Core Viewpoint - Designer Brands Inc. will release its fourth quarter and full year 2025 earnings on March 26, 2026, with a conference call scheduled for 8:30 am E.T. to discuss the results [1] Company Overview - Designer Brands Inc. is one of the largest designers, producers, and retailers of footwear and accessories globally, with a mission centered around being "shoe obsessed" [1] - The company has a diversified portfolio of brands, including Topo Athletic, Keds, Vince Camuto, and others, and operates a robust direct-to-consumer omni-channel infrastructure [1] - Designer Brands has a significant digital commerce business valued at approximately one billion dollars and operates over 660 stores across North America [1] Community Engagement - The company has donated over thirteen million pairs of shoes to the global non-profit Soles4Souls since 2018, reflecting its commitment to corporate values and community support [1]

Core Viewpoint - Designer Brands Inc. has appointed Sheamus Toal as Chief Financial Officer, effective February 16, 2026, to enhance financial and operational leadership during a transformative period for the company [1] Group 1: Appointment Details - Sheamus Toal will serve as Executive Vice President, Chief Financial Officer, and Principal Financial Officer [1] - Mark Haley will return to his role as Senior Vice President, Controller, and Principal Accounting Officer after serving as Interim Principal Financial Officer [1] Group 2: Sheamus Toal's Background - Sheamus Toal has extensive financial and operational experience from leadership roles in both public and private companies [1] - He previously served as Chief Operating Officer and Chief Financial Officer of The Children's Place, where he improved liquidity and optimized a digitally-driven business model [1] - His past roles include Executive Vice President and Chief Financial Officer at Saatva.com, where he significantly increased revenue and profitability [1] Group 3: Company Overview - Designer Brands is a leading designer, producer, and retailer of footwear and accessories, with a diverse portfolio of brands including Topo Athletic, Keds, and Jessica Simpson [1] - The company operates a billion-dollar digital commerce business and has over 670 retail locations in North America [1] - Designer Brands is committed to corporate social responsibility, having donated over twelve million pairs of shoes to Soles4Souls since 2018 [1]

Group 1: Company Actions - Designer Brands Inc. has conducted layoffs at the end of January 2026, although the exact number of affected employees is unclear [1] - The company aims to simplify its organizational structure, reduce complexity, and improve speed and accountability, as stated by a spokeswoman [2] - Designer Brands is focused on supporting affected associates during the transition [2] Group 2: Industry Context - Footwear and fashion job losses in 2025 exceeded 17,250, with a significant number of job cuts in the U.S. attributed to AI and automation [3] - Designer Brands is among the first companies in 2026 to announce layoffs, following Nike's decision to cut approximately 775 jobs as part of its operational consolidation [4] - Genesco is also undergoing a transformation of its IT operating model to support long-term growth, which may impact some positions within its IT organization [5]

Core Points - Designer Brands Inc. announced the resignation of Jared Poff as Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, effective October 31, 2025, to pursue a new opportunity [1] - Mark Haley has been appointed as Interim Principal Financial Officer, effective November 1, 2025, and will work closely with Poff and the financial leadership team during the transition [1][2] - The company is initiating an executive search for a permanent Chief Financial Officer [1] Company Overview - Designer Brands is a leading designer, producer, and retailer of footwear and accessories, with a diverse portfolio of brands including Topo Athletic, Keds, Vince Camuto, and others [3] - The company operates a billion-dollar digital commerce business and has over 660 retail locations in North America, including DSW Designer Shoe Warehouse [3] - Designer Brands has donated over twelve million pairs of shoes to the global non-profit Soles4Souls since 2018, reflecting its commitment to corporate social responsibility [3]

Group 1 - Designer Brands Inc. will release its second quarter 2025 earnings on September 9, 2025, with a conference call scheduled for 8:30 am E.T. to discuss the results [1] - Investors and analysts can participate in the call by dialing specific numbers and referencing the conference ID number 3316589 [2] - An archived version of the conference call will be available until September 23, 2025, for those unable to listen live [2] Group 2 - Designer Brands is one of the largest designers, producers, and retailers of footwear and accessories, with a diverse portfolio of brands including Topo Athletic, Keds, and Jessica Simpson [3] - The company operates a billion-dollar digital commerce business and has over 650 retail locations in North America, including DSW Designer Shoe Warehouse [3] - Designer Brands has donated more than eleven million pairs of shoes to the global non-profit Soles4Souls since 2018, reflecting its commitment to corporate social responsibility [3]

Financial Data and Key Metrics Changes - For the first quarter of fiscal 2025, net sales were $687 million, down 8% year-over-year, with comparable sales down 7.8% [28] - Consolidated gross margin decreased by nearly 120 basis points to 43%, primarily due to increased markdowns [30] - Adjusted operating income was essentially breakeven compared to $14.7 million last year, with an adjusted net loss of $12.5 million versus a gain of $4.8 million last year [32] Business Line Data and Key Metrics Changes - U.S. Retail segment sales were down 7.7%, with comparable sales down 7.3%, affected by lower traffic [28][9] - Canadian Retail segment sales declined 2.9%, with comparable sales down 9.2%, reflecting similar consumer sentiment challenges as in the U.S. [10][28] - Brand Portfolio segment sales were down 7.9%, but operating income grew by over 30% due to expense efficiency measures [30][12] Market Data and Key Metrics Changes - The first quarter saw a decline in consumer sentiment, with February being the weakest month due to unfavorable weather [6] - DSW gained 10 basis points in athleisure footwear market share during Q1, indicating some market resilience [16] Company Strategy and Development Direction - The company is focusing on enhancing customer value, optimizing product assortments, and diversifying sourcing strategies to mitigate tariff impacts [20][21] - Plans to reestablish private label brands as margin drivers and invest in growth brands like Topo and Keds are ongoing [20][22] - The company is adapting to a volatile environment by implementing cost-cutting measures expected to save $20 million to $30 million in 2025 [8][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macroeconomic challenges while acknowledging increased uncertainty in consumer behavior [6][25] - The decision to withdraw forward-looking guidance was made due to the unpredictable environment and cautious consumer sentiment [25][34] Other Important Information - The company ended the quarter with total inventories up 0.5% year-over-year, maintaining flexibility to respond to demand [33] - Total debt outstanding was $522.9 million, with total liquidity at $171.5 million [33] Q&A Session Summary Question: Can you elaborate on the $20 million to $30 million in savings related to SG&A? - Management explained that the savings are due to a lack of bonus accrual this year and additional cuts implemented, resulting in a projected reduction in SG&A for the full year [36][38] Question: What are the expectations for the Canadian and brand portfolio performance? - Management noted that Canadian consumer sentiment mirrors that of the U.S., with Topo performing exceptionally well, growing 84% in the quarter [39][43] Question: What trends are observed in Q2 and the impact of tariffs? - Management indicated that Q2 trends are similar to Q1, with ongoing concerns about the indirect impact of tariffs on consumer sentiment [47][48] Question: How is the company planning for back-to-school and holiday inventory? - Management expressed cautious optimism for back-to-school, highlighting strong inventory management and a diversified sourcing strategy [58][60]

Financial Data and Key Metrics Changes - In Q4 2024, total sales declined by 5% year-over-year, but comparable sales increased by 1% when excluding the 53rd week from the previous year [7][40] - For the full year, total company sales decreased by approximately 2%, with comparable sales down 1.7% [7][40] - Adjusted EPS for the full year was $0.27, at the upper end of the revised guidance range of $0.10 to $0.30 [8][49] - Consolidated gross profit margin for Q4 was 39.6%, an increase of 80 basis points year-over-year, while full-year gross margin was 42.7%, a decrease of 40 basis points [44][45] Business Line Data and Key Metrics Changes - U.S. Retail comps were up 1% in Q4, marking a return to positive comps for the first time since Q3 2022, driven by strength in athletic, women's dress, and luxury accessories [13][41] - Canada Retail segment saw Q4 comps increase by 5%, with strong performance in athletic and kids categories [14][41] - Brand Portfolio segment sales increased by approximately 12% in Q4 and roughly 14% for the full year, achieving operating profitability for the first time [16][42] Market Data and Key Metrics Changes - DSW's sales growth outpaced the footwear market in Q4, resulting in a 10 basis point gain in market share [13] - Top eight brands saw a 25% increase in sales on a full-year basis, contributing significantly to overall performance [10][66] - Topo Athletic brand sales grew nearly 80% in 2024, indicating strong market demand [31][43] Company Strategy and Development Direction - The company is focusing on a customer-first approach, leveraging insights and analytics to refine brand identity and enhance marketing effectiveness [20][22] - Plans to enhance the omnichannel customer experience and expand store footprint for the first time since 2019 [23][24] - Emphasis on revitalizing product assortment through data-driven strategies to improve inventory availability and productivity [25][26] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious consumer environment due to inflation and rising prices, impacting discretionary spending [35][59] - Guidance for 2025 anticipates low single-digit sales growth, with expectations for gradual improvement throughout the year [53][54] - The company aims to return to consistent top and bottom line growth, with a focus on driving profitable growth and evaluating expenses [56][60] Other Important Information - The company returned $79 million to shareholders through dividends and share repurchases in 2024 [50][51] - Total debt outstanding was $491 million at the end of the year, with total liquidity of $172.1 million [52] Q&A Session Summary Question: Can you provide more details on the fourth quarter, particularly regarding athleisure growth and Nike's performance? - Management highlighted significant growth in athleisure, particularly among the top eight brands, which saw a 25% increase in sales [66] - They noted a slower start to Q1 compared to expectations, influenced by macroeconomic factors [67][68] Question: What are the expectations for gross margin and SG&A dollar growth? - Management indicated that promotional activity is expected to provide leverage to gross margin, with SG&A expected to increase by about $50 million due to new initiatives and annualizing acquisitions [72][74]