Designer Brands Inc. Reports Second Quarter 2025 Financial Results

Core Insights - Designer Brands Inc. reported a sequential improvement in comparable sales by 280 basis points from the first quarter of 2025, indicating the effectiveness of its operational strategies [2] - The company achieved a positive diluted earnings per share (EPS) of $0.22 and an adjusted diluted EPS of $0.34, reflecting growth compared to the same period last year [1][9] - Despite a slight uptick in consumer sentiment, macroeconomic volatility continues to pose challenges, leading the company to refrain from reinstating full-year 2025 guidance [4] Financial Performance - Net sales decreased by 4.2% to $739.8 million, with total comparable sales down by 5.0% [9][11] - Gross profit fell to $322.9 million, resulting in a gross margin of 43.7%, down from 44.0% the previous year [9][12] - Reported net income attributable to Designer Brands was $10.8 million, with adjusted net income at $16.7 million [9][14] Liquidity and Debt - Cash and cash equivalents at the end of the second quarter of 2025 totaled $44.9 million, an increase from $38.8 million year-over-year [9] - Total debt rose to $516.3 million, compared to $465.7 million at the same time last year [9] Store Count and Operations - The total number of stores decreased to 668, with a total square footage of 10,962 thousand [3] - The U.S. Retail segment, which includes DSW stores, accounted for 80.5% of segment net sales, while the Canada Retail segment contributed 9.9% [11] Segment Results - U.S. Retail segment net sales were $610.9 million, down 4.8% from the previous year [11] - The Canada Retail segment saw a slight increase in net sales by 0.4% to $75.1 million [11] - The Brand Portfolio segment experienced a significant decline in net sales by 23.8%, totaling $73.2 million [11]