in premarket trading following stronger-than-expected second-quarter results [1] - Earnings per share were reported at $0.34, significantly exceeding the consensus estimate of $0.14 [1] - Revenue for the quarter reached $739.8 million, surpassing the expected $730.6 million [1] - Comparable sales experienced a 5% decline year-over-year but showed sequential improvement [1] Operational Highlights - The second quarter results featured a 280-basis point sequential improvement in comparable sales from the first quarter, indicating the effectiveness of targeted operational initiatives [2] - CEO Doug Howe emphasized that these initiatives contributed to a strong start for the back-to-school season in the U.S. retail segment, with improved traffic trends and higher conversion rates [2] Guidance and Market Conditions - The company has decided not to reinstate full-year 2025 guidance due to uncertainties related to global trade policies and tariffs [2]

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1] Group 1: Investment Philosophy - The investment approach is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1] Group 2: Market Focus - The investment strategy encompasses markets in the US, Canada, and Europe, indicating a broad geographical focus for potential investment opportunities [1]

U.S. Stock Market - U.S. stocks traded mostly higher, with the Dow Jones index gaining around 50 points, up 0.09% to 45,555.12 [1] - The NASDAQ rose 0.13% to 21,826.24, and the S&P 500 gained 0.15% to 6,504.97 [1] - Energy shares increased by 1.7%, while materials stocks fell by 1.2% [1] Company Earnings - Designer Brands Inc. reported better-than-expected earnings for Q2, posting earnings of 34 cents per share, exceeding the analyst consensus estimate of 23 cents [2] - The company also reported quarterly sales of $739.762 million, surpassing the analyst consensus estimate of $737.845 million [2] Commodity Market - Oil traded up 1.3% to $63.05, while gold increased by 0.3% to $3,687.80 [3] - Silver fell by 1.3% to $41.340, and copper decreased by 0.1% to $4.5550 [3] European Markets - European shares were mixed, with the eurozone's STOXX 600 falling 0.1% and Spain's IBEX 35 Index down 0.4% [4] - London's FTSE 100 rose 0.1%, Germany's DAX 40 declined 0.6%, and France's CAC 40 increased by 0.2% [4] Asian Markets - Asian markets closed mixed, with Japan's Nikkei 225 falling 0.42% and Hong Kong's Hang Seng gaining 1.19% [5] - China's Shanghai Composite fell 0.51%, while India's BSE Sensex gained 0.39% [5] Stock Movements - CaliberCos Inc. shares surged 695% to $17.04 after completing its initial purchase of Chainlink tokens [7] - Big Tree Cloud Holdings Limited shares increased by 314% to $4.2250, while Santech Holdings Limited shares rose by 245% to $2.28 [7] - Sentage Holdings Inc. shares dropped 39% to $4.1511, and 36Kr Holdings Inc. shares fell 36% to $6.50 [7] - PACS Group, Inc. shares decreased by 28% to $8.12 following the resignation of CFO Derick Apt [7]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net sales of $739.8 million, a decline of 4.2% year over year, with comparable sales down 5% [20][24] - Adjusted operating income was $30.3 million compared to $32.5 million last year, with adjusted net income at $16.7 million versus $17.1 million last year [24][25] - The effective tax rate on adjusted results was 10.1%, down from 20.6% last year [24] Business Line Data and Key Metrics Changes - U.S. retail segment sales declined 4.8% year over year, with comparable sales down 4.9%, showing significant improvement from Q1 [20][21] - The women's dress category posted a positive 5% comparable sales, a 900 basis point improvement from Q1 [20][21] - The brand portfolio segment saw total sales down 23.8% year over year, primarily due to a decline in internal sales to DSW, while external wholesale business grew by 7% [22][23] Market Data and Key Metrics Changes - Canadian retail segment sales were up 0.4% year over year, with comparable sales down 0.6%, indicating improvement from Q1 [21] - The athletic category experienced a slight negative comp of down 2%, but showed a two-point improvement from the first quarter [21] Company Strategy and Development Direction - The company is focusing on two pillars: customer and product, aiming to drive growth through scaling private label and enhancing wholesale models [11] - A new brand repositioning campaign titled "Let Us Surprise You" was launched to reinvigorate the DSW brand identity [12][39] - The company is optimizing inventory by reducing choice count by 25% while increasing depth by 15%, aiming to improve product availability and customer satisfaction [13][51] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of the year, despite ongoing macroeconomic headwinds and uncertainties related to tariffs [18][26] - The company is withholding full-year guidance due to the unpredictable macro environment but remains focused on disciplined execution [18][26] Other Important Information - The company ended Q2 with total inventories down 5% year over year and utilized excess cash to pay down debts, reducing total debt outstanding to $516.3 million [25] - The company fulfilled over 80% more digital demand through its logistics center compared to last year, enhancing operational efficiency [15] Q&A Session Summary Question: Can you elaborate on the interquarter trends and comp sales? - Management noted sequential improvement throughout the quarter, particularly in women's dress and athletic categories, with positive trends continuing into August [28][29] Question: What are the pressures foreseen in Q3 due to tariffs? - Management indicated that the primary concern is the indirect impact of tariffs on consumer sentiment rather than direct costs, with selective price increases implemented [34][35] Question: How is the new marketing campaign expected to impact store productivity? - Management expressed excitement about the campaign's early positive feedback and emphasized the importance of in-store experiences as a core differentiator [39][40] Question: What are the expectations for brand activations in Q4? - Management highlighted strong performance from brands like Birkenstock and noted that the top eight brands accounted for 45% of total sales [45] Question: Can you elaborate on the deeper assortment strategy? - Management confirmed a focus on increasing product availability and inventory productivity, with a significant reduction in choice count and an increase in depth planned [51]

Financial Data and Key Metrics Changes - Total sales for the quarter were down 4% year over year, with a 5% decline in comparable sales, reflecting a 280 basis point improvement from the first quarter [4][19] - Adjusted operating expenses were down over $14 million compared to last year, achieving 350 basis points of leverage compared to Q1, supporting year-over-year EPS growth [5][22] - Consolidated gross margin was 43.7% in the second quarter, decreasing by 30 basis points versus the prior year but leveraging 70 basis points from the first quarter [21] Business Line Data and Key Metrics Changes - In the U.S. retail segment, sales declined 4.8% year over year, with comp sales down 4.9%, showing significant improvement from Q1 [19] - Women's dress category posted a positive 5% comp, a 900 basis point improvement from the first quarter, while athletic sales were slightly negative at down 2% [20] - Canadian retail segment sales were up 0.4% year over year, with comps down 0.6%, indicating another significant improvement from Q1 [20] Market Data and Key Metrics Changes - The largest number of signups for the VIP rewards program occurred in stores, with store traffic improving and positively impacting the program [5] - The DoorDash partnership resulted in approximately 85% of transactions being from new customers, bolstering interest in stores across local geographies [7] - The brand portfolio segment saw total sales down 24% compared to last year, primarily due to lower internal sales, but wholesale activity across external retail partners delivered year-over-year growth [9][21] Company Strategy and Development Direction - The company is focusing on two pillars: customer and product, with plans to scale private label and build a more profitable wholesale model [10] - A new brand repositioning campaign, "Let Us Surprise You," aims to enhance customer engagement and brand identity [11] - The company is committed to optimizing inventory availability, reducing choice count by 25% while increasing depth by 15% for key styles [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of the year, despite ongoing macroeconomic headwinds and uncertainties related to tariffs [16][24] - The company is focused on disciplined execution and navigating the near-term environment while building a business grounded in brand strength [16] - Management remains committed to their strategy and transformation, encouraged by early signs of positive momentum [17] Other Important Information - The company ended the second quarter with total inventories down 5% year over year and utilized excess cash to pay down debts, ending with total debt outstanding of $516.3 million [23] - The effective tax rate for the second quarter on adjusted results was 10.1%, compared to 20.6% last year [22] Q&A Session Summary Question: Can you elaborate on the interquarter trends and comp sales? - Management noted sequential improvement throughout the quarter, particularly in women's dress and athletic categories, with positive trends continuing into August [28][30] Question: What are the pressures foreseen in Q3 due to tariffs? - Management highlighted concerns about the indirect impact of tariffs on consumer sentiment rather than direct costs, with selective price increases implemented [34][36] Question: How is the new marketing campaign expected to impact store productivity? - The campaign has received positive feedback, and management is focused on optimizing marketing investments while tracking performance closely [40][41] Question: What are the expectations for brand activations in Q4? - Management expressed optimism about the performance of key brands, including Birkenstock and Nike, with a focus on maintaining better in-stock levels [46] Question: Can you elaborate on the deeper assortment strategy? - The strategy involves increasing product availability and depth for key styles while reducing choice count, aimed at improving inventory productivity [51]

Financial Data and Key Metrics Changes - Total sales for the second quarter were down 4% year-over-year, with a 5% decline in comparable sales, reflecting a 280 basis point improvement from the first quarter [4][19] - Adjusted operating expenses decreased by over $14 million compared to last year, achieving 350 basis points of leverage compared to Q1, supporting year-over-year EPS growth [5][22] - Consolidated gross margin was 43.7%, a decrease of 30 basis points year-over-year, but leveraged 70 basis points from the first quarter [21] Business Line Data and Key Metrics Changes - U.S. retail comparable sales were down 5%, with total sales also down 5%, showing improvement correlated with slightly improved consumer sentiment [5][19] - Women's dress category delivered a positive 5% comparable sales, a 900 basis point improvement from the first quarter [8][20] - The brand portfolio segment saw total sales down 24% year-over-year, primarily due to lower internal sales, while external wholesale activity grew year-over-year [9][21] Market Data and Key Metrics Changes - In the Canada retail segment, sales were up 0.4% year-over-year, with comparable sales down 0.6%, indicating significant improvement from Q1 [19] - The adult athletic business showed sequential improvement, while Kids Athletic posted a flat comparable sales, representing a 500 basis point improvement over the prior quarter [8] Company Strategy and Development Direction - The company is focusing on two pillars: customer and product, aiming to drive growth through scaling private label and building a more profitable wholesale model [10] - A new brand repositioning campaign, "Let Us Surprise You," was launched to enhance customer engagement and brand identity [11][40] - The company is committed to optimizing inventory availability, reducing choice count by 25% while increasing depth by 15% for the back half of 2025 [12][51] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of the year, despite ongoing macroeconomic uncertainties and pressures on consumer discretionary spending [16][24] - The company is focused on disciplined execution and navigating the near-term environment while building a business grounded in brand strength [16][24] - Management noted that they are encouraged by early signs of positive momentum and sequential improvement throughout the quarter [17][57] Other Important Information - The company ended the second quarter with total inventories down 5% year-over-year and utilized excess cash to pay down debts, ending with total debt outstanding of $516.3 million [23] - The company is prioritizing diversification of its supply base to mitigate tariff impacts and has seen no negative reaction to selective price increases on private label products [15][36] Q&A Session Summary Question: Can you elaborate on the interquarter trends and comp sales? - Management noted sequential improvement throughout the quarter, particularly in women's dress and athletic categories, with positive trends continuing into August [28][30] Question: What are the expected pressures from tariffs in Q3? - Management indicated that the primary concern is the indirect impact of tariffs on consumer sentiment rather than direct costs, with selective price increases being implemented [34][36] Question: How is the new marketing campaign expected to impact store productivity? - Management expressed excitement about the campaign's early positive feedback and emphasized the importance of in-store experiences as a core differentiator [40][41] Question: What are the expectations for brand activations in Q4? - Management highlighted strong performance from brands like Birkenstock and noted that the focus will continue on maintaining better in-stock levels and brand partnerships [46] Question: Can you elaborate on the deeper assortment strategy? - Management explained that the strategy involves increasing product availability and depth while reducing choice count, aimed at improving inventory productivity [51]

Core Insights - Designer Brands (DBI) reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing an increase from $0.29 per share a year ago, resulting in an earnings surprise of +54.55% [1] - The company posted revenues of $739.76 million for the quarter ended July 2025, which was 1.1% below the Zacks Consensus Estimate and a decrease from $771.9 million year-over-year [2] - Designer Brands has underperformed the market, with shares down approximately 21.9% year-to-date compared to the S&P 500's gain of 10.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.23, with expected revenues of $767 million, while the estimate for the current fiscal year is -$0.27 on revenues of $2.92 billion [7] - The earnings outlook will be influenced by management's commentary during the earnings call and the trend of earnings estimate revisions [4][5] Industry Context - The Retail - Apparel and Shoes industry, to which Designer Brands belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Designer Brands may also be affected by the overall industry outlook, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) Designer Brands Inc. reported a sequential improvement in comparable sales for Q2 2025, achieving positive diluted EPS and adjusted diluted EPS with growth year-over-year, despite decreases in net sales, total comparable sales, and gross profit compared to the prior year - The company achieved a **280-basis point sequential improvement** in comparable sales from the first quarter of 2025[2](index=2&type=chunk) Second Quarter 2025 Key Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (million USD) | Change (%) | | :-------------------------- | :------ | :------ | :----- | :--------- | | Net Sales | $739.8 | $771.9 | $(32.1) | (4.2)% | | Total Comparable Sales | (5.0)% | (1.4)% | (3.6)% | - | | Gross Profit | $322.9 | $339.5 | $(16.6) | (4.9)% | | Gross Margin | 43.7% | 44.0% | (0.3)% | (30) bps | | Diluted EPS | $0.22 | $0.24 | $(0.02) | (8.3)% | | Adjusted Diluted EPS | $0.34 | $0.29 | $0.05 | 17.2% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Doug Howe highlighted the positive impact of targeted operational initiatives, leading to a strong start for the back-to-school season in U.S. Retail and improvements in traffic and conversion, while acknowledging ongoing macroeconomic volatility and uncertainty - Targeted operational initiatives supported a **strong start to the back-to-school season** within the U.S. Retail segment[2](index=2&type=chunk) - The company observed gradual improvements in traffic and a notable uptick in conversion[2](index=2&type=chunk) - Ongoing efforts include strengthening the brand, driving awareness through marketing investments, and optimizing the omni-channel model[2](index=2&type=chunk) - Management remains committed to disciplined execution amidst macroeconomic volatility, extended tariff increases, and caution in discretionary spending[2](index=2&type=chunk) [Consolidated Financial Results](index=6&type=section&id=Consolidated%20Financial%20Results) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, Designer Brands Inc. reported a decrease in net sales, gross profit, and net income attributable to Designer Brands Inc. compared to the prior year, with operating profit also declining and diluted EPS decreasing from $0.24 to $0.22 Condensed Consolidated Statements of Operations (Three Months Ended) | Metric | August 2, 2025 (thousands USD) | August 3, 2024 (thousands USD) | Change (thousands USD) | Change (%) | | :------------------------------------------ | :------------- | :------------- | :----- | :--------- | | Net sales | $739,762 | $771,900 | $(32,138) | (4.2)% | | Gross profit | $322,933 | $339,549 | $(16,616) | (4.9)% | | Operating profit | $26,583 | $28,589 | $(2,006) | (7.0)% | | Net income (loss) attributable to Designer Brands Inc. | $10,827 | $13,824 | $(2,997) | (21.7)% | | Diluted earnings (loss) per share | $0.22 | $0.24 | $(0.02) | (8.3)% | Condensed Consolidated Statements of Operations (Six Months Ended) | Metric | August 2, 2025 (thousands USD) | August 3, 2024 (thousands USD) | Change (thousands USD) | Change (%) | | :------------------------------------------ | :------------- | :------------- | :----- | :--------- | | Net sales | $1,426,671 | $1,518,496 | $(91,825) | (6.0)% | | Gross profit | $618,059 | $669,560 | $(51,501) | (7.7)% | | Operating profit | $19,321 | $37,971 | $(18,650) | (49.1)% | | Net income (loss) attributable to Designer Brands Inc. | $(6,597) | $14,607 | $(21,204) | (145.2)% | | Diluted earnings (loss) per share | $(0.14) | $0.25 | $(0.39) | (156.0)% | [Segment Performance](index=6&type=section&id=Segment%20Performance) Segment performance for Q2 2025 showed mixed results, with U.S. Retail experiencing declines across key metrics, Canada Retail seeing a slight net sales increase but overall declines, and the Brand Portfolio segment facing significant decreases across all key metrics [Net Sales by Segment](index=6&type=section&id=Net%20Sales%20by%20Segment) Consolidated net sales decreased by 4.2% for the three months ended August 2, 2025, with declines in U.S. Retail and Brand Portfolio segments, partially offset by a slight increase in Canada Retail Segment Net Sales (Three Months Ended August 2, 2025 vs. August 3, 2024) | Segment | August 2, 2025 (thousands USD) | August 3, 2024 (thousands USD) | Change (thousands USD) | Change (%) | | :---------------- | :------------- | :------------- | :----- | :--------- | | U.S. Retail | $610,926 | $641,694 | $(30,768) | (4.8)% | | Canada Retail | $75,077 | $74,797 | $280 | 0.4% | | Brand Portfolio | $73,157 | $95,993 | $(22,836) | (23.8)% | | Total Segment Net Sales | $759,160 | $812,484 | $(53,324) | (6.6)% | | Consolidated Net Sales | $739,762 | $771,900 | $(32,138) | (4.2)% | [Comparable Sales by Segment](index=6&type=section&id=Comparable%20Sales%20by%20Segment) Total comparable sales decreased by 5.0% for the three months ended August 2, 2025, with the Brand Portfolio segment's direct-to-consumer channel experiencing the most significant decline Change in Comparable Sales (Three Months Ended August 2, 2025 vs. August 3, 2024) | Segment | August 2, 2025 (%) | August 3, 2024 (%) | | :------------------------------------ | :------------- | :------------- | | U.S. Retail segment | (4.9)% | (1.1)% | | Canada Retail segment | (0.6)% | (3.1)% | | Brand Portfolio segment - direct-to-consumer channel | (29.2)% | (7.0)% | | Total | (5.0)% | (1.4)% | [Gross Profit by Segment](index=7&type=section&id=Gross%20Profit%20by%20Segment) Consolidated gross profit decreased by 4.9% for the three months ended August 2, 2025, with a slight decline in gross margin, and all segments experiencing a decrease in gross profit, particularly the Brand Portfolio Segment Gross Profit (Three Months Ended August 2, 2025 vs. August 3, 2024) | Segment | August 2, 2025 (thousands USD) | August 2, 2025 (% of Segment Net Sales) | August 3, 2024 (thousands USD) | August 3, 2024 (% of Segment Net Sales) | Change (%) | Basis Points Change (bps) | | :-------------------- | :---------------------- | :------------------------------------- | :---------------------- | :------------------------------------- | :--------- | :------------------ | | U.S. Retail | $264,522 | 43.3% | $282,916 | 44.1% | (6.5)% | (80) | | Canada Retail | $34,950 | 46.6% | $35,087 | 46.9% | (0.4)% | (30) | | Brand Portfolio | $18,508 | 25.3% | $26,635 | 27.7% | (30.5)% | (240) | | Consolidated Gross Profit | $322,933 | 43.7% | $339,549 | 44.0% | (4.9)% | (30) | [Operating Profit by Segment](index=7&type=section&id=Operating%20Profit%20by%20Segment) Consolidated operating profit decreased by 7.0% for the three months ended August 2, 2025, with all segments reporting a decline in operating profit, and the Brand Portfolio showing a significant increase in operating loss Segment Operating Profit (Three Months Ended August 2, 2025 vs. August 3, 2024) | Segment | August 2, 2025 (thousands USD) | August 2, 2025 (% of Segment Net Sales) | August 3, 2024 (thousands USD) | August 3, 2024 (% of Segment Net Sales) | Change (%) | Basis Points Change (bps) | | :-------------------- | :---------------------- | :------------------------------------- | :---------------------- | :------------------------------------- | :--------- | :------------------ | | U.S. Retail | $60,211 | 9.9% | $77,573 | 12.1% | (22.4)% | (220) | | Canada Retail | $8,498 | 11.3% | $9,052 | 12.1% | (6.1)% | (80) | | Brand Portfolio | $(3,606) | (4.9)% | $(2,053) | (2.1)% | 75.6% | (280) | | Consolidated Operating Profit | $26,583 | 3.6% | $28,589 | 3.7% | (7.0)% | (10) | [Financial Position & Capital Structure](index=2&type=section&id=Financial%20Position%20%26%20Capital%20Structure) [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of August 2, 2025, Designer Brands Inc. reported an increase in cash and cash equivalents and a decrease in inventories compared to the prior year, with total assets slightly decreasing and total liabilities increasing Condensed Consolidated Balance Sheet Highlights (as of August 2, 2025 vs. August 3, 2024) | Metric | August 2, 2025 (thousands USD) | August 3, 2024 (thousands USD) | Change (thousands USD) | | :-------------------------- | :------------- | :------------- | :----- | | Cash and cash equivalents | $44,937 | $38,834 | $6,103 | | Inventories | $610,876 | $642,783 | $(31,907) | | Total current assets | $751,925 | $798,048 | $(46,123) | | Total assets | $2,061,731 | $2,107,134 | $(45,403) | | Total current liabilities | $573,495 | $619,038 | $(45,543) | | Long-term debt | $509,593 | $458,974 | $50,619 | | Total liabilities | $1,777,720 | $1,748,070 | $29,650 | | Total shareholders' equity | $280,797 | $355,545 | $(74,748) | [Liquidity](index=2&type=section&id=Liquidity) The company's cash and cash equivalents increased year-over-year, and it maintained significant availability under its revolving credit facility, despite an increase in total debt compared to the prior year Liquidity Position (as of August 2, 2025 vs. August 3, 2024) | Metric | August 2, 2025 (million USD) | August 3, 2024 (million USD) | Change (million USD) | | :------------------------------------------------ | :------------- | :------------- | :----- | | Cash and cash equivalents | $44.9 | $38.8 | $6.1 | | Available for borrowings under credit facility | $104.3 | N/A | N/A | | Total Debt | $516.3 | $465.7 | $50.6 | | Inventories | $610.9 | $642.8 | $(31.9) | [Store Count](index=2&type=section&id=Store%20Count) As of August 2, 2025, Designer Brands Inc. operated 668 stores across its U.S. Retail and Canada Retail segments, a slight decrease from the previous year, with a corresponding reduction in total square footage Store Count and Square Footage (as of August 2, 2025 vs. August 3, 2024) | Segment | Stores (count) | Square Footage (thousands sq ft) | Stores (count) | Square Footage (thousands sq ft) | | :---------------------- | :------------------- | :--------------------------- | :------------------- | :--------------------------- | | U.S. Retail - DSW stores | 493 | 9,686 | 499 | 9,879 | | Canada Retail - The Shoe Co. stores | 121 | 618 | 123 | 631 | | Canada Retail - Rubino stores | 28 | 147 | 28 | 149 | | Canada Retail - DSW stores | 26 | 511 | 26 | 511 | | Total number of stores | 668 | 10,962 | 676 | 11,170 | [Financial Outlook & Non-GAAP Reconciliation](index=2&type=section&id=Financial%20Outlook%20%26%20Non-GAAP%20Reconciliation) [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) Due to ongoing macroeconomic uncertainty, particularly concerning global trade policies, Designer Brands Inc. has decided not to reinstate its full-year 2025 financial guidance - The Company has elected not to reinstate full year 2025 guidance due to macroeconomic uncertainty stemming primarily from global trade policies[6](index=6&type=chunk) [Non-GAAP Reconciliation](index=11&type=section&id=Non-GAAP%20Reconciliation) The company provides adjusted non-GAAP financial measures to offer a clearer view of its core operating performance by excluding certain one-time or non-recurring items, with adjusted diluted EPS for Q2 2025 at $0.34, higher than the GAAP diluted EPS of $0.22 Non-GAAP Adjusted Financial Results (Three Months Ended August 2, 2025 vs. August 3, 2024) | Metric | August 2, 2025 (thousands USD) | August 3, 2024 (thousands USD) | Change (thousands USD) | | :-------------------------- | :------------- | :------------- | :----- | | Adjusted operating expenses | $(295,250) | $(309,596) | $14,346 | | Adjusted operating profit | $30,261 | $32,524 | $(2,263) | | Adjusted net income | $16,716 | $17,071 | $(355) | | Adjusted diluted earnings per share | $0.34 | $0.29 | $0.05 | [Non-GAAP Measures Explanation](index=11&type=section&id=Non-GAAP%20Measures%20Explanation) Designer Brands Inc. uses non-GAAP financial measures to supplement GAAP results by adjusting for items not indicative of core operations, such as restructuring costs, acquisition-related costs, impairment charges, and foreign currency transaction losses, to provide better comparability and insight into business trends - Non-GAAP measures adjust for restructuring and integration costs, acquisition-related costs, impairment charges, foreign currency transaction losses, and their net tax impact[24](index=24&type=chunk)[25](index=25&type=chunk) - These measures are used to increase comparability to prior periods, identify business trends, and evaluate operating performance by adjusting for items not indicative of core operations[25](index=25&type=chunk) [Comparable Sales Performance Metric Definition](index=12&type=section&id=Comparable%20Sales%20Performance%20Metric%20Definition) The company defines comparable sales as a key metric for its direct-to-consumer businesses, encompassing sales from stores open for at least 14 months and e-commerce sales, with Canada Retail specifically excluding foreign currency translation impact - Comparable sales include sales from stores in operation for at least 14 months at the beginning of the applicable year[26](index=26&type=chunk) - The metric includes e-commerce sales for U.S. Retail and Canada Retail segments, and direct-to-consumer e-commerce net sales for the Brand Portfolio segment[26](index=26&type=chunk) - Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation[26](index=26&type=chunk) [Company Overview & Legal Disclosures](index=3&type=section&id=Company%20Overview%20%26%20Legal%20Disclosures) [About Designer Brands](index=3&type=section&id=About%20Designer%20Brands) Designer Brands Inc. is a major global designer, producer, and retailer of footwear and accessories, operating through a diversified brand portfolio, a robust omni-channel infrastructure, and over 660 stores in North America, while also engaging in international distribution and private label product development with a commitment to corporate social responsibility - Designer Brands is one of the world's largest designers, producers, and retailers of footwear and accessories, with a mission of being shoe obsessed[10](index=10&type=chunk) - The company's portfolio includes brands such as Topo Athletic, Keds, Vince Camuto, Kelly & Katie, Jessica Simpson, Lucky Brand, Mix No. 6, and Crown Vintage[10](index=10&type=chunk) - Operations include a direct-to-consumer omni-channel infrastructure, national wholesale distribution, a **billion-dollar digital commerce business**, and over **660 DSW, The Shoe Co., and Rubino stores** in North America[10](index=10&type=chunk) - Designer Brands supports the global community by donating over **twelve million pairs of shoes** to Soles4Souls since 2018[11](index=11&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) The report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially, including general economic conditions, consumer preferences, supply chain disruptions, and tariffs, with no undertaking by the company to update these statements - Forward-looking statements are based on current views and expectations and involve known and unknown risks and uncertainties[12](index=12&type=chunk) - Key risk factors include uncertain general economic and financial conditions, supply chain disruptions, tariffs, fluctuating interest rates, and impacts on consumer discretionary spending[12](index=12&type=chunk) - Other risks relate to changing consumer preferences, climate change, execution of business strategies, integration of acquisitions, supplier relationships, distribution systems, cybersecurity, and compliance with laws and regulations[12](index=12&type=chunk)[13](index=13&type=chunk) [Webcast and Conference Call Information](index=3&type=section&id=Webcast%20and%20Conference%20Call%20Information) Designer Brands Inc. hosted a conference call on September 9, 2025, to discuss its financial results, with details provided for live participation and an archived replay, and important information also disseminated via the company's investor website - A conference call was hosted on **September 9, 2025, at 8:30 am Eastern Time**[8](index=8&type=chunk) - Investors and analysts could participate via dial-in or live webcast, with an archived version available until September 23, 2025[8](index=8&type=chunk)[9](index=9&type=chunk) - Important information may be disseminated initially or exclusively via the Company's investor website[9](index=9&type=chunk) [Contact Information](index=12&type=section&id=Contact%20Information) Contact information for investor relations inquiries is provided - Contact for investor relations: Stacy Turnof, DesignerBrandsIR@edelman.com[27](index=27&type=chunk)