Designer Brands(DBI) The Motley Fool·2024-09-11 18:16Core Viewpoint - Designer Brands experienced a significant decline in stock price following a disappointing second-quarter earnings report and a reduction in guidance for the year [1][4]. Financial Performance - Comparable sales decreased by 1.4%, leading to a 2.6% drop in revenue to $771.9 million, which was below the consensus estimate of $816.1 million [2]. - Gross margin fell from 34.5% to 32.8%, primarily due to weakness in the U.S. retail segment [2]. - Operating expenses increased by 6% to $226.9 million [2]. - Adjusted earnings per share (EPS) dropped from $0.59 to $0.29, missing the estimate of $0.53 [3]. Market Segments - CEO Doug Howe noted challenges in categories such as dress and seasonal footwear, but mentioned an 8% increase in athleisure sales during the quarter [3]. - The U.S. segment outperformed the overall footwear sector by one percentage point [3]. Future Outlook - The company revised its full-year revenue growth forecast to flat to low-single digits, down from an earlier expectation of low-single digits [4]. - Adjusted EPS guidance was cut from a range of $0.70-$0.80 to $0.50-$0.60 [4]. - Despite a forward price-to-earnings ratio of less than 10, the stock is considered not investable until revenue and earnings growth can be restored [5].