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Designer Brands Inc (DBI)
NYSE:DBI
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Designer Brands
(NYSE:DBI)
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Rating:53Neutral
Price Target:
$8.50
▲(11.70% Upside)
Designer Brands' overall stock score is influenced by financial challenges, including high leverage and negative profitability. Despite strong technical indicators suggesting bullish momentum, valuation concerns and sales declines in key markets weigh on the score. The earnings call provided some positive insights with sequential improvements, but the overall outlook remains cautious.
Positive Factors
Gross Profit Margin Improvement
Improved gross profit margins indicate better cost management and pricing strategies, enhancing long-term profitability potential.
Debt Reduction
Reducing debt enhances financial stability and flexibility, allowing for more strategic investments and reducing interest expenses.
Product Category Growth
Growth in key product categories suggests strong brand appeal and market positioning, supporting future revenue expansion.
Negative Factors
High Leverage
High leverage poses financial risk, potentially limiting the company's ability to invest in growth opportunities and withstand economic downturns.
Decline in Total Sales
Declining sales can indicate weakening demand or competitive pressures, impacting revenue and profitability in the long term.
CFO Resignation
Leadership changes, especially in financial roles, can disrupt strategic continuity and affect investor confidence, impacting long-term planning.
Designer Brands (DBI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$378.73M
Dividend Yield2.62%
Average Volume (3M)1.37M
Price to Earnings (P/E)―
Beta (1Y)1.86
Revenue Growth-5.16%
EPS Growth-3394.48%
CountryUS
Employees14,000
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.38
Shares Outstanding41,903,370
10 Day Avg. Volume3,006,620
30 Day Avg. Volume1,373,971
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.97
Price to Sales (P/S)0.09
P/FCF Ratio3.09
Enterprise Value/Market Cap3.71
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit0.94
Enterprise Value/Ebitda17.08
Forecast
1Y Price Target
$6.00Price Target Upside-21.16% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)-0.46
Revenue Forecast (FY)$2.90B
Designer Brands Business Overview & Revenue Model
Company DescriptionDesigner Brands Inc., together with its subsidiaries, designs, manufactures, and retails footwear and accessories for women, men, and kids primarily in North America. The company operates through three segments: U.S. Retail, Canada Retail, and Brand Portfolio. It provides dress, casual, and athletic footwear; and handbags. The company offers its products under the Vince Camuto, Louise et Cie, Jessica Simpson, Lucky, JLO Jenifer Lopez, and other brands. It also operates vincecamuto.com e-commerce site, as well as www.dsw.com, www.dsw.ca, and www.theshoecompany.ca websites; and a portfolio of banners, including DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse. As of January 29, 2022, it operated 648 stores. Designer Brands Inc. was founded in 1991 and is based in Columbus, Ohio.
How the Company Makes MoneyDesigner Brands Inc. generates revenue through multiple streams, with its primary source being the sale of footwear and accessories in its retail locations and online platforms. The company benefits from a mix of branded products and private label offerings, allowing for higher margins on exclusive items. Additionally, DBI engages in promotional sales and loyalty programs that drive customer traffic and increase average transaction values. The company also partners with various brands and manufacturers, which helps in expanding its product selection and attracting a broader customer base. Seasonal promotions and strategic marketing initiatives contribute to sales growth, particularly during key shopping periods. Overall, DBI's revenue model is supported by a combination of direct sales and strategic partnerships that enhance its product offerings and market reach.
Designer Brands Earnings Call Summary
Earnings Call Date:Dec 09, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 19, 2026
Earnings Call Sentiment Neutral
The company showed sequential improvement with increased gross profit and reduced debt, indicating positive momentum. However, sales declines in several segments and geographic markets pose challenges.Q3-2025 Updates
Positive Updates
Sequential Improvement and Strategic Progress
The company posted another quarter of sequential improvement with comparable sales down 2.4%, a 260 basis point improvement from the second quarter, indicating strengthening consumer demand and improved in-store execution.
Gross Profit and Margin Improvement
Gross profit dollars exceeded last year by $5.8 million, with a 210 basis point improvement in gross margin, highlighted by a 100 basis point increase in merchandise margin.
Debt Reduction and Cash Flow
Strong cash flow generation allowed the company to pay down $47 million of debt during the quarter.
Positive Trends in Product Categories
The top eight brands posted a positive 4% comp for the quarter, and boots saw an 8% increase in regular price product sales. The athletic category also showed improvement with a 1% comp in adult athletic and an 8% comp in kids' athletic.
Brand Segment Performance
Topo brand delivered 25% growth over Q3 last year, and Jessica Simpson saw an 8% increase in external wholesale sales.
Negative Updates
Decline in Total Sales
Total sales for the quarter were down 3% year over year, with comparable sales down 2.4%.
Canadian Business Challenges
Total sales in the Canadian business were down 8%, with comp sales down 6.6%, largely due to unseasonably warm weather affecting seasonal product demand.
Brand Portfolio Sales Decline
Total sales in the Brand Portfolio segment were down 9%, driven by a decline in external wholesale business due to temporary sourcing-related delivery delays.
Company Guidance
During the third quarter of fiscal year 2025, Designer Brands Inc. demonstrated strong sequential improvement across several key metrics, which was highlighted during their earnings call. Total sales for the quarter decreased by 3% year-over-year, with comparable sales down 2.4%, marking a 260 basis point improvement from the previous quarter. Gross profit increased by $5.8 million, reflecting a 210 basis point improvement driven by a 100 basis point rise in merchandise margin. Notably, adjusted operating income rose to $46.5 million, surpassing the previous year's figure by nearly $3 million despite the prior year's $9 million incentive accrual reversal. Adjusted earnings per share improved significantly to $0.38 from $0.27 last year. The company managed to generate strong cash flow, allowing them to reduce their debt by $47 million during the quarter. In the U.S. Retail segment, comparable sales declined by 1.5%, while total sales decreased by 1% year-over-year, showing improvement from the second quarter's 5% decline. The Canadian business faced challenges due to warm weather, leading to an 8% drop in total sales and a 6.6% decline in comparable sales. However, the brand portfolio segment saw a $0.5 million increase in operating income year-over-year, despite an 8% drop in total sales due to delivery delays. The company remains focused on two pillars, customer and product, while advancing strategic growth brands and private labels. With a disciplined approach to inventory and operating expenses, Designer Brands expects total net sales for the year to decline by 3% to 5%, with adjusted operating income ranging between $50 million to $55 million.Designer Brands Financial Statement Overview
Summary
Designer Brands faces challenges with declining revenues and profitability pressures. Improvements in gross profit margins and cash flow generation are positive, but high leverage and negative returns on equity pose significant risks.Income Statement
Designer Brands has faced challenges in maintaining revenue growth, with a significant decline in TTM revenue. The gross profit margin has improved to 51.8% in TTM, indicating better cost management. However, the net profit margin remains negative, reflecting ongoing profitability issues. EBIT and EBITDA margins are low, suggesting operational inefficiencies.45
Neutral
Balance Sheet
The company has a high debt-to-equity ratio of 4.26 in TTM, indicating significant leverage and potential financial risk. Return on equity is negative, highlighting challenges in generating returns for shareholders. The equity ratio is low, suggesting limited financial stability.40
Negative
Cash Flow
There is a notable improvement in free cash flow growth, with a 194.7% increase in TTM, indicating better cash generation. The operating cash flow to net income ratio is positive, but the free cash flow to net income ratio suggests that cash flow is not fully translating into profitability.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.89B | 3.01B | 3.07B | 3.32B | 3.20B | 2.23B |
| Gross Profit | 1.50B | 1.29B | 974.89M | 1.08B | 1.07B | 311.24M |
| EBITDA | 82.26M | 99.53M | 138.51M | 255.94M | 283.15M | -496.59M |
| Net Income | -1.67M | -10.55M | 29.06M | 162.68M | 154.48M | -488.72M |
Balance Sheet | ||||||
| Total Assets | 2.05B | 2.01B | 2.08B | 2.01B | 2.01B | 1.98B |
| Cash, Cash Equivalents and Short-Term Investments | 51.35M | 44.75M | 49.17M | 58.77M | 72.69M | 59.58M |
| Total Debt | 1.27B | 1.29B | 1.24B | 1.10B | 1.02B | 1.94B |
| Total Liabilities | 1.75B | 1.73B | 1.71B | 1.58B | 1.60B | 1.73B |
| Stockholders Equity | 298.57M | 278.49M | 359.22M | 429.75M | 412.40M | 243.02M |
Cash Flow | ||||||
| Free Cash Flow | 128.32M | 87.27M | 107.40M | 146.45M | 138.40M | -184.91M |
| Operating Cash Flow | 137.71M | 82.24M | 162.40M | 201.43M | 171.43M | -153.79M |
| Investing Cash Flow | -39.68M | -62.67M | -182.49M | -88.12M | -35.03M | 2.63M |
| Financing Cash Flow | -82.30M | -22.09M | 10.48M | -128.48M | -121.49M | 122.95M |
Designer Brands Technical Analysis
Positive
7.61
Price Trends
4.56
Positive
4.05
Positive
3.55
Positive
Market Momentum
1.15
Negative
69.55
Neutral
73.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DBI, the sentiment is Positive. The current price of 7.61 is above the 20-day moving average (MA) of 5.98, above the 50-day MA of 4.56, and above the 200-day MA of 3.55, indicating a bullish trend. The MACD of 1.15 indicates Negative momentum. The RSI at 69.55 is Neutral, neither overbought nor oversold. The STOCH value of 73.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DBI.
Designer Brands Risk Analysis
Designer Brands disclosed 20 risk factors in its most recent earnings report. Designer Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Designer Brands Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $873.54M | 15.99 | 16.57% | 6.27% | 6.44% | -9.23% | |
69 Neutral | $514.10M | 8.93 | 8.78% | 3.12% | -6.22% | -22.81% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | $378.73M | -12.98 | -8.61% | 2.62% | -5.16% | -3394.48% | |
49 Neutral | $81.16M | -2.51 | -17.04% | ― | -6.40% | 11.65% | |
45 Neutral | $107.13M | -46.40 | ― | ― | -7.33% | -114.80% | |
38 Underperform | $96.43M | -1.53 | ― | ― | -10.09% | 81.44% |
* Consumer Cyclical Sector Average
DBI
Designer Brands
7.61
2.49
48.63%
GES
Guess?
16.75
3.63
27.67%
SCVL
Shoe Carnival
18.41
-15.06
-45.00%
PLCE
Children's Place
4.04
-6.06
-60.00%
DLTH
Duluth Holdings
2.20
-1.00
-31.25%
CURV
Torrid Holdings
1.03
-3.83
-78.81%
Designer Brands Corporate Events
Executive/Board ChangesDividends
Designer Brands Expands Board, Appoints New Director
Neutral
Nov 26, 2025
On November 20, 2025, Designer Brands Inc. expanded its Board of Directors from eleven to twelve members, appointing Deborah Ferrée as a Class II director. Her appointment does not alter her current roles or compensation as Vice Chair and Chief Product Officer. Additionally, the Board declared a quarterly cash dividend of $0.05 per share for Class A and B common shares, payable on December 19, 2025, to shareholders recorded by December 5, 2025.
Executive/Board Changes
Designer Brands Announces CFO Resignation and Interim Appointment
Neutral
Oct 8, 2025
On October 3, 2025, Designer Brands Inc. announced the resignation of Jared A. Poff from his roles as Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, effective October 31, 2025, to pursue a new professional opportunity. The Board has appointed Mark A. Haley as the interim Principal Financial Officer starting November 1, 2025, while continuing his role as Senior Vice President, Controller, and Principal Accounting Officer. The company is initiating an executive search for a permanent CFO. This transition is expected to be seamless, with Mr. Haley working closely with the company’s financial leadership. Mr. Haley will receive a retention bonus and restricted stock units as part of his new role.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.