Cautious Hold Rating on Designer Brands Amid Financial Challenges and Uncertain Turnaround

William Blair analyst Dylan Carden has maintained their neutral stance on DBI stock, giving a Hold rating today.

Dylan Carden has given his Hold rating due to a combination of factors impacting Designer Brands. The company reported disappointing first-quarter results and withdrew its full-year guidance, indicating a challenging retail environment. Despite efforts to cut costs and improve operational efficiency, including a notable reduction in operating expenses, the company is expected to face continued sales pressure and run at a loss in the near term.
Moreover, the company’s shares are trading at a relatively low multiple of its revised 2026 adjusted EBITDA estimate, reflecting market concerns over its financial health. The potential for sustained losses, coupled with a significant debt burden and limited cash reserves, poses a substantial risk. While there are efforts to improve profitability, such as enhancing digital order fulfillment and increasing in-store conversion, a significant turnaround is not anticipated until the company stabilizes its comps, profitability, and leverage position. Thus, the Hold rating reflects caution amid these uncertainties.

In another report released today, Telsey Advisory also maintained a Hold rating on the stock with a $5.00 price target.

Based on the recent corporate insider activity of 21 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DBI in relation to earlier this year.