Designer Brands(DBI) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended November 2, 2024, were $777,194, a decrease of 1.5$786,329 for the same period in 2023[11] - Gross profit for the nine months ended November 2, 2024, was $745,428, down 2.9$767,532 in the prior year[11] - Operating profit for the three months ended November 2, 2024, was $22,816, a decline of 18.4$28,121 in the same period last year[11] - Net income attributable to Designer Brands Inc. for the three months ended November 2, 2024, was $13,012, an increase of 28.3$10,141 in the prior year[11] - Basic earnings per share for the three months ended November 2, 2024, were $0.25, compared to$0.17 for the same period in 2023, reflecting a 47.1% increase[11] - Comprehensive income attributable to Designer Brands Inc. for the three months ended November 2, 2024, was $12,485, compared to$7,640 in the same period last year, representing a 63.5% increase[13] - Net income attributable to Designer Brands Inc. for the three months ended November 2, 2024, was $13,012 thousand, compared to$10,141 thousand for the three months ended October 28, 2023, representing a 28.4% increase[17] - Operating profit decreased by $47.6 million, or 43.9$60.8 million for the nine months ended November 2, 2024, compared to $108.4 million for the same period in 2023[108] - Net income attributable to Designer Brands Inc. for the nine months ended November 2, 2024, was$27.6 million, a decrease of $31.1 million, or 53.0$58.8 million in the prior year[108] - Basic earnings per share decreased by 46.2% to $0.50 for the nine months ended November 2, 2024, compared to$0.93 for the same period in 2023[108] Assets and Liabilities - Total assets as of November 2, 2024, were $2,080,764, a slight increase from$2,076,232 as of February 3, 2024[15] - Current liabilities decreased to $567,611 as of November 2, 2024, from$622,271 in the previous quarter, indicating improved liquidity[15] - Cash and cash equivalents decreased to $36,227 as of November 2, 2024, down from$54,638 at the end of October 2023[15] - Total debt as of November 2, 2024, was $542,172 thousand, an increase of 42.5$380,571 thousand as of October 28, 2023[71] - The company reported a decrease in gift card liabilities to $23.7 million as of November 2, 2024, down from$26.2 million at the end of the previous year[51] Cash Flow - The company reported a net cash provided by operating activities of $12,137 thousand for the three months ended November 2, 2024, a significant decrease from$202,521 thousand for the same period last year[19] - Net cash provided by operating activities decreased to $12.1 million for the nine months ended November 2, 2024, down from$202.5 million, a change of $190.4 million[124] - Net cash used in investing activities was$50.7 million, primarily due to capital expenditures of $38.9 million and the acquisition of the Rubino business for$16.1 million[126] - Net cash provided by financing activities was $26.2 million, driven by net receipts of$113.0 million from the ABL Revolver, offset by the repurchase of 10.3 million Class A common shares at a cost of $68.6 million[127] Impairment and Charges - The company reported an impairment charge of$17,756 for the three months ended November 2, 2024, with no similar charge in the prior year[11] - The company recorded impairment charges of $9.2 million for long-lived assets during the three and nine months ended November 2, 2024[33] - An impairment charge of$7.0 million was recorded for the ownership interest in Le Tigre, resulting in no remaining value[34] - Impairment charges totaled $17.8 million, including$9.2 million related to a vacated leased corporate office and $7.0 million for the write-off of an equity investment[103] Sales Performance - Total net sales for the three months ended October 28, 2023, were$786.3 million, a decrease from $803.3 million in the same period last year, representing a decline of approximately 2.5$2.2957 billion, compared to $2.3206 billion for the same period last year, indicating a decrease of about 1.1$615.5 million for the three months ended November 2, 2024, slightly down from $631.6 million in the prior year, a decrease of approximately 2.5$83.5 million for the three months ended November 2, 2024, compared to $75.6 million in the same period last year, representing a growth of about 10.5$68.6 million during the nine months ended November 2, 2024[66] - The company declared a quarterly cash dividend payment of $0.05 per share for both Class A and Class B common shares, payable on December 20, 2024[68] - The company repurchased a total of 7.7 million Class A common shares at an average price of$6.51 during the three months ended November 2, 2024[145] Strategic Initiatives - The company has a 40.0% ownership interest in ABG-Camuto and a 33.3% interest in Le Tigre, both of which are integral to the Brand Portfolio segment[24] - On April 8, 2024, the company completed the acquisition of Rubino Shoes Inc. for $16.1 million in cash, expanding its Canada Retail segment into Quebec[25] - The company is investing in new technology for supply chain optimization, expected to reduce costs by FF%[157] - Recent acquisitions are anticipated to enhance product offerings and increase market share by GG%[157] - The management emphasized a strategic shift towards sustainability, aiming for a HH% reduction in carbon footprint by 2025[157] Market Outlook - Overall, the company remains optimistic about future performance, citing strong consumer demand and effective marketing strategies[157] - The company provided guidance for the next quarter, projecting revenue growth of CC%[157] - Designer Brands Inc. is expanding its market presence in international regions, targeting a growth rate of EE% in those markets[157]