Designer Brands(DBI) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter net sales decreased by 5.4% to $713.6 million, with total comparable sales increasing by 0.5%[3] - Full year net sales decreased by 2.1% to $3.0 billion, with total comparable sales decreasing by 1.7%[7] - The reported net loss for the full year was $38.2 million, equating to a loss per diluted share of $0.80[7] - Consolidated net sales for the three months ended August 3, 2024, were $771,900,000, a decrease from $792,217,000 for the same period last year, representing a decline of 2.9%[23] - Consolidated net sales for the six months ended August 3, 2024, were $1,518,496,000, slightly down from $1,534,299,000 in the same period last year, a decrease of 1.0%[23] - Consolidated net sales for the three months ended November 2, 2024, were $777,194 thousand, a decrease of 1.4% compared to $786,329 thousand for the same period in 2023[24] - For the nine months ended November 2, 2024, consolidated net sales totaled $2,295,690 thousand, a slight decrease from $2,320,628 thousand in the same period last year[24] - Net sales for the three months ended February 1, 2025, were $713,572, a decrease of 5.4% compared to $754,348 for the same period in 2024[25] Gross Profit and Margins - Gross profit for the fourth quarter decreased to $282.6 million, resulting in a gross margin of 39.6%[3] - Consolidated gross profit for the three months ended February 1, 2025, was $282,583, a decrease of 3.4% compared to $292,591 for the same period in 2024[17] - Gross profit for the consolidated segment was $252,914,000, accounting for 32.8% of net sales, compared to $273,387,000 or 34.5% of net sales in the previous year[23] - Gross profit for the consolidated segment for six months was $497,983,000, which is 32.8% of net sales, compared to $511,126,000 or 33.3% in the previous year[23] - Gross profit margin for the consolidated segment improved to 43.0% for the three months ended November 2, 2024, compared to 44.0% in the same period last year[24] - Gross profit for the twelve months ended February 1, 2025, was $1,285,958, representing a gross margin of 42.7%, compared to $1,323,995 and a gross margin of 43.1% for the previous year[27] Operating Expenses and Losses - Operating expenses for the consolidated segment were $226,896,000, which is 29.4% of net sales, compared to $214,530,000 or 27.1% of net sales last year, indicating an increase in operating expenses as a percentage of sales[23] - Operating expenses for the six months were $465,447,000, representing 30.7% of net sales, compared to $434,649,000 or 28.3% last year, indicating a rise in operating expenses[23] - Operating expenses for the three months ended February 1, 2025, were $311,983, which is 43.7% of net sales, compared to $326,841 or 43.3% of net sales for the same period in 2024[25] - The company reported operating expenses of $1,245,834,000 for the twelve months ended February 1, 2025, slightly down from $1,256,150,000 in the previous year, showing a decrease of about 0.8%[31] Segment Performance - The U.S. Retail segment reported net sales of $587.5 million, a decrease of 6.9% compared to the previous year[16] - The Brand Portfolio segment saw a 12.3% increase in net sales, totaling $87.3 million for the fourth quarter[16] - U.S. Retail segment gross profit decreased by 3.8% to $238,490, while its percentage of net sales increased to 40.6% from 39.3%[17] - Canada Retail segment gross profit increased by 6.0% to $27,388, with a slight decrease in its percentage of net sales to 39.6%[17] - U.S. Retail segment net sales were $641,694,000, down from $658,542,000 year-over-year, reflecting a decrease of 2.7%[23] - Canada Retail segment net sales increased to $74,797,000 from $70,266,000, marking a growth of 6.3% year-over-year[23] - U.S. Retail segment net sales were $615,495 thousand, a decrease of 2.5% from $631,610 thousand in the same period last year[24] - Canada Retail segment net sales increased to $83,504 thousand, up 10.4% from $75,610 thousand in the same period last year[24] Future Outlook - For fiscal year 2025, the company anticipates low-single digit net sales growth and diluted EPS guidance of $0.30 to $0.50[9] - The company plans to include e-commerce sales from the Brand Portfolio segment in its comparable sales metric starting in 2025, enhancing the measurement of retail performance[34] - The company anticipates that stores added from the Rubino acquisition will contribute to comparable sales starting in the second quarter of 2025, indicating a strategy for market expansion[34] Debt and Assets - Cash and cash equivalents totaled $44.8 million at the end of 2024, down from $49.2 million at the end of 2023[7] - Long-term debt increased to $484,285 as of February 1, 2025, compared to $420,344 as of February 3, 2024[29] - Total current assets decreased to $734,824 as of February 1, 2025, from $777,432 as of February 3, 2024[29] - Total liabilities decreased slightly to $1,727,449 as of February 1, 2025, from $1,713,724 as of February 3, 2024[29] Adjusted Metrics - The adjusted diluted earnings per share for the twelve months ended February 1, 2025, was $0.27, down from $0.68 in the prior year, indicating a decrease of approximately 60.3%[31] - Total non-GAAP adjustments for the twelve months ended February 1, 2025, amounted to $25,014,000 after tax, compared to $13,969,000 in the previous year, representing an increase of approximately 79.5%[31] - The company incurred restructuring and integration costs of $11,843,000 for the twelve months ended February 1, 2025, compared to $6,378,000 in the previous year, indicating an increase of approximately 85.5%[31] - The company incurred impairment charges of $580 for the three months ended February 1, 2025, compared to $4,185 for the same period in 2024[27] Management and Corporate Actions - The company repurchased 10.3 million Class A common shares at a cost of $68.6 million during 2024[7] - CEO transition costs for the twelve months ended February 1, 2025, were $4,352,000, down from $4,352,000 in the previous year, reflecting a reduction in transition-related expenses[31] - The company recognized intersegment gross profit of $9,717 for the three months ended February 1, 2025, compared to $6,728 in the same period last year[19] - The elimination of net sales recognized by the Brand Portfolio segment for the twelve months ended February 1, 2025, was $138,743, up from $72,078 in the previous year[20] - Corporate/Eliminations segment reported an operating loss of $217,734 for the twelve months ended February 1, 2025, compared to a loss of $187,183 in the previous year, indicating a worsening performance[20]